GitLab GTLB reported non-GAAP earnings of 33 cents per share in fourth-quarter fiscal 2025, beating the Zacks Consensus Estimate by 43.48%. The bottom line soared 120% year over year.

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Total revenues of $211.4 million beat the consensus mark by 2.82% and rallied 29.1% year over year. The upside can be attributed to strong demand for its DevSecOps platform and AI-driven solutions.

Following the results, GTLB shares rose 1.16% in the pre-market trading, driven by positive financial results and outlook.

GTLB’s Top-Line Details

Subscriptions- self-managed and SaaS (87.8% of total revenues) revenues increased 30.7% year over year to $185.6 million, beating the Zacks Consensus Estimate by 2.22%. License- self-managed and other revenues (12.2% of total revenues) rose 18.9% year over year to $25.9 million.

SaaS revenues contributed 29% to total revenues and rallied 36% year over year, driven by the strong adoption of GitLab Dedicated, AI integration and expanding customer engagement.

Customers with more than $5000 of Annual Recurring Revenues (ARR) increased to 9,893, up 15% year over year. Customers with more than $100 thousand of ARR increased to 1,229, up 29% year over year, demonstrating GTLB’s ability to attract and retain large enterprise customers.

The dollar-based net retention rate was 123% in the reported quarter.

Total Remaining Performance Obligation (RPO) jumped 40% year over year to $945 million. The current RPO increased 35% to $579.2 million.

In the reported quarter, the company announced the general availability of GitLab Duo Self-Hosted and the private beta of GitLab Duo Workflow, reinforcing GTLB's commitment to innovation in the DevSecOps space.

Gitlab’s Operating Details

The fourth-quarter fiscal 2025 non-GAAP gross margin was flat year over year at 91%, reflecting improved operational efficiency and cost management.

On a non-GAAP basis, research and development expenses increased 23.1% year over year to $47.4 million. Sales and marketing expenses grew 9.1% to $80.1 million. General and administrative expenses rose 12.3% to $27.9 million in the reported quarter.

Operating income was $37.4 million on a non-GAAP basis compared with the year-ago quarter’s $13.2 million. The operating margin expanded 960 bps (basis points) year over year to 17.7%.

GTLB’s Balance Sheet & Cash Flow

As of Jan. 31, 2025, cash and cash equivalents, and short-term investments were $9.92 billion compared with $9.16 billion as of Oct. 31, 2024.

In the reported quarter, the company generated a cash flow from the operation of $63.2 million compared with $177 million in the previous quarter.

As of Jan. 31, 2025, the adjusted free cash flow was $62.1 million compared with $9.7 million as of Oct. 31, 2024.

Gitlab Provides Q1 & FY26 Guidance

For the first quarter of fiscal 2026, GTLB expects revenues between $212 million and $213 million, indicating year-over-year growth of 25-26%. The Zacks Consensus Estimate for revenues is pegged at $211.88 million.

Non-GAAP operating income is expected to be $21-$22 million for the fiscal first quarter.

Non-GAAP fiscal first-quarter earnings per share are expected between 14 cents and 15 cents. The consensus mark for the same is pinned at 14 cents.

For fiscal 2026, GitLab expects revenues between $936 million and $942 million, indicating year-over-year growth of 24%. The Zacks Consensus Estimate for the same is pegged at $931.75 million.

Non-GAAP operating income is expected to be $109-$114 million for the fiscal first quarter. 

Non-GAAP earnings per share are expected between 68 cents and 72 cents. The consensus mark for fiscal 2026 earnings is pinned at 74 cents.

GTLB’s Zacks Rank & Stocks to Consider

Currently, Gitlab has a Zacks Rank #3 (Hold).

CrowdStrike CRWD, Guidewire Software GWRE and Marvell Technology MRVL are some better-ranked stocks in the broader sector.

CrowdStrike, Guidewire Software and Marvell Technology each carry a Zacks Rank 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CrowdStrike’s shares have gained 12.9% year to date. CRWD is scheduled to release fourth-quarter fiscal 2025 results on March 4.

Guidewire Software shares have risen 16.5% year to date. GWRE is set to report second-quarter fiscal 2025 results on March 6.

Marvell Technology’s shares have declined 21.8% year to date. MRVL is set to report third-quarter fiscal 2025 results on March 5.

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