Gitlab Shares Fall Despite Q1 Earnings Beat, Revenues Up Y/Y

GitLab GTLB reported first-quarter fiscal 2026 non-GAAP earnings of 17 cents per share, beating the Zacks Consensus Estimate by 13.33%. The company reported earnings of 3 cents per share in the year-ago quarter.Total revenues of $214.4 million beat the consensus mark by 0.91% and rallied 27% year over year. The upside can be attributed to strong demand for its DevSecOps platform.GitLab shares dropped 13.01% in pre-market trading due to mounting competition in AI code generation and lingering public sector uncertainty.Gitlab’s Top-Line DetailsSubscriptions, self-managed and SaaS (90.7% of total revenues) revenues increased 28.6% year over year to $194.5 million, beating the Zacks Consensus Estimate by 3.33%. License, self-managed and other revenues (9.3% of total revenues) rose 11.2% year over year to $20 million.SaaS revenues contributed 30% to total revenues and surged 35% year over year, driven by the strong adoption of GitLab Dedicated, AI integration and expanding customer engagement. GitLab Inc. Price and Consensus GitLab Inc. price-consensus-chart | GitLab Inc. QuoteCustomers with more than $5K of Annual Recurring Revenue (ARR) increased to 10,104, up 13% year over year. Customers with more than $100K of ARR increased to 1,288, up 26% year over year, demonstrating GTLB’s ability to attract and retain large enterprise customers.The dollar-based Net Retention Rate was 122% in the reported quarter.Total Remaining Performance Obligation (RPO) surged 40% year over year to $955.1 million. The current RPO increased 34% to $584.8 million.In the reported quarter, GitLab announced the general availability of GitLab 18, featuring major innovations across core DevOps workflows, security and compliance, and AI capabilities natively integrated into the platform. The company also announced the general availability of GitLab Duo with Amazon Q for Ultimate self-managed customers on AWS and achieved FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government, under the sponsorship of the GSA.Gitlab’s Operating DetailsOn a non-GAAP basis, research & development expenses increased 22.3% year over year to $51.1 million. Sales and marketing expenses were up 15.1% to $85.5 million. General and administrative expenses declined 25.3% to $30.7 million in the reported quarter.Operating income was $26.1 million on a non-GAAP basis compared with the year-ago quarter’s loss of $3.8 million.Gitlab’s Balance Sheet & Cash FlowAs of April 30, 2025, cash and cash equivalents and short-term investments were $11.05 billion compared with $9.92 billion as of Jan. 31, 2025.In the reported quarter, the company generated a cash flow from the operation of $106.3 million compared with an operating cash outflow of $63.2 million in the previous quarter.As of April 30, 2025, the adjusted free cash flow was $104.1 million compared with $62.1 million as of Jan. 31, 2025.Gitlab Initiates Q2 & FY26 GuidanceFor the second quarter of fiscal 2026, GitLab expects revenues between $226 million and $227 million, indicating approximate growth of 24% year over year. The Zacks Consensus Estimate for revenues is currently pegged at $225.27 million.Non-GAAP operating income is expected to be in the range of $23-$24 million for the fiscal second quarter.Non-GAAP fiscal second quarter earnings are expected to be between 16 cents per share and 17 cents per share. The consensus mark for the same is pinned at 15 cents per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)For fiscal 2026, GitLab expects revenues between $936 million and $942 million, indicating growth of approximately 24% year over year. The Zacks Consensus Estimate for the same is pegged at $936.51 million.Non-GAAP operating income is expected to be in the range of $117-$121 million for fiscal 2026. Non-GAAP earnings are expected to be between 74 cents per share and 75 cents per share. The consensus mark for fiscal 2026 earnings is pinned at 70 cents per share.Gitlab’s Zacks Rank & Other Stocks to ConsiderCurrently, Gitlab has a Zacks Rank #2 (Buy).Karooooo KARO, Amphenol APH and Pegasystems PEGA are some other top-ranked stocks in the broader Zacks Computer & Technology sector.Karooooo, Amphenol and Pegasystems sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Karooooo shares have appreciated 32.8% in the year-to-date (YTD) period. The Zacks Consensus Estimate for KARO’s fiscal 2026 earnings has been revised upward by 2 cents to $1.82 in the past 30 days, suggesting year-over-year growth of 11.66%.Amphenol shares have returned 33.2% YTD. The Zacks Consensus Estimate for APH’s 2025 earnings is pegged at $2.66 per share, up by a penny over the past 30 days, suggesting a growth of 40.74%.PEGA shares have gained 8.7% YTD. 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Click to get this free report Amphenol Corporation (APH): Free Stock Analysis Report Pegasystems Inc. (PEGA): Free Stock Analysis Report Karooooo Ltd. (KARO): Free Stock Analysis Report GitLab Inc. (GTLB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks