Gitlab, Inc. Class A ((GTLB)) has held its Q4 earnings call. Read on for the main highlights of the call.
GitLab, Inc. Class A recently held its earnings call, revealing a strong performance marked by significant revenue growth and improved margins. The company celebrated notable achievements in customer acquisitions and expansions, particularly in the AI sector and GitLab Dedicated services. Despite these successes, challenges persist in the China joint venture and the broader macroeconomic environment, which remains uncertain.
Strong Year-over-Year Revenue Growth
GitLab reported impressive financial results, with fourth-quarter revenue increasing by 29% year-over-year to $211 million, surpassing expectations. The fiscal year revenue also saw a significant rise, growing by 31% to $759.2 million. This growth underscores the company’s robust market position and its ability to capitalize on emerging opportunities.
Record Non-GAAP Operating Margin
The company achieved a record non-GAAP operating margin of 18% in the fourth quarter, marking an increase of 960 basis points compared to the previous year. This improvement highlights GitLab’s operational efficiency and its focus on enhancing profitability.
Significant Customer Wins and Expansions
GitLab secured substantial deals with major players like Anthropic, AWS Professional Services, and Delta Airlines. The company’s Ultimate offering has reached 50% of total Annual Recurring Revenue (ARR), showcasing its growing appeal and market penetration.
GitLab Duo and AI Strategy
The company continues to gain traction with GitLab Duo, especially Duo Enterprise, securing key wins with Barclays and Capgemini. Customers are actively exploring AI tools, indicating a strong interest in GitLab’s AI strategy and offerings.
Growth in GitLab Dedicated
GitLab Dedicated experienced approximately 90% growth year-over-year in the fourth quarter, with significant adoption by large enterprise customers such as Delta Airlines and NatWest. This growth reflects the increasing demand for tailored solutions in the enterprise sector.
China Joint Venture Challenges
The company faced ongoing challenges with its China joint venture, Jihu, incurring non-GAAP expenses of $3.2 million in the fourth quarter. These challenges highlight the complexities of operating in the Chinese market and the need for strategic adjustments.
Macroeconomic Uncertainty
GitLab’s guidance assumes a consistent macroeconomic environment, acknowledging potential risks in the external economic landscape. This cautious approach reflects the broader uncertainties facing global markets.
Forward-Looking Guidance
Looking ahead, GitLab provided guidance for Q1 and FY2026, expecting revenue between $212 million and $213 million for Q1, representing a 25% to 26% year-over-year increase. For FY2026, total revenue is projected to be between $936 million and $942 million, reflecting approximately 24% growth. The company anticipates a non-GAAP operating income ranging from $21 million to $22 million for Q1, and between $109 million and $114 million for the full fiscal year. These projections underscore GitLab’s confidence in its strategic direction and market opportunities.
In summary, GitLab’s earnings call highlighted a strong financial performance with notable revenue growth and improved margins. The company celebrated significant customer wins and expansions, particularly in AI and GitLab Dedicated services. However, challenges remain in the China joint venture and the uncertain macroeconomic environment. Looking forward, GitLab’s guidance reflects optimism for continued growth and profitability, despite external uncertainties.