Q4 2025 Earnings Summary
- Strong Demand for GitLab Ultimate: GitLab Ultimate now drives 50% of total ARR with record first orders over $100,000, demonstrating compelling customer ROI with a payback period under 6 months and ROI over 480% in three years.
- Accelerating AI Adoption and Duo Product Expansion: Robust enterprise wins and the introduction of the innovative Duo Workflow beta illustrate that AI-driven enhancements are resonating with customers, potentially transforming DevSecOps practices.
- High Customer Retention and Expansion Potential: The impressive 123% dollar-based net retention rate and strong seat expansion indicate that customers not only stick with GitLab but are also expanding their usage, supporting sustainable revenue growth.
- Intense Competition in AI and Code Generation: Executives noted increasing competition from rivals such as GitHub CoPilot and other stand-alone code generation tools, which could put pressure on market share and margins.
- Reliance on a Stable Macroeconomic Environment: Guidance is based on the assumption that the current macroeconomic conditions will remain constant; any deterioration could impact customer spending and overall growth.
- Exposure to Public Sector Volatility: With about 12% of ARR coming from the public sector and some uncertainty expressed around this segment, shifts in government spending or policy could present risks.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +29% | Total Revenue increased from $163.78 million in Q4 2024 to $211.43 million in Q4 2025. This growth is driven by robust adoption of both subscription and license solutions, reflecting strong market expansion and deeper customer engagement with GitLab’s DevSecOps platform. |
Subscription Revenue | +30% | Subscription Revenue grew from $142.03 million in Q4 2024 to $185.56 million in Q4 2025. The increase indicates that existing customers are upgrading and new customers are being acquired, attributable to strong demand for integrated services and an emphasis on higher-tier subscriptions. |
License Revenue | +19% | License Revenue rose from $21.73 million in Q4 2024 to $25.87 million in Q4 2025. Although the growth rate is lower than subscriptions, it supports the overall revenue expansion and reflects steady incremental sales of licenses as the customer base continues to mature. |
Geographic Breakdown | ~+28–29% per region | Revenues in all regions grew roughly 28–29% YoY. With the U.S. at $172.77 million, Europe at $33.71 million, and Asia Pacific at $4.95 million in Q4 2025, the uniform growth suggests balanced global market penetration, building on previous period strengths and an expanding international customer base. |
Gross Profit | +28% | Gross Profit increased from $147.79 million in Q4 2024 to $188.56 million in Q4 2025. This gain is primarily the result of higher total revenue and operational efficiencies that improved the cost structure, leading to better margin realization compared to the prior period. |
Operating Loss | –44% (reduction) | Operating Loss improved from $34.88 million in Q4 2024 to $19.34 million in Q4 2025. The reduction reflects better management of operating expenses and improved cost absorption through robust revenue growth, indicating a more efficient scaling of the business. |
Net Loss Attributable to GitLab | –84% (reduction) | Net Loss narrowed dramatically from $36.47 million in Q4 2024 to $5.80 million in Q4 2025. This significant improvement is driven by the combination of strong revenue and gross profit growth, enhanced operating margins, and possibly favorable income tax adjustments, thereby reducing overall losses compared to the previous period. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenue (Quarterly) | Q1 FY '26 | no prior guidance | $212 to $213 million, representing 25% to 26% year-over-year | no prior guidance |
Non-GAAP Operating Income (Quarterly) | Q1 FY '26 | no prior guidance | $21 to $22 million | no prior guidance |
Non-GAAP Net Income Per Share (Quarterly) | Q1 FY '26 | no prior guidance | $0.14 to $0.15, assuming 172 million weighted average diluted shares outstanding | no prior guidance |
Non-GAAP Tax Rate (Quarterly) | Q1 FY '26 | no prior guidance | 22% | no prior guidance |
Total Revenue (Annual) | FY '26 | no prior guidance | $936 to $942 million, representing approximately 24% year-over-year | no prior guidance |
Non-GAAP Operating Income (Annual) | FY '26 | no prior guidance | $109 to $114 million | no prior guidance |
Non-GAAP Net Income Per Share (Annual) | FY '26 | no prior guidance | $0.68 to $0.72, assuming 173 million weighted average diluted shares outstanding | no prior guidance |
Non-GAAP Tax Rate (Annual) | FY '26 | no prior guidance | 22% | no prior guidance |
JiHu (China Joint Venture) Expenses (Annual) | FY '26 | no prior guidance | Approximately $18 million, compared to $13 million in FY '25 | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Enterprise Demand for GitLab Ultimate | Q1: Ultimate accounted for 46% of ARR with growing enterprise adoption ; Q2: 47% of total ARR and strong deal sizes with larger customers ; Q3: Achieved 48% of total ARR and strong enterprise wins | Q4: Ultimate reached 50% of total ARR with record net deals and heightened enterprise traction | Incremental positive growth in enterprise demand with steadily rising ARR contribution and stronger large-customer wins. |
Innovative AI-driven Product Expansion and Integration | Q1: Introduction of Duo Pro and Duo Enterprise with reported productivity gains ; Q2: Launched Duo Workflow concepts and agentic AI initiatives ; Q3: Discussed early-stage AI enthusiasm with cautious rollout and comparisons with competitors | Q4: Expanded portfolio with Duo Workflow entering private beta, integration with AWS, and broader AI-powered capabilities | Evolution from initial adoption to more mature, integrated, and differentiated AI solutions, with deeper market traction. |
Consistent Financial Performance and Operational Efficiency Improvements | Q1: Recorded significant margin improvements and positive free cash flow ; Q2: Reported operating margin expansion and scalable SaaS metrics ; Q3: Achieved record non‐GAAP operating margins at 13.2% with efficient cost management | Q4: Delivered a record non‐GAAP operating margin of 17.7% and robust free cash flow, underscoring a consistent financial uptrend | Financials and operational metrics have consistently improved across periods, with Q4 reflecting the strongest performance. |
High Customer Retention and Seat Expansion | Q1: DBNRR at 129% driven by over 50% seat expansion, with significant growth in high-ARR customers ; Q2: Achieved 126% DBNRR driven by seat expansions and expanded high ARR cohort ; Q3: Reported DBNRR of 124% with continued bulk seat rollouts | Q4: Maintained strong retention with a DBNRR of 123% alongside significant expansion in larger enterprise accounts | Retention and seat expansion remain a core strength—with consistently high DBNRR, even as numerical percentages show a slight adjustment likely reflecting mix changes. |
Competitive Pressures from Rivals | Q1: Noted competitive challenges from Microsoft’s Copilot and similar AI tools ; Q2: Discussed head-to-head evaluations with GitHub Copilot, emphasizing platform advantages ; Q3: Highlighted competitive differentiation in AI capabilities against alternatives | Q4: Acknowledged an increasingly competitive landscape with rivals like GitHub Copilot, while stressing its comprehensive platform integration as a key differentiator | Competition remains a constant theme; sentiment is cautiously optimistic as GitLab continues to leverage its integrated and security-focused approach to stand out. |
Evolving Pricing Strategies and Revenue Recognition Challenges | Q1: Detailed SSP headwinds causing a $1M Q1 revenue decrease and adjusted full-year guidance, alongside user-based pricing focus ; Q2: Outlined phased price increases (e.g., $19 to $24 to $29) and SSP adjustments impacting revenue allocation | Q4: Discussed gradual price increases and ongoing SSP analysis adjustments contributing to pricing benefits, with these challenges integrated into guidance | While pricing challenges (SSP headwinds) were a prominent focus in early quarters, their impact has been normalized over time as gradual price increases continue to drive improved unit economics. |
External Risks – Macroeconomic Stability and Public Sector Volatility | Q1: CFO noted a cautious macro environment with steady sales cycles ; Q2: Mentioned a persistent cautious spending environment and positive public sector momentum (e.g., FedRAMP progress) | Q4: Emphasized that guidance assumes stable macroeconomic conditions while also acknowledging emerging public sector volatility under new administration dynamics | Risks remain a background consideration. Consistent cautious sentiment persists, with growing focus on monitoring public sector volatility as part of the external environment. |
Shifting Sentiment on AI Adoption (Early Enthusiasm vs. Delayed Uptake) | Q1: Expressed mostly positive early adoption and expected productivity gains with initial AI product launches ; Q2 & Q3: Highlighted significant early enthusiasm alongside explicit concerns about delayed enterprise uptake and the gradual rollout of full benefits | Q4: Focus shifted to robust AI integration and expanded capabilities, with less emphasis on delayed adoption concerns and more on realized value from AI tools | The narrative has shifted from initially balancing enthusiasm with caution over delayed uptake, toward a more confident stance as AI integration matures and delivers tangible benefits. |
Topics Phased Out (SSP Headwinds and Seasonality Impacts on Free Cash Flow) | Q1 & Q2: SSP headwinds and seasonality impacts on free cash flow were detailed, with adjustments impacting revenue recognition and quarterly cash performance ; Q3: These topics were not prominently mentioned | Q4: No detailed discussion on seasonality impacts on free cash flow, with SSP headwinds mentioned only as part of pricing adjustments | These operational concerns have been largely phased out of the narrative in later periods, suggesting stabilization and resolution of earlier revenue recognition and seasonality issues. |
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Ultimate Sustainability
Q: Will Ultimate mix remain strong?
A: Management noted that Ultimate now represents 50% of total ARR, driven by strong security and compliance appeal with a payback period under 6 months and an ROI over 480% in three years, suggesting the momentum is sustainable into FY '26. -
Pricing & NRR
Q: NRR and pricing assumptions?
A: They highlighted a 123% NRR and explained that pricing exceeded expectations, with guidance factoring in about half the incremental pricing impact seen this year while maintaining steady seat growth. -
Growth vs Margin
Q: How balance growth and margins?
A: Management emphasized investing responsibly in sales and engineering, achieving roughly a 1,000 basis points improvement in operating margins year-over-year while driving top-line growth. -
Duo & Code Gen
Q: How differentiate Duo in code gen?
A: They stressed that Duo, enhanced with AI throughout the software lifecycle, performed beyond expectations by leveraging GitLab’s robust code context to counter competitive pressures in the evolving code generation market. -
Dedicated SKU Impact
Q: What drives Dedicated performance?
A: Management noted that GitLab Dedicated grew approximately 90% year-over-year, offering a unique single-tenant SaaS solution that not only reduces costs but also drives upgrades to Ultimate in sectors with complex security needs. -
Public Sector Outlook
Q: Update on public sector pipeline?
A: They disclosed that the public sector comprises roughly 12% of ARR and, despite a record quarter in deals, expect no changes to its outlook at this time. -
CRO and Sales
Q: Will the new CRO alter sales comp?
A: Management expects only incremental adjustments from the new CRO, who will sharpen the go-to-market strategy without major overhauls to existing sales compensation plans. -
Platform Utilization
Q: How boost platform adoption?
A: They plan to advance utilization by deploying detailed customer success plans and leveraging technical partnerships, ensuring customers maximize the platform and associated add-ons like Duo. -
Developer Demand
Q: Will developer numbers increase further?
A: Management pointed out that although engineers represent less than 1% of the population, AI will further amplify their productivity and expand the base of software creation, bolstering overall platform use. -
Guidance Tone
Q: Why a cautious guidance tone?
A: While management remains optimistic, they stressed that the guidance reflects a careful, multi-angle view of the macro environment, maintaining consistent, conservative projections amid market uncertainties. -
Customer Success Focus
Q: What’s planned for customer success?
A: They intend to scale customer success by adding leadership with deep sales experience to help manage growth beyond the $1 billion mark, ensuring customers realize faster value.