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Gitlab Inc. (GTLB)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $211.4M, up 29% YoY, with non-GAAP operating margin of 18% and non-GAAP diluted EPS of $0.33; cash from operations was $63.2M and adjusted FCF $62.1M .
  • Strong enterprise demand drove records: largest net ARR deal in company history, 1,229 customers >$100k ARR (+29% YoY), and DBNRR of 123%; SaaS revenue mix reached 29% and grew 36% YoY .
  • Guidance introduced for FY2026: revenue $936–$942M, non-GAAP op income $109–$114M, and non-GAAP diluted EPS $0.68–$0.72, with a new 22% long-term non-GAAP projected tax rate following the IP relocation under the BAPA .
  • Versus prior quarter, revenue rose from $196.0M to $211.4M (~7.9% sequential), margin expanded meaningfully; results exceeded prior Q4 guidance ($205–$206M revenue; $0.22–$0.23 non-GAAP diluted EPS) — a significant beat vs company guidance .
  • AI remains a core narrative: GitLab Duo adoption exceeded internal expectations, Duo Workflow private beta launched, and GitLab announced general availability of GitLab Duo with Amazon Q (post-quarter), reinforcing AI differentiation and go-to-market momentum .

What Went Well and What Went Wrong

What Went Well

  • Enterprise momentum: “We closed the largest net ARR deal in company history,” with record net adds >$100k ARR; non-GAAP operating income rose to $37.4M and non-GAAP operating margin reached a record 17.7% .
  • Product and AI traction: GitLab Dedicated grew ~90% YoY; Duo Enterprise adoption accelerated, with marquee wins (Barclays 20k Ultimate + Duo seats; Capgemini, CACI; Anthropic landed with Ultimate self-managed) .
  • Platform consolidation and Ultimate mix: Ultimate hit 50% of ARR, with top deals in the quarter being Ultimate expansions; SaaS scaled while maintaining best-in-class non-GAAP gross margin of 91% .

What Went Wrong

  • GAAP optics impacted by non-recurring tax items: full-year GAAP operating margin was -18% and GAAP net loss slightly negative due to BAPA-related items despite strong non-GAAP performance; Q3 operating cash flow showed a large outflow from BAPA payments .
  • Ongoing JiHu consolidation complexity: expenses related to JiHu persisted ($3.2M in Q4; ~$18M expected in FY2026), with deconsolidation timing uncertain .
  • Continued macro caution: management reiterated cautious spending environment and maintained conservative assumptions in guidance despite strong internal momentum .

Financial Results

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue ($M)$182.6 $196.0 $211.4
GAAP Gross Margin (%)88% 89% 89%
Non-GAAP Gross Margin (%)91% 91% 91%
GAAP Operating Margin (%)(22)% (15)% (7)%
Non-GAAP Operating Margin (%)10% 13% 18%
GAAP Diluted EPS ($)$0.08 $0.18 $0.06
Non-GAAP Diluted EPS ($)$0.15 $0.23 $0.33
Cash from Operations ($M)$11.7 $(177.0) $63.2
Adjusted Free Cash Flow ($M)$10.8 $9.7 $62.1
Segment Revenue ($M)Q2 FY2025Q3 FY2025Q4 FY2025
Subscription — self-managed & SaaS$163.2 $175.3 $185.6
License — self-managed & other$19.4 $20.8 $25.9
Total Revenue$182.6 $196.0 $211.4
KPIsQ2 FY2025Q3 FY2025Q4 FY2025
Customers ≥$5k ARR9,314 9,519 9,893
Customers ≥$100k ARR1,076 1,144 1,229
Customers ≥$1M ARR——123
Dollar-Based Net Retention Rate (%)126% 124% 123%
Total RPO ($M)$747.9 $811.8 $945.0
cRPO ($M)$475.0 $515.2 $579.2
SaaS % of Revenue28% 29% 29%
GitLab Dedicated YoY Growth——~90%

Notes:

  • Q3 cash from operations reflects BAPA-related tax payments; adjusted FCF excludes BAPA payments per non-GAAP definition .
  • SaaS grew 36% YoY in Q4; non-GAAP gross margin held at 91% despite SaaS mix .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q4 FY2025$205–$206 $211.4 (actual) Beat vs guidance
Non-GAAP diluted EPS ($)Q4 FY2025$0.22–$0.23 $0.33 (actual) Beat vs guidance
Revenue ($M)Q1 FY2026N/A$212.0–$213.0 New
Non-GAAP Operating Income ($M)Q1 FY2026N/A$21.0–$22.0 New
Non-GAAP diluted EPS ($)Q1 FY2026N/A$0.14–$0.15 New
Revenue ($M)FY2026N/A$936–$942 New
Non-GAAP Operating Income ($M)FY2026N/A$109–$114 New
Non-GAAP diluted EPS ($)FY2026N/A$0.68–$0.72 New
Long-term non-GAAP projected tax rateFY2026+N/A22% (post-BAPA) Methodology update
SSP accounting noteQ1/FY2026N/ASSP has no material impact; included in guidance Disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
AI initiatives (Duo, Workflow)Duo Enterprise GA; customers adopting AI beyond code gen; Gartner leadership in AI assistants Duo exceeded expectations; ~1/3 of ARR in certain Duo-attached deals; Duo Workflow entering private beta Accelerating adoption; expanding scope to agentic AI
Platform consolidation & UltimateUltimate 47–48% of ARR; toolchain consolidation ROI (Forrester TEI) Ultimate reached ~50% of ARR; top deals were Ultimate expansions Sustained mix shift to higher value tier
GitLab Dedicated (single-tenant SaaS)Strong traction; grew ~150% YoY (Q2); FedRAMP in-process Grew ~90% YoY; largest first-order Dedicated deal sold; vertical traction (financials, public sector) Strong, broadening adoption
Public sectorBest pubsec quarter in Q3; FedRAMP momentum Pubsec ~12% of ARR; no changes assumed in guide under new administration Stable with monitoring
Pricing & unit economicsPrice increases layering through renewals; improving unit economics FY2025 pricing exceeded expectations; halfway through, similar incremental impact expected in FY2026 Positive pricing tailwind continues
Margins & investment balance>1,000 bps YoY margin expansion in Q3; prioritize growth responsibly Record Q4 non-GAAP margin; investment in sales capacity and R&D (AI/security) ongoing Operating leverage while investing
Competitive landscape (Copilot, tools)Compete via platform context and security; vendor-agnostic models (Anthropic) Duo differentiation via platform knowledge graph; context across SDLC; autonomous agents coming Differentiated via platform-based AI

Management Commentary

  • “Q4 was a strong finish... driven in part by Ultimate, Dedicated and GitLab Duo... non-GAAP operating margin reached 18%” — CEO Bill Staples .
  • “We closed the largest net ARR deal in company history… record quarter of net adds for customers over $100,000 ARR… non-GAAP operating margin at 17.7%” — CFO Brian Robbins .
  • “GitLab Dedicated grew approximately 90% year-over-year… sold our largest first order Dedicated deal” — CEO Bill Staples .
  • “Ultimate has now reached 50% of our total ARR and our top 7 largest deals in the fourth quarter were Ultimate expansions” — CEO Bill Staples .
  • “Duo Workflow is entering private beta… our move from AI-assisted to AI-driven… an autonomous engineering buddy” — CEO Bill Staples .
  • “SaaS now represents 29% of total revenue and grew 36% year-over-year… maintained best-in-class gross margin” — CFO Brian Robbins .

Q&A Highlights

  • Duo contribution and competitive differentiation: Duo exceeded expectations; in Duo-attached deals ~1/3 of net ARR was Duo; differentiation via platform context (source, planning, security) and autonomous agent vision vs standalone tools/Copilot .
  • Ultimate sustainability: Ultimate at 50% of ARR with strong payback (<6 months) and ROI (~480% over three years); continued mix shift expected .
  • Margins vs growth investments: Continued focus on growth with responsible margin expansion; main FY2026 investments in sales capacity and engineering for AI/security .
  • Pricing tailwinds: FY2025 pricing impact exceeded expectations; about halfway through rollout, similar incremental benefit anticipated in FY2026 .
  • Public sector exposure: ~12% of ARR; watching policy environment, no changes embedded in FY2026 guidance .
  • Dedicated drivers: Single-tenant SaaS unique in category; drives Ultimate upgrades and appeals to regulated industries; positions for further mix improvement .

Estimates Context

  • S&P Global Wall Street consensus EPS and revenue estimates were unavailable due to API limits at the time of this analysis; therefore, beat/miss vs consensus cannot be provided (Values retrieved from S&P Global)*.
  • Relative to company’s own Q4 guidance, GitLab delivered a significant beat: revenue $211.4M vs $205–$206M guided; non-GAAP diluted EPS $0.33 vs $0.22–$0.23 guided .

Key Takeaways for Investors

  • Significant beat vs Q4 company guidance on both revenue and non-GAAP EPS, with strong operating leverage and cash generation — a positive near-term trading catalyst .
  • Enterprise strength and ARR quality: Record large-deal activity, rising counts of >$100k and >$1M ARR customers, and DBNRR of 123% indicate durable expansion drivers .
  • Strategic AI narrative: Duo adoption broadening, Duo Workflow entering private beta, and GA of GitLab Duo with Amazon Q enhance differentiation and cross-sell potential in FY2026 .
  • Mix shift to Ultimate and Dedicated supports higher ARPU and consolidation-led ROI, while maintaining 91% non-GAAP gross margin despite SaaS scaling .
  • FY2026 guide (~24% growth at midpoint) balances caution with momentum; watch execution on new CRO onboarding and go-to-market enhancements .
  • Tax model update (22% long-term non-GAAP projected rate) impacts EPS framing without increasing cash taxes; be mindful when comparing to prior periods .
  • Risks to monitor: macro caution, competitive intensity in code gen/AI assistants, JiHu deconsolidation timing/expenses, and potential estimate revisions once consensus data is available .

References:
Press release and 8-K: .
Q4 FY2025 earnings call transcript: .
Q3 FY2025 press release and call: .
Q2 FY2025 press release and call: .
Additional press release: GitLab Duo with Amazon Q GA .