GitLab’s Q3 FY26 Earnings: Strong Results, Softer Guidance, and a Sharp Stock Sell-Off
GitLab reported its fiscal third quarter 2026 results on December 2, delivering another period of solid top-line growth and improved profitability. However, despite the beat-and-raise performance on revenue and margins, shares of $GTLB plunged sharply in today’s session as investors reacted to softer-than-expected full‑year guidance and concerns about slowing expansion trends.
Q3 FY26 Highlights
The company posted its strongest quarter of the year, with notable improvements across revenue, profitability, and cash flow.
Key Numbers
According to GitLab’s official press release (source):
- Revenue: $244.4 million, up 25% year-over-year
- GAAP Operating Margin: -5%, improved from -15%
- Non-GAAP Operating Margin: 18%, up from 13%
- GAAP Net Loss: $8.3 million
- Non-GAAP Net Income: $43.5 million
- Operating Cash Flow: $31.4 million
- Adjusted Free Cash Flow: $27.2 million
On the customer front:
- Customers with over $5,000 ARR: 10,475 (+10% YoY)
- Customers with over $100,000 ARR: 1,405 (+23% YoY)
- Dollar-Based Net Retention Rate: 119%, indicating moderating expansion relative to prior years.
Guidance Update
The company also issued guidance for Q4 and revised its full-year outlook. While revenue expectations were generally in line with consensus, profitability guidance came in lighter than investors had hoped.
Q4 FY26 Guidance
- Revenue: $251–252 million
- Non-GAAP Operating Income: $38–39 million
- Non-GAAP EPS: $0.22–0.23
FY26 Full-Year Guidance
GitLab updated its full-year non-GAAP diluted EPS to $0.88–0.89, a correction from an earlier erroneous range published in prior materials. Revenue guidance was set at $946–947 million.
The revised EPS outlook—while still reflecting strong profitability momentum—fell short of some analyst expectations, creating disappointment in a market currently rewarding margin expansion.