Shares of Gitlab (GTLB) sank in after-hours trading after the software company reported earnings for its first quarter of Fiscal Year 2026. Earnings per share came in at $0.17, which beat analysts’ consensus estimate of $0.15 per share. In addition, sales increased by 26.8% year-over-year, with revenue hitting $214.51 million. This also beat analysts’ expectations of $213 million.
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Revenue growth was primarily driven by an increase in large customers. Indeed, the number of clients that are providing over $5,000 of annual recurring revenue (ARR) jumped 13% year-over-year to 10,104. When looking at customers with over $100,000 of ARR, this cohort grew by 26% to 1,288. This continues the company’s long-term trend of steadily growing its user base in each quarter, as demonstrated by the image below.
2026 Outlook
Looking forward, management now expects revenue and adjusted earnings per share for FY 2026 to be in the ranges of $936 million to $942 million and $0.74 to $0.75, respectively. For reference, analysts were expecting $941.69 million in revenue along with an adjusted EPS of $0.73. As we can see, the firm’s revenue outlook at the midpoint came in below what analysts had expected, which is likely what led to the stock’s after-hours drop.
Is GTLB a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GTLB stock based on 12 Buys, two Holds, and zero Sells assigned in the past three months. Furthermore, the average GTLB price target of $69.14 per share implies 42.5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
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