GitLab Inc. (NASDAQ:GTLB) saw its shares drop 8% in premarket trading Wednesday, even as the software company delivered another quarter of outperformance and raised its full-year revenue forecast.
The DevSecOps provider reported non-GAAP earnings of $0.25 per share for fiscal Q3, topping analyst estimates by $0.05. Revenue climbed 25% year over year to $244.4 million, surpassing Wall Street expectations of $239.09 million.
Customer momentum remained solid. GitLab closed the quarter with 1,405 customers generating more than $100,000 in annual recurring revenue — a 23% increase from last year. Its Dollar-Based Net Retention Rate held at 119%, pointing to continued upsell success and high engagement with the platform.
“More code means more of a need for GitLab,” CEO Bill Staples said. “We’ve architected GitLab and Duo Agent Platform to provide intelligent orchestration across the software lifecycle.”
Interim CFO James Shen added, “I am pleased with GitLab’s strong third quarter results for fiscal year 2026, which resulted in 25% year-over-year revenue growth.”
Profitability also moved in the right direction. GitLab posted an 18% non-GAAP operating margin, up from 13% a year earlier. The company reported $31.4 million in operating cash flow and $27.2 million in adjusted free cash flow, reflecting increased spending discipline.
Management lifted full-year revenue guidance to a range of $946–947 million, representing 25% growth and improving the midpoint by roughly $5.5 million — the same level of upside delivered in Q3.
For fiscal Q4, GitLab expects $251–252 million in revenue, up 19% and broadly in line with consensus at the midpoint.
Still, the stock dropped sharply despite the stronger outlook.
“There seems to be an unshakable disdain for GTLB stock, even if the company exceeds expectations,” analysts at Guggenheim Partners wrote after the report.
“Investors just won’t cut this team any slack, even if they think GitLab will continue to outperform in F4Q and ultimately grow at least 20% in FY27, which appears achievable,” they said.
TD Cowen analysts characterized the quarter as “a down-the-middle qtr & guide, with some muted upside coming from SMB/PubSec headwinds as expected.”
GitLab also announced that Jessica Ross will assume the CFO role in January, bringing experience from Frontdoor, Salesforce, and Stitch Fix. The company highlighted ongoing AI enhancements as well, including new integrations with Claude Code, OpenAI Codex, and Google Gemini to strengthen its Duo Agent Platform and DevOps automation capabilities.