Summary
GitLab's fiscal 2026 third quarter revenue reached $244.4 million, up 24.6% from a year earlier. Gross profit was $212.1 million, up 22.0%, while gross margin slipped to 86.8%, down 1.9 percentage points. The company reported an operating loss of $12.4 million, narrower than the prior-year quarter, and operating margin improved to negative 5.1%, up 9.6 percentage points. On a GAAP basis, net loss attributable to GitLab was $8.3 million, a swing from net income a year earlier, and diluted loss per share was $0.05. Non-GAAP operating income was $43.7 million, and non-GAAP net income attributable to GitLab was $43.5 million. The gap between GAAP and non-GAAP results reflects large stock-based compensation and other adjustments. The prior-year quarter included a large tax benefit related to bilateral advance pricing agreement negotiations, which made the year-over-year net income comparison difficult.
Cash generation improved sharply. Operating cash flow was $31.4 million, up from a negative figure a year earlier. Capital expenditures were $3.0 million, up 187.4%. Non-GAAP adjusted free cash flow was $27.2 million, compared with $9.7 million a year earlier. Deferred revenue, current, stood at $464.8 million, up 21.3%. Remaining performance obligations reached $1.0 billion, up 23.2%. The company's cash, cash equivalents, and short-term investments remained substantial, and management believes existing liquidity will support working capital and capital expenditure requirements for at least the next 12 months.
Operational metrics showed steady customer growth but softer expansion. Customers with more than $5,000 of annual recurring revenue reached 10,475, up 10% year over year. Customers with more than $100,000 of annual recurring revenue reached 1,405, up 23%. The dollar-based net retention rate was 119%, down from 124% a year earlier. GitLab named Jessica Ross as chief financial officer, effective January 15, 2026. The company was recognized as a Leader in the Gartner Magic Quadrant for DevOps Platforms for the third consecutive year and in the 2025 Gartner Magic Quadrant for AI Code Assistants for the second consecutive year. It expanded the GitLab Duo Agent Platform, launched an AI Catalog for custom agent creation, and added integrations with external agents such as Claude Code, OpenAI Codex, and Google Gemini. More than 50 million registered users and more than 50% of the Fortune 100 are part of the company's customer base.
Guidance points to continued growth. For the fourth quarter of fiscal 2026, GitLab expects revenue of $251.0 million to $252.0 million, non-GAAP operating income of $38.0 million to $39.0 million, and non-GAAP diluted net income per share of $0.22 to $0.23. For the full fiscal year 2026, the company expects revenue of $946 million to $947 million, non-GAAP operating income of $147 million to $148 million, and non-GAAP diluted net income per share of $0.95 to $0.96. The outlook assumes approximately 172 million weighted average shares outstanding for the fourth quarter and 171 million for the full year. Risks include intense competition, rapid technological changes, security and privacy breaches, customer renewal and expansion challenges, the incorporation of artificial intelligence features, and macroeconomic pressures such as inflation, tariffs, regulatory uncertainty, and volatile capital markets. Gross margin pressure remains a watch item as the company invests in SaaS and cloud infrastructure. The market for its services may not grow, and customer spending levels could change.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $244.4M | $236.0M | +3.6% | $196.0M | +24.6% |
| Gross profit | $212.1M | $207.5M | +2.3% | $173.9M | +22.0% |
| Gross margin | 86.8% | 87.9% | -1.1 pp | 88.7% | -1.9 pp |
| Research & development | $68.7M | $71.5M | -3.9% | $61.4M | +12.0% |
| Sales & marketing | $105.0M | $109.6M | -4.2% | $95.3M | +10.1% |
| General & administrative | $50.8M | $44.7M | +13.6% | $46.0M | +10.5% |
| Total operating expenses | $224.5M | $225.8M | -0.6% | $202.7M | +10.8% |
| Operating income (loss) | -$12.4M | -$18.4M | +32.7% | -$28.7M | +57.0% |
| Operating margin | -5.1% | -7.8% | +2.7 pp | -14.7% | +9.6 pp |
| Net income (loss) | -$8.8M | -$10.0M | +12.0% | $28.3M | -131.1% |
| Net margin | -3.6% | -4.2% | +0.6 pp | 14.4% | -18.0 pp |
| Diluted EPS | -$0.05 | -$0.06 | +$0.01 | $0.18 | -$0.23 |
| Customers | 1,405 | 1,344 | +4.5% | 1,144 | +22.8% |
| Net retention rate | 119.0% | 121.0% | -2.0 pp | 124.0% | -5.0 pp |
Risks
GitLab has implemented AI capabilities across its services, including GitLab Duo and the GitLab Duo Agent Platform, and the filing warns that AI features face rapidly evolving regulation, IP litigation, privacy obligations, flawed output, and reliance on third-party AI model vendors. Developing and offering AI-powered features may also lead to greater than expected expenditures because deploying AI systems involves high computing costs, which could adversely affect gross margin, profitability, financial position, and cash flow.
Gross margin decreased to 86.8% in FY2026 Q3 from 88.7% in FY2025 Q3, down 1.9 pp, and MD&A attributes the decline to higher hosting expenses for increased SaaS and cloud usage. The filing warns that as SaaS makes up an increasing percentage of total revenue, increased cloud-related costs may adversely impact gross margins.
The filing states GitLab faces intense competition from well-established providers such as Microsoft and Atlassian, as well as other companies with offerings in fewer stages, including code hosting, code collaboration, file storage, distribution services, and AI. Competitors may offer products at lower prices or for free, and pricing pressures could result in reduced sales, reduced margins, or loss of market share.
MD&A reports Dollar-Based Net Retention Rate was 119% as of October 31, 2025, compared with 124% as of October 31, 2024. The filing warns that customer expansions and renewals may decline, and contractions and down-tiers may increase, due to factors including customer satisfaction, pricing, competition, and macroeconomic conditions.
The filing expands security risk to include AI-enabled social engineering, automated vulnerability exploitation, inadvertent data exposure due to model training, inappropriate data access using AI-enabled features, and AI supply-chain attacks. It also notes GitLab uses third-party service providers and sub-processors and that a breach could lead to litigation, regulatory enforcement, fines, and reputational harm.
The filing repeatedly cites global business and macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget, debt ceiling and potential government shutdowns, and volatility of global debt and equity markets, as factors that may cause customers to modify spending priorities or delay or abandon purchasing decisions, thereby lengthening sales cycles. MD&A notes these conditions may put pressure on overall spending for GitLab's products and services.
GitLab states The DevSecOps platform is built using open-source technology and accepted community code contributions, and that using or incorporating third-party technology can become a vector for supply-chain cyber attacks. It also relies on independent open source contributors to develop and enhance open source technologies, and delays or failures by those contributors could increase development expenses or delay releases.
The filing warns that many states, regions, and supranational bodies have proposed or enacted regulations related to AI and machine learning, imposing prescriptive obligations and increasing regulatory enforcement and litigation risk. GitLab's generative AI features process personal data subject to GDPR and CCPA, and difficulties addressing privacy or data protection concerns may result in liability, regulatory investigations, and fines.
The filing discusses the One Big Beautiful Bill Act enacted in July 2025, which provides immediate deductibility for domestic research and experimental expenses but increased the tax rate associated with international operations and reduced certain foreign-derived deduction benefits. It also notes OECD Pillar 2 and digital services taxes could increase GitLab's worldwide effective tax rate and non-income taxes.
GitLab maintains a publicly available Handbook and emphasizes transparency as a core value, but the filing warns the Handbook may not be up to date or accurate, may be used by competitors or bad actors, and could lead to unintended disclosures of material information, disclosure control failures, or Regulation FD issues.
GitLab uses channel partners to sell and support products, particularly for enterprise, governmental, and international sales, and warns that channel partners may deliver poor services or a poor selling experience, may not prioritize GitLab products because they are not exclusive, and may fail to comply with contractual obligations.
The filing warns that customers may choose to stay on free self-managed or SaaS product offerings instead of converting into paying customers, and that GitLab has implemented user limits on its free SaaS product and previously discontinued certain lower priced product offerings. If efforts to sell additional products and services to end-customers are not successful, the business may suffer.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
Customers with more than $100,000 of ARR
Customers with more than $5,000 of ARR
Non-GAAP Operating Margin
Total RPO
Non-GAAP Adjusted Free Cash Flow
cRPO
Summary, forecast, risks and KPIs are extracted from Gitlab Inc.'s SEC filings for Q3 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.