GitLab (GTLB) Stock Forecast & Price Target

GitLab Inc. reported total revenue of $260.4 million for the fiscal year, reflecting a significant year-over-year increase of 23%, surpassing expectations. The company's subscription revenue, which constitutes 90% of total sales, grew by 26% year-over-year to reach $234.3 million, further indicating strong demand for its all-in-one DevSecOps platform. Additionally, GitLab demonstrated improved profitability with operating margins increasing to 20.2%, up from 17.7% in the previous year, signaling effective management and operational efficiencies.

GitLab Inc. has revised its revenue guidance for FY26 to $1,108.5 million, reflecting a growth rate of approximately 16% year-over-year, which is about $12 million below consensus expectations. The company's non-GAAP operating income guidance for FY26 stands at $133 million, indicating a significant margin decline of approximately 500 basis points year-over-year, and a forecasted 12.1% operating margin in FY27, projected to drop roughly 490 basis points as investment in go-to-market capacity increases. Additionally, a decline in net revenue retention (NRR) to 118% marks the eighth consecutive quarter of decreasing retention rates, highlighting challenges in the mid-market and SMB segments that contribute to a weaker outlook for revenue growth in FY27.