GitLab GTLB is set to release its third-quarter fiscal 2025 results on Dec. 5, 2024.
The company anticipates third-quarter fiscal 2025 revenues between $187 million and $188 million, suggesting 25%-26% year-over-year growth. Non-GAAP earnings is anticipated to be between 15 cents and 16 cents.
The Zacks Consensus Estimate for revenues is pegged at $187.67 million, indicating an increase of 25.39% from the year-ago quarter’s reported figure.
The consensus mark for earnings remained at 16 cents per share in the past 30 days, calling for a year-over-year increase of 77.78%.
GitLab Inc. Price and EPS Surprise
GitLab Inc. price-eps-surprise | GitLab Inc. Quote
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The company beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 328.13%.
Let’s see how things have shaped up before the announcement.
Factors Likely to Influence Q3 Results
GitLab’s third-quarter results are expected to benefit from improved buying behavior across all customer sizes, particularly with enterprise customers. This normalization is expected to have continued and been driven by the further adoption of its DevSecOps platform.
The integration of AI in GitLab’s DevSecOps platform, particularly through GitLab Duo, has been driving productivity and security improvements for customers. This has resulted in larger deal sizes, such as Barclays adopting GitLab Duo for thousands of developers. This shift to AI-driven solutions is likely to have contributed to customer growth and retention in the to-be-reported quarter.
GitLab’s largest customers, particularly those with annual recurring revenue (ARR) of more than $100,000, have shown significant adoption of the Ultimate tier. These customers account for a growing share of new revenue, which is expected to have continued in the fiscal third quarter.
The Ultimate tier, GitLab’s top offering, is likely to have continued witnessing robust growth driven by security and compliance use cases. This tier represented 47% of the fiscal second quarter’s total ARR, and more than 50% of bookings indicated strong demand for advanced features and services.
GitLab's SaaS offerings, including GitLab Dedicated, continue to show strong growth. SaaS revenues grew 46% year over year in the fiscal second quarter, and SaaS now represents 28% of total revenues. This trend is expected to have continued in the quarter to be reported, bolstered by GitLab Dedicated’s appeal to regulated industries.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
GTLB currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Rubrik RBRK has an Earnings ESP of +0.42% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rubrik shares have surged 37.4% year to date. RBRK is set to report third-quarter fiscal 2025 results on Dec. 5.
Pure Storage PSTG has an Earnings ESP of +2.98% and a Zacks Rank #3.
Pure Storage shares have rallied 48.6% year to date. PSTG is set to report its third-quarter fiscal 2025 results on Dec. 3.
Hewlett Packard HPE has an Earnings ESP of +1.51% and a Zacks Rank #3.
Hewlett Packard shares have rallied 25% year to date. HPE is scheduled to release fourth-quarter fiscal 2024 results on Dec. 5.
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Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
Pure Storage, Inc. (PSTG) : Free Stock Analysis Report
GitLab Inc. (GTLB) : Free Stock Analysis Report
Rubrik, Inc. (RBRK) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
