By Amira McKee

Gitlab expects sales to slow this year and outlined several initiatives to help boost guidance that its chief executive officer described as disappointing.

The provider of software development tools expects revenue of $1.10 billion to $1.12 billion in fiscal 2027, or growth of between 15.1% and 17%. Analysts polled by FactSet were looking for $1.12 billion, or growth of about 17.3%. That is down from the 26% growth Gitlab logged last year, including a 23% increase in the fourth quarter.

"We aren't satisfied with our revenue growth guidance," Chief Executive Bill Staples said during a call with analysts following the results.

The guidance, following a better-than-expected fourth quarter, is a result of the company's bookings growth rate not having scaled with revenue growth in the past three years, Staples said. The company also doesn't expect to benefit this year from certain tailwinds it saw in 2026.

Gitlab outlined five steps it will take to try to improve its growth, including investments in its sales organization, providing greater value to price sensitive customers and executing on its artificial intelligence strategy.

The company sees its GitLab Duo Agent Platform, which embeds AI agents to assist with workflow automation, along with hybrid pricing, driving multi-year growth, Chief Financial Officer Jessica Ross said. Still, the executive told analysts the company does not anticipate that platform to provide a significant contribution to revenue this year.

Shares declined 7.6% to $24.70 in after-hours trading. Through Tuesday's close the stock had fallen 29% this year.

For the quarter-ended Jan. 31, Gitlab recorded a net loss of $2.6 million, or 2 cents a share, compared with a profit of $6.9 million, or 4 cents a share, a year earlier.

Adjusted earnings came in at 30 cents a share. Analysts polled by FactSet were expecting 23 cents a share.

Revenue climbed 23% to $260.4 million, topping the $252.2 million that Wall Street forecast, according to FactSet.

Customers with more than $1 million in annual run-rate subscription agreements reached 155, an increase of 26% from a year earlier. Customers with more than $5,000 and $100,000 grew 8% and 18% respectively.

For the first quarter, GitLab said it expects adjusted earnings of 20 cents to 21 cents a share, and revenue of $253 million to $255 million in the first quarter. Wall Street is modeling adjusted earnings of 21 cents a share and revenue of $256.3 million according to FactSet.

Its full-year adjusted per-share profit guidance for between 76 cents and 80 cents also fell below expectations for $1.04 cents a share.

The company's board allocated $400 million for the GitLab's first-ever buyback program.

Write to Amira McKee at amira.mckee@wsj.com

(END) Dow Jones Newswires

March 03, 2026 18:16 ET (23:16 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.