GitLab (NASDAQ:GTLB) stock is experiencing a significant downturn today, trading at $59.65, reflecting a drastic 19.9% drop. The sharp decline follows the software company’s recent disappointing earnings report.

Although GitLab exceeded estimates for fiscal Q4 of 2024, its fiscal 2025 outlook fell short of investor expectations. The company predicts an adjusted EPS ranging from -5 cents to -4 cents for the first quarter of fiscal 2025, with revenue estimates varying from $165 million to $166 million.

In a broader perspective, GitLab’s poor forecast mirrors a similar trend seen across the software industry this quarter, with companies reporting weaker than anticipated outlooks for 2024. The repercussions of GitLab’s report appear to have caused a ripple effect, causing stock trading values of other Enterprise Software businesses like Crowdstrike, Datadog, MongoDB, and Snowflake, to drop by over 5%.

The market seems to be reacting negatively to GitLab’s unsatisfactory outlook, despite the company’s praiseworthy performance in Q4 of 2024. This serves as a harsh reminder that even exceeding quarterly expectations can be overshadowed if the future fiscal projections don’t meet investor expectations.