diff --git a/.gitlab/TagInitializationErrors.java b/.gitlab/TagInitializationErrors.java
new file mode 100644
index 00000000000..d2bee684419
--- /dev/null
+++ b/.gitlab/TagInitializationErrors.java
@@ -0,0 +1,107 @@
+import org.w3c.dom.Element;
+import javax.xml.parsers.DocumentBuilderFactory;
+import javax.xml.transform.OutputKeys;
+import javax.xml.transform.TransformerFactory;
+import javax.xml.transform.dom.DOMSource;
+import javax.xml.transform.stream.StreamResult;
+import java.io.File;
+import java.nio.file.Files;
+import java.util.ArrayList;
+import java.util.LinkedHashMap;
+import java.util.List;
+import java.util.Map;
+
+/// Tags intermediate `initializationError` retries with `dd_tags[test.final_status]=skip`.
+///
+/// Gradle generates synthetic "initializationError" testcases in JUnit reports for setup methods.
+/// When a setup is retried and eventually succeeds, multiple testcases are created, with only the
+/// last one passing. All intermediate attempts are marked skip so Test Optimization is not misled.
+///
+/// For any suite with multiple `initializationError` test cases (when retries occurred), all entries
+/// but the last one are tagged by this script with `dd_tags[test.final_status]=skip`. The last
+/// entry is left unmodified, allowing **Test Optimization** to apply its default status inference based
+/// on the actual outcome. Files with only one (or zero) `initializationError` test cases are left unmodified.
+///
+/// Before:
+/// 
+/// ```
+/// <testcase name="initializationError" />
+/// ```
+/// 
+/// After:
+/// 
+/// ```
+/// <testcase name="initializationError">
+///   <properties>
+///     <property name="dd_tags[test.final_status]" value="skip" /> 
+///   </properties>
+/// </testcase>
+/// ```
+/// 
+/// Usage (Java 25): `java TagInitializationErrors.java junit-report.xml`
+
+class TagInitializationErrors {
+  public static void main(String[] args) throws Exception {
+    if (args.length == 0) {
+      System.err.println("Usage: java TagInitializationErrors.java <xml-file>");
+      System.exit(1);
+    }
+    var xmlFile = new File(args[0]);
+    if (!xmlFile.exists()) {
+      System.err.println("File not found: " + xmlFile);
+      System.exit(1);
+    }
+    var doc = DocumentBuilderFactory.newInstance().newDocumentBuilder().parse(xmlFile);
+    var testcases = doc.getElementsByTagName("testcase");
+    Map<String, List<Element>> byClassname = new LinkedHashMap<>();
+    for (int i = 0; i < testcases.getLength(); i++) {
+      var e = (Element) testcases.item(i);
+      if ("initializationError".equals(e.getAttribute("name"))) {
+        byClassname.computeIfAbsent(e.getAttribute("classname"), k -> new ArrayList<>()).add(e);
+      }
+    }
+    boolean modified = false;
+    for (var group : byClassname.values()) {
+      if (group.size() <= 1) continue;
+      for (int i = 0; i < group.size() - 1; i++) {
+        var testcase = group.get(i);
+        var existingProperties = testcase.getElementsByTagName("properties");
+        if (existingProperties.getLength() > 0) {
+          var props = (Element) existingProperties.item(0);
+          var existingProps = props.getElementsByTagName("property");
+          boolean alreadyTagged = false;
+          for (int j = 0; j < existingProps.getLength(); j++) {
+            if ("dd_tags[test.final_status]".equals(((Element) existingProps.item(j)).getAttribute("name"))) {
+              alreadyTagged = true;
+              break;
+            }
+          }
+          if (alreadyTagged) continue;
+          var property = doc.createElement("property");
+          property.setAttribute("name", "dd_tags[test.final_status]");
+          property.setAttribute("value", "skip");
+          props.appendChild(property);
+        } else {
+          var properties = doc.createElement("properties");
+          var property = doc.createElement("property");
+          property.setAttribute("name", "dd_tags[test.final_status]");
+          property.setAttribute("value", "skip");
+          properties.appendChild(property);
+          testcase.appendChild(properties);
+        }
+        modified = true;
+      }
+    }
+    if (!modified) return;
+    var tmpFile = File.createTempFile("TagInitializationErrors", ".xml", xmlFile.getParentFile());
+    try {
+      var transformer = TransformerFactory.newInstance().newTransformer();
+      transformer.setOutputProperty(OutputKeys.ENCODING, "UTF-8");
+      transformer.transform(new DOMSource(doc), new StreamResult(tmpFile));
+      Files.move(tmpFile.toPath(), xmlFile.toPath(), java.nio.file.StandardCopyOption.REPLACE_EXISTING);
+    } catch (Exception e) {
+      tmpFile.delete();
+      throw e;
+    }
+  }
+}
diff --git a/.gitlab/collect_results.sh b/.gitlab/collect_results.sh
index 5991a125902..dec34ed5d59 100755
--- a/.gitlab/collect_results.sh
+++ b/.gitlab/collect_results.sh
@@ -90,6 +90,9 @@ do
     echo " (non-stable test names detected)"
   fi
 
+  echo "Add dd_tags[test.final_status] property on retried synthetics testcase initializationErrors"
+  $JAVA_25_HOME/bin/java "$(dirname "$0")/TagInitializationErrors.java" "$TARGET_DIR/$AGGREGATED_FILE_NAME"
+
   echo "Add dd_tags[test.final_status] property to each testcase on $TARGET_DIR/$AGGREGATED_FILE_NAME"
   xsl_file="$(dirname "$0")/add_final_status.xsl"
   tmp_file="$(mktemp)"