GitLab Inc. (GTLB) Earnings & Analysis

Latest quarter

GitLab reported Q2 FY2027 revenue of $286.3 million, above the consensus estimate of $273.3 million. Adjusted earnings per share of $0.24 also exceeded the consensus of $0.18.

Revenue rose 21.3% from $236.0 million a year earlier. In its filing, GitLab attributed the increase to demand for its platform, including new customers, expansion among existing paid customers and growth in customers with $100,000 or greater in annual recurring revenue. CFO Jessica Ross said SaaS represented 34% of quarterly revenue and grew 36% year over year.

GitLab’s gross margin declined to 84.1% from 87.9%, while its operating margin fell to −19.9% from −7.78%. The filing attributed higher cost of revenue primarily to increased third-party hosting costs for SaaS and cloud usage. Diluted loss per share was −$0.22, compared with −$0.06 a year earlier.

Free cash flow was −$3.3 million, compared with $46.5 million a year earlier. GitLab’s filing attributed cash used in operations during the quarter primarily to the timing of collections and restructuring payments.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Bill Staples said first-order count grew more than 100% year over year in Q2, as a dedicated sales organization and product-led investments brought in new customers. CFO Jessica Ross said the company closed more large deals than forecast and that public-sector demand rebounded. Ross also said dollar-based net retention was 117%, up sequentially for the first time since 2024.

Staples said more than 130 customers committed more than $20 million to Flex in its first six weeks. He described Flex as a dollar commitment customers can allocate across seats and consumption products as their needs change. Paid consumption run rate ended Q2 above $40 million, up from $15 million at the end of Q1, he said.

Asked about the sales strategy, Staples said Flex could let customers redirect unused seat capacity to new products and use more seats or credits beyond their commitment, with excess usage billed monthly. On competition, he said GitLab was seeing higher win rates against its primary competitor, while AI coding tools could create demand for more seats and consumption products.

Ross said non-GAAP gross margin was 86.5% and that SaaS growth was powered by GitLab Dedicated and Duo. She attributed non-GAAP operating income ahead of expectations to sales and marketing productivity and the timing of investments.

For the second half, Ross said the outlook assumes a more normalized bookings pace than Q2 and a limited contribution from Duo Agent Platform. Asked about Flex and guidance, she said the product was “too new to bake into our guidance with precision.” Ross estimated that Flex could shift up to $13 million of FY2027 revenue into future periods, but said the shift would not change customer commitments or cash economics.

Guidance

GitLab raised its FY2027 outlook and now expects revenue of $1.129 billion to $1.133 billion, non-GAAP operating income of $148 million to $152 million, and non-GAAP net income per share of $0.85 to $0.87. Ross said the guidance does not incorporate Flex’s potential revenue-recognition impact.