Gitlab Inc. (GTLB): Results of Operations and Financial Condition
Gitlab Inc. (GTLB) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 GitLab Reports Second Quarter Fiscal Year 2027 Financial Results Second Quarter Fiscal Year 2027 Highlights: • Total revenue of $286.3 million, up 21% year-over-year • GAAP operating margin of (20)%; non-GAAP operating margin of 15% • Operating cash flow of $(3.1) mi
How this was made
The 30-second read
Why it matters
The earnings release provides fresh data on revenue growth, profitability, and guidance, offering traders actionable insight.
Market read
First‑report earnings with guidance; material for traders evaluating GitLab and comparable SaaS stocks.
What to watch
New GitLab Flex commercial model and AI‑driven Orbit product could unlock future revenue not reflected in current guidance.
GitLab reported $286.3 million of revenue, up 21% year-over-year, alongside a GAAP operating margin of (20)% and non-GAAP operating margin of 15%.
Revenue grew 21% year-over-year, net ARR growth exceeded 40% year over year, and dollar-based net retention was 117%, but GAAP operating margin declined to (20)% from (8)% and operating cash flow turned negative.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $286.3 million | – | 21% |
| Subscription—self-managed and SaaS revenueGAAP | $ 258,311 (in thousands) | – | – |
| License—self-managed and other revenueGAAP | $ 27,943 (in thousands) | – | – |
| Gross profitGAAP | $ 240,616 (in thousands) | – | – |
| Gross marginGAAP | 84% | – | – |
| Gross profitnon-GAAP | $ 247,545 (in thousands) | – | – |
| Gross marginnon-GAAP | 86% | – | – |
| Sales and marketing expenseGAAP | $ 134,363 (in thousands) | – | – |
| Research and development expenseGAAP | $ 94,980 (in thousands) | – | – |
| General and administrative expenseGAAP | $ 68,208 (in thousands) | – | – |
| Total operating expensesGAAP | $ 297,551 (in thousands) | – | – |
| Operating lossGAAP | $ (56.9) million | – | $ (38.5) million |
| Operating marginGAAP | (20)% | – | – |
| Operating incomenon-GAAP | $ 42.6 million | – | $ 3.0 million |
| Operating marginnon-GAAP | 15% | – | – |
| Net loss attributable to GitLabGAAP | $ (36.8) million | – | $ (27.6) million |
| Net income attributable to GitLabnon-GAAP | $ 42.1 million | – | $ 1.2 million |
| Net loss per share attributable to GitLab, basicGAAP | $ (0.22) | – | $ (0.16) |
| Net loss per share attributable to GitLab, dilutedGAAP | $ (0.22) | – | $ (0.16) |
| Net income per share attributable to GitLab, basicnon-GAAP | $ 0.25 | – | $ — |
| Net income per share attributable to GitLab, dilutednon-GAAP | $ 0.24 | – | $ — |
| Net cash provided by (used in) operating activitiesGAAP | $ (3.1) million | – | $ (52.5) million |
| Adjusted free cash flownon-GAAP | $ 9.8 million | – | $ (36.7) million |
| Dollar-Based Net Retention Rateother | 117% | – | – |
| Customers with more than $5,000 of ARRother | 11,114 | – | 8% year-over-year |
| Customers with more than $100,000 of ARRother | 1,571 | – | 17% year-over-year |
| Total RPOother | $1.2 billion | – | 16% year-over-year |
| cRPOother | $744.7 million | – | 20% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription—self-managed and SaaSNot provided in the filing. | $ 258,311 (in thousands) | – | – |
| License—self-managed and otherNot provided in the filing. | $ 27,943 (in thousands) | – | – |
Q3 FY 2027 and FY 2027 outlook
- RevenueQ3 FY 2027: $281 - $283; FY 2027: $1,129 - $1,133
- NoteNon-GAAP operating income: Q3 FY 2027: $35 - $37; FY 2027: $148 - $152
- NoteNon-GAAP diluted net income per share: Q3 FY 2027: $0.19 - $0.20; FY 2027: $0.85 - $0.87
- NoteNon-GAAP diluted net income per share assumes approximately 172 million and 172 million weighted average shares outstanding during Q3 FY 2027 and FY 2027, respectively.
Capital returns
- In the quarter, GitLab repurchased approximately 3.5 million shares.
- Common stock repurchased: $ 104,637 (in thousands).
What drove it
- First Order growth of more than 100% year on year.
- Net ARR growth exceeding 40% year over year.
- GitLab introduced GitLab Flex, a commercial model providing one annual commitment covering platform seats, GitLab Credits, and eligible capabilities.
- GitLab launched GitLab Secrets Manager as a usage-based add-on for Premium and Ultimate customers on GitLab.com.
- GitLab Orbit, available in public beta, connects code, work items, pipelines, deployments, and production signals into a unified context graph.
Concerns
- GAAP gross margin was 84%, compared with 88% in Q2 FY 2026, while non-GAAP gross margin was 86%, compared with 90%.
- GAAP operating margin was (20)%, compared with (8)%, and GAAP operating loss widened to $ (56.9) million from $ (18.4) million.
- GAAP net cash provided by operating activities was $ (3.1) million, compared with $ 49.4 million, and non-GAAP adjusted free cash flow was $ 9.8 million, compared with $ 46.5 million.
- Restructuring charges were $ 19,422 (in thousands) and were associated with the restructuring announced in May 2026.
- The company cited risks including customer renewals and expansions, intense competition, security and privacy breaches, rapid technological changes, adoption of artificial intelligence features, and general economic conditions.
What to watch
- Q3 FY 2027 revenue guidance of $281 - $283.
- FY 2027 revenue guidance of $1,129 - $1,133.
- Q3 FY 2027 non-GAAP operating income guidance of $35 - $37 and FY 2027 guidance of $148 - $152.
- Dollar-Based Net Retention Rate of 117%, cRPO growth of 20%, and Total RPO growth of 16% year-over-year.
- The effect of GitLab Flex, GitLab Secrets Manager, and GitLab Orbit on customer commitments, usage, and revenue growth.
- Operating cash flow and adjusted free cash flow following Q2 results of $ (3.1) million and $ 9.8 million, respectively.
Balance sheet and cash flow
- Cash and cash equivalents as of July 31, 2026: $ 226,491 (in thousands).
- Short-term investments as of July 31, 2026: $ 1,030,495 (in thousands).
- Total assets as of July 31, 2026: $ 1,661,832 (in thousands).
- Total liabilities as of July 31, 2026: $ 690,345 (in thousands).
- Total GitLab stockholders’ equity as of July 31, 2026: $ 925,529 (in thousands).
- Additions to property and equipment: $ (213) (in thousands).
- Net cash used in investing activities: $ (9,535) (in thousands).
- Net cash used in financing activities: $ (95,511) (in thousands).
- Net decrease in cash and cash equivalents: $ (108,904) (in thousands).
Analysis
GitLab delivered $286.3 million of revenue in the second quarter of fiscal year 2027, up 21% year-over-year from $236.0 million. Subscription—self-managed and SaaS revenue was $ 258,311 (in thousands), while License—self-managed and other revenue was $ 27,943 (in thousands). The company characterized the quarter as having record gross bookings and net ARR growth exceeding 40% year over year. Dollar-Based Net Retention Rate was 117%, customers with more than $100,000 of ARR increased 17% year-over-year to 1,571, and cRPO grew 20% to $744.7 million.
Profitability was mixed. GAAP gross margin declined to 84% from 88%, and non-GAAP gross margin declined to 86% from 90%. GAAP operating loss widened to $ (56.9) million from $ (18.4) million, producing a GAAP operating margin of (20)% versus (8)%. Non-GAAP operating income increased to $42.6 million from $39.6 million, although non-GAAP operating margin fell to 15% from 17%. The reconciliation includes $ 19,422 (in thousands) of restructuring charges associated with the restructuring announced in May 2026.
Cash generation weakened in the quarter. GAAP net cash used in operating activities was $ (3.1) million compared with $ 49.4 million of cash provided by operating activities in Q2 FY 2026. Non-GAAP adjusted free cash flow was $9.8 million compared with $46.5 million. GitLab reported $ 226,491 (in thousands) of cash and cash equivalents and $ 1,030,495 (in thousands) of short-term investments as of July 31, 2026. The company repurchased approximately 3.5 million shares during the quarter, with common stock repurchased of $ 104,637 (in thousands).
For Q3 FY 2027, GitLab expects revenue of $281 - $283, non-GAAP operating income of $35 - $37, and non-GAAP diluted net income per share of $0.19 - $0.20. FY 2027 guidance calls for revenue of $1,129 - $1,133, non-GAAP operating income of $148 - $152, and non-GAAP diluted net income per share of $0.85 - $0.87. The next reporting period will test whether the company can translate its commercial and AI product initiatives into continued retention, RPO growth, and improved cash flow while managing the GAAP margin pressure evident in Q2.
Management, verbatim
Q2 was an exceptional quarter, with record gross bookings and net ARR growth exceeding 40% year over year.
Bill Staples, GitLab Chief Executive Officer
We saw sequential acceleration in dollar-based net retention and meaningful operating leverage, reflecting the strength of our execution and the increasing scalability of our model.
Jessica Ross, GitLab Chief Financial Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported Q2 financial metrics were not provided.
- Year-over-year percentage changes for Subscription—self-managed and SaaS revenue and License—self-managed and other revenue were not provided.
- Debt was not reported.
- Dividend information was not reported.
- Prior-quarter or prior-year values for Dollar-Based Net Retention Rate were not provided.
- Prior-year values for customer counts, Total RPO, and cRPO were not provided.
- Gross margin, operating expenses, tax rate, operating cash flow, free cash flow, and GAAP guidance measures were not provided for Q3 FY 2027 or FY 2027.
- Previous-release outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
GitLab filed a Form 8‑K reporting its Q2 FY2027 results and FY2027 outlook, including new product launches and commercial model changes.
Ticker impact
Q2 FY2027 revenue rose 21% YoY to $286.3M, GAAP operating loss $56.9M, non‑GAAP profit $42.1M, and FY2027 guidance of $281‑$283M revenue.
Potential short‑term downside as investors weigh GAAP loss against non‑GAAP profit and guidance.
Revenue beat is positive, but GAAP loss widening and guidance below prior expectations could trigger sell pressure.
Market effects
Highlights continued growth in the DevSecOps software sector, may benefit peers with similar SaaS models.
Limited to US and global tech investors tracking SaaS earnings.
Modest; contributes to broader tech earnings season sentiment.
Counterpoint
Despite GAAP losses, the strong non‑GAAP earnings and expanding ARR could support a longer‑term upside.
Key entities
- CompanyGitLab Inc.
Developer platform provider reporting Q2 FY2027 results.
- ExecutiveBill Staples
CEO of GitLab, quoted on AI‑driven growth opportunities.
