GitLab 2026 Q2 Earnings Losses Widen Despite Revenue Beat

GitLab (GTLB) reported its fiscal 2026 Q2 earnings on Sep 04, 2025. The company beat revenue and earnings estimates but swung to a loss, with an expanded net income deficit year-over-year. GitLab raised its full-year revenue and profit guidance.

GitLab’s Q2 revenue of $235.96 million exceeded the consensus estimate of $227.25 million and grew 29.2% year-over-year. The company raised its 2026 adjusted EPS guidance and provided an updated Q3 outlook, reflecting confidence in its long-term growth trajectory despite short-term financial headwinds.

Revenue
GitLab’s total revenue for Q2 2026 reached $235.96 million, marking a 29.2% year-over-year increase from $182.58 million. Subscription revenue, encompassing both self-managed and SaaS offerings, led the performance, accounting for $212.68 million of the total. License revenue, also covering self-managed and other segments, contributed $23.28 million. These figures underscore the company’s continued focus on its core subscription model while maintaining steady performance in its license-based offerings.

Earnings/Net Income
GitLab reported a loss of $0.06 per share in Q2 2026, a significant decline from a profit of $0.08 per share in the prior-year period, representing a 175% negative change. The company recorded a net loss of $10 million, worsening from a net income of $12.24 million in Q2 2025, a deterioration of 181.7%. Despite beating revenue expectations, the earnings performance reflects ongoing operational costs and strategic investments.

Price Action
GitLab’s stock price edged down 0.20% during the latest trading day, tumbled 8.04% during the most recent full trading week, and declined 1.56% month-to-date.

Post-Earnings Price Action Review
Despite strong top-line results and a raised earnings outlook, the stock fell sharply in after-hours trading, shedding 8.68% to $42.74. The market appeared to focus on the company’s widened loss and lingering profitability concerns, overshadowing its revenue beat and forward-looking guidance. The price action highlights investor skepticism around GitLab’s ability to maintain profitability as it scales its operations and invests in AI-driven growth initiatives.

CEO Commentary
William Staples, CEO & Director, highlighted strong second-quarter results with 29% year-over-year revenue growth to $236 million and a non-GAAP operating margin of 17%. He emphasized three strategic priorities: scaling new customer acquisition through product-led and sales-driven approaches, accelerating value realization for current customers, and innovating in DevOps, security, and AI. He noted that 70% of the revenue growth stemmed from seat expansion and expressed confidence in the company’s AI-native DevSecOps platform and leadership changes.

Guidance
GitLab expects Q3 2026 revenue of $238–239 million (23% YoY growth), with non-GAAP operating income of $31–32 million and net income per share of $0.19–0.20. For FY 2026, it anticipates revenue of $936–942 million (24% YoY growth), non-GAAP operating income of $133–136 million, and net income per share of $0.82–0.83.

Additional News
GitLab’s Q2 report included several strategic updates. The company announced the launch of its GitLab Duo Agent Platform, designed to enhance human-AI collaboration across the software development lifecycle. This platform underscores GitLab’s commitment to AI-native solutions, allowing customers to integrate their preferred AI generation tools directly within its ecosystem. Additionally, GitLab’s customer base continued to expand, with 10,338 customers generating over $5,000 of ARR, a 11% year-over-year increase, and 1,344 customers generating over $100,000 of ARR, up 25% year-over-year. The company also reported a 121% dollar-based net retention rate, reflecting strong customer satisfaction and product stickiness. Total RPO grew 32% to $988.2 million, while cRPO increased 31% to $621.6 million. These metrics support GitLab’s long-term growth narrative. No significant M&A or C-level executive changes were disclosed within the three weeks surrounding the earnings release.