GitLab 2Q revenue $236.0M, estimated $227.4M

GitLab 2Q revenue $236.0M, estimated $227.4M

GitLab's Q2 2026 Earnings Preview: Growth Prospects Amid Market Challenges

GitLab Inc. (GTLB) is poised to release its Q2 2026 earnings on September 3, 2025, with analysts expecting revenues between $226 million and $227 million, representing a 24% year-over-year (YoY) growth [1]. Non-GAAP earnings per share (EPS) are anticipated to be between 16 cents and 17 cents per share.

The company has consistently outperformed analyst expectations, beating the Zacks Consensus Estimate in each of the last four quarters by an average of 37.64% [1]. Key factors driving this growth include ongoing investments in innovation across its core DevOps platform, security, and AI-driven solutions. The continued adoption of GitLab Duo, including Duo Enterprise, and the expansion of GitLab Dedicated are expected to contribute to top-line growth [1].

GitLab's strong dollar-based net retention rate of 122% in the first quarter of fiscal 2026, driven by seat expansion, tier upgrades, and increased customer yield, indicates continued growth potential from existing customers [1]. The company's expanding clientele and market leadership in the DevSecOps platform category are expected to have contributed to its growth prospects [1].

Despite these positive factors, GTLB shares have lost 14.8% year-to-date (YTD), underperforming the Zacks Computer & Technology sector's rise of 12.9% and the Zacks Internet - Software industry's growth of 19.5% [1]. GTLB shares have also underperformed Microsoft (MSFT) shares, which have gained 20.2% YTD [1].

GitLab stock is trading at a premium, with a forward 12-month Price/Sales of 7.55X compared to the Internet - Software industry's 5.71X [1]. The company's growing customer base, which includes cloud platforms like Alphabet's GOOGL Google Cloud and Amazon AMZN, is likely to have driven growth during the fiscal second quarter [1].

Investors should note that GitLab faces challenges from one-time expenses, such as the global Summit event and ongoing costs related to its China joint venture, Jihu, which add pressure to its margins. The company's gross margin contracted 100 basis points in the first quarter of fiscal 2026. Stretched valuation also remains a concern [1].

GitLab's historical post-earnings stock performance tends to improve following earnings announcements, with a positive one-day return occurring 67% of the time over the past three years. However, backtesting of earnings release impacts from 2022 to the present reveals a more nuanced picture: the stock has shown a 53.33% win rate over three days, 60.00% over 10 days, and 60.00% over 30 days post-earnings, with a maximum observed return of 12.77% over 30 days. These results suggest that while short-term volatility is common, patient investors may find opportunities in the stock following earnings reports.

References:
[1] https://www.ainvest.com/news/gitlab-q2-earnings-preview-strong-growth-prospects-complicated-market-landscape-2509/
[2] https://finance.yahoo.com/news/earnings-watch-gitlab-gtlb-reports-030208750.html
[3] https://site.financialmodelingprep.com/market-news/gitlab-inc-nasdaq-gtlb-quarterly-earnings-preview