GitLab Q2 Earnings Exceed Estimates, Stock Faces Uncertainty Ahead

GitLab Inc. (GTLB) reported Q2 earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.16 per share. Revenues were $235.96 million, surpassing the Zacks Consensus Estimate by 4.14%. The company has topped consensus revenue estimates four times over the last four quarters. Gitlab shares have lost about 15.4% since the beginning of the year.

GitLab Inc. (GTLB) has reported its second quarter (Q2) fiscal year 2026 financial results, demonstrating strong performance and exceeding analyst expectations. The company reported earnings of $0.24 per share, surpassing the Zacks Consensus Estimate of $0.16 per share [1]. Revenues reached $235.96 million, which was $235.96 million, surpassing the Zacks Consensus Estimate by 4.14% [1].

This quarter's results reflect a 29% year-over-year (YoY) increase in revenue, driven by the company's AI-native DevSecOps platform. The platform's extensibility and interoperability have enabled GitLab to integrate various AI tools directly within its platform, enhancing customer satisfaction and innovation [1].

The company's GAAP operating margin was (8)%, while the non-GAAP operating margin stood at 17%. This indicates a significant expansion in operating margins compared to the same period last year. Operating cash flow and non-GAAP adjusted free cash flow were $49.4 million and $46.5 million, respectively, reflecting robust financial health [1].

GitLab also announced strategic appointments and product launches. Brian Robins, the outgoing Chief Financial Officer, will be replaced by James Shen, the current Vice President of Finance, effective September 19, 2025. Simon Mundy will be promoted to Chief Accounting Officer, reporting to Shen. Additionally, Manav Khurana was appointed as Chief Product and Marketing Officer, and Manu Narayan as Chief Information Officer [1].

The company also announced the public beta launch of GitLab Duo Agent Platform, an extensible AI orchestration platform designed for human-AI collaboration across the software development lifecycle. This platform integrates with various AI tools, including Anthropic Claude Code, Cursor, Amazon Q, Google Gemini CLI, and opencode [1].

Looking ahead, GitLab expects to achieve revenues between $238.0 million and $239.0 million in the third quarter and between $936 million and $942 million for the full fiscal year 2026. Non-GAAP diluted net income per share is expected to range between $0.19 and $0.20 for the third quarter and between $0.82 and $0.83 for the full fiscal year [1].

GitLab shares have lost about 15.4% since the beginning of the year, despite the positive earnings report. This decline can be attributed to broader market conditions and sector-specific challenges. However, the company's strong Q2 results and positive outlook may provide a basis for future growth and recovery.

References:
[1] https://ir.gitlab.com/news/news-details/2025/GitLab-Reports-Second-Quarter-Fiscal-Year-2026-Financial-Results/default.aspx