A month has gone by since the last earnings report for GitLab Inc. (GTLB) . Shares have added about 7% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Gitlab due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for GitLab Inc. before we dive into how investors and analysts have reacted as of late.Gitl ...

Summary of GitLab Conference Call Company Overview - **Company**: GitLab - **Industry**: Software Development Lifecycle Management Key Points and Arguments 1. **Company Growth and IPO Success**: GitLab transitioned from having no audited financials to a successful IPO on NASDAQ within 11 months, marking one of the most successful IPOs at that time based on revenue multiples [5][6] 2. **Product Development and Offerings**: GitLab has evolved from a simplistic seat-based model to offering various SKUs, including the Agile Plan SKU, which competes with Jira. The introduction of GitLab Dedicated has seen a 92% year-over-year growth [7][8] 3. **AI Integration**: The company has partnered with major tech firms like Google, Oracle, and AWS to enhance AI functionalities in DevSecOps. AI discussions have become prevalent in sales cycles, indicating a shift in market focus [9][10] 4. **Sales and Market Strategy**: GitLab has experienced a change in leadership with four different Chief Revenue Officers (CROs) in two and a half years. The current CRO is data-driven and focused on long-term strategies rather than immediate revenue impacts [17][18] 5. **Customer Retention and Expansion**: GitLab boasts a top quartile gross retention rate, with churn being lower than contraction. The net dollar retention rate has remained strong, with older cohorts expanding at rates comparable to newer cohorts [19][20] 6. **Cost Savings for Customers**: GitLab provides significant cost savings by reducing the need for multiple point solutions, improving developer productivity, and shortening release cycles from months to hours [29][30] 7. **Pricing Model Transition**: GitLab is exploring a hybrid pricing model that includes a seat-based core and an AI consumption-based layer. This aims to provide predictability for large customers while maintaining a straightforward pricing structure [33][34][39] 8. **Market Potential**: The total addressable market (TAM) for GitLab is estimated at $40 billion, with expectations for growth driven by AI and citizen developers. The company anticipates an increase in the number of seats sold as software complexity rises [38][49] Additional Important Insights 1. **Historical Performance**: The 2016 cohort has grown over 100 times in annual recurring revenue (ARR) in ten years, showcasing the long-term value of GitLab's offerings [20] 2. **Investment Focus**: GitLab is prioritizing investments in sales, marketing, and R&D, particularly in AI and security, to maintain its competitive edge [45][46] 3. **Future of Software Development**: The rise of citizen developers and AI's impact on software complexity is expected to expand the market further, indicating a shift in how companies operate [48][49]

Key Takeaways GitLab Q2 EPS of $0.24 beat estimates, with revenue up 29.2% year over year at $236 million.Subscription revenue climbed 30.3% to $212.7M, driven by SaaS adoption and expanding customer base.Despite solid growth, GTLB shares fell 9.57% in pre-market trading after reporting results.GitLab (GTLB) reported second-quarter fiscal 2026 non-GAAP earnings of 24 cents per share, beating the Zacks Consensus Estimate by 50%. The company reported earnings of 15 cents per share in the year-ago quarter.Tota ...

Financial Performance - GitLab's Q2 FY26 revenue reached $236 million, demonstrating a 29% year-over-year growth rate[7, 56] - The company achieved a 17% Non-GAAP operating margin in Q2 FY26[7, 56] - GitLab's Non-GAAP adjusted free cash flow margin was 20% in Q2 FY26, translating to $46 million in adjusted free cash flow[7, 56] - The dollar-based net retention rate was 121%[7] Customer Growth and ARR - GitLab has 10,338 base customers[7] - The number of customers with over $100K in ARR reached 1,344[7] - GitLab Dedicated accounts for $50 million of total ARR[26] Strategic Objectives - GitLab aims to acquire new customers through sales-led growth, focusing on first-order lands and module adoption[10, 12] - The company is accelerating customer value realization through sales excellence and faster value demonstration[18, 19] - GitLab is shifting towards depth-first innovation, investing in core DevOps, security, and AI growth levers[32] Product and AI - GitLab Ultimate contributes 53% of the company's total ARR[22] - 56% of startups joining the GitLab Startup Program in Q2 FY26 are AI companies[14] - Customer surveys indicate that 91% believe AI-native dev tools will increase their GitLab usage[43]

Core Insights - GitLab (GTLB) is expected to report second-quarter fiscal 2026 revenues between $226 million and $227 million, reflecting a year-over-year growth of approximately 24% [1][10] - The Zacks Consensus Estimate for revenues stands at $226.57 million, indicating a 24.09% increase from the previous year [2] - Non-GAAP earnings per share are anticipated to be between 16 cents and 17 cents [1] Revenue Growth Factors - The anticipated revenue growth is attributed to ongoing investments in innovation across GitLab's core DevOps platform, security, and AI-driven solutions [4] - The adoption of GitLab Duo, particularly Duo Enterprise, is expected to drive growth as customers integrate AI capabilities into their workflows [5] - GitLab's strong dollar-based net retention rate of 122% in the first quarter of fiscal 2026 suggests continued growth potential from existing customers [6] Clientele Expansion - GitLab's expanding customer base, including significant growth in customers with over $5K and $100K of Annual Recurring Revenue (ARR), indicates its ability to attract and retain large enterprise clients [7] - Collaborations with major cloud platforms like AWS and Google Cloud are likely to enhance GitLab's market presence and customer engagement [14][16] Competitive Landscape - Despite strong growth prospects, GitLab shares have underperformed compared to the Zacks Computer & Technology sector and Microsoft, with a year-to-date decline of 14.8% [8][10] - GitLab's stock is currently trading at a premium, with a forward Price/Sales ratio of 7.55X compared to the industry average of 5.71X, indicating a stretched valuation [11] Strategic Partnerships - A three-year collaboration agreement with AWS aims to expand access to GitLab Dedicated, enhancing compliance and reducing costs for organizations in regulated industries [15] - The integration with Google Cloud services is expected to streamline developer workflows, thereby increasing customer engagement and adoption [16]

Core Insights - GitLab (GTLB) shares have declined by 16.8% year-to-date, underperforming the broader Zacks Computer & Technology sector, which has risen by 7%, and the Zacks Internet - Software industry, which has increased by 16.2% [1][2][10] - The underperformance is attributed to macroeconomic uncertainties and heightened competition in AI-enabled DevSecOps, particularly from larger competitors like Microsoft [2][10] - Despite challenges, GitLab is experiencing strong demand for its DevSecOps platform, with significant growth in its customer base [4][5] Stock Performance - GitLab's stock has lagged behind Microsoft, which has gained 19.4% year-to-date [2][10] - The company reported a 13% year-over-year increase in customers with over $5K in Annual Recurring Revenue (ARR) and a 26% increase in customers with over $100K in ARR in Q1 FY26 [5][10] Product and Portfolio Expansion - GitLab launched GitLab 18 in May 2025, introducing AI-native features and integrated tools for Premium and Ultimate customers at no additional cost [6][7] - The company achieved FedRAMP Moderate Authority to Operate status for GitLab Dedicated for Government, enhancing its offerings for federal agencies [8] Partnerships and Collaborations - GitLab is leveraging partnerships with major cloud platforms like Google Cloud and Amazon to expand its reach among large enterprise customers [11][12] - The integration of Amazon Q's AI agents into GitLab's platform aims to accelerate development and streamline security processes [11] Financial Guidance - For Q2 FY26, GitLab expects revenues between $226 million and $227 million, reflecting a growth of approximately 24% year-over-year [13] - For the full fiscal year 2026, the revenue forecast is between $936 million and $942 million, indicating a similar growth rate [14] Earnings Estimates - The Zacks Consensus Estimate for GTLB's Q2 FY26 earnings is 16 cents per share, with a year-over-year increase of 6.67% [15] - The consensus for fiscal 2026 earnings is pegged at 75 cents per share, reflecting a year-over-year increase of 1.35% [16] Valuation Metrics - GTLB is currently trading at a forward price/sales ratio of 7.57X, which is higher than the sector average of 6.57X, indicating a stretched valuation [17]

Core Insights - GitLab (GTLB) is experiencing strong demand for its DevSecOps platform, with significant contributions from solutions like GitLab Ultimate, Dedicated, and GitLab Duo, leading to increased customer adoption and relationship expansion [1][10] - The company's financial performance reflects this demand, with total revenues of $214.4 million in the first quarter of fiscal 2026, marking a 27% year-over-year increase [1] Customer Growth - GitLab's expanding clientele is evident, with customers generating over $5K in Annual Recurring Revenue (ARR) increasing to 10,104, a 13% year-over-year rise [2] - Customers with more than $100K in ARR grew to 1,288, up 26% year-over-year, indicating GitLab's success in attracting and retaining large enterprise customers [2] Product Innovations - The company announced the general availability of GitLab 18, which includes major innovations in core DevOps workflows, security, compliance, and AI capabilities [3] - GitLab Duo with Amazon Q was also launched for Ultimate self-managed customers on AWS, alongside achieving FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government [3] Strategic Partnerships - GitLab benefits from a robust partner network, including major cloud platforms like Google Cloud and Amazon Web Services (AWS), which aids in expanding its presence among large enterprises [4] Competitive Landscape - GitLab operates in a highly competitive environment, facing significant competition from Microsoft, Atlassian, and other DevSecOps platforms [5][6][7] - Microsoft has strengthened its position through the integration of GitHub and Azure DevOps, making it a formidable rival for GitLab [6] Stock Performance and Valuation - GitLab's shares have declined by 17.7% year to date, contrasting with a 7% return from the broader Zacks Computer & Technology sector [8] - The stock is trading at a premium, with a forward 12-month Price/Sales ratio of 7.51X compared to the industry average of 5.74X, and it currently holds a Value Score of F [11] Earnings Estimates - The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is 16 cents per share, reflecting a 6.67% year-over-year increase [13] - The consensus for fiscal 2026 earnings is set at 75 cents per share, indicating a 1.35% year-over-year growth [13]

Core Insights - GitLab Inc. reported a 27% year-over-year revenue growth to $214.5 million for Q1 FY2026, with a non-GAAP operating margin of 12% [1] - The company reaffirmed its guidance for approximately 24% top-line growth for FY2026, indicating strong market expansion opportunities [1] AI-Driven Product Adoption - GitLab Duo's first-time customer acquisition increased by 35% quarter-over-quarter, with significant wins including Highmark Health, the FBI, NatWest, and Volkswagen Digital Solutions [2][3] - 52% of total Annual Recurring Revenue (ARR) now comes from customers using the Ultimate tier, reflecting a growing demand for advanced security and AI features [2] Financial Performance - The company achieved a record adjusted free cash flow of $104.1 million, with a free cash flow margin of 49%, and a non-GAAP operating income of $26.1 million, compared to a loss of $3.8 million in the same period last year [4][5] - SaaS revenue, now constituting 30% of total revenue, increased by 35% year-over-year, driven by strong adoption of GitLab Dedicated [4] Strategic AI Platform Expansion - GitLab Duo's integration with Amazon Q and the expansion of agentic AI features have been pivotal, with AI-assisted test generation accelerating by over 35% during evaluations [6][7] - The company is focused on ongoing investment in native AI workflows and ecosystem interoperability to maintain relevance in evolving development environments [7] Future Outlook - Management guided Q2 FY2026 total revenue to be between $226 million and $227 million, and full-year FY2026 revenue to be between $936 million and $942 million, both implying a 24% year-over-year growth [8] - GitLab is set to publicly launch Duo Workflow (agentic AI) this winter and will provide further product innovation details at the GitLab 18 launch event on June 24 [9]

Core Insights - GitLab reported first-quarter fiscal 2026 non-GAAP earnings of 17 cents per share, exceeding the Zacks Consensus Estimate by 13.33% and up from 3 cents per share in the same quarter last year [1] - Total revenues reached $214.4 million, surpassing the consensus mark by 0.91% and reflecting a year-over-year increase of 27%, driven by strong demand for its DevSecOps platform [1][7] Revenue Breakdown - Subscription revenues, which include self-managed and SaaS, accounted for 90.7% of total revenues, increasing by 28.6% year over year to $194.5 million, beating the Zacks Consensus Estimate by 3.33% [3] - SaaS revenues contributed 30% to total revenues and surged 35% year over year, attributed to the strong adoption of GitLab Dedicated, AI integration, and expanding customer engagement [3] Customer Metrics - Customers with more than $5K of Annual Recurring Revenue (ARR) rose to 10,104, a 13% increase year over year [4] - Customers with more than $100K of ARR increased to 1,288, up 26% year over year, indicating GitLab's success in attracting and retaining large enterprise customers [4] - The dollar-based Net Retention Rate was 122% in the reported quarter [4] Performance Obligations - Total Remaining Performance Obligation (RPO) surged 40% year over year to $955.1 million, with current RPO increasing 34% to $584.8 million [4] Product Innovations - GitLab announced the general availability of GitLab 18, featuring major innovations in core DevOps workflows, security, compliance, and AI capabilities [5] - The company also launched GitLab Duo with Amazon Q for Ultimate self-managed customers on AWS and achieved FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government [5] Operating Expenses - Non-GAAP research & development expenses increased by 22.3% year over year to $51.1 million, while sales and marketing expenses rose 15.1% to $85.5 million [6] - General and administrative expenses decreased by 25.3% to $30.7 million, resulting in an operating income of $26.1 million compared to a loss of $3.8 million in the previous year [6] Cash Flow and Balance Sheet - As of April 30, 2025, cash and cash equivalents and short-term investments totaled $11.05 billion, up from $9.92 billion as of January 31, 2025 [7] - The company generated a cash flow from operations of $106.3 million in the reported quarter, compared to an operating cash outflow of $63.2 million in the previous quarter [8] Guidance - For Q2 fiscal 2026, GitLab expects revenues between $226 million and $227 million, indicating approximately 24% year-over-year growth [9] - Non-GAAP operating income is anticipated to be in the range of $23-$24 million for the fiscal second quarter [9] - For fiscal 2026, GitLab projects revenues between $936 million and $942 million, also indicating growth of approximately 24% year over year [10]

Core Insights - GitLab (GTLB) is expected to report first-quarter fiscal 2026 results on June 10, 2025, with anticipated revenues between $212 million and $213 million, reflecting a year-over-year growth of 25-26% [1][9] - Non-GAAP earnings are projected to be between 14 cents and 15 cents per share, with the Zacks Consensus Estimate for revenues at $212.52 million, indicating a 25.61% increase from the previous year [1][2] Revenue Growth Drivers - The expected performance in the first quarter is attributed to ongoing investments in innovation within GitLab's core DevOps platform, security, and AI-driven solutions [3] - The expansion of GitLab Dedicated, which grew nearly 90% year-over-year in the prior quarter, is likely to have contributed to revenue growth, appealing to customers seeking secure, single-tenant SaaS solutions [4][9] Client Expansion and Partnerships - GitLab's growing customer base, including notable clients such as Delta AirLines, NatWest Group, Alphabet, and Amazon, is anticipated to drive growth in the first quarter [5][9] - Delta AirLines' adoption of GitLab Dedicated is expected to enhance product adoption and recurring revenues [6] - NatWest Group's expanded use of GitLab Ultimate and GitLab Dedicated reflects rising demand for secure solutions in regulated sectors, likely aiding revenue momentum [7] Collaborative Initiatives - GitLab's collaboration with Amazon Q to launch an AI-powered DevSecOps solution is designed to improve the developer experience and is expected to positively impact customer engagement [8][10] - Continued collaboration with Alphabet's Google Cloud platform aims to enhance GitLab's scalability and intelligence in its offerings, further increasing customer engagement [10]