Core Insights - GitLab has emerged as a significant player in the DevSecOps space, particularly after its IPO in 2021, but has faced a substantial decline in stock value, dropping approximately 80% from its peak during the tech sell-off of 2022-2023 [1][2] - Recently, GitLab's stock has shown signs of recovery, largely due to the increasing adoption of its AI-powered DevSecOps platform, although it still trades about 63% below its all-time high, indicating cautious investor sentiment [2][3] AI-Native Strategy - GitLab is positioning itself as an AI-native DevSecOps company, integrating AI throughout the software lifecycle, with its AI-powered suite, GitLab Duo, experiencing a sixfold increase in weekly usage in 2025, with around 25% of this attributed to new customers [4] - The company has launched the Duo Agent Platform, currently in public beta, aimed at large enterprises, allowing engineers to utilize AI agents for software development tasks, thereby enhancing productivity and reducing delivery times [5] - GitLab has formed partnerships with major companies like Amazon, OpenAI, and Alphabet to enable their AI agents to function within its Duo Agent Platform, providing customers with flexibility while maintaining security [6] Monetization and Financial Outlook - GitLab is shifting its pricing model for the Duo Agent Platform from a purely seat-based subscription to a hybrid model that includes usage-based pricing, with plans for general availability by the end of 2025 [7] - The AI-native DevSecOps platform is driving strong customer adoption and financial momentum, and despite its strengths, GitLab is trading at a reasonable valuation [8]

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) and Pegasystems (PEGA) are significant players in the enterprise automation sector, each providing unique platforms for enhancing software development and business operations [1][2] Market Overview - The global autonomous enterprise market was valued at $49.25 billion in 2024 and is projected to grow at a CAGR of 16.2% from 2025 to 2030, presenting substantial growth opportunities for both GitLab and Pegasystems [2] GitLab (GTLB) Analysis - GitLab is experiencing strong demand for its DevSecOps platform, with solutions like GitLab Ultimate and GitLab Duo driving customer adoption [3] - In Q1 of fiscal 2026, GitLab reported a 13% year-over-year increase in customers with over $5K in Annual Recurring Revenue (ARR), totaling 10,104, and a 26% increase in customers with over $100K in ARR, reaching 1,288 [4] - GitLab's recent product launch, GitLab 18, includes significant innovations in DevOps workflows, security, compliance, and AI capabilities, which are expected to enhance its market presence [5] Pegasystems (PEGA) Analysis - Pegasystems is benefiting from the rising demand for its GenAI Blueprint solution, which integrates AI to create enterprise workflow applications, with over 1,000 new Blueprints being developed weekly [6] - In Q2 of 2025, Pegasystems reported a 16% year-over-year increase in Annual Contract Value (ACV) to $1.51 billion, driven by the popularity of its GenAI Blueprint [7] - The introduction of the Powered by Pega Blueprint solution allows system integrators to incorporate their expertise into Pega's AI-driven workflow designer, enhancing client success [8] Stock Performance and Valuation - Year-to-date, GitLab shares have decreased by 16.4%, while Pegasystems shares have increased by 23.5%, attributed to macroeconomic challenges for GitLab and strong demand for PEGA's products [9][10] - Valuation metrics indicate that both GTLB and PEGA shares are currently overvalued, with GitLab trading at a forward Price/Sales ratio of 7.55X compared to PEGA's 5.68X [13] - The Zacks Consensus Estimate for GTLB's 2025 earnings is $0.75 per share, reflecting a 1.35% year-over-year increase, while PEGA's estimate is $1.84 per share, indicating a 21.85% year-over-year increase [15] Earnings Performance - GitLab has consistently beaten earnings estimates over the past four quarters, with an average surprise of 37.64%, while Pegasystems has also exceeded estimates with a higher average surprise of 66.66% [16] Conclusion - Both GitLab and Pegasystems are well-positioned to capitalize on the growth in enterprise automation, but Pegasystems currently shows stronger momentum, higher earnings growth, and broader adoption of its GenAI solutions [17]

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 is positioned as a leading DevSecOps platform, emphasizing its comprehensive capabilities in software innovation and security [3][10] - The company has approximately 50 million users and aims to enhance developer productivity while reducing security risks [3][10] - GitLab's unique all-remote culture allows it to hire talent globally, with over 2,000 employees across 65 countries [8][10] Company Overview - GitLab is described as the most comprehensive DevSecOps platform, facilitating software development, security, and operations [3][4] - The platform integrates various functions into a single system, improving efficiency and reducing the need for multiple tools [4][10] - GitLab's mission focuses on enhancing the software development lifecycle through continuous innovation and AI integration [10][19] Financial Performance - GitLab reported a 27% year-over-year revenue growth, with a non-GAAP gross margin of 90% [37][38] - The company generated over $100 million in free cash flow in the first quarter, maintaining a clean balance sheet with over $1 billion in cash [32][38] - The SaaS revenue grew by 35% year-over-year, now comprising about 30% of total revenue [37][40] Market Position and Strategy - GitLab aims to be the "Switzerland" of software development, providing a neutral platform that is not tied to any specific cloud provider [25][27] - The total addressable market (TAM) for GitLab is estimated at $40 billion, with growth opportunities in AI and adjacent markets [27][28] - The company employs both bottom-up and top-down sales strategies, with about 50% of Fortune 100 companies using GitLab products [29][28] Product Development and AI Integration - GitLab has invested hundreds of millions in R&D to enhance its platform, focusing on AI integration throughout the software development lifecycle [10][19] - The introduction of GitLab Duo, an AI product, aims to improve code suggestions and overall development efficiency [19][22] - Partnerships, such as with Amazon Q, are designed to tackle critical development challenges and enhance GitLab's offerings [22][23] Challenges and Customer Needs - Security remains a top priority for customers, with GitLab's Ultimate product accounting for two-thirds of sales due to its advanced security features [23] - Companies are increasingly looking to integrate various tools to enhance software velocity, which GitLab's platform facilitates [23] - The evolving landscape of AI and remote work is reshaping customer expectations and the skills required in the workforce [11][12]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The global economy is expected to grow by 3% in 2025 and 2026, accelerating to 3.3% in 2027, with global inflation hovering around 2.5% [9][11] - AI is projected to drive approximately $1 trillion in spending by 2030, with over $800 billion dedicated to generative AI infrastructure [2][66] - The adoption of Agentic AI is on the rise, with an estimated spending of $155 billion by 2030, indicating a significant potential for productivity improvements [3][59] Global Economic Outlook - The global growth forecast has been upgraded by 20 basis points, largely due to China benefiting from a trade truce [9][10] - Trade policy uncertainty remains high, with geopolitical risks potentially affecting oil prices and energy importers [11][13] - The US economy is projected to grow by 1.6% in 2025-2026, reaching 1.9% in 2027, with a stable labor market [12][14] AI and Data Center Market - The global data center market is expected to reach ~$1 trillion by 2030, with AI servers representing 80-85% of the total addressable market (TAM) at ~$700 billion [2][66] - AI networking and storage are projected to account for ~$74 billion and ~$39 billion, respectively [2][66] Agentic AI Adoption - Agentic AI systems are designed to operate autonomously, with customer service, marketing, sales, and software development being the first major job functions to adopt these technologies [3][61] - Surveys indicate that 64% of organizations plan to pursue agentic AI initiatives by 2025, with significant spending potential [3][59] Precision Medicine and AI - AI is expected to accelerate the development of personalized medicine, which tailors treatments to individual patient profiles, although scalability and cost remain challenges [4][46] - Companies like Tempus AI, Guardant Health, Exact Sciences, and NeoGenomics are leading in AI precision medicine [46][48] Payments and Cross-Border Travel - A survey indicated that over 40% of respondents intend to change their cross-border travel plans, which could impact companies like Visa and Mastercard [52][53] - The travel industry is facing headwinds due to concerns about government policies and economic conditions [53][56] Semiconductor Industry - The semiconductor market is experiencing competitive dynamics among key players like Nvidia, Broadcom, and AMD, particularly in AI-related technologies [66][67] - AI data center systems are expected to grow significantly, capturing a larger share of global IT spending by 2030 [66][67]

Core Viewpoint - Artificial intelligence (AI) is positioned as a significant technological advancement with substantial investment potential, still in its early stages [1] Group 1: AI Investment Opportunities - Five top AI-related stocks identified for long-term investment include Nvidia, Broadcom, Taiwan Semiconductor Manufacturing, Palantir Technologies, and GitLab, each with unique niches and growth opportunities [2] Group 2: Nvidia - Nvidia's GPUs are essential for AI infrastructure, holding over 90% market share in the GPU space, driven by increasing demand from cloud computing and tech companies [4][5] - The company's CUDA software platform enhances its competitive edge, making it the preferred choice for AI developers [4] - Continued growth in AI infrastructure spending positions Nvidia as a clear winner in the sector [6] Group 3: Broadcom - Broadcom focuses on networking components and custom AI chip design, with AI networking revenue increasing by 70%, accounting for 40% of total AI revenue [8] - The potential market for custom AI chips is estimated between $60 billion to $90 billion, with significant demand expected from top customers [9] - Transitioning VMWare customers to subscription models and its VMware Cloud Foundation platform further strengthens Broadcom's position [10] Group 4: Taiwan Semiconductor Manufacturing - Taiwan Semiconductor Manufacturing is a leader in advanced semiconductor manufacturing, producing AI chips for major clients like Nvidia and Apple [12] - High-performance computing now constitutes 59% of its revenue, up from 46% a year ago, indicating strong growth driven by AI [13] - TSMC's advanced-node capacity and pricing power position it favorably in the AI infrastructure build-out [14] Group 5: Palantir Technologies - Palantir focuses on the applications and workflow layers of AI, developing an AI operating system that organizes data for various industries [16] - The company's AI Platform (AIP) has seen a 39% revenue increase last quarter, showcasing its growth potential [17] - Despite high valuation risks, Palantir's unique position in the AI space presents significant opportunities [18] Group 6: GitLab - GitLab leads in the DevSecOps space, enhancing software development productivity through AI-driven tools [20] - The company has achieved strong revenue growth of 25% to 40% over the past two years, with a 122% dollar-based net retention rate [21] - GitLab's technology is enhancing, rather than replacing, software developers, driving its growth trajectory [22]

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]