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Gitlab (GTLB) Down 4.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for GitLab Inc. (GTLB - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Gitlab due for a breakout? 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.
GitLab Q2 Earnings Beat on Revenue Growth and Sales Productivity
GitLab reported second-quarter fiscal 2027 non-GAAP earnings of 24 cents per share, which remained unchanged year over year and 33.33% above the Zacks Consensus Estimate.
Revenues of $286.25 million rose 21.3% year over year and beat the consensus mark by 4.74%.
Broad-based strength across new and existing customers supported the quarter. Net annual recurring revenue (ARR) growth accelerated to 42% year over year, while the dollar-based net retention rate was 117%.
GTLB’s Revenue Mix Shows Broad-Based Growth
Subscription, self-managed and SaaS revenues increased 21.5% year over year to $258.31 million. License, self-managed and other revenues rose 20.1% year over year to $27.94 million.
SaaS revenues represented 34% of total revenues and increased 36% year over year. Calculated billings grew 24%, while total remaining performance obligations rose 16% to $1.2 billion and current RPO increased 20% to $744.7 million.
GitLab’s Customer Expansion Accelerates
Customers generating more than $5,000 of ARR reached 11,114, up 8% year over year. Customers with more than $100,000 of ARR increased 17% year over year to 1,571. Ultimate ARR grew roughly 35% and accounted for 59% of total ARR. Eight of GitLab’s 10 largest second-quarter deals purchased Ultimate, while gross retention remained above 90%.
GitLab recorded approximately 1,700 first orders, more than double the year-ago level, while first-order net ARR increased 39%. Deals worth at least $500,000 grew more than 150% year over year. Account executive capacity increased about 30%, while productivity per rep improved about 10%.
GitLab's Flex and AI Products Gain Traction
GitLab Flex attracted more than 130 customers with over $20 million in commitments during its first six weeks in market. Paid consumption run rate exceeded $40 million at quarter-end, up from $15 million exiting the first quarter. Management is targeting more than $100 million by fiscal year-end.
Duo Agent Platform paid consumption run rate increased roughly 50% sequentially. GitLab Orbit, which entered public beta in June, had more than 2,200 organizations enabled indexing and generated more than 170,000 customer queries. Roughly 80% of query volume came from customers connecting Orbit to external agents.
GTLB's Operating Details
In the second quarter of fiscal 2027, non-GAAP gross margin was 86%, down from 90% in the prior year.
On a non-GAAP basis, sales and marketing expenses rose 15.8% year over year to $103.82 million, research and development costs increased 24.6% year over year to $65.17 million, and general and administrative expenses advanced 19.1% year over year to $36.00 million.
Non-GAAP operating income increased 7.6% year over year to $42.57 million. However, the corresponding operating margin was 15%, down from 17% in the year-ago quarter.
GTLB’s Cash Flow Weakens on Collection Timing
As of July 31, 2026, cash and cash equivalents and short-term investments were $1.26 billion compared with $1.36 billion as of April 30, 2026.
Operating cash outflow was $3.09 million compared with operating cash flow of $49.37 million in the year-ago quarter. Adjusted free cash flow declined to $9.75 million from $46.45 million.
The company repurchased approximately 3.5 million shares during the quarter and had about $245 million remaining under its current authorization.
GitLab Raises Fiscal 2027 Outlook
For the third quarter of fiscal 2027, GitLab expects revenues of $281-$283 million, implying 15%-16% year-over-year growth. Non-GAAP operating income is projected to be $35-$37 million, while non-GAAP earnings are expected to be between 19 cents and 20 cents per share.
For fiscal 2027, revenues are now projected to be $1.129-$1.133 billion, representing 18-19% growth. Non-GAAP operating income is expected to be $148-$152 million, and earnings are likely to be between 85 cents and 87 cents per share. The outlook assumes a normalized bookings pace, modest Duo Agent Platform revenue contribution and excludes the potential revenue-timing impact of Flex. Management estimates a maximum $13 million fiscal 2027 revenue-timing impact from Flex adoption.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted -11.11% due to these changes.
VGM Scores
Currently, Gitlab has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Gitlab has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Gitlab belongs to the Zacks Internet - Software industry. Another stock from the same industry, Elastic (ESTC - Free Report) , has gained 2.4% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.
Elastic reported revenues of $478.11 million in the last reported quarter, representing a year-over-year change of +15.1%. EPS of $0.70 for the same period compares with $0.60 a year ago.
Elastic is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year change of +26.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Elastic. Also, the stock has a VGM Score of D.
View the Zacks #1 Rank List
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Gitlab (GTLB) Down 4.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for GitLab Inc. (GTLB - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Gitlab due for a breakout? 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.
GitLab Q2 Earnings Beat on Revenue Growth and Sales Productivity
GitLab reported second-quarter fiscal 2027 non-GAAP earnings of 24 cents per share, which remained unchanged year over year and 33.33% above the Zacks Consensus Estimate.
Revenues of $286.25 million rose 21.3% year over year and beat the consensus mark by 4.74%.
Broad-based strength across new and existing customers supported the quarter. Net annual recurring revenue (ARR) growth accelerated to 42% year over year, while the dollar-based net retention rate was 117%.
GTLB’s Revenue Mix Shows Broad-Based Growth
Subscription, self-managed and SaaS revenues increased 21.5% year over year to $258.31 million. License, self-managed and other revenues rose 20.1% year over year to $27.94 million.
SaaS revenues represented 34% of total revenues and increased 36% year over year. Calculated billings grew 24%, while total remaining performance obligations rose 16% to $1.2 billion and current RPO increased 20% to $744.7 million.
GitLab’s Customer Expansion Accelerates
Customers generating more than $5,000 of ARR reached 11,114, up 8% year over year. Customers with more than $100,000 of ARR increased 17% year over year to 1,571. Ultimate ARR grew roughly 35% and accounted for 59% of total ARR. Eight of GitLab’s 10 largest second-quarter deals purchased Ultimate, while gross retention remained above 90%.
GitLab recorded approximately 1,700 first orders, more than double the year-ago level, while first-order net ARR increased 39%. Deals worth at least $500,000 grew more than 150% year over year. Account executive capacity increased about 30%, while productivity per rep improved about 10%.
GitLab's Flex and AI Products Gain Traction
GitLab Flex attracted more than 130 customers with over $20 million in commitments during its first six weeks in market. Paid consumption run rate exceeded $40 million at quarter-end, up from $15 million exiting the first quarter. Management is targeting more than $100 million by fiscal year-end.
Duo Agent Platform paid consumption run rate increased roughly 50% sequentially. GitLab Orbit, which entered public beta in June, had more than 2,200 organizations enabled indexing and generated more than 170,000 customer queries. Roughly 80% of query volume came from customers connecting Orbit to external agents.
GTLB's Operating Details
In the second quarter of fiscal 2027, non-GAAP gross margin was 86%, down from 90% in the prior year.
On a non-GAAP basis, sales and marketing expenses rose 15.8% year over year to $103.82 million, research and development costs increased 24.6% year over year to $65.17 million, and general and administrative expenses advanced 19.1% year over year to $36.00 million.
Non-GAAP operating income increased 7.6% year over year to $42.57 million. However, the corresponding operating margin was 15%, down from 17% in the year-ago quarter.
GTLB’s Cash Flow Weakens on Collection Timing
As of July 31, 2026, cash and cash equivalents and short-term investments were $1.26 billion compared with $1.36 billion as of April 30, 2026.
Operating cash outflow was $3.09 million compared with operating cash flow of $49.37 million in the year-ago quarter. Adjusted free cash flow declined to $9.75 million from $46.45 million.
The company repurchased approximately 3.5 million shares during the quarter and had about $245 million remaining under its current authorization.
GitLab Raises Fiscal 2027 Outlook
For the third quarter of fiscal 2027, GitLab expects revenues of $281-$283 million, implying 15%-16% year-over-year growth. Non-GAAP operating income is projected to be $35-$37 million, while non-GAAP earnings are expected to be between 19 cents and 20 cents per share.
For fiscal 2027, revenues are now projected to be $1.129-$1.133 billion, representing 18-19% growth. Non-GAAP operating income is expected to be $148-$152 million, and earnings are likely to be between 85 cents and 87 cents per share. The outlook assumes a normalized bookings pace, modest Duo Agent Platform revenue contribution and excludes the potential revenue-timing impact of Flex. Management estimates a maximum $13 million fiscal 2027 revenue-timing impact from Flex adoption.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted -11.11% due to these changes.
VGM Scores
Currently, Gitlab has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Gitlab has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Gitlab belongs to the Zacks Internet - Software industry. Another stock from the same industry, Elastic (ESTC - Free Report) , has gained 2.4% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.
Elastic reported revenues of $478.11 million in the last reported quarter, representing a year-over-year change of +15.1%. EPS of $0.70 for the same period compares with $0.60 a year ago.
Elastic is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year change of +26.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Elastic. Also, the stock has a VGM Score of D.