NEW YORK, September 2, 2026, 10:30 EDT — GitLab shares rose 14.0% on Wednesday as its quarterly revenue surpassed forecasts and annual recurring revenue climbed more than 40%. The stock pared gains after reaching a 23.2% intraday high.
- At 10:25:06 EDT, GitLab was up 14.0% at $51.42, compared to its previous close of $45.09 on Tuesday.
- Revenue for the fiscal second quarter increased by 21% to $286.3 million, surpassing the LSEG consensus estimate of $273.1 million.
- Adjusted free cash flow dropped 79% to $9.8 million, while the GAAP gross margin decreased by four points.
GitLab Inc. NASDAQ:GTLB opened at $55.55. The stock declined to $51.42 as of 10:25:06 EDT, data from Yahoo Finance showed.
The pullback is significant. Investors favored quicker contract activity, yet still took note of softer unit economics.
GitLab’s opening surge lost altitude
Regular-session price, U.S. dollars. .
Source: Yahoo Finance. Intraday readings may be delayed.
Revenue increased by 21% to $286.3 million, beating analyst expectations of $273.1 million as compiled by LSEG by 4.8%, Reuters reported.
Adjusted diluted earnings came to 24 cents per share, surpassing the consensus forecast of 18 cents.
CEO Bill Staples described the quarter as “exceptional.” The company posted record gross bookings, with net ARR rising more than 40%, Staples said in the company’s SEC filing.
The stronger indicator is the demand signal, outweighing the headline revenue beat. It indicates fresh commitments are coming in at a quicker pace than recognized subscription revenue.
Growth accelerated, but cash conversion weakened
Source: GitLab fiscal Q2 2027 earnings release filed with the SEC, September 1, 2026.
Cash conversion declined. Adjusted free cash flow fell to $9.8 million, compared with $46.5 million in the same period last year.
GAAP gross margin dropped to 84%, down from 88%. Non-GAAP operating margin slipped two points to 15%.
Leading indicators held steady. Remaining performance obligations climbed 20% to $744.7 million, and the number of customers generating over $100,000 in ARR grew 17% to 1,571.
GitLab forecasted fiscal third-quarter revenue between $281 million and $283 million. For the full year, the company projects revenue in the range of $1.129 billion to $1.133 billion.
Most analysts remain on hold after the earnings jump
Twenty-nine recommendations compiled by LSEG.
Sources: Reuters/LSEG; Yahoo Finance.
Analysts are still wary. According to LSEG, there are eight recommendations at buy or above, 19 holds, and two at sell or below.
The median target of $50 was beneath the morning’s price. Any near-term gains hinge on turning bookings into revenue while avoiding additional margin pressure.
Risks: A slowdown in AI demand is possible, usage-based pricing may postpone revenue recognition, and increasing infrastructure expenses could continue to weigh on gross margins.
