GitLab (GTLB -8.38%), a leading provider of an integrated platform for software development, security, and operations, reported its Q2 FY2026 results on Sept. 3, 2025. Revenue reached $236 million, exceeding management’s revenue guidance range of $226 million–$227 million. Adjusted EPS came in at $0.24, up from $0.15 in the same period last year and also ahead of guidance offered back in the Q1 report. Adjusted operating margin moved to 17% in Q2 FY2026, up from 10% one year ago.
The quarter underscored robust customer and enterprise expansion and continued focus on AI-driven innovation, although leadership transitions and slight margin pressures introduced areas to watch for the coming quarters.
| Metric | Q2 Fiscal 2026 | Q2 Fiscal 2025 | Y/Y Change |
|---|---|---|---|
| Adjusted EPS | $0.24 | $0.15 | 60% |
| Revenue | $236 million | $182.6 million | 29% |
| Adj. operating margin | 17% | 10% | 7 pp |
| Free cash flow | $46.5 million | $10.8 million | 330% |
Source: GitLab. Note: Fiscal 2026's second quarter ended July 31, 2025. Fiscal 2025's Q2 ended July 31, 2024.
Business Overview and Strategic Focus
GitLab serves organizations ranging from startups to multi-national enterprises with its all-in-one DevSecOps platform, reflecting GitLab’s core proposition—a single application that helps customers manage every step of the software development lifecycle, from planning to code writing to deployment and monitoring. The platform streamlines workflows, increases code delivery speed, and helps reduce security risks by integrating all these functions into a unified experience.
The company’s open-core approach encourages thousands of community members to contribute improvements and new features, supporting rapid innovation. In recent years, GitLab has moved to enhance its artificial intelligence (AI) capabilities inside its platform, aiming to give customers smarter automation, better code suggestions, and advanced security features. Expanding into enterprise accounts, deepening cloud partnerships, and furthering AI integration have been key areas of focus.
Quarter Highlights: Growth Drivers and Product Developments
The reported quarter saw GitLab achieve a 29% increase in GAAP revenue. Those generating over $100,000 in recurring annual revenue now total 1,344, up 25 % from last year’s reporting period. Total customers spending more than $5,000 annually rose 11% to 10,338.
The platform’s subscription-based model, combining both software as a service (SaaS) and self-managed options, generated $212.7 million (GAAP), up from $163.2 million in Q2 FY2025. Remaining performance obligations, a measure of future contracted revenue not yet recognized, increased by 32% year-over-year. The dollar-based net retention rate, which measures how much recurring revenue is retained from existing customers after accounting for churn, upgrades, and downgrades, held steady at a healthy 121%.
It launched a public beta of GitLab Duo Agent Platform, described as an AI orchestration layer that integrates with multiple external artificial intelligence tools. This product is meant to help customers quickly adopt AI-driven development through their preferred large language models. Strategic expansion continued with a three-year partnership with Amazon's AWS to broaden the Dedicated (single-tenant) service, specifically targeting compliance-heavy and public sector environments.
Gross margin, a key profitability indicator measuring the percentage of revenue remaining after direct costs, slipped slightly to 90% on a non-GAAP basis, down from 91% in Q2 FY2025. Although operating margins improved, the company reported a GAAP net loss, influenced by stock-based compensation and other non-cash accounting charges. The cash position strengthened, with cash and equivalents rising to $261.4 million, providing flexibility for ongoing investment and operations.
Looking Ahead: Guidance and Key Watch Areas
For Q3 FY2026, management projects revenue of $238 million to $239 million, implying year-over-year growth of about 30%. Full-year guidance for FY2026 forecasts revenue of $936 million to $942 million. The company provided guidance for non-GAAP operating income of $133 million–$136 million for FY2026, and similarly raised its forecast for non-GAAP diluted earnings per share to $0.82–$0.83 for FY2026. Revenue guidance, however, was maintained at its previous level.
Leadership changes are a notable point going forward. GitLab’s Chief Financial Officer is stepping down as of September 19, 2025, with the interim CFO promoted from within the finance function. Additional new executive appointments may support scaling as the company grows. Investors will likely monitor how the company manages its margin trends, continued enterprise customer gains, and execution on its AI strategy, all while facing strong competition in developer and security software markets. GTLB does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
