GitLab, which sells a DevSecOps platform for writing, securing and shipping software, reported revenue of $286.3 million for its second quarter of fiscal 2027, ended July 31, 2026. That was up 21% from $236.0 million a year earlier, and chief executive Bill Staples cited "record gross bookings and net ARR growth exceeding 40% year over year" sec.gov. BigGo Finance, a market-news site, reported that revenue beat a $273.1 million consensus, that adjusted EPS of $0.24 beat an $0.18 estimate, and that the shares rose more than 16% after hours finance.biggo.com. It also reported that GitLab raised fiscal 2027 revenue guidance to $1.129 billion–$1.133 billion and guided the third quarter to $281 million–$283 million finance.biggo.com.
The same results showed what that growth now costs. Non-GAAP gross margin fell to 86% from 90%, the GAAP operating loss widened to $56.9 million from $18.4 million, and adjusted free cash flow was $9.8 million sec.gov. Against fiscal 2026 revenue of $955.2 million sec.gov, the raised range implies full-year growth of 18.2% to 18.6%, below the second quarter's pace. The stock closed at $46.85 on September 25, 2026, for a market value of $7.804 billion, after trading between $18.73 on April 10 and $55.55 on September 2 cnbc.com.
GitLab Flex lets customers move spend from seats to AI credits without a new contract
The commercial change in the quarter was GitLab Flex. It is one annual commitment covering platform seats, GitLab Credits and new eligible capabilities as they launch, with monthly reservations that customers can reshape without contract amendments sec.gov. In March 2026, chief financial officer Jessica Ross described "building new multi-year growth drivers with GitLab Duo Agent Platform and hybrid pricing" sec.gov. GitLab also put Orbit into public beta. Orbit links code, work items, pipelines, deployments and production signals into a unified context graph, which GitLab said made agents respond up to 11x faster with up to 45x fewer hallucinations in internal testing sec.gov.
Remio.ai, an AI-industry news site, reported that GitLab said at its June Transcend event that weekly active users of Duo Agent Platform had risen tenfold since its January 2026 general availability. Remio.ai added that GitLab did not publish the starting population or the corresponding revenue remio.ai. A Seeking Alpha contributor writing as "Research and Value," who discloses a long position, lists seat-based model disruption from AI and competition from GitHub as risks, but argues "Flex and AI adoption should offset pressures" seekingalpha.com.
Our read is that Flex is built as a hedge: if agents reduce the number of human seats a customer buys, the same commitment can be moved to credits without a renegotiation. GitLab has held pricing on seats before. After it raised its Premium tier from $19 to $29 per user per month in April 2023, then-CFO Brian Robins told analysts that churn was "unchanged" for Premium customers who renewed that month, CNBC reported cnbc.com.
Gross margin and cash have fallen while the agent products scaled
| Period | Revenue growth (YoY) | Non-GAAP gross margin |
|---|---|---|
| Q3 FY25 (to Oct 31, 2024) | 31% | 91% |
| Q4 FY26 (to Jan 31, 2026) | 23% | 89% |
| FY26 (to Jan 31, 2026) | 26% | 89% |
| Q2 FY27 (to Jul 31, 2026) | 21% | 86% |
Sources: GitLab results releases sec.govsec.govsec.gov.
Non-GAAP operating margin also slipped, to 15% from 17%, although non-GAAP operating income rose to $42.6 million from $39.6 million sec.gov. BigGo reported that operating cash flow swung to a $3.1 million outflow from a $49.4 million inflow, and that adjusted free cash flow a year earlier was $46.5 million finance.biggo.com. On those figures the quarter's $9.8 million is a 79% decline. In fiscal 2026, by contrast, GitLab generated $219.6 million of adjusted free cash flow and authorised a $400 million buyback sec.gov. Our read is that the gross-margin slide lines up with the agent launches, which makes the cost of serving AI workloads the variable investors are pricing.
Retention and backlog growth have slowed, and the third-quarter guide dips
BigGo reported dollar-based net retention of 117%, total remaining performance obligations up 16% to $1.2 billion and current RPO up 20% to $744.7 million finance.biggo.com. In the quarter ended October 31, 2024, GitLab reported net retention of 124%, RPO up 48% to $811.8 million and current RPO up 39% sec.gov.
Management reads the trend differently. Ross said GitLab "saw sequential acceleration in dollar-based net retention and meaningful operating leverage" sec.gov. The comparison above spans seven quarters.
The anomaly is the guide. The figures show the dip but give no reason for it.
TipRanks reported on September 18, 2026 that Morgan Stanley kept its Hold rating cnbc.com. GitLab's next report is estimated for December 3, 2026 cnbc.com. The figure that will test the raised outlook is whether third-quarter revenue lands below the $286.3 million just reported, and whether gross margin falls again alongside it.