GitLab Inc. (NASDAQ:GTLB) stock surged Wednesday after the company reported strong fiscal second-quarter results. The software developer also issued upbeat third-quarter guidance and raised its fiscal 2027 outlook.
GitLab reported adjusted earnings of 24 cents per share. That beat the consensus estimate of 18 cents.
Revenue rose 21% year over year to $286.25 million. It also topped the Street estimate of $273.12 million.
Adjusted operating income increased to $42.6 million from $39.6 million. The adjusted operating margin was 15%. Meanwhile, adjusted free cash flow totaled $9.8 million, representing a 3% margin.
GitLab ended the quarter with $1.3 billion in cash and investments. It also recorded about $23.3 million in restructuring charges.
The company repurchased about 3.5 million shares during the quarter. It had roughly $245 million remaining under its buyback authorization.
Bookings And Retention Improve
Gross bookings reached a record. First orders more than doubled to about 1,700, marking the highest level in three years.
New-logo net annual recurring revenue rose 39%. First-order net ARR climbed nearly 40%, while total net ARR grew 42%.
Deals worth at least $500,000 surged more than 150%. Ultimate ARR rose about 35% and represented 59% of total ARR.
Gross retention remained above 90%. Dollar-based net retention improved sequentially to 117% for the first time since 2024.
Total remaining performance obligations rose 16% to $1.2 billion. Current RPO increased 20% to $744.7 million. Calculated billings grew 24%, up from 12% growth in the previous quarter.
SaaS And AI Adoption Accelerate
SaaS revenue increased 36% and accounted for 34% of total revenue. GitLab Dedicated and Duo drove the growth.
The company’s Flex model secured more than $20 million in commitments from over 130 customers within six weeks. GitLab expects the model to defer no more than $13 million in fiscal 2027 revenue.
The paid consumption run rate jumped to more than $40 million from $15 million in the first quarter. GitLab aims to exceed $100 million by year-end.
Duo Agent Platform’s paid committed recurring revenue rose 50% sequentially. Orbit indexing grew 70% to more than 2,200 organizations and generated over 170,000 queries.
Orbit achieved 70% accuracy, compared with 58% for traditional retrieval-augmented generation. Secure repositories, code pushes and CI/CD pipelines grew 60%, 50% and 40%, respectively.
Meanwhile, GitLab’s public-sector business rebounded. Account executive capacity grew about 30%, while productivity per representative increased roughly 10%.
GitLab Raises Fiscal 2027 Outlook
GitLab raised its fiscal 2027 adjusted earnings forecast to 85 cents to 87 cents per share. That topped the analyst estimate of 81 cents.
The company now expects revenue of $1.129 billion to $1.133 billion, above the $1.12 billion consensus estimate. It continues to forecast a gross margin of 85% to 87%.
For the third quarter, GitLab expects adjusted earnings of 19 cents to 20 cents per share. Analysts project 18 cents. The company forecast revenue of $281 million to $283 million, compared with the $281 million consensus estimate.
GTLB Price Action: GitLab shares were up 24.81% at $56.27 during premarket trading on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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