GitLab Beats Q2 Estimates As AI-Fueled DevOps Demand Surges
GitLab ($GTLB) reported fiscal Q2 2026 earnings on Tuesday, September 1, 2026, delivering a decisive beat across revenue, earnings, and operating income. The company posted revenue of $286.3 million, topping analyst expectations of $273 million by nearly 5%. Adjusted EPS came in at $0.24, well above the $0.18 consensus, while non-GAAP operating income reached $42.6 million, surpassing the $31.2 million estimate.
Dollar-Based Net Retention Rate Holds at 117% Despite Macro Headwinds
Investors closely watched the dollar-based net retention rate (DBNRR), which held steady at 117% — a sign that existing customers are expanding their usage of GitLab’s DevSecOps platform. This metric indicates that the average customer spent 17% more with GitLab year-over-year, even as enterprise software budgets remain under pressure. The company’s non-GAAP gross margin of 86% underscores the scalability of its cloud-native offering, while adjusted free cash flow of $9.8 million reflects continued operational discipline.
Remaining Performance Obligations Signal Strong Pipeline Momentum
Total remaining performance obligations (RPO) reached $1.2 billion, up 16% year-over-year, and current RPO (cRPO) grew 20% to $744.7 million. These backlog metrics suggest that deal activity remains healthy, with customers committing to multi-year contracts. The cRPO growth rate outpacing total RPO growth indicates that near-term revenue conversion is accelerating, a positive signal for the upcoming quarters.
Q3 Guidance In Line, But Full-Year Outlook Brightens
For the fiscal third quarter, GitLab guided revenue to $281-$283 million, essentially in line with the $281 million consensus, and non-GAAP operating income of $35-$37 million, comfortably above the $29.6 million estimate. Adjusted EPS is projected at $0.19-$0.20. More notably, the company raised its full-year FY27 revenue outlook to $1.129-$1.133 billion, above the $1.12 billion consensus, and lifted non-GAAP operating income guidance to $148-$152 million, well above the $138 million estimate. Adjusted EPS guidance of $0.85-$0.87 also exceeds expectations.
What’s Next: Watch CRO Growth and AI Features for Sustained Outperformance
GitLab’s strong quarter underscores the durable demand for AI-powered DevSecOps tools. With cRPO growing faster than revenue, the company is well-positioned to sustain its beat-and-raise trajectory. Investors should monitor the next earnings release for continued strength in DBNRR and the pace of AI-driven upselling. Any slowdown in cRPO growth would signal a potential inflection, while sustained expansion would validate the current valuation.
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