GitLab’s second-quarter revenue jumps 21% as AI demand drives bookings

Investing.com -- GitLab reported stronger-than-expected momentum in its second quarter of fiscal 2027, with revenue rising 21% from a year earlier as demand for its software development and security platform accelerated amid growing adoption of artificial intelligence.

Revenue for the quarter ended July 31 reached $286.3 million, up from $236.0 million a year earlier. Adjusted earnings per diluted share were 24 cents, unchanged from the year-ago period, while adjusted operating income rose to $42.6 million from $39.6 million.

The results underscore GitLab's push to capitalize on the growing use of AI in software development, as companies seek tools that can provide security, governance and context across increasingly automated development workflows. The company said first-order growth exceeded 100% year over year, while net annual recurring revenue growth exceeded 40%.

Customer expansion also remained strong. Customers generating more than $100,000 in annual recurring revenue rose 17% to 1,571, while those generating more than $5,000 increased 8% to 11,114. GitLab's dollar-based net retention rate was 117%, and total remaining performance obligations rose 16% to $1.2 billion.

The company continued to invest in AI capabilities, including its GitLab Orbit platform, which entered public beta during the quarter. GitLab said internal testing showed the unified context graph enabled AI agents to respond up to 11 times faster and with up to 45% fewer hallucinations. It also launched GitLab Secrets Manager as a usage-based add-on for Premium and Ultimate customers.

GitLab also generated $9.8 million in adjusted free cash flow, down from $46.5 million a year earlier, while operating cash flow swung to a $3.1 million outflow from a $49.4 million inflow. The company repurchased about 3.5 million shares during the quarter.

For the third quarter, GitLab forecast revenue of $281 million to $283 million and adjusted operating income of $35 million to $37 million. It expects full-year fiscal 2027 revenue of $1.129 billion to $1.133 billion, with adjusted operating income of $148 million to $152 million and adjusted diluted earnings per share of 85 cents to 87 cents.

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