The Earnings Debate

Management noted that "Q2 was an exceptional quarter", reporting that second quarter total revenue was $286.3 million, up 21% year-over-year, and non-GAAP operating income was $42.6 million, representing a 15% operating margin.

Non-GAAP gross margin was 86.5%.

For the second quarter, adjusted free cash flow was $9.8 million, representing a 3% margin, and the company ended the quarter with $1.3 billion in cash and investments.

Additionally, the company delivered the largest gross bookings quarter in history, with dollar-based net retention rate at 117% and net ARR growing 42% year-over-year.

Calculated billings grew 24% for the quarter.

During the call, management discussed updates on their five growth initiatives. On the product front, the company highlighted the launch of GitLab Flex, noting that "in the first 6 weeks on the market, over 130 customers committed more than $20 million to Flex". Exiting the quarter, the platform-wide paid consumption run rate was above $40 million, up from $15 million in the first quarter.

Under their AI strategy, Duo Agent Platform paid CRR grew 50% sequentially, and more than 2,200 organizations have enabled GitLab Orbit indexing in the public beta.

The company also announced the August launch of Secrets Manager and Dedicated Runners as their second and third new consumption products of the year.

For forward guidance, management raised its outlook for the full year, with Jessica Ross stating "we are raising our guidance to reflect the strong momentum we experienced in the first half of the year as well as the momentum we anticipate will continue into the back half". For the third quarter of fiscal year 2027, the company expects total revenue of $281 million to $283 million, representing approximately 15% to 16% year-over-year growth, and non-GAAP operating income of $35 million to $37 million.

For the full year, total revenue is expected to be $1.129 billion to $1.133 billion, representing approximately 18% to 19% year-over-year growth, and non-GAAP operating income is expected to be $148 million to $152 million.

Full year non-GAAP gross margins are expected to be between 85% to 87%.

What is The Earnings Debate?

We turn quarterly earnings calls into a fast-paced financial comedic debate. Our AI hosts (one skeptic and one optimist) agree on almost nothing. We cut through jargon, pressure-test claims, and spotlight the questions that matter. Rigorous analysis. Actual laughs.
On the beat so you don't miss a beat.