GitLab Soars on Strong Q2 Earnings, Boosted by AI Demand

GitLab gets it done during Q2 as revenue grows 31%, shares spike

GitLab (NASDAQ:GTLB) demonstrated impressive results when the DevSecOps software company released its second quarter earnings report and outlook on Tuesday. Shares soared 15% during early market action on Wednesday. "Taking this to the stock, this continues to be a growth-first software market, and it's increasingly rare to find a 30%+ grower at any stage," said Canaccord Genuity analysts, led by Kingsley Crane, in a Wednesday note. "The company's ability to continue to power revenue growth from seat expansions in this software buying environment is clear evidence, in our view, that the platform value proposition is resonating with customers." Canaccord Genuity maintains its Buy rating and $65 price target on the stock. Meanwhile, Bank of America maintained its Buy rating as well and increased its price target to $68 from $66, implying a near 50% upside. "The biggest surprise, to us, is how Dedicated, GitLab's single-tenant SaaS deployment option, is helping drive healthy SaaS growth (+46% y/y in F2Q25)," said BofA analysts, led by Koji Ikeda, in a note. "A large data cloud software vendor recently migrated to Dedicated, demonstrating GitLab's ability to power software companies at scale." Wells Fargo also increased its price target on the stock, bumping it up to $75 from $70, and maintained its Overweight rating. The firm also mentioned GitLab's artificial intelligence offerings are gaining momentum. "Enterprises are focusing on real results and real use cases for AI," said GitLab CEO Sid Sijbrandij, during yesterday's earnings call. "They are looking beyond just code generation. They are looking to integrate AI into all aspects of software development to deliver tangible results. This requires a strategic approach that aligns AI solutions with business goals, provides measurable benefits, and improves security." GitLab has a Buy rating from both Seeking Alpha and Wall Street analysts. It has a Hold rating from Seeking Alpha's Quant system, which routinely beats the market. More on GitLab GitLab Inc. (GTLB) Q2 2025 Earnings Call Transcript GitLab: Over 60% Undervalued After Market Overreaction GitLab: Don't Chase A Buyout Rumor Biggest stock movers today: NVDA, ZS, and more GitLab surges as Q2 results top expectations; raises full-year outlook

GitLab Stock Climbs On Q2 Results, Strong FY 25 Guidance - GitLab (NASDAQ:GTLB)

GitLab reports quarterly earnings of 15 cents per share which beat the analyst consensus estimate by 50%. GitLab Inc. GTLB shares are climbing after the company reported its second-quarter financial results after Tuesday's closing bell. Here's a look at the details from the report. The Details: GitLab reported quarterly earnings of 15 cents per share, which beat the analyst consensus estimate by 50%. Quarterly revenue came in at $182.6 million, which beat the analyst consensus estimate of $176.889 million by 3.23% and represents a 30.82% increase over the same period last year. Customers with more than $5,000 of ARR reached 9,314, an increase of 19% year-over-year. Customers with more than $100,000 of ARR reached 1,076, an increase of 33% year-over-year. Dollar-Based Net Retention Rate was 126%. Total RPO grew 51% year-over-year to $747.9 million, while cRPO grew 42% to $475.0 million. "Organizations need to deliver software faster to accelerate performance and respond to intense competition," said Sid Sijbrandij, GitLab CEO and co-founder. "Our results show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable benefits, and improving security." Read Next: What's Going On With Lululemon Stock After Earnings? Outlook: GitLab sees fiscal-year 2025 earnings of between 45 cents and 47 cents per share, versus the 36-cent estimate, and revenue in a range of $742 million to $744 million, versus the $736.612 million estimate. GTLB Price Action: According to Benzinga Pro, GitLab shares are up 12.18% after-hours at $50.12 at the time of publication Tuesday. Read Also: Why Intuitive Machines Stock Is Soaring To The Moon Image: Courtesy of GitLab, Inc. Market News and Data brought to you by Benzinga APIs

GitLab Beats Profit and Sales Estimates, Boosts Outlook on Strong AI Demand

Co-founder and CEO Sid Sijbrandij said organizations need faster software solutions to compete in the AI arena. GitLab (GTLB) shares soared Wednesday, a day after it posted better-than-expected results and raised its guidance, becoming the latest tech firm to benefit from the soaring demand for artificial intelligence (AI) products. The software-development provider reported fiscal 2025 second-quarter adjusted earnings per share (EPS) of $0.15, with revenue jumping 31% year-over-year to $182.6 million. Both exceeded consensus estimates of analysts compiled by Visible Alpha. The number of customers with annual recurring revenue (ARR) of more than $5,000 increased 19% to 9,314, and those with ARR of more than $100,000 rose 33% to 1,076. Co-founder and CEO Sid Sijbrandij explained that "organizations need to deliver software faster" to boost performance and respond to tougher competition. He said GitLab's results "show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable benefits, and improving security." GitLab now sees full-year adjusted EPS in the range of $0.45 to $0.47, compared with its earlier forecast of $0.34 to $0.37. It anticipates revenue between $742.0 million and $744.0 million, up from the previous $733.0 million to $737.0 million. Shares of GitLab soared 20% to $53.68 about 30 minutes after the opening bell Wednesday but are still down roughly 15% year-to-date.

GitLab surges as Q2 results top expectations; raises full-year outlook

For the period ending July 31, GitLab said it earned an adjusted $0.15 per share as revenue rose 31% year-over-year to come in at $182.6M. "Our second quarter fiscal year 2025 results validate the value that customers gain from GitLab's integrated platform," said Brian Robins, GitLab chief financial officer. "We delivered another quarter of better than 30% top-line growth and significant year-over-year operating margin expansion. As we enter the second half of fiscal year 2025, I'm confident in our ability to continue to exceed customer expectations and in the opportunity we have with AI to further accelerate tangible business outcomes." A consensus of analysts expected the company to earn an adjusted $0.10 per share on $177.15M in sales. Looking to the next quarter, GitLab said it expects to earn between $0.15 and $0.16 on an adjusted basis. Sales are expected to be between $187M and $188M. Analysts were expecting adjusted earnings of $0.11 per share on $187.7M in sales. GitLab also raised its full-year outlook, as it now sees sales between $742M and $744M, up from a prior view of $733M to $737M. It also expects to earn between $0.45 and $0.47 per share on an adjusted basis, up from a prior range of $0.34 to $0.37 per share. Analysts were expecting full-year sales of $736.67M and earnings of $0.37 per share. The company will hold a conference call at 4:30 p.m. EST to discuss the results.

Gitlab Reports Beat And Raise Quarter, Analysts Expect AI To Be 'Significant Contributor' By Fiscal 2026 - GitLab (NASDAQ:GTLB)

The company raised its FY25 revenue growth and operating income guidance. Shares of Gitlab Inc GTLB spiked in early trading on Wednesday, after the company reported upbeat second-quarter results. The company reported its results amid an exciting earnings season. Here are some key analyst takeaways. Cantor Fitzgerald analyst Yi Fu Lee reiterated an Overweight rating, while raising the price target from $55 to $60. Scotiabank analyst Patrick Colville reaffirmed a Sector Outperform rating, while lifting the price target from $59 to $65. Truist Securities analyst Joel Fishbein maintained a Buy rating and price target of $80. Piper Sandler analyst Rob Owens reiterated an Overweight rating and price target of $75. KeyBanc Capital Markets analyst Jason Celino reaffirmed an Overweight rating and price target of $62. RBC Capital Markets analyst Matthew Hedberg maintained an Outperform rating and price target of $55. Check out other analyst stock ratings. Cantor Fitzgerald: GitLab delivered a "sequentially stronger" quarter, with revenue growth of 7.9% quarter-on-quarter coming in higher than consensus. The company also reported operating income and free cash flows higher than expected, "coming off a record FCF level previous quarter," Lee said Remaining performance obligations (RPO) came in at $747.9 million in the quarter. That's up 50.8% year-on-year, with current RPOs comprising 64% of total RPOs. "We also learned AI contribution exceeded GitLab's internal plan by 3x although off from a small base, but we envision AI will be a significant contributor in FY2026," he added. Scotiabank: "After 1Q bookings were a sticking point, GTLB reported accelerated growth for both cRPO (42% vs. 34% last qtr; 34% a yr prior) & RPO (51% vs. 48% last qtr; 37% a yr prior)," Colville wrote. The company generated strong revenue, beating consensus by around 3%. It remains among the few software companies still growing at above 30%. "While the improvement in bookings was the highlight, mgmt noted a handful of marquee wins with Duo, and Duo contribution finished ~3x ahead of plan," the analyst stated. Gitlab raised its full-year revenue growth guidance from 27% at the midpoint to 28% as well as its operating income guidance from between $34 million and $38 million to between $55 million and -$58 million, he further stated. Truist Securities: GitLab delivered a beat-and-raise quarter. Total revenue of $183 million exceeded expectations. "SaaS now represents 28% of total revenue and helped to power the subscription line to 34% growth versus our estimate of 27%," Fishbein added. "We believe that the company is executing on their opportunity to offer enterprises a platform solution for DevOps, in what has been a highly fragmented market to this point," the analyst wrote. The company also reported "promising wins with newer offerings, showcasing their ability to leverage their enterprise foothold into extended sales opportunities." Piper Sandler: Gitlab reported operating margins of 10%, setting a company record. It beat expectations on a revenue outperformance and cost discipline. "The combination of 30%+ growth and ~1,300 points of y/y operating leverage (with a +10% margin) is very unique in the current software backdrop," he added. The company reported earnings of 15 cents per share and free cash flow of $11 million. It exceeded expectations on both, the analyst stated. "Driving the strength seen in leading indicators was traction with Duo, with management highlighting that Duo adoption was 3x ahead of internal plan for 2Q," he further wrote. KeyBanc Capital Markets: GitLab reported quarterly revenues of $182.6 million. That's up 30.8% year-on-year, "solidly" ahead of consensus of $176.9 million, Celino said. "Ultimate tier adoption continues to tick up and now represents 47% of ARR (vs. 46% in F1Q)," he added. "Mgmt. cited a stable macro environment, and noted churn/ contraction in F2Q was the best it's been in the past eight quarters," the analyst wrote. Revenue growth and cost discipline led to a strong operating margin beat, he further stated. RBC Capital Markets: "Results were highlighted by a dollar-based NRR of +126% and 9,314/1,076 customers with >$5K/$100K ARR, +19%/+33% y/y," Hedberg wrote in a note. Management noted that they were confident that AI could "further accelerate tangible business outcomes," he added. The company raised its fiscal 2025 guidance by more than the second quarter beat, he added. GTLB Price Action: Shares of Gitlab had risen by 18.42% to $52.91 at the time of publication on Wednesday. Read Next: Marvell Steals The Spotlight From Nvidia, Broadcom In August: What's Next For Chip Investors? Image: Shutterstock Market News and Data brought to you by Benzinga APIs

Why GitLab Stock Was Soaring Today | The Motley Fool

Shares of GitLab (GTLB 17.30%) were soaring today after the DevOps cloud software specialist posted strong results in its fiscal 2025 second-quarter earnings report, beating estimates on the top and bottom lines. As of 12:17 p.m. ET, the stock was up 17% on the news. In a difficult environment for cloud software companies, GitLab keeps delivering solid growth. Revenue in the quarter rose 31% to $182.6 million, topping estimates at $177 million. Adjusted gross margin remained strong at 91%, and the company continued to gain leverage on its operating costs as sales and marketing expenses were up just 6% to $97.8 million. Customers with more than $100,000 in annual recurring revenue rose 33% to 1,076, showing the business is scaling up with higher-end customers, and dollar-based net retention rate was 126%, showing that existing customers have increased their spending by 26% over the last four quarters. Adjusted operating income, which excludes stock-based compensation, flipped from a $4.3 million loss in the quarter a year ago to an $18.2 million profit. On the bottom line, the company reported adjusted operating income of $0.15, up from $0.01 in the quarter a year ago and better than the consensus of $0.10. CEO Sid Sijbrandij said, "Our results show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable results, and improving security." Looking ahead, GitLab expects revenue of $187 million-$188 million, up 25.2% at the midpoint from a year ago and slightly ahead of estimates. On the bottom line, the company called for adjusted earnings per share of $0.15-$0.16, up from $0.09 a year ago and better than the consensus of $0.11. GitLab also reported strong growth in remaining performance obligations at 51%, a proxy for its backlog. The company's valuation has come down sharply from its post-IPO peak, making the price look more reasonable. If it can keep delivering solid growth and improving its margins, the stock should move higher from here.

GitLab raises its full-year outlook, sending its stock higher in extended trading - SiliconANGLE

GitLab raises its full-year outlook, sending its stock higher in extended trading Shares of GitLab Inc. surged in extended trading today after the software development company posted strong earnings results and bumped up its full-year outlook. That came even as lingering concerns over the health of the company's chief executive officer fuel speculation over a possible sale. The company reported second quarter earnings before certain costs such as stock compensation of 15 cents per share, easily beating the Street's target of 10 cents per share. Revenue for the period came to $128.6 million, up by an impressive 31% from a year earlier and above the analysts' consensus estimate of $176.9 million. All told, GitLab delivered net income of $12.3 million, recovering from a loss of $51.2 million in the year-ago period. GitLab's co-founder and CEO Sid Sijbrandij (pictured) told analysts the company is benefiting as more businesses try to embed artificial intelligence and security tooling into their technology platforms. Because of that, the company is raising its full-year forecast by a fairly hefty margin. It said it's now looking at full-year sales of between $742 million and $744 million, up from its previous guidance of $733 million to $737 million. It's also targeting earnings of between 45 cents and 47 cents per share, compared to its previous forecast of 34 cents to 37 cents. Both projections are now well ahead of the Street's targets, with analysts looking for full-year revenue of $736.6 million and earnings of 36 cents per share. GitLab's forecast for the third quarter also looks good, with the company targeting earnings of 15 cents to 16 cents on sales of $187 million to $188 million. In comparison, the Street says it's looking for third-quarter earnings of just 11 cents per share on sales of $187 million. "Organizations need to deliver software faster to accelerate performance and respond to intense competition," Sijbrandij said in a statement. "Our results show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable benefits, and improving security." Investors liked what they saw, and GitLab's stock jumped more than 15% in extended trading, erasing a loss of 5% that occurred during the regular trading session, prior to today's report. GitLab is considered to be a pioneer in DevOps, selling software that enables companies to adopt a modern strategy of rapid, continuous software updates by combining their developer teams and information technology operations staff. Using GitLab's tools, developers can share code more easily and create new applications faster than before. Today's results clearly helped to alleviate concerns some shareholders have had about the company in light of Sijbrandij's revelation three months earlier that he's undergoing treatment for osteosarcoma, a form of bone cancer. Shortly after, a report in Reuters emerged saying that GitLab was exploring a potential sale, citing Datadog Inc. as a possible acquirer. In a note to clients later that month, financial analyst William Blair said Sijbrandij's "uncertain health could be a factor in the board's openness to a potential sale", noting that the CEO controls 45.5% of GitLab's voting stock through dual-class shares. Sijbrandij said during the company's prior earnings call in June that he was undergoing treatment for a second time, having previously done so a year earlier. "My doctor believes that this finding is part of the original lesion and that as such the disease has not metastasized" he told analysts at the time. "I'm working on making a full recovery. As [with] the last time, my scope and responsibilities as GitLab's CEO and chair remain unchanged." Sijbrandij's health is said to be one of the main reasons for the poor performance of GitLab's stock lately. Prior to today's results, the stock was down 29% in the year-to-date, with investors also worried about a cautious information technology spending environment stemming from the broader economic outlook.

Cantor Fitzgerald lifts GitLab shares target on strong quarterly results By Investing.com

On Wednesday, Cantor Fitzgerald updated its outlook on GitLab Inc (NASDAQ: NASDAQ:GTLB) shares, increasing the price target to $60 from the previous $55 while maintaining an Overweight rating. The firm highlighted GitLab's impressive second fiscal quarter of 2025 (F2Q25), which saw a 7.9% sequential increase in revenue and outperformed the same quarter last year by 38.1%. This growth surpassed FactSet consensus estimates for revenue by 3.2%, operating income by 68.5%, and free cash flow (FCF) by over threefold. The results reflect GitLab's consistent performance, coming off a record FCF level in the previous quarter. The firm's analysis suggests that GitLab's earnings per share (EPS) were set up for a positive outcome, despite concerns about cloud migration that affected its peer, JFrog. The analyst firm believes that GitLab's comprehensive artificial intelligence (AI) DevSecOps solution, along with its attention to customer feedback and integration of new functionalities, contributed to the company's robust performance. In the report, GitLab's recent achievements were characterized as a "classic beat and raise" situation, with the company's full-year 2025 revenue guidance approaching a 30% growth mark. The market responded positively to GitLab's performance, with the stock experiencing a 16% increase in after-hours trading, contrasting with a 2% decline in the S&P 500 index on the same day. The firm's commentary underscores GitLab's ability to exceed expectations and deliver strong financial outcomes. This performance demonstrates the company's strategic position in the market and its potential for continued growth. In other recent news, GitLab Inc. has been making headlines with its strong financial performance. The company's second-quarter financial results for 2025 showed a significant revenue outperformance, with a notable contribution from its Ultimate tier. This premium tier drove seven of GitLab's top ten deals and represented over 65% of the investment from customers with an annual recurring revenue exceeding $100,000. Analysts from Needham and Wells Fargo (NYSE:WFC) have maintained their Hold and Overweight ratings on GitLab respectively, with Wells Fargo raising its price target for the company. BofA Securities and Mizuho also raised their price targets on GitLab, maintaining their Buy and Outperform ratings respectively, while Goldman Sachs (NYSE:GS) reiterated its Buy rating. GitLab's recent developments also include an executive change, with Ashley Kramer stepping in as the Interim Chief Revenue Officer following the resignation of Christopher Weber. Furthermore, there have been rumors of GitLab engaging in potential acquisition talks, with Datadog (NASDAQ:DDOG) Inc. identified as a potential buyer. These recent developments underscore the company's robust financial performance and growth potential. GitLab Inc (NASDAQ: GTLB) has recently been the subject of increased attention following its favorable second fiscal quarter results. In line with these developments, InvestingPro provides valuable insights that could further inform investors about GitLab's financial health and market performance. According to InvestingPro, GitLab holds more cash than debt on its balance sheet, which can be a sign of financial stability and flexibility. Additionally, a noteworthy number of 21 analysts have revised their earnings expectations upwards for the upcoming period, reflecting a positive outlook on the company's future performance. From a data perspective, GitLab's market cap stands at $7.1 billion, with a significant revenue growth of 34.15% in the last twelve months as of Q1 2025. The company's gross profit margin is impressive at 89.63%, indicating strong operational efficiency. However, it's important to note that GitLab is not profitable over the last twelve months, with a negative P/E ratio of -16.13. Despite the lack of profitability, analysts predict that the company will turn a profit this year, which could be an encouraging sign for potential investors. For those interested in deeper analysis, there are additional InvestingPro Tips available on the platform, providing more nuanced guidance for GitLab's stock. As the company navigates its growth trajectory, these insights could prove invaluable for investors seeking to make informed decisions.

GitLab: Fantastic Performance Over The Last 2 Quarters (GTLB)

GitLab's valuation is justified by its dominant market position and growth rates. GitLab Inc (NASDAQ:GTLB) is a company with significant growth potential due to its market position and a potential TAM of more than $40 billion. At the time of my last article, however, the stock had taken a big hit after guidance came in worse than expected. Fortunately, the stock was able to bounce back from the weaker-than-expected guidance and even raised guidance above what was expected at the time. The first half of the fiscal year was also very strong from a business perspective, but that is still not enough for me to raise my rating, even though the company is incredibly strong. GitLab and GitHub, which is owned by Microsoft (MSFT), are the two dominant players in the Git market. Git basically means that multiple people can work on the same thing without interfering with each other. Atlassian (TEAM), with its Bitbucket application, is also on the market, but in my opinion, plays a rather minor role compared to GitLab and GitHub. GitLab's differentiator is its focus on a single platform that goes beyond traditional code hosting and collaboration offerings. Because it is a single platform, licensing costs are lower for customers because they only need GitLab and not multiple other applications. Plus, this also keeps the integration costs low. The things that GitLab does, or that you can do with GitLab, are planning and collaboration, publishing and monitoring, and bug tracking and fixing. Then there is continuous improvement and continuous delivery, and last but not least, security. In particular, security is a strong differentiator right now, and I think GitLab is a step ahead of the competition in this area. Another advantage over GitHub is that you have more control over your data and repositories because they can be hosted locally. GitLab has a lot of features that GitHub requires you to use third-party tools for. But in general, like Visa (V) and Mastercard (MA) in another space, they are both very strong players that dominate the market. GitHub also has its advantages in some areas. For example, it is often said that GitHub is supposed to be faster. Clients with more than $5,000 ARR increased by 19% year over year, and clients with more than $100,000 ARR saw a fantastic 33% year-over-year growth to 1,076 clients. This, combined with revenue growth of 30.8% year over year, is a fantastic result that many would not have expected given the downwardly revised guidance at the beginning of the year. In particular, the guidance for FY25 has been very encouraging. At the beginning of the year, the guidance was weak, forecasting only $0.22 per share, while analysts were expecting $0.37 per share. In Q2, the guidance was raised to $0.34 to $0.37 and is now at $0.45 to $0.47, well above the originally expected $0.37. The negative for me is that the guidance for shares outstanding is 168 million. Since they are currently at 158 million, we can expect the SBC to continue to grow. At first glance, FCF looks good because it is significantly higher than last year: $48 million this year versus $15 million last year. Unfortunately, SBCs are still so high that SBC-adjusted FCF is still negative. But even though SBC adjusted FCF is still negative, there is a positive trend, and it is possible that FCF will be positive in the next fiscal year even after the adjustment. Overall, there are positive trends. The GAAP operating margin, while still negative, improved to -22% and the operating loss decreased by $13 million to -$41 million. Although FCF in Q2 was lower than a year ago, it was up sharply in H1, as shown above. However, this is a number to watch in Q3 to see if FCF weakens again in Q3. I don't think there are any big surprises in the balance sheet. Cash and cash equivalents increased from 1,036,285 to 1,083,104, which is a positive development, and debt remains at zero. Receivables are relatively flat and payables are up, which, I think, is also a sign of improved capital efficiency. We can also see the pricing for GitLab Duo and what is included in Duo and Dedicated to have a current overview. At this point, it should be noted that GitLab stands out from the competition in terms of features, but this is also reflected in the prices. On a positive note, Gardner's AI efforts are not going unrecognized, as GitLab was recognized as a leader in Gardner's new field of AI code assistants. GitLab's earnings calls are always quite interesting as you get to hear a lot about the business and, more recently, about AI and the benefits GitLab sees for its customers in terms of faster, more efficient work or identifying sources of errors. GitLab predicts that there will be a shift in how AI is used, from reactive to proactive, and that autonomous agents will play a larger role in the future. And it looks like GitLab can compete very well with Copilot. Also, SaaS is already at 28% of revenue because they have a 46% growth rate. GitLab is also doing very well in the complex security space with their dedicated offering. The price increases will also continue to impact revenues in the coming months, as not all customers were able to renew their contracts at the same time and revenues will therefore vary depending on the timing of the renewal process. It was also mentioned that historically Q1 is the weakest quarter and Q4 is the strongest quarter, so I think the guidance for the full year is conservative and could potentially be exceeded. GitLab is still richly valued, but currently, the growth rates justify the high valuation, and unlike before, the valuation has already improved. The days of 20x+ PS multiples were really overdone. Now, however, with a ~11x PS multiple for long-term investors, the valuation should be fair if you have a 5-10 year horizon. Because GitLab is so dominant in what they do that they will grow into the valuation. The example of GitLab and its stock price illustrates once again the need to separate stock price from business performance. Although the stock's YTD performance has not been great, GitLab's underlying business has delivered fantastic results. Therefore, I consider the shares much more attractive today than at the beginning of the year. For an upgrade to Buy, however, I still need a few more quarters to be able to better assess FCF and the impact of AI.