Gitlab Reports Beat And Raise Quarter, Analysts Expect AI To Be 'Significant Contributor' By Fiscal 2026

Shares of Gitlab Inc (NASDAQ: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.

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