It has been about a month since the last earnings report for GitLab Inc. (GTLB). Shares have added about 1.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Gitlab due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Gitlab Q1 Earnings Beat Estimate, Revenues Up Y/Y
GitLab delivered first-quarter fiscal 2027 non-GAAP earnings of 23 cents per share, which beat the Zacks Consensus Estimate of 20 cents by 15%.
Total revenues were $264.2 million, topping the consensus mark of $254 million by 4.04%. The top line increased 23% year over year, supported by solid demand for GitLab’s DevSecOps platform.
GitLab’s Q1 Top-Line Details
Subscriptions, self-managed and SaaS revenues (90.6% of total revenues) increased 18% year over year to $239.3 million, beating the Zacks Consensus Estimate by 3.16%. License, self-managed and other revenues (9.4% of total revenues) rose 25% year over year to $24.9 million.
GitLab’s revenue growth was supported by continued strength in enterprise adoption and customer expansion metrics. Customers with more than $5,000 of ARR increased to 10,831 (up 7% year over year), while customers with more than $100,000 of ARR rose to 1,519 (up 18%). Dollar-Based Net Retention Rate was 117%.
Contracted demand also improved. Total RPO grew 18% year over year to $1.1 billion, while current RPO increased 24% year over year to $724.1 million.
GitLab’s Operating Details
On a non-GAAP basis, research & development expenses increased 13.1% year over year to $57.9 million. Sales and marketing expenses were up 19.2% year over year to $101.9 million. General and administrative expenses increased 11.7% year over year to $34.3 million in the reported quarter.
Profitability improved year over year. GitLab reported non-GAAP operating income of $37.5 million compared with $26.1 million a year ago. The non-GAAP operating margin expanded to14.2% from 12.2%. Non-GAAP gross margin was 87.7% in the first quarter of fiscal 2027.
GitLab’s Balance Sheet & Cash Flow
As of April 30, 2026, cash and cash equivalents and short-term investments were $1.36 billion compared with $1.25 billion as of Jan. 31, 2026.
In the reported quarter, the company generated cash flow from operations of $149.2 million compared with $45.7 million in the previous quarter.
Adjusted free cash flow was $146.7 million as of April 30, 2026, compared with $41.7 million as of Jan. 31, 2026.
GitLab Offers Q2 & FY27 Guidance
For the second quarter of fiscal 2027, GitLab expects revenues between $272 million and $274 million.
Non-GAAP operating income is expected to be in the range of $30-$32 million for the fiscal second quarter.
Non-GAAP earnings for the fiscal second quarter are expected to be between 17 cents and 18 cents per share.
For fiscal 2027, GitLab raised revenue guidance to between $1.112 billion and $1.118 billion.
Non-GAAP operating income is expected to be in the range of $135-$141 million for fiscal 2027.
Non-GAAP earnings are expected to be between 79 cents and 82 cents per share.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted 26.32% due to these changes.
VGM Scores
Currently, Gitlab has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Gitlab has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Gitlab belongs to the Zacks Internet - Software industry. Another stock from the same industry, Snowflake Inc. (SNOW), has gained 8.3% over the past month. More than a month has passed since the company reported results for the quarter ended April 2026.
Snowflake reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of +33.5%. EPS of $0.39 for the same period compares with $0.24 a year ago.
Snowflake is expected to post earnings of $0.45 per share for the current quarter, representing a year-over-year change of +28.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Snowflake has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
