GitLab Inc. (NASDAQ: GTLB) reported fiscal second-quarter 2026 earnings on September 4, with shares dropping 9.8% to $42.33 during morning trading.
Despite beating Wall Street expectations, the company’s cautious revenue outlook and the resignation of its CFO weighed heavily on investor sentiment.
For the quarter ended July 31, GitLab delivered revenue of $236 million, up 29% year-over-year and ahead of analyst projections of $227.2 million. Adjusted earnings per share came in at $0.24, compared to $0.16 expected, marking a 50% earnings surprise.
Non-GAAP operating margin reached 17%, while free cash flow was $46 million, a 20% margin. GitLab ended the quarter with $1.2 billion in cash and investments.
The company continues to benefit from expanding its large customer base. Clients with annual recurring revenue (ARR) above $100,000 grew 25% to 1,344. Total customers with at least $5,000 ARR rose to 10,338, representing more than 95% of ARR. Dollar-based net retention rate stood at a strong 121%.
GitLab Ultimate, its flagship product, now makes up 53% of total ARR. The GitLab Duo Agent Platform, which integrates AI into the software development lifecycle, has gained momentum and is expected to drive future growth.
Despite these positive results, shares sank after GitLab announced that CFO Brian Robins will step down on September 19 to join Snowflake as CFO. Robins had held the role since October 2020 and was credited with helping drive operational discipline. James Shen, Vice President of Finance, will serve as interim CFO.
🚨Leadership Change: GitLab $GTLB announced that Chief Financial Officer Brian Robins will step down from his role on September 19, 2025, following notice of his resignation submitted on August 28.
The company clarified that Robins’ decision to leave is unrelated to any… pic.twitter.com/uxxoGTXjtG
— ABBO News (@ABBONews) September 3, 2025
The leadership transition raised concerns about stability, particularly as GitLab undergoes significant go-to-market organizational changes. Analysts noted that while fundamentals remain strong, uncertainty around management could weigh on the stock in the short term.
For Q3 FY26, GitLab guided revenue between $238 million and $239 million, about 23% growth year-over-year, below analyst expectations of $241.5 million. Adjusted EPS is projected at $0.19–$0.20, compared to the consensus of $0.19.
For the full fiscal year, GitLab reaffirmed revenue of $936 million to $942 million but raised adjusted EPS guidance to $0.82–$0.83 from $0.74–$0.75, above estimates of $0.75.
While Bank of America and Barclays both suggested the conservative guidance is likely caution rather than a demand slowdown, they acknowledged investor concerns. Analysts see current weakness as a potential buying opportunity, given GitLab’s profitability gains and product traction.
Despite recent pressure, GitLab has consistently beaten both earnings and revenue estimates over the last four quarters. However, shares have dropped nearly 25% year-to-date, underperforming the S&P 500’s 9.1% gain.
With strong product adoption, rising customer spending, and expanded AI capabilities, GitLab remains positioned for long-term growth. Yet competitive pressure, SMB softness, and leadership uncertainty will shape near-term investor confidence.
The post GitLab Inc. ($GTLB) Stock: Stock Drops Over 9% as Q2 Earnings Beat Offset by CFO Exit and Conservative Guidance appeared first on CoinCentral.
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