GitLab Inc. (Nasdaq: GTLB) reported fiscal second-quarter revenue of $286.3 million, an increase of 21% from a year earlier, as customers expanded their use of its DevSecOps platform. Management said gross bookings reached a record and net annual recurring revenue growth exceeded 40%.
The company posted non-GAAP diluted earnings of $0.24 per share and non-GAAP operating income of $42.6 million. Its adjusted operating margin was 15%, compared with 17% a year earlier, while the GAAP operating margin widened to a negative 20% from a negative 8%.
How GitLab AI Growth Is Changing the Software Pipeline
GitLab AI growth is being driven by the rising volume of software produced by human developers and automated agents. The company argues that more AI-generated code increases demand for shared context, security, governance and control throughout the development lifecycle.
Dollar-based net retention improved to 117%. Customers generating more than $100,000 of annual recurring revenue increased 17% to 1,571, while customers above $5,000 of ARR rose 8% to 11,114.
Total remaining performance obligations grew 16% to $1.2 billion, and current RPO increased 20% to $744.7 million. Operating cash flow was negative $3.1 million, compared with positive $49.4 million in the prior-year period, while adjusted free cash flow fell to $9.8 million from $46.5 million.
Outlook Balances Growth With Margin Questions
For the fiscal third quarter, GitLab expects revenue of $281 million to $283 million, non-GAAP operating income of $35 million to $37 million and adjusted diluted EPS of $0.19 to $0.20.
Full-year revenue is projected at $1.129 billion to $1.133 billion. Management expects non-GAAP operating income of $148 million to $152 million and non-GAAP diluted EPS of $0.85 to $0.87.
The GitLab AI growth thesis is supported by bookings, ARR expansion and higher-value customer growth. However, investors will also be watching cash conversion, the wider GAAP loss and pressure on adjusted margins. The next phase depends on whether new products such as GitLab Flex, Secrets Manager and the Orbit context layer turn greater AI usage into durable platform revenue.
