GitLab reports the second quarter of fiscal 2027 — the three months ended 31 July 2026 — after the US close on Tuesday 1 September 2026, with the call at 4:30 p.m. Eastern. Consensus is $0.18 of non-GAAP earnings per share on about $273.1 million of revenue, press-reported from third-party estimate feeds, and both figures sit inside guidance GitLab issued on 2 June: revenue of $272–274 million and non-GAAP diluted EPS of $0.17–0.18.
The revenue guide is the story. $273 million against the $235.960 million GitLab reported for the same quarter a year ago is 15.7% growth, against 23.1% in the quarter it just reported. A seven-point step down, guided by the company, in one quarter.
And there is a second number in the same guidance table that is harder to explain: GitLab guided non-GAAP operating income of $30–32 million, which on the revenue guide is an operating margin of about 11.4% — down from the 14.2% it delivered in April. That is the quarter in which the company removes 14% of its people.
The points
- The guide is a seven-point deceleration. Q2 revenue of $272–274 million is +15.3% to +16.1% year over year, against +23.1% in the April quarter. Both the guide and the reported quarter are GitLab's.
- The full year asks for less again. Fiscal 2027 revenue of $1,112–1,118 million, less the $264.158 million reported and the $273 million guided, leaves about $577.8 million for the second half against $504.8 million a year earlier — +14.5%. The subtraction is ours.
- The margin is guided down in the quarter of the cuts. Non-GAAP operating income of $30–32 million on $272–274 million is 10.9% to 11.8%, against 14.2% in April.
- And it is not the restructuring charge. GitLab excludes restructuring charges from its non-GAAP measures by its own stated definition. The roughly $19 million of the $30–35 million restructuring cost that lands in this quarter is in the GAAP loss, not in the margin guided above.
- The cut itself is large. About 350 people, 14% of the workforce, and an exit from 22 countries cutting the geographic footprint by roughly 37% — announced after the April quarter closed, so this is the first print that carries it.
- The volume metrics were already decelerating before any of that. Customers above $5,000 of ARR grew 7% year over year in April, down from 16% seven quarters earlier; the dollar-based net retention rate was 117%, down from 124% over the same span.
- The forward book is the one thing not decelerating. Current remaining performance obligations grew 24% to $724.1 million in April, faster than the 23% revenue growth beneath it.
- Our trailing Rule of 40 is 51.1 — revenue growth of 24.9% plus a free cash flow margin of 26.2% on $263 million of free cash flow against $1.005 billion of revenue. Our arithmetic, on reported figures, and the same score set out when GitLab joined coverage yesterday.
The deceleration is guided, not feared
| Quarter | Revenue | YoY |
|---|---|---|
| Q1 FY2026 | $214.509M | |
| Q2 FY2026 | $235.960M | |
| Q4 FY2026 | $260.402M | |
| Q1 FY2027, reported | $264.158M | +23.1% |
| Q2 FY2027, guided | $272–274M | +15.3 to +16.1% |
| H2 FY2027, implied | $577.8M | +14.5% |
The reported quarters and the guided one are GitLab's; the implied second half is the full-year range less the two, and that is ours.
Two points about the shape. First, sequential growth of 3.3% at the midpoint is the slowest quarter-on-quarter step in this series — GitLab added $3.756 million sequentially in April and is guiding to add about $8.8 million now, on a base a fifth larger than a year ago. Second, the deceleration is not a forecast this site is making about a company that has not seen it coming: it is the company's own guide, and the full-year number underneath it is lower still.
The reason to take the guide reasonably literally, rather than as the usual sandbagging, is that the volume metrics have been pointing this way for seven straight quarters. Customer growth above the $5,000 threshold has fallen from 16% to 7% and net retention from 124% to 117%, in each of the last seven quarters, without a reversal. Guidance that finally matches a two-year trend is a different object from guidance set low to be beaten.
Against that, the restructuring itself removes exactly the coverage that refills a funnel: exiting 22 countries is not a cost line, it is a smaller sales map.
A margin guided down in the quarter of the cuts
This is the part worth arriving with a question about.
| Revenue | Non-GAAP op. income | Margin | |
|---|---|---|---|
| Q1 FY2027, reported | $264.158M | $37.5M | 14.2% |
| Q2 FY2027, guided | $272–274M | $30–32M | 10.9–11.8% |
| FY2027, guided | $1,112–1,118M | $135–141M | 12.1–12.6% |
All GitLab's figures; the margins are the division, which is ours.
GitLab is guiding to convert less of each revenue dollar in the quarter it removes a seventh of its people, and the restructuring charge is not the explanation, because the company's own non-GAAP definition takes restructuring charges out. Nor is it dilution of the per-share line: the non-GAAP EPS guide of $0.17–0.18 assumes about 168 million weighted-average shares, roughly where the count sat after the April quarter's buyback.
There are ordinary explanations — severance-adjacent costs that are not classified as restructuring, retention pay, duplicate cost during the country exits, or simply a conservative first guide under a new operating structure. The company has not given one, and the release is the place to look for it. What can be said without inventing anything is that the fiscal 2027 full-year margin guide of 12.1–12.6% is below the 14.2% just delivered, so this is not framed as one bad quarter inside a rising year.
What the price is paying for
Our GitLab model was published on 31 August against a share price of $46.54. Its four cases, all ours:
| Case | Fair value | vs $46.54 |
|---|---|---|
| Bear | $29.26 | −37% |
| Base | $44.57 | −4% |
| Act 2 | $46.56 | +0% |
| Bull | $65.92 | +42% |
Of the five companies reporting today, GitLab is the one whose price is not making a large claim. Hold every other assumption fixed and solve for the exit multiple that makes the base case equal the price and it is 4.81 times terminal revenue against the 4.5x the base case uses — a third of a turn. That solve is ours.
More striking: the case built on the restructuring working — margin up, growth slightly down, a multiple between base and bull — is worth $46.56, which is two cents from where the shares closed on 31 August. The market is currently paying, to the cent, for Bill Staples' plan to do what he said it would. That is a coincidence of two of our own assumptions meeting a price, not a prediction; but it does mean the July quarter is being priced as if the restructuring already worked, and the first evidence either way is on Tuesday.
The bear case, worth $29.26, is simply the seven-quarter deceleration continuing at its observed rate with the multiple de-rating to 3.0x. It is 37% below the price, and nothing in the guide contradicts it yet.
What to watch
- Revenue against $272–274 million, and the full-year range. A raise to the full year says the 14.5% second half was conservatism. Left alone, it is the plan.
- Non-GAAP operating margin against the guided 10.9–11.8%, and what management says about why a quarter with 14% fewer people converts less. This is the single least-explained number in the guide.
- Customers above $5,000 of ARR against 10,831 and +7%, and dollar-based net retention against 117%. Seven consecutive quarters of decline in both. An eighth makes the bear case's assumption the observed trend rather than an extrapolation.
- Current RPO against $724.1 million and +24%. It has been growing faster than revenue, which is the only forward-looking disagreement with the guide.
- Whether the restructuring cost stays inside $30–35 million, with about $19 million in this quarter, and whether the country exits show up in the customer counts before they show up in the cost line.
GitLab reports the quarter ended 31 July 2026 after the US close on Tuesday 1 September, with the call at 4:30 p.m. Eastern. Consensus of $0.18 and about $273.1 million is press-reported from third-party estimate feeds as of 1 September 2026 on a non-GAAP basis, and is not a series this site stores or verifies. All guidance — second-quarter and full-year revenue, non-GAAP operating income and non-GAAP diluted EPS, the share counts they assume, and the size and phasing of the restructuring — is GitLab's own, from its first-quarter fiscal 2027 release of 2 June 2026, as is the definition that excludes restructuring charges from non-GAAP measures. Reported revenue, operating income, customer counts, net retention, remaining performance obligations and the buyback are the company's, from that release and the quarterly releases before it. Ours rather than GitLab's: the implied second half, the operating margins computed from the guided ranges, the trailing Rule of 40, and the fair values, exit multiples and the multiple implied by the price, which are assumptions in our GitLab model of 31 August 2026 and not company forecasts. The price of $46.54 is the 31 August 2026 close.
