GitLab Inc., a key player in the software development sector, has reported significant growth in its first quarter for fiscal year 2026, with revenues increasing by 27% year-over-year to reach $214.5 million. The company’s non-GAAP operating margin improved to 12%, a notable shift from the losses reported in the same period last year. These results reflect not only the accelerated adoption of artificial intelligence (AI) technologies within its platform but also highlight strategic customer acquisitions and record high adjusted free cash flow, further solidifying GitLab’s position in a competitive landscape.
During an earnings call held on June 10, 2025, the company emphasized ongoing investments in its product capabilities, particularly through its GitLab Duo suite. This collection of AI-infused development tools saw a remarkable 35% increase in first-time customers from the previous quarter. High-profile clients such as Highmark Health, the Federal Bureau of Investigation, NatWest, and Volkswagen Digital Solutions were mentioned as significant wins that underscore the platform’s growing enterprise appeal. Notably, 52% of GitLab’s total Annual Recurring Revenue (ARR) now comes from customers utilizing the Ultimate tier, which reinforces the increasing demand for more advanced security features and AI capabilities among corporate users.
“Our momentum with GitLab Duo continues to grow. The increase in enterprise sales reflects the critical nature of our solutions as businesses navigate complex development and security challenges,” stated CEO William Staples during the call. This swift uptake of AI-powered solutions fosters deeper integrations within enterprises, ensuring GitLab’s competitive edge persists as the demand for sophisticated DevSecOps tools rises.
In terms of financial performance, GitLab achieved an impressive $104.1 million in adjusted free cash flow, marking an all-time quarterly high with a free cash flow margin of 49%. The company reported a non-GAAP operating income of $26.1 million, a substantial improvement from a loss of $3.8 million in the comparable quarter last year. This robust financial outcome was aided by a 35% year-over-year increase in SaaS revenue, which now constitutes 30% of the company’s total revenue.
CFO Brian Robbins highlighted the efficiency of GitLab’s business model, which allows for sustainable growth without sacrificing profitability. “The significant improvement in our operating margin—from negative 2.3% last year to 12.2% this year—demonstrates our ability to scale effectively while managing costs,” Robbins noted. Such financial agility not only bolsters GitLab’s investment in AI initiatives but also mitigates execution risks as the company paves its way into an evolving market landscape.
Strategically, GitLab has focused on enhancing its AI capabilities and expanding its ecosystem. The introduction of GitLab Duo alongside Amazon Q exemplifies this thrust, merging autonomous software development agents with GitLab’s DevSecOps platform. Early feedback from users indicates a high satisfaction rate—82% reported being satisfied with the new AI workflows during a private beta evaluation led by R+V Insurance. This reflects strong community engagement and suggests that GitLab is attuned to the real-time needs of enterprises, enabling a targeted approach to product improvement.
“Our latest integration with Amazon Q has been a game changer. It not only streamlines workflows but also enhances the user experience by embedding advanced AI development tools directly into our platform,” Staples elaborated. Such continuous investment in AI-driven enhancements and compatibility with other software environments ensures GitLab retains its relevance as automation trends reshape the software development landscape.
Looking forward, GitLab’s management has set optimistic revenue guidance for the coming quarters, forecasting total revenues for Q2 FY2026 to fall between $226 million and $227 million, which would reflect consistent year-over-year growth of approximately 24%. For the full fiscal year 2026, the company anticipates revenues in the range of $936 million to $942 million. This strategic outlook is coupled with projections for non-GAAP operating income to be between $117 million and $121 million, and a non-GAAP net income per share of $0.74 to $0.75 based on 172 million shares.
The launch of GitLab Duo Workflow—integral to the company’s vision for agentic AI—is anticipated later this winter, with more comprehensive product announcements slated for the GitLab 18 launch event on June 24. Despite the robust growth and strategic initiatives underway, the management refrained from making additional comments regarding changes in guidance philosophy or the overarching macroeconomic outlook during the earnings call.
As GitLab strives to reinforce its market position, investors and stakeholders remain focused on how the company’s continued investment in AI and its strategic customer acquisitions will reshape its future trajectory in a rapidly evolving technology landscape. With its latest financial results underscoring both resilience and opportunity, GitLab’s future appears poised for continuing expansion amid growing demand for cutting-edge software solutions.