Key Highlights

  • Shares are trading at $55.55 in pre-market activity, up 23.19% from Tuesday's close of $45.09.
  • Fiscal second-quarter Revenue reached $286.3 million, up 21% year over year and roughly five points ahead of guidance, with adjusted EPS of $0.24 beating a $0.18 estimate.
  • Net dollar-based retention accelerated to 117% for the first time since 2024, with net new annual Recurring Revenue growing 42% year over year.
  • The company's new Flex consumption pricing model drove committed revenue run rate above $40 million, up from $15 million in the first quarter.
  • Full-year revenue guidance was raised to a range of $1.129 billion to $1.133 billion, with EPS guidance of $0.85 to $0.87.

Record Quarter Triggers a Sharp Pre-Market Rally

GitLab (NASDAQ:GTLB) shares soared in pre-market trading after the company reported its strongest quarter since going public. GitLab is a San Francisco-based software company that develops an all-in-one DevSecOps platform used to streamline the software development lifecycle from planning through deployment. Fiscal second-quarter revenue reached $286.3 million, up 21% year over year and roughly five points ahead of the midpoint of guidance, with adjusted Earnings Per Share of $0.24 beating a $0.18 estimate.

Management described it as the largest gross bookings quarter in company history, with net dollar-based retention accelerating to 117% on a sequential basis for the first time since 2024, while net new annual recurring revenue grew 42% year over year.

New Flex Pricing Model Fuels Adoption

The quarter's strength was driven in part by the recent launch of Flex, a flexible dollar-commitment consumption pricing model, which pushed paid consumption run rate above $40 million, up from $15 million in the first quarter, with more than 130 customers already committing over $20 million to the model in its first six weeks. Management is targeting more than $100 million in paid committed consumption run rate by fiscal year-end. Strong underlying momentum also included more than 1,700 first orders, more than double the year-earlier figure, and deals over $500,000 growing more than 150% year over year.

Guidance Raised as Analysts Turn More Bullish

Full-year revenue guidance was raised to a range of $1.129 billion to $1.133 billion, representing 18% to 19% year-over-year growth, with non-GAAP EPS guidance of $0.85 to $0.87. Several research firms raised price targets following the report, including Needham to $65, BTIG to $60, and Rosenblatt to $55, while some firms, including Bank of America, maintained a Neutral rating citing potential growth deceleration to the mid-teens in the third quarter as the Flex pricing transition plays out. The company also disclosed the upcoming resignation of its Chief Accounting Officer.

Outlook: Can the Flex Transition Sustain This Momentum?

The stock's sharp pre-market gain reflects strong conviction in the company's execution, though some analysts remain cautious about growth deceleration as the Flex pricing model continues to shift revenue timing. Continued adoption of Flex and progress toward the $100 million committed consumption target will likely be the key metrics to watch next quarter.