Executive Summary
Executive overview: GitLab delivered solid top-line growth in Q1 FY2026, with revenue of $214.5 million, up 27% year over year, and noteworthy operating leverage culminating in non-GAAP operating income of $26.1 million and a 12.2% non-GAAP operating margin. The company continued to demonstrate durable profitability through strong gross margins and a record adjusted free cash flow of $104.1 million, representing a 49% margin. Management underscored the AI-native DevSecOps value proposition, highlighting GitLab 18 and Duo-related innovations that broaden the addressable market across Premium, Ultimate, and dedicated deployments, including Duo Workflow in private beta and ongoing AWS collaboration. Important ARR dynamics remain favorable: 10,104 customers with ARR of at least $5,000 per year, 1,288 customers with ARR above $100,000, and a DBNRR of 122%. Total RPO grew 40% year over year to $955.1 million, with cRPO up 34% to $584.8 million, underscoring durable revenue visibility. The quarter also featured heightened SaaS mix and enterprise adoption, including strong momentum in Ultimate and Duo, and continued expansion in large deals where Ultimate accounted for 52% of total ARR and eight of the ten largest deals. Management signaled a robust product roadmap with GitLab 18 enhancements focused on artifact management, faster CI/CD, security dashboards, and AI-enabled workflows, along with disciplined capital allocation and a substantial cash cushion. The outlook remains constructive, with Q2 revenue guidance of $226–$227 million and full-year revenue guidance of $936–$942 million, supported by continued operating leverage and AI-driven platform expansion. Risks highlighted include JiHu deconsolidation uncertainties, macro volatility, and pricing dynamics in SMB segments, though the company maintains a strong balance sheet and flexible investment capacity to navigate potential headwinds.
Key Performance Indicators
QoQ: -78.97% | YoY:34.24%
QoQ: -718.11% | YoY:34.35%
QoQ: -717.98% | YoY:37.14%
Key Insights
Revenue and profitability: Q1 FY2026 revenue of $214.5 million, up 27% from the prior year; GAAP gross margin of approximately 88.3%, non-GAAP gross margin of 90% (company notes best-in-class margin as SaaS scales). Non-GAAP operating income of $26.1 million and non-GAAP operating margin of 12.2%, versus a year-ago loss. Net income was negative $35.9 million, with an EPS of -0.22; however, adjusted free cash flow reached a record $104.1 million (adjusted FCF margin 49%)....
Financial Highlights
Revenue and profitability: Q1 FY2026 revenue of $214.5 million, up 27% from the prior year; GAAP gross margin of approximately 88.3%, non-GAAP gross margin of 90% (company notes best-in-class margin as SaaS scales). Non-GAAP operating income of $26.1 million and non-GAAP operating margin of 12.2%, versus a year-ago loss. Net income was negative $35.9 million, with an EPS of -0.22; however, adjusted free cash flow reached a record $104.1 million (adjusted FCF margin 49%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
214.51M |
26.79% |
1.46% |
| Gross Profit |
189.47M |
25.97% |
0.48% |
| Operating Income |
-34.61M |
34.24% |
-78.97% |
| Net Income |
-35.88M |
34.35% |
-718.11% |
| EPS |
-0.22 |
37.14% |
-717.98% |
Management Commentary
Key themes from the earnings call: AI-native platform as a differentiator and growth engine; GitLab 18 introduces centralized artifact management, faster CI/CD, enhanced security and AI-native capabilities; Duo and Duo Enterprise expanding adoption, including a 35% QoQ increase in new Duo customers and 82% private-beta satisfaction for Workflow; AWS collaboration and integration of Amazon Q; FedRAMP Moderate authorization for Dedicated; large enterprise wins (R+V, FBI, NatWest, FORVIA HELLA) illustrating broad sector appeal; Ultimate now represents 52% of total ARR with 8 of the 10 largest deals; guidance remains unchanged given macro assumptions; JiHu expenses and deconsolidation uncertainty acknowledged; Q1 days were fewer, affecting some sequential comparison.
Unlike competitors, we are the only AI-native, cloud agnostic model-neutral DevSecOps platform capable of running anywhere, including air-gapped environments.
— William Staples
82% of surveyed users already classify themselves as either satisfied or very satisfied with Workflow's capabilities.
— William Staples
Forward Guidance
Guidance and outlook: For Q2 FY2026, total revenue expected at $226–$227 million (roughly 24% YoY growth); non-GAAP operating income of $23–$24 million; non-GAAP diluted EPS of $0.16–$0.17 assuming 171 million shares. For FY26, total revenue forecasted at $936–$942 million (~24% YoY); non-GAAP operating income of $117–$121 million; non-GAAP diluted EPS of $0.74–$0.75 assuming 172 million shares. JiHu-related non-GAAP expenses for FY26 are forecast at approximately $18 million (vs. $13 million last year). The guidance implies continued operating leverage, aided by higher SaaS mix (approximately 30% of revenue) and sustained ARR growth, alongside AI-driven product expansion and enterprise-scale adoption. Investors should monitor AI adoption velocity in Duo and Workflow, the cadence of Ultimate land-and-expand deals, the impact of pricing changes on new logo intake, renewal mix, and potential JiHu deconsolidation timing.