WS Investor
03 Jun 2026, 12:43
GitLab Falls 6% Despite Strong Revenue Growth as Restructuring Overshadows Results
Shares of GitLab (NASDAQ: GTLB) fell 6% in premarket trading despite reporting strong first-quarter fiscal 2027 results, as investors focused on the company's restructuring plan and softer profitability outlook.
GitLab reported revenue of $264.2 million, up 23% year-over-year, while non-GAAP operating income increased to $37.5 million from $26.1 million a year ago. Non-GAAP earnings rose to $0.23 per share, and adjusted free cash flow reached a strong $146.7 million.
The company continued to show healthy customer growth. Customers generating more than $100,000 in annual recurring revenue increased 18% year-over-year to 1,519, while the dollar-based net retention rate remained strong at 117%. Remaining performance obligations grew 18% to $1.1 billion, highlighting continued demand for GitLab's DevSecOps platform.
Management also highlighted growing adoption of its AI offerings, including GitLab Duo Agent Platform, expanded integrations with Anthropic's Claude models, and new collaborations with AWS and Google Cloud aimed at accelerating enterprise AI software development.
However, investors appeared focused on GitLab's announcement that it will reduce its workforce by approximately 14%, or 350 employees, and exit 22 countries as part of a broader restructuring effort. The company expects to incur $30 million to $35 million in restructuring charges, with most of the costs occurring over the coming quarters.
GitLab also guided fiscal 2027 revenue to $1.112 billion-$1.118 billion and non-GAAP operating income to $135 million-$141 million. While the outlook reflects continued growth, the combination of restructuring actions and cautious guidance appeared to weigh on investor sentiment.
Despite the stock's decline, the quarter demonstrated strong revenue growth, expanding profitability, robust cash generation, and increasing traction for GitLab's AI-powered software development platform.
Shares of GitLab (NASDAQ: GTLB) fell 6% in premarket trading despite reporting strong first-quarter fiscal 2027 results, as investors focused on the company's restructuring plan and softer profitability outlook.
GitLab reported revenue of $264.2 million, up 23% year-over-year, while non-GAAP operating income increased to $37.5 million from $26.1 million a year ago. Non-GAAP earnings rose to $0.23 per share, and adjusted free cash flow reached a strong $146.7 million.
The company continued to show healthy customer growth. Customers generating more than $100,000 in annual recurring revenue increased 18% year-over-year to 1,519, while the dollar-based net retention rate remained strong at 117%. Remaining performance obligations grew 18% to $1.1 billion, highlighting continued demand for GitLab's DevSecOps platform.
Management also highlighted growing adoption of its AI offerings, including GitLab Duo Agent Platform, expanded integrations with Anthropic's Claude models, and new collaborations with AWS and Google Cloud aimed at accelerating enterprise AI software development.
However, investors appeared focused on GitLab's announcement that it will reduce its workforce by approximately 14%, or 350 employees, and exit 22 countries as part of a broader restructuring effort. The company expects to incur $30 million to $35 million in restructuring charges, with most of the costs occurring over the coming quarters.
GitLab also guided fiscal 2027 revenue to $1.112 billion-$1.118 billion and non-GAAP operating income to $135 million-$141 million. While the outlook reflects continued growth, the combination of restructuring actions and cautious guidance appeared to weigh on investor sentiment.
Despite the stock's decline, the quarter demonstrated strong revenue growth, expanding profitability, robust cash generation, and increasing traction for GitLab's AI-powered software development platform.