TLDR
- GitLab revenue jumps 23% as AI demand offsets layoff concerns.
- GTLB rebounds after hours despite 14% workforce reduction plan.
- GitLab AI tools gain traction as Q1 cash flow rises sharply.
- GTLB stock spikes after hours on strong revenue and AI momentum.
- GitLab trims workforce while AI platform growth supports outlook.
GitLab (GTLB) shares moved sharply after its latest earnings update, as strong revenue growth met a major workforce reduction plan. GTLB closed at $31.82, down 5.83%, before rebounding after hours to $33.33, up 4.73%. The move followed GitLab’s first-quarter fiscal 2027 results and a restructuring plan tied to execution priorities.
GitLab Revenue Grows as AI Products Gain Traction
GitLab reported first-quarter fiscal 2027 revenue of $264.2 million, up 23% from $214.5 million a year earlier. The company linked the growth to stronger platform activity and rising demand for AI-driven software development tools. Moreover, GitLab continued to position its DevSecOps platform around enterprise automation, security, and governance.
The company’s non-GAAP operating income reached $37.5 million, compared with $26.1 million in the prior-year quarter. Its non-GAAP operating margin improved to 14%, up from 12% a year earlier. However, GitLab still reported a GAAP operating loss of $15.7 million.
GitLab also narrowed its GAAP net loss to $5 million from $35.9 million in the same quarter last year. Its non-GAAP net income rose to $39 million, while diluted non-GAAP earnings reached $0.23 per share. Besides, operating cash flow increased to $149.2 million, showing stronger cash generation during the quarter.
AI Partnerships Strengthen GitLab’s Enterprise Position
GitLab expanded its AI product strategy through the GitLab Duo Agent Platform during the quarter. The company added automated security remediation, pipeline configuration tools, and delivery analytics. Additionally, it widened access for free-tier users with cost controls and flat-rate agentic code reviews.
The company also deepened its connection with Anthropic’s Claude models. This gives GitLab customers access to newer AI capabilities within existing governance and audit systems. Hence, the platform keeps AI activity under the same compliance structure used across the software lifecycle.
GitLab also announced collaborations with AWS and Google Cloud during the quarter. These deals allow enterprise teams to use Amazon Bedrock or Vertex AI with GitLab Duo Agent Platform. Moreover, GitLab received Google Cloud’s DevSecOps technology partner award for the sixth consecutive year.
GitLab Cuts Workforce and Issues Fiscal 2027 Outlook
GitLab announced a 14% workforce reduction after the quarter, equal to about 350 full-time team members. The company also plans to exit 22 countries and reduce its geographic footprint by about 37%. GitLab expects $30 million to $35 million in pre-tax restructuring charges.
The company expects about $19 million of those charges in the second quarter of fiscal 2027. Most remaining costs should appear over the following three quarters. GitLab expects to complete most of the restructuring plan by the end of fiscal 2027.
For the second quarter, GitLab expects revenue between $272 million and $274 million. For fiscal 2027, it expects revenue between $1.112 billion and $1.118 billion. The company also guided for full-year non-GAAP diluted earnings between $0.79 and $0.82 per share.
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