GitLab (GTLB) Stock Drops 5% After Beating Earnings — What’s Going On?

TLDR

• GitLab reported Q1 adjusted EPS of $0.23, beating the $0.21 estimate, with revenue of $264.2 million, up 23% year-over-year and above the $254.2 million consensus.
• The company raised its full-year fiscal 2027 guidance, now forecasting EPS of $0.79–$0.82 and revenue of $1.112–$1.118 billion.
• GitLab plans to cut its workforce by roughly 14% (350 employees) and exit 22 countries, with $30–$35 million in restructuring charges expected.
• CEO Bill Staples cited the AI “agentic era” as creating structural tailwinds, pointing to early traction from the Duo Agent Platform.
• Despite the earnings beat, GTLB stock was down around 5.4% in Wednesday premarket trading, extending Tuesday’s 5.8% decline to $31.82.

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GitLab (GTLB) beat Q1 earnings estimates and raised full-year guidance, but the stock still fell — here’s what happened.

$GTLB Q1’27 EARNINGS HIGHLIGHTS

🔹 Revenue: $264.2M (Est. $254.25M) 🟢; +23% YoY
🔹 Adj. EPS: $0.23 (Est. $0.21) 🟢

FY Guide:
🔹 Revenue: $1.112B-$1.118B (Est. $1.11B) 🟢
🔹 Non-GAAP Operating Income: $135M-$141M
🔹 Adj. EPS: $0.79-$0.82 (Est. $0.79) 🟡

Q2 Guide:
🔹 Revenue:… pic.twitter.com/K7TWkeIQPo

— Wall St Engine (@wallstengine) June 2, 2026

GitLab posted adjusted earnings of $0.23 per share for the quarter ended April 30, ahead of the Wall Street estimate of $0.21. That compares to $0.17 a year ago. Revenue came in at $264.2 million, up 23% year-over-year and above the consensus of $254.2 million.

GTLB stock fell 5.8% on Tuesday to close at $31.82, and dropped another 5.4% in Wednesday premarket trading. The stock is down about 15% year to date, even after surging 40% last month.

GitLab Inc., GTLB

Guidance Beat — But Not By Enough?

GitLab raised its full fiscal year 2027 outlook. The company now expects EPS of $0.79–$0.82 on revenue of $1.112–$1.118 billion. Wall Street was looking for $0.80 EPS on $1.11 billion in revenue.

For Q2, GitLab guided for EPS of $0.17–$0.18 on revenue of $272–$274 million. Analysts had expected $0.19 EPS and $273.2 million in revenue — so the Q2 profit guidance came in slightly light.

Mizuho raised its price target on GTLB to $28 from $26, maintaining a Neutral rating. The firm cited the revenue beat but flagged ongoing risks, including whether AI could erode GitLab’s developer seat model and rising competition from AI-native startups.

Rosenblatt kept its Buy rating with a $43 target. Needham lifted its target to $38. BofA raised its target to $32, while RBC moved to $29.

Workforce Cut and Country Exits

GitLab confirmed plans to reduce its full-time headcount by around 14%, or roughly 350 employees, and exit 22 countries. The company called it a realignment toward “strategic priorities.”

Restructuring costs are expected to total $30–$35 million, with $19 million hitting in Q2. GitLab expects the plan to be wrapped up by the end of the fiscal year.

CEO Bill Staples said the AI “agentic era is creating structural tailwinds for GitLab,” pointing to the Duo Agent Platform as central to its strategy. The platform is designed to let humans work alongside AI agents on multistep tasks.

In April, GitLab expanded its partnership with Google Cloud. The deal allows Google Cloud users to access the Duo Agent Platform using Google’s Vertex AI models.

Duo Agent Platform is not expected to make a material contribution to revenue this fiscal year.

Subscription revenue grew 23% year-over-year in Q1, making up 91% of total revenue. GitLab’s gross profit margin sits at 87% on a trailing twelve-month basis.