GitLab shares surged 24.81% to $56.27 in premarket trading Wednesday after the company reported strong fiscal second-quarter results that beat Wall Street estimates and raised its fiscal 2027 outlook. The software developer reported adjusted earnings of 24 cents per share, beating the consensus estimate of 18 cents, and revenue rising 21% year over year to $286.25 million, above the $273.12 million estimate. Adjusted operating income increased to $42.6 million. The company ended the quarter with $1.3 billion in cash and investments and recorded about $23.3 million in restructuring charges while repurchasing 3.5 million shares with roughly $245 million remaining under buyback authorization. Bookings and retention improved with gross bookings at a record, first orders more than doubling to about 1,700, new-logo net ARR up 39%, deals worth at least $500,000 surging more than 150%, Ultimate ARR up 35% representing 59% of total, gross retention above 90%, and dollar-based net retention improving to 117%. Net annual recurring revenue growth exceeded 40%. SaaS revenue increased 36% to 34% of total revenue. The Flex model secured more than $20 million in commitments from over 130 customers in six weeks and the paid consumption run rate jumped to more than $40 million. Duo Agent Platform's paid committed recurring revenue rose 50% sequentially and Orbit indexing grew 70% to more than 2,200 organizations. The results helped ease concerns about competitive pressure from Microsoft’s GitHub and rivals such as Cursor, as executives pointed to rising customer demand tied to artificial intelligence tools that are speeding software development. GitLab raised its fiscal 2027 adjusted earnings forecast to 85-87 cents per share and revenue to $1.129 billion to $1.133 billion. Third-quarter guidance is for adjusted earnings of 19-20 cents and revenue of $281 million to $283 million.