Gloo Is Doubling Revenue While Its Stock Sits 64% Below Its Peak

The $424 Million Question

Gloo Holdings went public in November 2025 and has spent most of its life as a public company in a drawdown. The stock is down roughly 57% from its debut and sits about 64% below its late-2025 peak of $9.50, with the last 90 days alone off nearly a third. And yet the operating story keeps getting louder: fiscal Q2 revenue rose 188% year-over-year to $46.6 million, management raised full-year guidance to $200 million, and it reaffirmed a path to adjusted EBITDA profitability by Q4. That gap — a collapsing share price against compounding top-line growth — is the whole dossier.

This is a roll-up with a thesis. Gloo is building an applied-AI platform for what it calls the faith and flourishing ecosystem: churches, campus ministries, Bible translators, universities, and the "network capability providers" that serve them. CEO Scott Beck framed the quarter plainly: “Q2 was another solid quarter with revenue increasing 188% year-over-year to $46.6 million.” — Scott Beck, Chief Executive Officer · 2026-09-09 Since going public it has met or beaten guidance every quarter. The market, for now, is unimpressed.

What Actually Changed: Gloo Code and the Work-Not-Tools Thesis

The freshest company-unique signal is Gloo Code, a new agentic building capability inside Gloo AI Studio announced September 8, one day before this call. Its promise is cost-efficient development that "preserves the customers' coding privacy" — a direct shot at Claude Code, Cursor and Copilot. It slots into a platform story centered on Agentic workflow: Gloo increasingly takes over the work itself (help desk, donor engagement, marketing flows) rather than selling software a customer must operate. Pat Gelsinger, the former Intel CEO now Head of Technology, described Studio as "an open router, a guardrails, a coding environment, all rolled into one," picking the lowest-cost — often open-source — model for each task.

That is a genuinely new keyword for a company whose prior quarters were dominated by Gloo 360 and MasterWorks. It matters because it converts a macro threat into a lever. Falling model prices are the wind at Gloo's back: “When the models get better, we get better,” — Scott Beck, Chief Executive Officer · 2026-09-09 Beck said. Gelsinger was blunter about the obsession with token prices: “If there's a single day that token usage isn't going up, I'm asking the team what's going on.” — Patrick Gelsinger, Executive (likely Chief Technology Officer or similar) · 2026-09-09

The quarter's other structural change is the closing of the Cedarstone acquisition, which added over 250 mid-market names plus accounting and donor services — work Gloo can deliver with AI and re-price over time. Cross-sell is now formalized via a new sales compensation program across a distributed salesforce, the mechanism behind the land-expand-expand engine. Management counts more than 30 customers at over $1 million in annual contract value, up to a first $10 million customer, and over 40 universities.

Margins, Dilution, and the Roll-Up Burden

The most tangible financial change is gross margin. CFO Paul Seamon reported that “cost of revenue in the quarter was 64.0% of total revenue, an improvement of 10.8 percentage points from 74.8% in the prior year period,” — Paul Seamon, Chief Financial Officer · 2026-09-09 driven by scale and a favorable mix shift from acquisitions. Adjusted EBITDA improved $3.2 million sequentially to negative $8.3 million, aided by a $4.4 million restructuring charge taken to integrate business lines.

The bottom line is still red but narrowing fast: net loss was $17 million in the latest quarter, a roughly 46% year-over-year improvement, while free cash flow less stock-based comp ran negative $22 million. That burn is the quiet reason the equity trades where it does. Gloo raised only $23.7 million in a follow-on offering, ended the quarter with $39.3 million in cash, and extended a $13.2 million senior secured loan. For a company acquiring its way into a platform, the balance sheet — not the P&L narrative — is the binding constraint, and the Q3 outlook of roughly 90 million weighted shares signals continued dilution.

Why the Tape Disagrees

Here is the contrast worth sitting with. Across the market, most of the fresh earnings reporters this week are wrestling with tariff refunds — Apparel Retail names and food distributors alike. Gloo is untouched by that macro noise; it trades on AI credibility and capital structure instead. But the broad AI-infrastructure basket is fading on the tape: the global AI data centers cluster is negative over the last 30 days and worse over 90, with high-performance-compute and co-packaged-optics sub-themes among the biggest decliners. Gloo is a software layer above that spending cycle, but it is priced in sympathy with it.

The prior-record contrast is sharpest on the recurring themes. In the April call, management leaned on a Sequoia essay to argue "services are the new software":

A company might spend $10,000 on QuickBooks and $120,000 on the accountant to close the books. The next legendary company will just close the books.

The bet, then, is simple: if Gloo delivers adjusted EBITDA profitability in Q4 and crosses into free-cash-flow positivity in the back half of 2027 as guided, the 64% drawdown looks like mispricing of an accelerating, high-margin platform at a $424 million valuation. If integration, dilution, or a growth air pocket interrupts the sequence, the roll-up discount is deserved. The tape is currently voting with the skeptics. The next two quarters are where that verdict gets rewritten — or confirmed.