diff --git a/changelogs/unreleased/25327-coverage-badge-rounding.yml b/changelogs/unreleased/25327-coverage-badge-rounding.yml
new file mode 100644
index 00000000000..ea985689484
--- /dev/null
+++ b/changelogs/unreleased/25327-coverage-badge-rounding.yml
@@ -0,0 +1,5 @@
+---
+title: Show coverage to two decimal points in coverage badge
+merge_request: 10083
+author: Jeff Stubler
+type: changed
diff --git a/lib/gitlab/badge/coverage/report.rb b/lib/gitlab/badge/coverage/report.rb
index 9a0482306b7..778d78185ff 100644
--- a/lib/gitlab/badge/coverage/report.rb
+++ b/lib/gitlab/badge/coverage/report.rb
@@ -23,7 +23,7 @@ module Gitlab
           @coverage ||= raw_coverage
           return unless @coverage
 
-          @coverage.to_i
+          @coverage.to_f.round(2)
         end
 
         def metadata
diff --git a/lib/gitlab/badge/coverage/template.rb b/lib/gitlab/badge/coverage/template.rb
index fcecb1d9665..afbf9dd17e3 100644
--- a/lib/gitlab/badge/coverage/template.rb
+++ b/lib/gitlab/badge/coverage/template.rb
@@ -25,7 +25,7 @@ module Gitlab
         end
 
         def value_text
-          @status ? "#{@status}%" : 'unknown'
+          @status ? ("%.2f%%" % @status) : 'unknown'
         end
 
         def key_width
@@ -33,7 +33,7 @@ module Gitlab
         end
 
         def value_width
-          @status ? 36 : 58
+          @status ? 54 : 58
         end
 
         def value_color
diff --git a/spec/features/projects/badges/coverage_spec.rb b/spec/features/projects/badges/coverage_spec.rb
index 821ce88a402..f51001edcd7 100644
--- a/spec/features/projects/badges/coverage_spec.rb
+++ b/spec/features/projects/badges/coverage_spec.rb
@@ -18,7 +18,7 @@ feature 'test coverage badge' do
 
       show_test_coverage_badge
 
-      expect_coverage_badge('95%')
+      expect_coverage_badge('95.00%')
     end
 
     scenario 'user requests coverage badge for specific job' do
@@ -30,7 +30,7 @@ feature 'test coverage badge' do
 
       show_test_coverage_badge(job: 'coverage')
 
-      expect_coverage_badge('85%')
+      expect_coverage_badge('85.00%')
     end
 
     scenario 'user requests coverage badge for pipeline without coverage' do
diff --git a/spec/lib/gitlab/badge/coverage/template_spec.rb b/spec/lib/gitlab/badge/coverage/template_spec.rb
index 383bae6e087..d9c21a22590 100644
--- a/spec/lib/gitlab/badge/coverage/template_spec.rb
+++ b/spec/lib/gitlab/badge/coverage/template_spec.rb
@@ -1,7 +1,7 @@
 require 'spec_helper'
 
 describe Gitlab::Badge::Coverage::Template do
-  let(:badge) { double(entity: 'coverage', status: 90) }
+  let(:badge) { double(entity: 'coverage', status: 90.00) }
   let(:template) { described_class.new(badge) }
 
   describe '#key_text' do
@@ -13,7 +13,17 @@ describe Gitlab::Badge::Coverage::Template do
   describe '#value_text' do
     context 'when coverage is known' do
       it 'returns coverage percentage' do
-        expect(template.value_text).to eq '90%'
+        expect(template.value_text).to eq '90.00%'
+      end
+    end
+
+    context 'when coverage is known to many digits' do
+      before do
+        allow(badge).to receive(:status).and_return(92.349)
+      end
+
+      it 'returns rounded coverage percentage' do
+        expect(template.value_text).to eq '92.35%'
       end
     end
 
@@ -37,7 +47,7 @@ describe Gitlab::Badge::Coverage::Template do
   describe '#value_width' do
     context 'when coverage is known' do
       it 'is narrower when coverage is known' do
-        expect(template.value_width).to eq 36
+        expect(template.value_width).to eq 54
       end
     end
 
@@ -113,7 +123,7 @@ describe Gitlab::Badge::Coverage::Template do
   describe '#width' do
     context 'when coverage is known' do
       it 'returns the key width plus value width' do
-        expect(template.width).to eq 98
+        expect(template.width).to eq 116
       end
     end