GitLab Q1 2026 Earnings Report

GitLab EPS Results

• Actual EPS: $0.17
• Consensus EPS: $0.15
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $0.03

GitLab Revenue Results

• Actual Revenue: $214.51 million
• Expected Revenue: $213.21 million
• Beat/Miss: Beat by +$1.30 million
• YoY Revenue Growth: +26.80%

GitLab Announcement Details

• Quarter: Q1 2026
• Date: 6/10/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, June 10, 2025
• Conference Call Time: 4:30PM ET

GitLab (NASDAQ:GTLB), through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. It offers GitLab, a DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle. The company helps organizations to plan, build, secure, and deploy software to drive business outcomes. It also provides related training and professional services. The company was formerly known as GitLab B.V. and changed its name to GitLab Inc. in July 2015. GitLab Inc. was founded in 2011 and is headquartered in San Francisco, California.

GitLab Q1 2026 Earnings Call Transcript

Key Takeaways

• Q1 2026 financial performance: Revenue rose 27% YoY to $214.5 M with a non-GAAP operating margin of 12.2%, and record adjusted free cash flow of $104.1 M (49% margin).
• AI-native product expansion: GitLab included Duo chat and code suggestions in Premium and Ultimate, launched Duo Enterprise for Premium customers, integrated Amazon Q, and expanded the Duo Workflow private beta.
• Customer expansion and retention: Dollar-based net retention was 122%, Ultimate tier represented 52% of ARR, SaaS revenue grew 35% YoY, and the count of customers with ≥$5K ARR reached 10,104.
• Guidance for Q2 and FY 2026: GitLab expects Q2 revenue of $226–227 M (+24% YoY) and full-year revenue of $936–942 M (+24% YoY), with non-GAAP operating income of $23–24 M in Q2 and $117–121 M in FY 2026.
• China joint venture expenses: Jihu JV costs were $3.1 M in Q1 and are forecast at $18 M for FY 2026, with the timing of deconsolidation still uncertain.

Presentation

[Operator]

Good day, everyone, and welcome to today's GitLab First quarter fiscal year twenty twenty six conference call. At this time, all participants are in a view and listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. If you'd like to ask a question, please use the raise hand feature located in the menu at the bottom of your Zoom toolbar. In addition, please ensure your Zoom name reflects your full name and the firm you are with.

[Operator]

And if you're joining via phone, you may press 9 to ask a question. Please note this call is being recorded. It is now my pleasure to turn the conference over to Kelsey Turcotte.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Good afternoon. We appreciate you joining us for GitLab's first quarter fiscal year twenty twenty six financial results conference call. With me are Bill Staples, our CEO, and Brian Robbins, our CFO. During this afternoon's call, we will provide an overview of the business, commentary on our first quarter results, and guidance for the second quarter and fiscal year twenty twenty six. Before we begin, I'll cover the Safe Harbor statement.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

I would like to direct you to the cautionary statement regarding forward looking statements on Page two of our presentation and in our earnings release issued earlier today, both of which are available under the Investor Relations section of our website. The presentation and earnings release include a discussion of certain risks, uncertainties, assumptions and other factors that could cause our results to differ from those expressed in any forward looking statements within the meaning of the Private Securities Litigation Reform Act. As is customary, the content of today's call and presentation will be governed by this language. In addition, during today's call, we will be discussing certain non GAAP financial measures. These non GAAP financial measures exclude certain unusual or non recurring items that management believes impact the comparability of the periods referenced.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Please refer to our earnings release and presentation materials for additional information regarding these non GAAP financial measures and the reconciliations to the most directly comparable GAAP measures. I'll now turn the call over to Bill. Bill?

[Bill Staples, CEO at GitLab]

Thank you, Kelsey, and good afternoon, everyone. Thank you for joining us today. First quarter revenue increased 27% year over year to 215,000,000 with non GAAP operating margin reaching 12%. I wanna thank our team for your focus on execution and our customers. Our continued growth underscores the demonstratable value customers realize with our AI native DevSecOps platform.

[Bill Staples, CEO at GitLab]

Unlike competitors, we are the only AI native, cloud agnostic, model neutral DevSecOps platform capable of running anywhere, including air gapped environments. We offer comprehensive solutions across the software development life cycle with built in contextual AI that's really only possible on a platform with a unified data store. Every day, organizations face pressure to maximize efficiency, and software is an essential lever they have to create business agility and competitive advantage. Our DevSecOps platform stands at the core of enabling customers to build that mission critical software. I view our strategic differentiators as an opportunity for GitLab to advance conversations about AI's strategic role in software development.

[Bill Staples, CEO at GitLab]

As enterprises embrace AI and transform development practices, our unified platform uniquely enables them to maintain enterprise security and compliance. We believe our market is moving rapidly in a direction that's inherently advantageous for platform solutions. I expect AI code creation tools to empower more code creators than ever. The result is that the volume of code being created will expand, and all of those users and agents still require a platform in order to test, validate, secure, package, and deploy their code to production environments. This is what GitLab does today.

[Bill Staples, CEO at GitLab]

Super Micro, an AI solutions provider, recently doubled the size of their software team and upgraded from our free tier in q one. They selected GitLab premium and Duo Pro to build an internal software acceleration program targeting two x faster feature development for their end to end AI infrastructure solutions. It was a big quarter for our r and d team with the annual launch of new product capabilities across the platform in GitLab 18. This May introduction and product road map build upon the essential capabilities of successful software development, core DevOps, security, and AI. In core DevOps, we are centralizing artifact management, optimizing CICD pipelines for speed and security, and making it easier for users to find, filter, and embed content from anywhere in the platform.

[Bill Staples, CEO at GitLab]

We want to ensure customers can easily collaborate and drive maximum ROI from their GitLab investment. We're also deepening our security capabilities to help customers achieve comprehensive visibility and control. This includes custom frameworks to design, implement, and enforce compliance, vulnerability dashboards to pinpoint critical findings, and innovation to improve detection accuracy, reduce false positives, and help customers focus on the code that threat actors can exploit. Security is a key driver of GitLab ultimate adoption, and we want to deliver market leading solutions that are even more effective because they're embedded in our DevSecOps platform. And finally, we are natively integrating AI throughout the platform.

[Bill Staples, CEO at GitLab]

Customers who use our premium and ultimate tiers now have access to both Duo chat and code suggestions. In addition, GitLab Duo Enterprise is now available for GitLab premium customers. We now include chat and code suggestions with premium and ultimate because we see every engineer is experimenting with AI, and we want Duo to be an obvious solution for them with no barriers to adoption. This integrated approach offers an ideal starting point for both new and existing customers, allowing them to leverage chat and code suggestions with limited usage limits and providing them a smooth upgrade path to our offerings with higher usage limits and more comprehensive capabilities, including GitLab Duo Pro, Duo Enterprise, and when GA, GitLab Duo Workflow. We also made Duo Enterprise available to premium customers for the time in response to customer demand for self hosted models and its ability to inject AI in planning, collaboration, and deployment By lowering barriers to adoption and expanding the serviceable market with more flexible packaging, we believe we will be able to unlock more Duo adoption in coming quarters.

[Bill Staples, CEO at GitLab]

New and existing customers are increasingly finding Duo a compelling solution versus competitors. Competitors. For example, R and V Insurance, a top five German insurer, is expanding their GitLab deployment by implementing Duo Enterprise in their regulated environment. After adopting GitLab Ultimate in 2023 to integrate their full dev SecOps lifecycle, RNV's recent Duo enterprise evaluation demonstrated significant improvements with a more than 35% acceleration in AI assisted test generation and 25% acceleration in both root cause analysis and code explanation. In April, we launched GitLab Duo with Amazon Q, a strategic integration that embeds Amazon Q's autonomous software development agents directly within the GitLab DevSecOps platform.

[Bill Staples, CEO at GitLab]

Early access participant Volkswagen Digital Solutions reported significant productivity gains, noting the joint capabilities dramatically reduce context switching and accelerate their entire pipeline from code commit to production deployment. Our partnership with AWS extends beyond technical integration to coordinated go to market initiatives, including GitLab's position among the select AWS Global Summit sponsors. This alliance amplifies our market presence and drives higher quality customer engagement. Over the coming months, we'll showcase this powerful combination at AWS Global Summit events, further expanding our enterprise reach. Finally, we remain on schedule to launch GitLab Duo Workflow, our AgenTeq AI solution, this winter.

[Bill Staples, CEO at GitLab]

We're getting great feedback from our Workflow private beta participants. What began as a private beta with six major customers has now expanded to dozens. Developers report that Workflow flow is beginning to transform their daily productivity. Engineers describe confidently delegating complex, multistep refactoring tasks to workflow and then watching as it methodically outlines a transparent execution plan resulting in clean, properly committed code. Our private data satisfaction metrics are really compelling.

[Bill Staples, CEO at GitLab]

82% of surveyed users already classify themselves as either satisfied or very satisfied with workflows capabilities, validating our strategic investment in AgenTic software development. Momentum with GitLab Duo continues to grow, particularly with Duo Enterprise. In q one, the number of customers who purchased GitLab Duo for the time increased 35% quarter over quarter. We also closed some great expansion deals with existing customers. For example, Highmark Health and NGEN, a health tech subsidiary of Highmark Health, added GitLab Duo Enterprise to their existing GitLab ultimate deployment.

[Bill Staples, CEO at GitLab]

Multiple strategic objectives drove this decision. This includes enhanced developer productivity and a comprehensive enterprise wide AI solution that strengthens both code quality and security while simultaneously extending generative AI benefits beyond developers to their broader technical teams. Ultimate now represents 52% of total ARR with eight of our 10 largest deals in the quarter purchasing Ultimate. We're also seeing Ultimate continue to increase as a percentage of total new customer lands. This quarter's new ultimate customers include Efecoden, Technosilda, Premise Health, and SGK.

[Bill Staples, CEO at GitLab]

We also had significant expansions at American Family Mutual Insurance Company and the FBI. In q one, a leading AI powered market intelligence and search platform chose GitLab in a competitive evaluation that included GitHub. Their goal is to unify their growing development team under a single solution to manage what has become a very complex environment. In addition to GitLab Ultimate, they chose Duo Enterprise to power AI development capabilities and streamline workflows. These large scale adoptions validate our comprehensive platform strategy and demonstrate growing market recognition of the value delivered by Duo Enterprise.

[Bill Staples, CEO at GitLab]

Turning to dedicated, our single tenant SaaS solution. We continue to see broad adoption across industries, and I'm pleased to announce that we achieved FedRAMP moderate authorization. We expect this will create a nice tailwind in our public sector business with Dedicated for government. The rapid adoption we're seeing validates our strategic investment in providing enterprise grade isolation with cloud native convenience, particularly among security conscious sectors where compliance requirements traditionally slowed digital transformation efforts. In q one, German based four via Helle, one of the world's oldest automotive suppliers, purchased GitLab Dedicated and Duo Enterprise.

[Bill Staples, CEO at GitLab]

Dedicated will enable them to streamline their highly complex environment and reduce r and d overhead costs. Additionally, Ignite by Forvia Hella, the organization's software factory, shared with us that GitLab Duo's intelligent code suggestions have become a daily asset for their developers. Combined with the chat feature, Duo allows for immediate feedback and iteration, resulting in faster development cycles and a more secure code base. According to Ignite, GitLab Duo is a seamless and powerful addition to their workflows. Also in q one, NatWest expanded their investment with us.

[Bill Staples, CEO at GitLab]

Since NatWest became a dedicated customer in 2022, we've partnered closely with them to drive results that include 20% improvements in deployment frequency over the last twelve months, which have increased the pace of outcomes to colleagues and customers utilizing AI code generation and governance simplification. Based on the success they've seen over the past several years, NatWest increased their GitLab footprint to 17,000 users on dedicated and 6,000 Duo enterprise seats. One of the things that distinguishes GitLab is our vibrant co creation ecosystem with April setting an all time record for customer contributions to our platform. This represents customer driven innovation with industry leaders like Thales, Scania, and Siemens. Recent submissions include package registry capabilities and expanded logging functionality for our AI gateway.

[Bill Staples, CEO at GitLab]

This collaborative model delivers real world value across multiple dimensions. It accelerates our feature velocity, ensures innovations match enterprise requirements, and fosters deeper partnerships with our customers. I believe our mission to help customers deliver secure software faster is of critical importance to every business in the world, and our technology holds transformational power. We aspire to be the world's best AI native DevSecOps platform, unlocking step function productivity improvements by redefining the software engineering experience through human and agent collaboration. I shared this new vision for GitLab with our team members a few weeks ago, and I will introduce it along with the innovation we're building today and the road map ahead at our GitLab eighteen launch event later this month. And with that, I'll turn it over to Brian.

[Brian Robins, Chief Financial Officer at GitLab]

Thank you, Bill, and thanks again to everyone for joining us today. I'm pleased with our team's focus on execution in the first quarter, which resulted in 27% revenue growth, significant year over year operating margin expansion, and record adjusted free cash flow. These results highlight the effectiveness of our intelligent DevSecOps platform and demonstrates our ability to generate sustainable growth while enhancing profitability. We believe all of this position us for long term success even amid evolving market conditions. Turning to the numbers.

[Brian Robins, Chief Financial Officer at GitLab]

First quarter revenue reached $214,500,000 an increase of 27% from Q1 of the prior year. We now have 10,104 customers with ARR of at least $5,000 which contributed over 95% of total ARR in Q1. Our larger customer cohort of $100,000 plus in ARR increased 26% year over year and reached twelve eighty eight. We have a diversified customer base both by industry and geography, and new single customer accounts for more than 2% of ARR. On the expansion front, we ended the quarter with a dollar based net retention rate or DBNRR of 122%.

[Brian Robins, Chief Financial Officer at GitLab]

Q1 DBNRR was driven by a combination of seat expansion at approximately 80%, increased customer yield at approximately 5%, and tier upgrades at approximately 15%. Q one seat growth was driven in part by strength in Ultimate and GitLab Du as customers start on their AI journey and continue to expand deployments. We also continue to see a tailwind on mix of seats from the large deal we signed in Q4, which will continue through Q3 of this year. As we have mentioned, we expect these ratios to fluctuate quarter to quarter based on the composition of the underlying renewable portfolio. Total RPO grew 40% year over year to $955,100,000 while CRPO grew 34% year over year to 5 and $84,800,000 We encourage investors to look at these numbers over a multi quarter period.

[Brian Robins, Chief Financial Officer at GitLab]

Non GAAP gross margin was 90% for the quarter. The team has maintained a best in class gross margin even as our SaaS business has quickly scaled, driven in part by the strength in GitLab dedicated. SaaS is 30% total revenue and grew 35% year over year. Once again, we saw a significant increase in operating leverage. Q1 non GAAP operating income was $26,100,000 compared to a loss of $3,800,000 in Q1 of last year.

[Brian Robins, Chief Financial Officer at GitLab]

As a reminder, we hosted Summit, a global gathering of our team in Q1 FY twenty twenty five, which was a nonrecurring expense of $15,000,000 Non GAAP operating margin was 12.2% compared to negative 2.3% in Q1 of last year, an increase of approximately 1,400 basis points year over year. We have a very strong business model with minimal fixed expenses given our remote work environment. This gives us the flexibility to continue to invest in the business and expand operating margins. Now turning to guidance. Our guidance philosophy has not changed and assumes that the macroeconomic environment have been operating in since April continues.

[Brian Robins, Chief Financial Officer at GitLab]

For the second quarter of FY twenty twenty six, we expect total revenue of $226,000,000 to $227,000,000 representing growth rate of approximately 24% year over year. We expect a non GAAP operating income of $23,000,000 to $24,000,000 and we expect a non GAAP net income per share of $0.16 to $0.17 assuming 171,000,000 weighted average diluted shares outstanding. For the full year FY 2026, we expect total revenue of $936,000,000 to $942,000,000 representing a growth rate of approximately 24% year over year. We expect a non GAAP operating income of $117,000,000 to $121,000,000 and we expect a non GAAP net income per share of $0.74 to $0.75 assuming 172,000,000 weighted average diluted shares outstanding. The fundamentals of our business are very strong.

[Brian Robins, Chief Financial Officer at GitLab]

We generated $104,100,000 in adjusted free cash flow in Q1, a record adjusted free cash flow margin of 49%. Free cash flow is driven by ongoing improvements in operating leverage and Q4 to Q1 seasonality in collections. We ended the quarter with $1,100,000,000 in cash and investments, providing us with significant flexibility to navigate market fluctuations while continuing to invest in both our AI capabilities, platform enhancements and go to market organization. Separately, I'd like to provide an update on Jihu, our China joint venture. In Q1 FY twenty twenty six, non GAAP expenses related to Jihu were $3,100,000 compared to $3,000,000 in Q1 of last year.

[Brian Robins, Chief Financial Officer at GitLab]

Our goal remains to deconsolidate Jihu. However, we cannot predict the likelihood or timing when that may potentially occur. Thus, for FY 2026 modeling purposes, we forecast approximately $18,000,000 of expenses related to Jehu compared with $13,000,000 from last year. In closing, I'm pleased with our team's focus on execution in Q1, which resulted in another strong quarter of top line growth, increasing operating leverage, and growing momentum in AI adoption. We also continue to meaningfully enhance our platform.

[Brian Robins, Chief Financial Officer at GitLab]

I'm very excited about all of the new, secure, scalable AI native capabilities we're delivering in GitLab eighteen and what that can mean for customers. We invite you to join our GitLab eighteen launch event on June 24 to learn more about it. To register, please visit our Investor Relations website. Thank you for joining today. With that, I'll now turn it over to Kelsey, who will moderate the q and a.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Thank you very much, Brian. With that, we'll take our question for Rob Owens at Piper Sandler. Rob, go ahead.

[Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Great. Thank you very much. Hopefully, you guys can hear me on the other end, and I will stick to Kelsey's one question just to try and stay on her good side. Bill, in a high level, obviously, a lot of noise around what AI is doing with coding, especially with code suggestion and code completion. And I think you did a good job in your prepared remarks kind of laying out the value that you add beyond that, right, in terms of packaging, testing, CICD.

[Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies]

So help us understand just where customer conversations are strategically right now with things just moving so fast in this space.

[Bill Staples, CEO at GitLab]

For engineers. And every single customer conversation I have at one point or another lands on AI. I think our customers see that, and every team leader is looking for ways to use AI to make their teams more productive, accelerate innovation, improve quality, you know, everything. It is evolving very rapidly. Every day, it seems like there's new tools, new techniques, new innovation, and we're right there along with that.

[Bill Staples, CEO at GitLab]

In fact, this quarter, I had a chance to really dive in with our product and engineering organization, understand, more deeply what we're building as, you know, my here as CEO, and, get really excited about the level of focus and the accelerated innovation that I'm seeing, coming out of the engineering team with our new vision. So, I I think, you know, it's a time where there's gonna be a lot of fluctuation. For example, when I go talk to customers right now, it's very common that they'll say, hey. I'm using Duo. I'm testing it side by side, you know, other competitive tools, whether that's Copilot or Cursor or Windsurf or others.

[Bill Staples, CEO at GitLab]

They're truly open to experimenting with multiple tools, in fact, buying multiple tools to compare them side by side and make sure they're giving their engineers the best. I think that's likely to continue. And, you know, the great thing about that is, all of those tools that are really focusing on code creation are creating more code and more code creators that end up needing GitLab for all the things that we do, you know, after the code gets created, all the testing, all the validation, all the security, packaging, publishing, and the rest. So we we believe long term, this is an exciting time for engineers, and it only, helps GitLab further our mission as well.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks for the question. Next question goes to Koji Ikeda of Bank of America. Koji, go ahead.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Yeah. Hey, guys. Thanks so much for taking the questions. I wanted to ask maybe a question on the growth. And so when I look at the business and the financial metrics, it's almost like a tale of two growth stories here.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

And so when we look at the fiscal q one beat, probably one of the skinniest beats that we've seen since the IPO, and you're keeping the the revenue guide for the full year. But when I dig a little bit deeper, RPO, CRPO, billings, all look pretty good. And so help us understand the puts and takes there, and maybe any commentary on deal linearity in the quarter, and if you could, May demand versus April demand. Thank you.

[Brian Robins, Chief Financial Officer at GitLab]

Thanks, Koji. This is Brian. You know, for the quarter, there wasn't any surprises. I'm happy with how the team executed in the quarter. There were two things that we observed in the quarter.

[Brian Robins, Chief Financial Officer at GitLab]

One is the mix favored more SaaS, and then two, the linearity was back end weighted in the quarter. You know, as a reminder also, one q had a few less days and a few less days in one q of last year. There's been no change in guidance, Swasey, and we're assuming the same macroeconomic conditions that we've seen this year in the guidance.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks, Koji. Next question goes to Sanjit Singh of Morgan Stanley. Sanjit, go ahead.

[Sanjit Singh, Executive Director at Morgan Stanley]

Yeah. Sanjay

[Kelsey Turcotte, VP of Investor Relations at GitLab]

oh, there you are. Good. Thanks.

[Sanjit Singh, Executive Director at Morgan Stanley]

Congratulations on the on improving profitability. Really nice to see. I guess my question, I guess, for Brian, when we look at the sequential customer adds this quarter, when we look at, like, net new adds on both the 100 k side and on the customers above 5 k, they look like they decelerated a little bit. And I was wondering if there's any theme there with some of the pricing changes you announced in the quarter with respect to, new customers signing up for premium and just any sort of color behind, the net new customer additions this quarter. Appreciate it. Thanks.

[Brian Robins, Chief Financial Officer at GitLab]

Yeah. Absolutely. Great question. Let me break the answer down in hitting two things. One, let me hit on orders, and then also break down the composition of the numbers and less, of being greater than five k.

[Brian Robins, Chief Financial Officer at GitLab]

So one of the companies or objectives that we announced in the last earnings call was to increase the volume of new orders. On a logos on a logo basis, we performed better this quarter than last year for enterprise and mid market segment, and and we also performed a lot better on dollars added, within the quarter. And so that initiative that we that we, put into place is starting to pay dividends. When you look at the components of new customer ads greater than five k, a number of different things that go into that. is new customers.

[Brian Robins, Chief Financial Officer at GitLab]

is lost customers in churn. is customers who expanded into the five k bucket. And then is customers who contracted into the five k bucket. When I look at the breakdown of all those, the biggest change that we had was customers expanding into the five k bucket and customers contracting into the five k bucket. And that basically comprised of a 160 logos different year over year.

[Brian Robins, Chief Financial Officer at GitLab]

And so at the low end of the market, SMB and low end of mid market is where we're seeing some price sensitivity, but it's not impacting the financials. It's impacting the new customer ads. And, you know, as a reminder, we don't compensate on new customer ads. We compensate on bookings within the quarter. So I hope that's, helpful.

[Brian Robins, Chief Financial Officer at GitLab]

You know, the new customer ads this quarter greater than five k, didn't concern me.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks, Brian. Next question goes to Kash Rangan at Goldman Sachs. Kash, go ahead.

[Bill Staples, CEO at GitLab]

Wanna call you someone that trained here, but, Bill, can

[Kash Rangan, Managing Director at Goldman Sachs]

you talk

[Bill Staples, CEO at GitLab]

Hey,

[Kash Rangan, Managing Director at Goldman Sachs]

Cash.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Go ahead. The the the train is we're actually having some trouble hearing you. You you wanna drop for a minute, and then we'll put you back in the in the queue? Okay. So we'll take the next question, from Derek Wood at Cowen. Derek, go ahead.

[Derrick Wood, Managing Director at TD Cowen]

Great. Thanks, guys. I guess either for Bill or Brian, we we got investor questions around you know, because adoption of AI is so strong inside of developer use cases, and there's just such good proven productivity gains. Is there a reason to be worried about job growth in the software developer market? And so I guess, how are you guys seeing seat growth trend during renewals, and what's your kind of broader view on how AI impacts demand for developers in the enterprise looking out over the next, couple of years?

[Bill Staples, CEO at GitLab]

Yeah. Thanks, Derek. I'll talk a little bit about how I see the outlook. And, Brian, feel free to add any commentary on the seat trends in the quarter. You know, I think I know there's a raging debate about this, and I think a lot of it is born, you know, out of anxiety about the future, you know, by engineers, frankly, as they see how powerful AI can be at, helping to do software engineering.

[Bill Staples, CEO at GitLab]

Frankly, I've seen this trend, throughout my career, building developer tools, in around this space for about thirty years. Every time we create advances in productivity and higher levels of of abstraction where, you know, prized engineering skills become maybe less required and sometimes no longer required. The same kind of phenomenon occurs, and I'd say this one's definitely stronger than other times because of the power of AI. But every time I've also seen that higher level of abstraction and more productivity actually yield more opportunity. And I believe the same is true here with AI.

[Bill Staples, CEO at GitLab]

I see the number of engineers continuing, to, you know, be sustained and even grow. I think the number of people who are able to create code is only going to increase with some of the power of AI and ability to create code without having necessarily the deep technical skills at times required. And then I also believe the volumes of code will also increase. And both of those are really important for GitLab. As you know, you know, we price today based on users, but also, a large part of our business is taking that code and helping users manage it throughout the software life cycle.

[Bill Staples, CEO at GitLab]

And so more code and more users means, good business for GitLab. Brian, Brian, you wanna talk about any of that?

[Brian Robins, Chief Financial Officer at GitLab]

Yeah. I'm just coming a little bit on seats and developer hiring in general. And so, you know, from a seat perspective and our dollar based net retention rate, 80% of the contribution came from seats. And it's really a combination of a couple different things. One, the large deal that we had in March, I'm sorry, in April, but also the additional seats that we're selling for Duo and the add on SKUs that we have.

[Brian Robins, Chief Financial Officer at GitLab]

And so happy with the number of additional seats that we're selling into our customer base. From a developer hiring perspective, we aren't correlated directly with the market. It's a very large TAM. We're barely penetrating the TAM. There's a big market in in front of us.

[Brian Robins, Chief Financial Officer at GitLab]

With that said, some of the recent reports I've read is developer hiring has turned positive, and we've seen an uptick over the last quarter or two.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks for the question.

[Derrick Wood, Managing Director at TD Cowen]

Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Appreciate it. Next question goes to Pendulum Bora of JPMorgan. Pendulum, go ahead.

[Pinjalim Bora, Executive Director - Equity Research at JP Morgan]

Can you hear me?

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Yep. I can now.

[Pinjalim Bora, Executive Director - Equity Research at JP Morgan]

Great. Bill, seems like the bottleneck has kind of shifted right, from kind of AI driven code generation, and GitLab is obviously poised, to break that bottleneck for for a lot of your customers as you as you infuse AI. But how do you make sure that GitLab extracts the value that is aligned with that unlock, that customers might enjoy, beyond coding, since, your pricing is kind of more on a seed basis? Right? How are you thinking about that?

[Bill Staples, CEO at GitLab]

Yeah. Pendulum, really good question. And that's something we've been studying quite intensely, for some time and especially my last quarter as I had a chance to dive in with product and engineering and help really refine our vision with greater aspiration and focus, in the coming quarters. And as I mentioned in the prerecorded remarks, I'm really excited to talk more about that vision in our June 24 GitLab eighteen launch event. But let me maybe share five ways that we're focusing on creating value and differentiation with our AI approach.

[Bill Staples, CEO at GitLab]

You know, GitLab today is really known as a place where engineers collaborate and teams come together to build software across the software life cycle. And when we think about AI, we're we think about building on that core strength to unlock a really unique collaborative experience with many to many interactions between humans and agents. We also are building our reputation for open source and co creation. And so we're pursuing a strategy that that allows for that to extend into Agenetic AI as well, and we're gonna provide pervasive extensibility and flexibility with an open community approach for catalog and catalog for agent discovery and development. we're also building our reputation for security and privacy.

[Bill Staples, CEO at GitLab]

You know, we already provide cloud neutrality, LLM neutrality, and the support for self hosted models. And our agentic approach, which will, provide agents that span the software life cycle, continues to support the best in class standards for security and privacy. we're also in a unique position given our single database platform approach. And we're taking advantage of that by building what we call a knowledge graph that stitches together all of the context for a given task, whether the human is executing that task or an agent's executing the task, to give really high quality context that allows for better outcomes. So, for example, one of the things that we're looking at, the team's actually implementing right now is a deep research feature that allows, an agent to crawl the entire hierarchy of all of the context that we understand about a given project, all of the issues, all of the work items, all of the code, obviously, the people working on that code, the security scans, the test cases, everything related so they can create a summary and help an engineer or engineering leader understand exactly where the state of that project is.

[Bill Staples, CEO at GitLab]

That's something that, really is not possible without a platform built the way GitLab is. Finally, the thing that we're really looking deeply at is integrating software life cycle agents natively into GitLab so that every premium and ultimate customer can automatically start collaborating with them friction free out of the box. That's one of the reasons that we introduced Duo chat and Duo code suggestions into premium and ultimate this last quarter so that we can lay the groundwork for that kind of human to agent collaboration in the quarters to come.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks, Bill. Next question goes to Nick Altman with Scotiabank. Nick, go ahead.

[Nick Altmann, Director - U.S. Software Equity Research at Scotiabank]

Awesome. Thank you. Bill, you mentioned seeing a higher mix of customers land in Ultimate. Can you just give us a sense for how much that has changed over the last couple quarters and whether we should expect expansion rates to come down a bit just given you're seeing kind of more customers land in the ultimate tier? And then the follow-up is just any implications on how we should consider, you know, the the new pricing and packaging model with Duo Enterprise being available to premium customers and whether you expect that to impact the cadence of customer planning in Ultimate? Thanks.

[Bill Staples, CEO at GitLab]

Yeah. part of your question around more customers choosing Ultimate, it's awesome to see. Obviously, when a customer adopts Ultimate, they're getting the very best in capabilities from GitLab from the start, and we love seeing that. And I think it speaks to the strength of our security offerings as part of ultimate and the real market trend to shift left and really focus on security as part of, the DevOps life cycle. And so happy to see that.

[Bill Staples, CEO at GitLab]

You know, the reality is most customers still do start with premium, and premium and ultimate are kind of the ultimate one two punch. Right? Premium is a great SKU, low cost, affordable, most capable, product, I think, in the market at its price point and very attractive for customers to start with, and that is where the majority of customers do start today. And then, they mature and scale both the number of engineers and teams using GitLab as well as the level of capability they buy into with that ultimate upgrade providing a great expansion path for us. I don't see that changing.

[Bill Staples, CEO at GitLab]

Honestly, I it's it's great to see more customers landing in ultimate, but, I I believe that one, land and expand strategy we have is working and will continue. With regard to the part of your question around the shift to make enterprise available with, premium or to premium customers, that's, really a change that we've done for a couple of reasons. You know, we do see demand, from premium customers for that enterprise product. There are a number of capabilities there that, make a lot of sense for them, including self hosted models as well as AI capabilities across the software life cycle. Now they don't have the security capabilities there as part of ultimate, but majority of the features that we have in Duo Enterprise do apply to those premium customers, and we're happy to unlock that for them.

[Bill Staples, CEO at GitLab]

As we studied that change, we also saw that, while many customers do buy both ultimate and enterprise together, the dual enterprise skew was not a driver of the upgrade to ultimate, and so therefore, not a significant risk in terms of expanding the service addressable market by more flexible packaging.

[Nick Altmann, Director - U.S. Software Equity Research at Scotiabank]

Great. Great. Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Thanks, Nick. Next question goes to Greg Powell of BTIG. Greg, go ahead.

[Gray Powell, Managing Director at BTIG]

Okay. Great. Thank you. Can you hear me okay?

[Bill Staples, CEO at GitLab]

We can.

[Gray Powell, Managing Director at BTIG]

Awesome. Look, I I know, like, a a lot of the questions are focused on top line momentum, but I I just gotta I gotta ask. You posted a huge free cash flow number in q one. Was there anything that was onetime in nature that helped the results? And then if I just look at past seasonality, q q four actually tends to be the biggest quarter for free cash flow.

[Gray Powell, Managing Director at BTIG]

So if that's correct, then it seems like you all could potentially post 20% plus margins this year, again, on the free cash flow side. So I guess is there anything you'd say that would you know, or anything that you'd highlight to talk me down? Because I I feels like something that broader market seems to be missing.

[Brian Robins, Chief Financial Officer at GitLab]

Yeah. Thanks for the question. Q four is seasonally our strongest quarter, and so we collect that cash in q one. And we generated over a $100,000,000 in free cash flow, so happy with that. But there's nothing anomalistic within the quarter that led to the higher free cash flow collections. It was just normal business operations.

[Nick Altmann, Director - U.S. Software Equity Research at Scotiabank]

Great. Thanks. Fair enough.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Thanks, Gray. Next question goes to Mike Sikos of, Needham. Mike, go ahead.

[Michael Cikos, Senior Analyst at Needham & Company]

Hey. Thanks for taking the questions, guys. I I just wanted to come back to the earliest comments. It might have been in response to Rob over at Piper. But, Bill, when you were talking about the AI experimentation that's going on out there, you'd rattled off, hey.

[Michael Cikos, Senior Analyst at Needham & Company]

People are testing multiple vendors, whether it's GitLab with Duo versus Cursor, Windsurf. And I just wanted to see how how is it you guys gained confidence that you're you're winning in this market. Right? We've tiptoed around the the new logo growth this quarter, the the skinny beat. I just wanted to see, like, with the strength of the offering here, how do you ensure you're climbing above some of the marketing club that's out there or or ensure that you're continuing to gain?

[Bill Staples, CEO at GitLab]

Yeah. I mean, I we actually, engage with those customers who are testing multiple vendors, you know, the typical bake off. And, you know, frankly, we see a GitLab Duo win out against other leading competitors and some of our largest customers. So I don't have a lot of concern about our ability to compete in the market. You know, I think there's lots of opportunity still ahead of us.

[Bill Staples, CEO at GitLab]

As I said earlier, I think we're building on a really strong strategy and some clear differentiation. Our GitLab, Duo workflow product has been in private beta. It's been getting really strong feedback as well, and we're on track to make that public beta available later this summer as as well as GA, to come, later in the winter. So I think that'll only strengthen our competitive position and and put us in a really great prop really good good spot with customers.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great.

[Michael Cikos, Senior Analyst at Needham & Company]

Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Thanks, Mike. Next question goes to Jonathan McIver at Cantor Fitzgerald. Jonathan, go ahead.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

Yeah. Thank you.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

Can can you just talk about the enhancements with GitLab 18? Just specifically, what are the features that you see, differentiating the most? And then just, as a quick follow-up, what are the factors that played into the, decision not to charge for those features, especially, you know, in light of the comments you've made today around, you know, the the innovation you're driving around AI, the high quality context, improved outcomes. You know, how how do you expect to capture that value?

[Bill Staples, CEO at GitLab]

Yeah. It's a good question. You know, I have heard some, questions about our, unlock of the Duo chat and Duo code suggestions as part of, premium and ultimate and why we're doing that. It's really important strategy point to understand. You know, the reality is every engineer is looking for AI tools today to help them with their job.

[Bill Staples, CEO at GitLab]

And we want GitLab, premium or ultimate, both to be an obvious, no friction, no barrier approach to AI. And so by including it, we eliminate all the friction for adoption. Now we do have usage limits on it, so you can't use it unlimited. But developers can use it. They can get started.

[Bill Staples, CEO at GitLab]

They can get a really good feel for, its usability and its capability. And then we offer a very smooth ramp up to pro and to enterprise now, for all customers. So we think it's, you know, a natural part of a ramp to value that's gonna just lower the barrier to adoption and expand the market that's available to the full AI capabilities from GitLab. Yeah. With regard to your the part of your question around AI or around a broader capabilities of the platform with the GitLab 18 launch, I shared a few of those, you know, in the prepared remarks.

[Bill Staples, CEO at GitLab]

But, I'd really just encourage everyone to tune in to the June 24 event. We've got some incredible demos, in that event as well as we talk through the big releases. As I looked across the innovation, you know, there's just some amazing things. Just in the last year alone, we launched more than a 100 new innovations and capabilities for our premium customers and even more than that for our ultimate customers. So the the volume of innovation is really powerful.

[Bill Staples, CEO at GitLab]

For core DevOps, in particular with 18, we are centralizing artifact management. That's been a very strong request that I personally gotten from many customers. We're using more legacy vendors for that. We're improving our world class CICD pipelines, for speed and security. And, when it comes to security as well, a lot of customers, as we've mentioned, upgrading to ultimate for those tools, they've been asking for better vulnerability dashboards, improved detection accuracy, reduction in false positives that are, you know, fairly common for these, security tools who air on the side of conservatism, and we're delivering on those promises.

[Bill Staples, CEO at GitLab]

And then, you know, finally with AI, I mentioned a bold new vision that we're sharing and some really incredible, innovation, including our agentic chat and the ability to do asynchronous work and many to many collaborations between humans and agents. All of that to come in the days ahead building on the Duo chat and Duo code suggestions that we unlock now for every customer. So, hopefully, that gives you a a flavor, Jonathan.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

Yes. Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Next question comes from Adam Tindle at Raymond James. Adam, go ahead.

[Adam Tindle, Managing Director at Raymond James Financial]

Okay. Thank you. I just wanted to start, Brian, on q one, the results versus guidance. I I know it was kind of mentioned earlier, the skinny beat, sort of the tightest we can recall in a little while. Just the rationale for that, you mentioned the days in q one.

[Adam Tindle, Managing Director at Raymond James Financial]

I don't think you had mentioned that on the Q4 call, so I wonder if that was maybe part of the reason or what would be the rationale for sort of that skinnier beat. And as you thought about guidance for Q2, you noted that you're assuming the macro since April continues, which is a fair assumption. But I just wonder how you might reflect on how May and this June have been similar or different from April because we've heard from a lot of vendors that things have sort of bounced back. I just wonder what you might be seeing. Thank you.

[Brian Robins, Chief Financial Officer at GitLab]

Yeah. So let me let me hit on days. So going into the quarter, we knew how many days there was. That was just as a reminder that there were fewer days in the quarter, so that didn't really have much to do with guidance. From a guidance perspective, you know, there's been no change in guidance lossy.

[Brian Robins, Chief Financial Officer at GitLab]

The two things that happened in the quarter that I mentioned was the mix favored SaaS. From a rev rec self managed, we recognized more upfront on SaaS. It's a 100% ratable, and the linearity was a little bit more back end weighted. From a sort of an environment perspective, you it remains cautious, but people are still buying. We haven't really seen too much difference, from a macroeconomic perspective.

[Brian Robins, Chief Financial Officer at GitLab]

One also hit a little bit on federal as well. I know that's been out there a lot. We had a really great quarter, in first quarter in federal. We overexceeded our expectations, and we had good growth year over year. And so the federal business continues to do well as well.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thanks for the question. Next question goes to Steve Koenig at Macquarie. Steve, go ahead.

[Steve Koenig, Managing Director at Macquarie Capital]

Great. Great. Okay. Thanks, Kelsey. Hi, GitLab.

[Steve Koenig, Managing Director at Macquarie Capital]

I wanted to, just dig in, maybe follow-up on that last question a little bit more. So, Brian, in your comment about, the in the quarter, there was a bit more SaaS, you know, than usual, and and linearity was back end weighted. Was that a function of kind of, you know, little little bit more of the macro and or execution related, you know, or or both. And, and you're not the company that has come you know, especially in the DevOps area that has that has seen that that phenomenon. So so more color about why you think that was.

[Steve Koenig, Managing Director at Macquarie Capital]

And and then secondly, you know, as you're looking at the macro and you're seeing impacts, like, what what metrics are you all tracking internally to to understand the macro? And and lastly, in your in your q two, will you make will you make any execution adjustments or tactical adjustments in your go to market to try to, you know, try to improve the linearity? That's all I got. Thanks for taking the question.

[Brian Robins, Chief Financial Officer at GitLab]

No. That was a that was a packed question with multiple questions in it. And so, you know, from a from a macro, you know, I I I sit in try to sit in, you know, all of our forecast calls that we have. And, you know, only on a couple occasions has it come up that, you know, tariffs people were contemplating delaying. And it was really from the procurement department, not actually the owner, you know, the the buyer itself.

[Brian Robins, Chief Financial Officer at GitLab]

And so not sure if that was a negotiation tactic or something that that company was seriously contemplating. From a macro perspective, you know, the GitLab platform, you know, Ultimate has less than six month payback and over 480% ROI in three years. And so people are buying our platform to consolidate and save money. And so we haven't really seen much overall from a macro perspective. Some of the metrics that we look at internally, you know, is all around, you know, the linearity within a quarter, and so we have that tracked over the last, you know, you know, several years.

[Brian Robins, Chief Financial Officer at GitLab]

We have a plan that we track to see how we're doing against that. We look at pipeline creation. We look at pipeline movement, and so Within the quarter itself, you asked about execution. You know, every quarter, you know, there's deals that you think are gonna close in the door in the quarter, and, you know, there's approvals that you need to get that may or may not happen. And so, you know, that was a normal sort of end of quarter phenomenon, not something specifically that we saw this quarter versus some of the previous quarter.

[Brian Robins, Chief Financial Officer at GitLab]

So, you know, as CFO, I think you can always improve on execution. Ian's focusing on that, and we're we're driving better execution across the entire organization, but there was nothing specific call out within the quarter.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great.

[Steve Koenig, Managing Director at Macquarie Capital]

Great. Thanks.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Question goes to Jason Ader at William Blair. Jason, go ahead.

[Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair]

Can you hear me okay, Kelsey?

[Kelsey Turcotte, VP of Investor Relations at GitLab]

We can now.

[Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair]

Alright. Awesome. Bill, where where do you see the biggest risk of disruption to the current DevOps tool chain?

[Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair]

Obviously, this tool chain has been in place for a while. You guys play across the entire tool chain. But with the emergence of these AI coding assistants that are taking off like wildfire, especially some of the startup players, where, you know, where does that how does that ripple affect impact other parts of the tool chain? I know you kinda said earlier you thought it was good for you, but I I imagine there are some parts of the tool chain that could be more impacted than others. And then just secondly, would it make sense for you guys to partner with a Cursor or Windsurf?

[Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair]

Because, you know, maybe that actually could could be a a a channel for you to bring in new customers.

[Bill Staples, CEO at GitLab]

Yeah. Hey. Great question. You know, I know there's a lot of market excitement about those tools and, you know, frankly, we're we're really excited about them as well. I know it's also sometimes confusing about where one tool begins and another tool ends.

[Bill Staples, CEO at GitLab]

But the way I think about this is Cursor and Windsurf, since you mentioned those two, they're helping, engineers create applications and new code in particular. And, GitLab actually picks up where those code assistance leave off. All of the code that they generate, you know, does need all of the things that GitLab does so well, testing, securing, analyzing, packaging, building, deploying. Right? And so, they already actually work great with GitLab.

[Bill Staples, CEO at GitLab]

Cursor works great. Windsurf works great. And, they already are driving code into GitLab. And so that's why a lot of our customers do test those tools in addition to Duo. And, we do offer co creation capabilities as well.

[Bill Staples, CEO at GitLab]

As I mentioned, you know, the Duo, code suggestions capability that's now part of every premium and ultimate license has the same ability as the cursor or windsurf in multiple IDEs, development tools to to create code and create applications. And our capability there is only gonna get stronger over time. But we really believe in interoperability and being an open platform, and so we embrace those tools. We're excited by the innovation of brain developers, and we don't see them, challenging the the domain, the parts of the dev sec ops life cycle that we are world class at today. So, you know, I guess I'll just finalize this by saying, we we also you know, as we think about our AI strategy, we're just thinking much broader from the start.

[Bill Staples, CEO at GitLab]

It's a multipronged strategy that looks across the software life cycle, and we're really excited about the approach we've brought, you know, brought to the market already with AgenTek AI, with Amazon Q, and our partnership there, as well as the Duo workflow product and the beta that's, now playing out with GA to come. So, you know, as I think about the the broader picture of work we're doing versus what the startups are doing, I they're really complementary and and really exciting for customers down the road. Hope that answers your question.

[Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair]

Thank you.

[Kelsey Turcotte, VP of Investor Relations at GitLab]

Great. Thank you very much to everyone who's participated. This concludes our q one f y twenty six earnings presentation. Have a great day. And if you have any questions, just follow-up with the IR team. Take care. Bye bye.

Participants

Executives

• Kelsey Turcotte, VP of Investor Relations
• Bill Staples, CEO
• Brian Robins, Chief Financial Officer

Analysts

• Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies
• Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America
• Sanjit Singh, Executive Director at Morgan Stanley
• Kash Rangan, Managing Director at Goldman Sachs
• Derrick Wood, Managing Director at TD Cowen
• Pinjalim Bora, Executive Director - Equity Research at JP Morgan
• Nick Altmann, Director - U.S. Software Equity Research at Scotiabank
• Gray Powell, Managing Director at BTIG
• Michael Cikos, Senior Analyst at Needham & Company
• Jonathan Ruykhaver, Analyst at Cantor Fitzgerald
• Adam Tindle, Managing Director at Raymond James Financial
• Steve Koenig, Managing Director at Macquarie Capital
• Jason Ader, Co-Group Head - Technology, Media & Communications at William Blair