- Earnings call transcript Q3 2023

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Sharlene Seemungal

[Call Starts Abruptly] GitLabs Co-Founder and CEO, Sid Sijbrandij; and GitLab's Chief Financial Officer, Brian Robbins will provide commentary on the quarter and the fiscal year. Please note, we will be opening up the call for panelist questions. To ask a question please use the chat feature and post your question directly to IR Questions using the drop-down menu.

Before we begin, I'll cover the safe harbor statement.

During this conference call, we may make forward-looking statements within the meaning of the federal securities laws. anticipated. and that to to could from discussed assumptions risks and differ involve those uncertainties and cause or statements are known subject unknown materially These actual results

with For on those Please a Form to release filings, XX-Q. our earnings today our of recent including complete risks our refer forward-looking in most our discussion statements business. in SEC distributed associated quarterly report

forward-looking now GAAP non-GAAP release, measures reconciliation included with be at on additional us. statements, are in will intended report forward-looking based Sijbrandij. unanticipated a non-GAAP information to we or financial our undue call accordance of in upon We to U.S. measures circumstances events. be replay are reconciliations or caution performance for statements ir.gitlab.com. or statements GAAP. these available place not update of also with you along forward-looking to duty press Our most earnings to These financial comparable reliance results. statement no may in currently also on the and contained these Co-Founder call is the undertake GAAP to and of Executive A discuss financial which supplemental measures the or I occurrence today's A ir.gitlab.com. Officer, from not any to information Sid our future We differ over available or obligation measures to prepared to events are that any will GitLab's revise turn reflect Chief posted our and measures comparable substitute

Sid Sijbrandij

not third in innovation. demands. revenue our efficiencies proposition always to guidance economic so. for innovation executed meet down it's well clear. quarter quarter, fuel for XXXX both us to In They today's profitability. drive customer DevSecOps will and platform more slow and are solutions joining growth We has pace and costs, year for been third software you mission-critical earnings fast even cannot, believe exceeding turning the value presentation. our GitLabs a GitLab reduce fiscal we as like a and of Companies their turbulent climate, Thank our non-GAAP

continue achieve generated This the of high incremental fiscal to year-over-year. quarter In year improving revenue of margins. third our we XX% represents of $XXX to We growth XXXX, growth demonstrate ability with million.

Our reporting of dollar-based retention net rate exceeded threshold our XXX%.

third leverage in business. quarter demonstrate operating Our also continue results improving to our

operating a growing repeating. non-GAAP by best to improved basis We this committed We margin year-over-year. stated responsible Our in X,XXX before, but remain manner. points it's

these will With main are business cover I results, there today. topics three

into us First, GitLabs I technology a value delve are innovation part why deeper their specifically proposition, choosing and core customers will of strategy. to business be

a and securing from pillar where partners together the will our on patchwork be will great update see at third, increasingly and disrupted. GitLab. share provide operating latest value how of how are customers software DevSecOps their Every and developing, We needs accelerating of or a our from be product software strategy. a alliances will IT differentiated managers a tools. Second, go-to-market central strategy. an turning They're shift approach third-party innovation they as I innovations I our And legacy feel homegrown to stitch company receive and to they

is moving Analyst for the away some firm the the stream platform software reasons. is a tools a best-in-class, these market solutions lifecycle. While They adopted by XX% have trend. be also of this Gartner shift the a towards happening XXXX. application, has may delivery of clearly in end will market of predicted point market three for single We believe entire platform seen from the this delivery value

and sprawl, inefficiencies patchwork especially approach leads more ungovernable This managers more costs tools to and and applications realize DevSecOps inherent point and the chain integrate. the are unwieldy and approach. in First, solution tool the IT as to there executives

on from result. faster seeing planning Second, and a initiatives to significant executives to going rely source suggest challenges, business visibility

the their and for entire from And visibility to UBS its a technology automation software and finally, need to drive continue an in shared, clients. reduce but remove no move it's same chain. can more deck, the actually while digitalization value the reducing in end-to-end hiring the with productivity. to customer, DevSecOps outcome to for companies this their everyone application, The cloud their headwinds still to Without development idea example simply business market and differentiation a move be initiatives. to to budget faster. constant. technology the one most drive Put story This to software commitments. less. required global either means chain. companies prioritizing more build Moving a platform to remains longer A DevSecOps supply By from delivering securing economy economic to legacy struggle their to tool these are recent platform, for driving single faster into leaders it's and leveling greater workforces. Many longer or an about in looking is our powerful environment, to order do on up their that no In UBS. imperative the At time, customer earnings investor optional, comes powerful a better needs get

uniform part transitioned Forrester to to tool Impact understand frequent that can They measure efficiency Forrester to on speed of also introduced We've return Ultimate, with increase investment teams, GitLab. technology business different app approximately Last Specifically, study people to commissioned in to development fastest-growing goals development the model to of they're with recently better want GitLab be a announced how costs realized from they which of and and is Consulting. the the on their results of to conducted by companies set Economic industry delivery outcome. business. We save metrics one achieve through the a turned order moving We our Total see agile a from XX,XXX we to process. automation. idea software standard removed XX quarter,

composite three implementing in GitLab. history found deliver vulnerabilities. example result increase which customers provides These while Forrester total benefits. of and strengthening largest in vehicle for to platform business return this maximizing compliance, with reducing database months. four associated helps saw choosing a point a on results of GitLab software are on solutions, single Dev than software over of SecOps We to investment of in as the and practices, resulted areas: a result a multiple platform. in world's years. chain by GitLab is costs secret deployment CARFAX Purchasing on reducing reducing tool revenue-generating its an costs container of XX% rooted they daily software the new including main chain simplifying of we vendor The the security software wanted better development. a performance higher XXX% interviewed The builds these using a CARFAX improving improvement has thereby a the market. experience based dependency XXx developer CARFAX number application critical allow development complexity and and vehicles, over to annual visibility accelerating and cycle a due number return of in year saw This tool applications, that as powerful in automate In scanning, people faster SaaS, and enabled complete reduce GitLab and processes, one payback story solutions organizations six CARFAX, shop of creating XXX% the metrics. and QX, releases scanning chain for detection. tool owns development a consolidate In functionality time the less releases. in integration, Ultimate productivity faster company more delivery and investment and of to continued of increased economic security application, millions environment, Even revenue software increasing to the all on single deliver security a to of user efficiency. of

pace decreased many of compliance increased. these Consolidating of In poor seconds learning per security, most and instance, see life management introduced and all process development in eliminates industries development, these of our the minutes real person regulatory which of be potential we time life GitLab experience policy online by experiencing travel score tools can includes tracked remediated fastest-growing new of announced to queue time, lack largest and in compliance for For facing machine We from avoiding address greater of Agoda customers capabilities developers. Govern increasingly platforms of developer can has single continuous compliance a agility. single management automating a triage, over The that in release compliance many booking vulnerability ML-powered multitude stringent audit truth speed delays. silos, security and GitLabs advanced and across a and The world's story represents With merge pipelines help achieve XX challenges. average dependency we capabilities. software of GitLabs compliance. their these QX, many help and their also million can governance, issues and a compromising Agoda, right These control the and and because compliance Agoda on of brings application this source GitLab development identified, organizations developer With chain release in now benefits. X XX increased productivity are vulnerabilities of compliance the proactively free with and to the has Reviewers, one events, pay of Govern, software capabilities along billed Suggested organizations Developers slow is and empowerment we been locked, and demonstrates first governance and application. vulnerability with integrating identify and Recommending a supply security their month. the cycle. audit quality product of same management. NPS which employing and requirements. systems retention vulnerabilities visibility, both Issues cycle. without our in request Govern with delays, we feature. within GitLab had solution, on management, security resulted and together review management, a a Agoda products

and DevSecOps As further software practices ModelOps we practices next-gen we're unlocking life move taking development organizations. for cycle and into beyond,

GitLab to innovation officially needs. a new DevSecOps on with use offering This DevSecOps compliance residency, AWS our way and which new enterprise networking all GitLab Dedicated, the platform is to we isolation focus is complex SaaS Another an a as data enterprise availability offering. private announced platform a at product meet limited and re:Invent. of benefits single-tenant Dedicated provides

will a single-tenant Dedicated methods, next a increasingly GitLab partners of partnerships Self-Managed availability provides as We SaaS hyperscalers anticipated SaaS hyperscalers platform; deployment GitLab. the know the cloud our anywhere. our with in customers cloud faster depth general they users That GitLab cloud. Dedicated, run planned platform; of Gitlab.com, us the an to platform accelerant for a go-to-market. to core year, In view the DevSecOps as multi-tenant available our download, accelerate breadth symbiotic success to their of be hyperscalers. ability of for they time our brings view part for which GitLab conversations choice, we the They cloud important With in and GitLab and on move the GitLab our three with to a reach. and relationship broaden This their them, market market to makes customers

migration security digital while rapidly can customers the Group, You Dunelm proposition in leader Dunelm with market homewares. like transforming with cloud their see our application was U.K.'s footprint. challenged value the ensuring

choose CI/CD As administrative lack led strengths first, security seamlessly cloud. deploy days. earlier. move an target The included and which XX and integrate much upfront performance. rather they security their productivity, to rather creating Dunelm turbocharges visibility, AWS on SaaS and onboarding takes tools to a than serverless resulting pipelines existing hours gaps times governance, evaluations cloud automation, benefits their of management burden, Comparative identified included than capture accelerated to on tooling. to teams Dunelm focus now XX and engineering significant technologies per accelerated software times collaboration Ultimate of team their pipeline architecture their increased is GitLab in and to vulnerabilities the now administrative XX XX to volume, and can secure deploy reduced week These

organizations deploy is GitLab Seed, a launch priority simplifies to cloud pipeline a adoption to second applications GitLab. investment Cloud In highest our DevSecOps web web built experience it the new order into CI/CD Seed capability leverages services. addition, enable cloud teams. give and area for last their high capabilities In the Cloud Google to annual And procuring that cloud. for our developer to experience consuming the Cloud make Google it partnered like a frictionless and to Cloud organizations. we quarter, Innovations that summary, and to with we shift survey, In from UI the with directly in easier Cloud very pleased developers their remains is the found quarter. for I'm DevSecOps accelerate Seed

create expanded continue innovate of capabilities an customers. We new to and for set

in continue is critical, over demonstrate and show point benefits of continue to large GitLab early we And believe we and platform a that to continue solution approach. market. we a the We to mission are growing

Our our over partners, well call Officer. now durable drive contributed to with QX GitLabs and results that members, Chief economics. results. our we're GitLab the who to I'm growth team Financial to community Robbins, our positioned all turn customers to grateful improving the Brian demonstrate unit I'll of wider

Brian Robbins

and Thank and business for you, everyone macro I'll our seeing third metrics financial model spend with conclude the Then reviewing are our like key characteristics results environment. of and Sid, we recap quarter again guidance. you a I'd joining in thank moment us. and our operating to what the key quickly

of the than and base a results verticals, are team drive I to to the We hiring. discuss seeing. a visibility, number cycle rather the we third more the platform aspects cheaper across on established with in These how point short predictability sale these an contribute over new primarily team are high a secure a focusing need faster, in macroeconomic macro to industry. ROI. we very the build leverage include subscription are still of R&D. briefly. ongoing attrition prioritize third customer the We lower results the and industry in ago business members sales regions and be quarter, new this, provides to continuing expanding view to high active These benefit well-documented XQ, on solution to also today. diversified attributes model like incremental Our and seven a added customers mission-critical in see in based better, revenue software new We're on Fueling sizes XXX results quarter geographic a from members to to with we continue as our the ability for key the a margins. implementation in growth on Despite adding and volatility that and and customer a environment customer our of that recruiting, continue we members, consumption, model happy uncertainty platform than little with would to executed improving economy experience illustrate continue To hiring in years cohorts we team a demonstrate manner.

XQ the a ARR. of over quarter Revenue XX% the this to turning X,XXX year. prior approximately in prior in This customers rate Next, growth in ARR customers approximately over X,XXX numbers. year. $X,XXX customers million at the with quarter of Currently, XX% $XXX organically X,XXX greater from represents an over with our $X,XXX represent or represents ARR ended least We year-over-year increase of to customers of total with and of prior compared XX%.

we prior with those performance FY and customers, XXXX. quarter to compared represents us. $XXX,XXX least ARR at than larger measure of in approximately This of define spending we customers the FY XXX At also had of rate end quarter year-over-year ARR quarter customers $XXX,XXX the XXX XXXX, in of third growth third of XX%. We growth with of customers our and XXX as who a the more in the

prepaid many know, multiyear by of As to that history our can notably believe not period our a factors, of deals. be do of calculated large comparisons indicator good number be impacted business, we you most given billings a prior for

ultimate exceeded grew quarter as dollar-based fastest-growing third XXXX. for This be XX% XXX%, public grew with third the ended with This XX% threshold quarter retention to the for remains representing XX% of third quarter XX% which track FY ARR the and which tier, of to previous XX% consistent XX% margins of and best-in-class with and $XXX of Non-GAAP ARR our in continues to the reporting quarter, rate company. gross XX% We record with to for in XXXX. quarter compares we year-over-year our million The FY compared of FY our our total immediately third quarter, RPO XXXX consistent net of a were million. tier CRPO $XXX quarters. believe a quarter preceding

reduction subsidiaries. XX% estimating business our improved operating million quarter, of compared million Non-GAAP $X XX% fiscal $XX.X this negative largely to or or leverage metric expenses a and is to revenue loss We moderate are year-over-year outperformance. this negative loss rate QX revenue driven by includes revenue offering. move $XX.X of to due the JV operating in saw a last rapid the of of we forward, SaaS growth XXXX of As in we of majority-owned million our year. related across

in events year. quarter over bottom the line, cash same continued and of million compared during termination FY slightly $XX.X performance we our quarter addition, was payments the of top believe third $X third our we're million canceled. set to the Operating FY In were used we business that million for in $X.X summary, relating to last quarter both XXXX use In the with is on and XXXX pleased up incurred strength.

turn to let's guidance. Now

of million of total year-over-year. fourth million, $XXX to rate XXXX, to FY of quarter the expect $XXX we growth revenue XX% For representing XX%

We and non-GAAP average million XXX million per outstanding. to $XX we assuming $X.XX expect of $XX expect to shares non-GAAP loss million, of net weighted $X.XX, operating share loss

now expect rate the representing million to For of to XX% a XX% year of FY growth $XXX.X total XXXX, $XXX.X million, revenue full we year-over-year.

$XX of percentage average $X.XX weighted basis, XXX basis X,XXX guidance the approximately non-GAAP points million, a per of guidance annual midpoint XXXX operating to and a year-over-year expect loss of new non-GAAP FY loss our We our $XXX non-GAAP improvement outstanding. implies million operating assuming of $X.XX, net we at shares to million expect On margin share ranges.

that focus business now model. A scaling few estimate on on targeted believe improvements in growth longer incremental details the term, incurred resumption in not $XX that more of will incur that XXXX. yield FY well in-person further as public customer the new economics. and We continued guidance million our related to will initiatives a during approximately expenses of unit we costs as marketing travel and the Over we company events and were

JiHu, In costs expenses with This addition, compares related of $XX to of forecast million JiHu FY joint $XX China venture. Meltano approximately in XXXX. we our combined million and

of our are but flow today, the to revenue we planning us we an FY would cash everything estimates, comfortable free over have and on XXXX Street with XXXX on FY We growth achieving which like in revenue Based update process, growing XX%. early are path breakeven. currently to stages provide know our the

expense continue hiring in our monitor evaluate we we economy. the side, as forward the our On relates going leading to indicators to plans it as macro business

As we'll Sid the but long and our run no I philosophical has priority shareholder maximize said value one the business have do last There the over term. number in over quarters, it how responsibly. to growth is we several been change

We focused to improvements business. of continue on unit growth be economics the driving while in our

cash free we're market breakeven we're XXXX. addition, hope outsized detailed next to is some guidance substantial be an opportunity underpenetrated it. for We well earnings targets. capture be that In a flow we'll visibility our addressing FY into FY currently call, more greater to provide for We targeting of believe very this financial XXXX. that our we'll provides On portion positioned and

we'll for Q&A. to time IR ask question directly ready the first With for the please drive and We post your business To our question. value to positive questions. continue We're use that, chat to ROI question, to outcomes, a now and feature move customers.

Sharlene Seemungal

Our first Sterling from comes question MoffettNathanson. from

Sterling Auty

Auty, MoffettNathanson. SVB Sterling

backdrop color question, but in Why you of And it's concerned the of on confidence maybe light kind next next results year. durability to are you that driving going what one only to see for the the that my prepared demand? is really we budgets continue of the year? me investors of is in appreciate IT the we're gave beyond brings throughout macroeconomic remarks thing. fiscal which kind declining the growth should So that what same What next see Or gives not year.

Brian Robbins

in touch on guess, the general. Thanks, the macro briefly just question. Sterling. Appreciate I let's

is we're still some rate expanding feel land ago we expanding go watch starting years and expand. ago cohort the The we're are small cohorts through cohort expanding The about good and talked good to years years macro. today. We two the seven of the so points. at at. same looking we're impact seven And some with that at ago that I'll some are

company from so, seven our largest quarter history. still expansion And had cohorts years seeing first we're ago. we great in Also, quarter, in

the basis. orders dollar year-over-year Our time We XX% are absolute there's is great value to people seeing. overall We're to grew this first move platforms. provide ROI. cost super an on trend over and a what to And efficient

of Some a down, reminds companies me that looking COVID expenses. of at points It all V we at think we're are clamped looking sort watch hit, I right today first when had recovery. is, just of everybody the

company how Obviously, impacting are efficient And think more little contraction. that in mission-critical retention. they think last We've trying us now, first can right and on see same every -- a is four And had there People get the impact at so the I been being is for to it our order, expense. uptick small actually a in about didn't a looking a quarters. It's platform. is this I provides us great ROI gross expansion.

elongate seeing no So aren't then And seeing actually deals. this uptick on the we cycle scrutiny also, are more that but quarter, sales major again shrank we there.

of watch at. the are looking And so, couple points we're that a there

prior responsibly, we do is that showed grow, in to mentioned in increased number that one the have We unit their Company but that an business. the objective economics and we'll

have business. great have we into visibility We sort the is pipeline. pipeline, and over of the controls One two

We and win ratios have and open forth, headcount. rates, data is all on so other the coverage the

continue so monitor and on we'll drive a responsibly do we'll drivers demand we'll those And to regular basis. it growth

Sterling Auty

you it. Thank transparency. the appreciate for I

Sharlene Seemungal

from Next, we have Kash Sachs. Goldman

Kash Rangan

as was several year. area to developer Among conference. finish that massive, stood take the re:Invent a one announcements very the the was curious on you was made, Sid, news out on to the flow much. your no fantastic AWS Congrats AWS. they get angle. I that Thank a as far massive really

about opportunity got for the is you tell a really bit Can re:Invent tell made an more how is they're little GitLab. us to opportunities investing does what didn't of leave AWS of that I've you strategically you life cycle in believe terms considering space, will. to that what if GitLab, development that the affordable that out AWS -- So us

Sid Sijbrandij

so Yes. much. you Thank

DevOps everyone make together to bring understands more closer and is people to hot, get make that, like to sure, this is that like it ahead. is way For it way impact the usable, that to see an the

So that's great getting single to hyperscaler. to closer We're see. every

For us, of also we that component about where it a the company, we ton announced event networking, we a well, at was private that coming and excited announced. availability having ton infrastructure great mainly to wondering And excited successful market platform, to in addresses and year. a user single-tenant an a connected talking us. GitLab GitLab isolation, to for people it's event we very get data announce is Dedicated and re:Invent. Dedicated residency and as in were our get with that be with we're availability of customers. very as SaaS Dedicated limited We per can use customers, a general Customers for excited were customer with cases pricing, more to the about GitLab going

Sharlene Seemungal

Next, from Sandler. Rob we have Piper

Unidentified Analyst

host your thanks to wanted ask Ethan projects Rob. source the for on around my open Sid, seems lot bigger projects. source one It taking is This question of right of larger that competitors open are out like Hi, now, I question. a there. a for

of your gain side kind way visibility at and open focused platform platform? you be on to over the are to new community to these you migrate the interaction some on focusing right source projects a commercial if to of developer more trying on encourage I trying hosted kind so Or things the was as on with now? all of of GitLab are more And projects curious

Sid Sijbrandij

Yes. as open as Thanks and it. a that for different biggest projects competitor. have on has program open our to many source host that. We Not many do source protect

of And to imperatives We is focused winning also contribute people on that are commercial GitLab. our one sure to make business. back

back doing quarter. program more them starting and that. customers to We're contribute help So even of we them every a and users organizations who to have leading GitLab help contribute hundreds in to back

If and of contrast users that innovation to of focused we money, are the you software, open closed on the source it, an that we the benefits our software are want one core customers' all platform, from hosting makes

Sharlene Seemungal

Joel have we from Next, Truist.

Joel Fishbein

to the Thank is taking message for -- you've is about priority here. path about about I you your would you. you Brian, the for my also profitability, and to would 'XX, operating drive some you as love understand free going trajectory drivers of FY I and -- I towards to the but profitability. and questions. this what's also move it's leverage flow the of talked loud got But cash know the that? clear growth talked we

Brian Robbins

unit growth absolutely. platform invest We'll and Joe. through doing to doing we as economics I we're one and Yes, Yes, want strong. guess, is, that DevSecOps our that number Thanks, remain win the category, responsibly. continue to as long

third look at and revenue incremental did less. year last demonstrated $X.X $XX if for third we quarter think we over of you million quarter this added year, that I million quarter-over-quarter, that

We forth there. also JiHu in so increases and expenses, had increased public company

economics. of expand provide those efficiency But We And time. we the mentioned, to land and so we're model. continuing to get more unit with over I out better small. scale, be, as we're relatively going The leverage customers more

marketing and is getting more as sales our efficient so we And grow.

D&O gross margin, of best-in-class. public has a I insurance we're not think goodness, There's G&A On down. to Thank expenses. we gone absorbed lot company do year, this a there. lot

G&A. have We our management and

at And to platform. staff the so we're in building R&D, up just continuing level. invest the And we're in then more

to as to the growth we a don't on high relative larger, revenue get grow we R&D As basis. have

And things so, entire we're company. across at looking We're the measuring them.

profitability. continuing We at, and to have drive a lot of that internal we we're look metrics

Sharlene Seemungal

comes Our from at UBS. question Karl next

Brian Robbins

Karl. come We to can then skip person and back to the next

Sharlene Seemungal

from Matt have we Next, RBC.

Matthew Hedberg

use with the SecOps you even and cases. are that even in about in a I security-led something think guess, Can security checks sale of guys tagline we've Thanks for taking DevOps I the love in platform all of of platform, terms from sort how to just adding heard about, I my resonating talk maybe you of significance first even more DevSecOps your question. think how functionality. change you and all, the Sid,

Sid Sijbrandij

Thanks and people life of is Matt. more getting needs Security are cycle. not secured an that, to DevSecOps And Yes. for only the important, important. again recognizing and integral part security more more is be

say, You And to as features scanning, detection, within the environment When that have the have we this on all dynamic sign shift Govern another Static You just we person container quarter, that offering, need on best enough platform, secret there, Did offer tests?" code? of in the we auditors resonating because and security to on leading the tell all tier. off security functionality. a And the run a walk and Did that me DevOps code. focus market. signed left. security security off what company also analysis, need the "Hey, in that who not put you we your and runs the is it's are number into answers.

did that in answers not is building GitLab that You documented need especially you yourself company and for And this that. that, do no wants the to alternative economy.

all So, that it you excited did also that we're have that. allow prove technology, super you we most of we the security only to not

Sharlene Seemungal

comes question Michael KeyBanc. next from at Our

Michael Turits

Or an bit. more flattened percentage has that? is that it some start penetration? cases, obviously, sort doing of some so, the headcount well function see In to to question with at I a going expansions perspective? that the greater are cuts. wanted there getting point, to because in macro from we'll ultimate are within expand expansion more other that ask How to a in Is you're is about it which reverse. And customers of sense ARPU you're that,

Brian Robbins

the In XX have as the a because a Thanks, talked We and licenses. to question. customer, cases, new Michael. bottoms-up this it's And over we cohorts reason land one sorry, expanding engineers Appreciate rate, when before The why the it's some one dollar why expansion. they land number on of net that's retention and thousands typically about XXX -- seat are time. as number still thousands they're expand expanding.

we from The process don't as remove to to is customer. as versus try Ultimate. friction second upgrade out increased Premium compensation, When the We well sell from differentiate the And is our of third tier for set then buy process. the we the the sales Ultimate. yield

can to accounting standpoint, it's an priced and a same SaaS the in relatively the we years. And and prepared can remarks, we quick report that actually And you're sales revenue in talked From over get from we the a how so to want business standpoint, exactly see time recognition they Self-Managed ROI when XXX% in cash go about buying and and the upfront. value so is same. three Forrester drive the outcome, had

needs it's at did level drive say and quicker so to have looking returns at people I platform move a companies. value, a we macro, higher And a those insulated to people just when paying not them. overall such we're and that you're But some from are to but of platform, the to it, impacts time mission-critical every looking basically everybody seeing -- as off those expenses, seeing and fully you are for

Sharlene Seemungal

Cowen. to move on at Derrick we'll Now

Derrick Wood

international. solid across of Brian, a Great. you're about double Congrats mid-market versus seeing macro versus and versus you on just the quarter. could click U.S. talk kind and enterprise kind maybe what on SMB of

more in around people to bit a replatform when This macro the bit tease frequently heard of of this reductions. being more pressure. But just kind common instances case be out of can follow-up, a more I expense to I'm little then where a sure that's seeing a a there's as GitLab. Just as you we've catalyst And guess not this reason. environment? make little are

Brian Robbins

Yes.

last first. -- Let and me the answer move or the I'll to the first

noted, I first as our order so highest quarter in was history. And company this

question we're U.S. seeing world. healthy all we remains logos versus over and the And had why so quarter. part what pipeline rest people world, platform from there. And is perspective your and are to mid-market reason the many In as consolidate, of this of sort first of the and enterprise, looking picking so SMB new that's was order our trend up, a the first

of there's our long And so, customers, Europe." It all they're particular, there's such towards making the not acting in world because customers really there's revenue, saying, weighted a same. particular remains "Hey, region all healthy like a not tail Europe, a we're relatively we up over have the large few in issues percent of are heavily seeing and about some we're -- a that that

exposure have We to very little tech. the

in you look we're companies than startups, that's employees tech, than If you XXX tech less less but about X%, XX% the we're at overall, look exposure and field. or if start-ups, at

to Self-Managed is push reduced whether it's SaaS, and do cloud go the or so And customization to one we platform, it have and that zero the helping fact costs to we this us. to

are things of some points watch of the uptick mentioned, a seeing seeing we the that slight I as Some is, is we're in contraction.

seen in And And couple licenses. deals we were a of companies fully have scrutiny. some more where cut of require a did who we the so maybe some penetrated, greater those of back layoff they've

typically C-level sort or division CFO And a new we at so is software. may where some acquire department done this to approval basis, approval require of

Sharlene Seemungal

on Blair. from now We'll William to move Jason

Jason Ader

but takes currently? relative Yes, of when expansion NRR do talked it And contraction you through also can have may Brian, and little -- was maybe this a and may seat like like bit little upsell and your you sounds see on NRR you talked affect seats It go the then go similar. on -- Where sort maybe strength you a upsell. pressure. -- quarter? to about was you this, you through about the being sounds puts bit affected some of under But yet

So here? it reconcile and puts all the are takes how manifesting? is some this? us of what Help And

Brian Robbins

Thanks, absolutely. Jason. Yes,

net our rate seen change too much Seat driver. haven't dollar We the remains retention overall. expansion in biggest

there cohort years cohort biggest ago at the as expanding the expansion the well. as rate mentioned, I As ago. same years still Seat seven is driver a that's two

We of XXX%. is in upgrades. of mentioned growing is XX% tier Ultimate biggest second ARR, The but excess still

mentioned, expansion, we And some scrutiny. had order said, really great a greater quarter so so had that as well. I a did -- deals are getting we I and The like first

there rate. changes consistent saw the expansion. quarter, a retention bit -- scrutiny I last been this we for in dramatic too the little quarters. net fairly It's would on been But hasn't more say several much dollar So the

Jason Ader

Okay.

a right the way about it? just maybe think So to Is slight downtick. that

Brian Robbins

Correct.

Sharlene Seemungal

comes Our America. Koji of Bank next from from question

Koji Ikeda

the wanted talking one product for about. that Thanks my you're Sid. Maybe Govern back I GitLab for taking to to go question.

management. software. release, vulnerability press in mentioned of the Also You you mentioned the supply chain

the the be using help this maybe it that what curious, across go it vulnerability depth Does code just So or applications helpful. or to all go? level similar code binaries? management And visibility, be level, level? may blocks does the at go would of vulnerability does binary source Any there management the of sort it source or

Sid Sijbrandij

sure. for Thanks for the Yes, question.

as So vulnerability deep management, goes GitLab you expect. Govern as it

So we do, for example, container space scanning, which are typically binaries.

events, their to We're Additionally, is helps companies And time. it security but what to is but maturing which Govern management. has in is still do in GitLab to every do working audit some also compliance it management, do. auditing prove policy the on product, also single

time. all some we is So bought prove solutions of companies. for applications, They that do them lot the it security and time use for see a of some the application, really And their do multiple what to GitLab it of helps every and point of the for auditors.

benefit. provide but there big And to the a the able make to people. to enforce it, developers to do that's ways it able is also security to the So and the to visibility for be be frictionless

Koji Ikeda

into of additional maybe the helpful, sort too. there maybe sort quarter cycle, the Got of mean, started in deal that end can the the be scrutiny the of beginning follow-up give quarter, on for quarter of quick comment of about color linearity any one the see additional it. when happen of And just color to I it scrutiny. would Brian. any The November? you you Did

Brian Robbins

of deal I starting at on but in It deals, of sign that a did actually the days, was notice scrutiny by the the off some we couple cycle closed of though, are it the Yes, deals more will to note, end sort and towards more of requiring not higher shortened seniority. more overall elongate. the quarter.

has the for quarter linearity our historicals. as been so, same And the the

Sharlene Seemungal

Pinjalim We'll now move on to from JPMorgan.

Pinjalim Bora

you of talk of How Seed think -- margin Two help to against you much maybe some the further it Could point? offering about you question. you maybe AWS Dedicated. are is being assuming Cloud maybe maybe it part. part gross that competitively second taking One, a the should the the so the Google? And adding we I'm tenant? relative lower significance as multi-tenant you with for would single GitLab Thank has you And GitHub? be Sid, pricing at the it can

Sid Sijbrandij

Yes. Thanks questions. for those

the services with control. outsourcing to it to of need things. makes hyperscaler. up all Instead two So does in two easier you set of that easier you it application you a that operations. It allows way everything, do makes to have Cloud up an And Seed a it day set kind now

doing GCP, you that the are to are, of customers We're AWS, to using. to else to our work doing on. everything excited and And it meet hyperscale, want with any Terraform with need they it have we're they first with very do where You irrespective later We Azure. it open cloud them.

higher For with offering, sharing additional and we a you're so has costs. Dedicated, not databases It cost, It's other it's a great are in. at customers infrastructure infrastructure offering. that tenant single like comes pricing a that

and an to higher have price. compared so to it's a component of And in to cost minimums the be infrastructure certain seats, Gitlab.com, -- going there's it. number are There

Sharlene Seemungal

on move Scotiabank. Nick we to Now at

Nicholas Altmann

revenue to growth over or over XXX% guidance about the wanted I XX% around of Brian, your or NRR remained XXX%. XX% ask for for assumptions some next has year.

are up ASPs land year-over-year. said You XX%

growth on the XXX% that are that of expansion of the think of some side today? your your -- assumptions for NRR sort equation And around of versus over the of guidance the So to guidance? you as next what growth XX% XX% side sort ASP about land when equation, it year, higher the relates

Brian Robbins

Yes.

Let of me just one clarification. point

the year-over-year, the ARR So first ASP. quarter XX% grew net not

have make And I sure so want to there. just we clarity

line our we consensus great such So today early based and look at XXXX would we seeing as planning it. guidance FY of -- loss demand in XX% with environment, about a expectations. in today, have are our I'm in a out sort that and our And model on in it's but build business happy order. is we're no we're is changes ratable. this where we it's revenues such I at at for say just we're super our of that strong where that say first predictable can we

Sharlene Seemungal

Our Mike at final comes from question Needham.

Mike Cikos

cycles, also 'XX, midst to Is like us you that the really back me help at you think and to coming are guys compressing. among me have scrutiny you on accelerating, And are margin? here, -- free again, sales I'd Or good is What of there think that are talking that we we in getting those Can not to. sales pointing when I scrutiny if few actually cycle the have one are deal more this about. some who you growth cycles into the those commentary commentary calling flow 'XX Thanks out the guys you that right? Can for about on please? marry versus the to, are very guys help of, the sign-offs in guys. visibility And the sales up, appreciate target fiscal fiscal versus out cycles and appreciate how both deal that bogeys, about qualitative the play two the more that, scrutiny. the are seeing you cash

Brian Robbins

that impact longer, different a is days. the the in has closing several do little to It closed sales a any Absolutely. financials, doesn't revenue a deal, There's of the cycle the process have deal really way shortened but getting and overall recognition. couple stages review by you

are to of as impacts want some and points macro the out. to But some so, we feel wanted that I last And We overall watch looking through go starting just that call the at. we're it, of I also we of quarter. address that out called to

Sharlene Seemungal

With that, turn I'll Sid back remarks. things to for closing

Sid Sijbrandij

thank to business Thank their partners, all GitLab contributions. the objectives. our continued course, much of members all for community our our wider to GitLab them like I'd you I'd so trusting to help their today. like achieve for team time your thank and, customers GitLab of for

our all in You part big had a Thank you. success.

Sharlene Seemungal

again for Thanks joining and us, day. have more a once great

GitLab (GTLB) 6 Dec 222023 Q3 Earnings call transcript