Release Date: June 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GitLab Inc (GTLB, Financial) reported a 27% year-over-year increase in revenue, reaching $215 million for the first quarter.
- The company achieved a non-GAAP operating margin of 12%, highlighting significant year-over-year operating margin expansion.
- GitLab Inc (GTLB) continues to see strong adoption of its AI-native DevSecOps platform, with strategic differentiators like cloud agnosticism and comprehensive solutions across the software development lifecycle.
- The company launched GitLab 18, introducing new product capabilities that enhance core DevOps, security, and AI functionalities.
- GitLab Inc (GTLB) achieved FedRAMP Moderate authorization, which is expected to boost its public sector business with its Dedicated offering.
Negative Points
- The company's Q1 beat was described as one of the 'skinniest' since its IPO, indicating tighter performance margins.
- There was a noted deceleration in sequential customer adds, particularly in the $100,000 ARR cohort.
- GitLab Inc (GTLB) experienced a back-end weighted linearity in the quarter, which could indicate potential challenges in deal closures.
- The company faces price sensitivity at the low end of the market, impacting new customer additions.
- Concerns were raised about the potential impact of AI on job growth in the software developer market, which could affect demand for GitLab's services.
Q & A Highlights
Q: How are customer conversations evolving with the rapid advancements in AI, particularly regarding code suggestion and completion?
A: Bill Staples, CEO: Every customer conversation touches on AI. Customers are eager to use AI to enhance productivity, innovation, and quality. The market is rapidly evolving with new tools and techniques. Customers often experiment with multiple AI tools, including GitLab Duo, to find the best fit. This experimentation ultimately benefits GitLab, as more code creation leads to increased demand for GitLab's comprehensive platform for testing, validation, and deployment.
Q: Can you explain the growth dynamics, given the fiscal Q1 results and the outlook for the year?
A: Brian Robins, CFO: The quarter's results were as expected, with a mix favoring SaaS and back-end weighted linearity. The guidance remains unchanged, assuming consistent macroeconomic conditions. The growth in RPO, CRPO, and billings indicates strong underlying demand, despite a slightly narrower beat compared to previous quarters.
Q: How is AI adoption affecting job growth in the software developer market, and what are the implications for GitLab?
A: Bill Staples, CEO: AI is seen as a productivity enhancer rather than a job threat. Historically, advances in productivity have led to more opportunities. AI will likely increase the number of code creators and the volume of code, benefiting GitLab. Brian Robins, CFO, added that developer hiring is turning positive, and GitLab's market opportunity remains vast.
Q: How does GitLab plan to capture value from AI-driven enhancements, given the current pricing model?
A: Bill Staples, CEO: GitLab is focusing on creating value through AI by enhancing collaboration between humans and agents, maintaining security and privacy, and leveraging its unified platform for better context and outcomes. The introduction of Duo Chat and code suggestions in Premium and Ultimate tiers is part of a strategy to lower adoption barriers and provide a smooth upgrade path to more advanced AI capabilities.
Q: What are the key differentiators in GitLab 18, and why were certain features included without additional charges?
A: Bill Staples, CEO: GitLab 18 introduces centralized artifact management, improved CICD pipelines, and enhanced security features. The inclusion of Duo Chat and code suggestions in Premium and Ultimate tiers aims to eliminate adoption barriers and provide a seamless upgrade path. The strategy is to offer a friction-free AI experience, encouraging broader adoption and eventual upgrades to more comprehensive solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
