- Revenue: $169 million, an increase of 33% year-over-year.
- Adjusted Revenue: $170 million, an increase of 34% year-over-year (excluding SSP impact).
- Dollar-Based Net Retention Rate (DBNR): 129%.
- Customers with ARR of at least $5,000: 8,976, an increase of approximately 21%.
- Customers with ARR of more than $100,000: 1,025, an increase of over 35% year-over-year.
- Total RPO: $681 million, a growth of 40% year-over-year.
- CRPO: $436 million, a growth of 34% year-over-year.
- Non-GAAP Gross Margins: 91%.
- Non-GAAP Operating Loss: $3.8 million, compared to a loss of $15 million in the first quarter last year.
- Cash from Operating Activities: $38.1 million, compared to an $11 million use of cash in the same quarter last year.
- Adjusted Free Cash Flow: $37.4 million, compared to an $11.2 million use of cash in the same quarter last year.
- Q2 FY 2025 Revenue Guidance: $176 million to $177 million, representing a growth rate of 26% to 27% year-over-year.
- Q2 FY 2025 Non-GAAP Operating Income: $10 million to $11 million.
- Q2 FY 2025 Non-GAAP Net Income per Share: $0.09 to $0.1.
- FY 2025 Revenue Guidance: $733 million to $737 million, representing a growth rate of approximately 26% to 27% year-over-year.
- FY 2025 Non-GAAP Operating Income: $34 million to $38 million.
- FY 2025 Non-GAAP Net Income per Share: $0.34 to $0.37.
- JiHu Non-GAAP Expenses: $3 million in Q1 FY 2025, compared to $5.6 million in Q1 of last year.
Release Date: June 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GitLab Inc (GTLB, Financial) reported a strong first quarter with 33% revenue growth and significant year-over-year margin expansion.
- The company achieved a best-in-class dollar-based net retention rate of 129%, indicating strong customer loyalty and expansion.
- GitLab Inc (GTLB) continues to innovate with AI capabilities, including the release of GitLab Duo Chat, which enhances productivity and security.
- The company closed significant deals, including the second-largest deal in its history with a U.S.-based global investment banking firm.
- GitLab Inc (GTLB) generated positive Q1 operating and adjusted free cash flow for the first time, highlighting financial stability and operational efficiency.
Negative Points
- The company faces a $4 million headwind for FY 2025 due to updated standalone selling price (SSP) allocations, impacting revenue recognition.
- Despite strong performance, the macroeconomic environment remains cautious, particularly in procurement departments, which could affect future sales cycles.
- GitLab Inc (GTLB) is undergoing significant investments in global field CTOs, solution architects, and services offerings, which may impact short-term profitability.
- The company's CEO, Sid Sijbrandij, is undergoing treatment for osteosarcoma, which could potentially impact leadership stability.
- There is some seasonality in revenue, with Q1 being the weakest quarter and Q4 the strongest, which could lead to fluctuations in financial performance.
Q & A Highlights
Q: Can you discuss the demand environment and any macro changes from Q4 to Q1?
A: Brian Robins, CFO: There were no major macro changes from Q4 to Q1. Sales cycles and discounting remained consistent. The macro environment continues to be cautious, particularly from procurement departments. New business and existing customer expansions, reflected in our 129% dollar-based net retention rate, indicate strong demand.
Q: Can you clarify the $4 million SSP headwind and its impact on full-year guidance?
A: Brian Robins, CFO: The $4 million SSP headwind is a full-year impact, not just Q1. We absorbed this in our guidance, which includes the $1 million impact in Q1 and the remaining $3 million for the rest of the year.
Q: Any updates on the incremental pricing guide and its impact on fiscal year revenue?
A: Brian Robins, CFO: The incremental pricing guide of $10 million to $20 million benefit for this fiscal year is included in our guidance. We are performing better than our internal models.
Q: What is the current percentage of ARR from the Ultimate tier, and how is the demand for Duo Pro and Duo Enterprise?
A: Brian Robins, CFO: Ultimate tier represents 46% of total ARR, up from 44% last quarter. Sid Sijbrandij, CEO: Duo Pro has shown great initial results, with significant productivity gains reported by major customers. Duo Enterprise features, particularly in security, are generating strong interest.
Q: Have you considered any changes to the pricing model, especially for the SaaS business?
A: Sid Sijbrandij, CEO: Our primary pricing is based on users, reflecting the productivity gains we provide. While we charge for storage on SaaS, the main value comes from making people more efficient. Our gross margins of 91% indicate low compute costs, emphasizing our focus on productivity.
Q: What are the top priorities for product capabilities this fiscal year?
A: Sid Sijbrandij, CEO: Our top focus is on AI, including Duo Pro and Duo Enterprise. We are also investing in security, compliance, planning capabilities, and replacing point solutions to enhance our platform's value.
Q: Can you explain the smaller sequential change in RPO from Q4 to Q1?
A: Brian Robins, CFO: Q4 is our strongest quarter, and Q1 is seasonally our lowest. The sequential change in RPO reflects this seasonality. CRPO growth of 34% year-over-year aligns with our revenue growth.
Q: How are customer hiring intentions, specifically for developers, impacting demand?
A: Brian Robins, CFO: We don't have specific data on customer hiring intentions. However, the consistent seat expansion contributing to our net dollar retention rate indicates stable demand.
Q: How does GitLab's product competitiveness compare to leading competitors, especially with new AI features?
A: Sid Sijbrandij, CEO: Our AI features are competitive, integrating security, dev, and ops. We offer the most AI features across the broadest platform, allowing customers to replace more point solutions and achieve faster cycle times.
Q: What is the expected contribution of Duo Pro and Duo Enterprise to fiscal year revenue?
A: Brian Robins, CFO: The contribution of Duo Pro and Duo Enterprise is included in our guidance. While we haven't broken it out separately, we expect significant impact in future fiscal years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
