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GitLab Reports Fourth Quarter and Full Year 2023 Financial Results

Quarterly revenue of $122.9 million, up 58% year-over-year

Fiscal Fourth Quarter Highlights:

  • Total revenue of $122.9 million
  • GAAP operating margin of (38)%; Non-GAAP operating margin of (11)%
  • GAAP net loss per share of $(0.26); Non-GAAP net loss per share of $(0.03)

Fiscal Year 2023 Highlights:

  • Total revenue of $424.3 million
  • GAAP operating margin of (50)%; Non-GAAP operating margin of (21)%
  • GAAP net loss per share of $(1.16); Non-GAAP net loss per share of $(0.46)

SAN FRANCISCO, March 13, 2023 (GLOBE NEWSWIRE) — All-Remote – GitLab Inc. (NASDAQ: GTLB), The DevSecOps Platform, today reported financial results for its fourth quarter and full fiscal year of 2023, ended January 31, 2023.

“Now more than ever, it is critical for companies to show an immediate return on their software investments,” said Sid Sijbrandij, co-founder and CEO, GitLab Inc. “With our DevSecOps platform, our customers are consolidating tools, reducing integration costs, increasing productivity, and accelerating their revenue by deploying their software faster. We believe we are well positioned to continue to demonstrate significant value to our customers in the current macroeconomic environment.”

“Our fourth quarter results demonstrate our continued focus on growth while driving improvements in the unit economics of the business,” said Brian Robins, CFO, GitLab Inc. “Revenue of $122.9 million grew 58% organically, and our non-GAAP operating margin improved by approximately 2,400 basis points year-over-year. We see significant opportunities ahead, and we’re confident in the value that GitLab provides to customers.”

Fourth Quarter Fiscal Year 2023 Financial Highlights (in millions, except per share data and percentages):

  Q4 FY 2023   Q4 FY 2022   Y/Y Change
Revenue $ 122.9     $ 77.8       58 %
GAAP Gross margin   88 %     88 %    
Non-GAAP Gross margin   90 %     89 %    
GAAP Operating loss $ (46.3 )   $ (40.6 )   $ (5.7 )
Non-GAAP Operating loss $ (13.8 )   $ (27.4 )   $ 13.6  
GAAP Net loss attributable to GitLab $ (38.7 )   $ (45.8 )   $ 7.1  
Non-GAAP Net loss attributable to GitLab $ (4.5 )   $ (23.2 )   $ 18.7  
GAAP Net loss per share attributable to GitLab $ (0.26 )   $ (0.32 )   $ 0.06  
Non-GAAP Net loss per share attributable to GitLab $ (0.03 )   $ (0.16 )   $ 0.13  
                       

Fiscal Year 2023 Financial Highlights (in millions, except per share data and percentages):

  FY 2023   FY 2022   Y/Y Change
Revenue $ 424.3     $ 252.7       68 %
GAAP Gross margin   88 %     88 %    
Non-GAAP Gross margin   90 %     89 %    
GAAP Operating loss $ (211.4 )   $ (129.0 )   $ (82.4 )
Non-GAAP Operating loss $ (87.1 )   $ (98.3 )   $ 11.2  
GAAP Net loss attributable to GitLab $ (172.3 )   $ (155.1 )   $ (17.2 )
Non-GAAP Net loss attributable to GitLab $ (67.7 )   $ (95.3 )   $ 27.6  
GAAP Net loss per share attributable to GitLab $ (1.16 )   $ (1.95 )   $ 0.79  
Non-GAAP Net loss per share attributable to GitLab $ (0.46 )   $ (1.20 )   $ 0.74  
                       

A reconciliation between GAAP and non-GAAP financial measures is contained in this release under the section titled “Non-GAAP Financial Measures.”

Fourth Quarter Fiscal Year 2023 Business Highlights:

  • Customers with more than $5,000 of ARR increased to 7,002, up 52% from Q4 of fiscal year 2022.
  • Customers with more than $100,000 of ARR increased to 697, up 42% from Q4 of fiscal year 2022.
  • Customers with more than $1 million of ARR increased to 63, up 62% from Q4 of fiscal year 2022.
  • Dollar-Based Net Retention Rate was 133% in Q4 of fiscal year 2023.
  • Announced the limited availability of GitLab Dedicated, a single-tenant SaaS solution for organizations in highly regulated industries and have complex compliance and security requirements.
  • Announced beta availability of Value Streams Dashboard, a new way for all DevSecOps stakeholders to have visibility into value stream metrics.
  • Announced beta availability of GitLab Remote Development, enabling organizations to let developers establish an environment that best suits their needs, including where, when, and how they prefer to work.
  • Announced GitLab Premium price increase from $19 to $29 per user per month effective April 3, 2023.
  • Announced the expansion of the GitLab for Startups program.
  • Appointed Mark Porter, Chief Technology Officer at MongoDB, Inc., to GitLab’s Board of Directors.
  • Received a SOC 2 Type 1 report for GitLab Dedicated, which includes Security and Confidentiality criterion.
  • Expanded SOC 2 Type 2 report for GitLab.com to include the Availability Criteria.
  • Won CRN’s Tech Innovator Awards in the Application Development and DevOps category for GitLab 15.

First Quarter and Fiscal Year 2024 Financial Outlook

For the first quarter of fiscal year 2024, GitLab Inc. expects (in millions, except share and per share data):

  Q1 FY 2024 Guidance   FY 2024 Guidance
Revenue $117.0 – $118.0   $529.0 – $533.0
Non-GAAP operating loss $(27.0) – $(26.0)   $(64.0) – $(59.0)
Non-GAAP net loss per share assuming approximately 151 million and 153 million weighted average shares outstanding as of Q1 FY2024 and FY24, respectively $(0.15) – $(0.14)   $(0.29) – $(0.24)
       

These statements are forward-looking and actual results may differ materially as a result of many factors. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Guidance for non-GAAP financial measures excludes stock-based compensation expense, amortization of acquired intangible assets, foreign exchange (gain) loss, equity method investment (gain) loss, changes in the fair value of acquisition related contingent consideration, and restructuring charges. We have not provided the most directly comparable GAAP financial guidance measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation of non-GAAP guidance for operating loss and net loss per share to the corresponding GAAP measures is not available.

Conference Call Information

GitLab will host a conference call today, March 13, 2023, at 1:30 p.m. (PT) / 4:30 p.m. (ET) to discuss its fourth quarter and full year fiscal 2023 financial results. Investors and analysts should register for the call in advance by visiting https://gitlab.zoom.us/webinar/register/WN_XQP9f5HKSoOKr24vQiswcw. A replay of the call will be available on GitLab’s investor relations website (ir.gitlab.com).

About GitLab

GitLab is the most comprehensive DevSecOps Platform that empowers organizations to maximize the overall return on software development by delivering software faster and efficiently, while strengthening security and compliance. GitLab’s single application is easier to use, leads to faster cycle time and allows visibility throughout and control over all stages of the DevSecOps lifecycle. With GitLab, every team in your organization can collaboratively plan, build, secure, and deploy software to drive business outcomes faster with complete transparency, consistency and traceability.

Non-GAAP Financial Measures

GitLab believes non-GAAP measures are useful in evaluating its operating performance. GitLab uses this supplemental information to evaluate its ongoing operations and for internal planning and forecasting purposes. GitLab believes that non-GAAP financial information, when taken collectively with its GAAP financial information, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. We define non-GAAP financial measures as GAAP measures, excluding stock-based compensation expense, amortization of acquired intangible assets, foreign exchange (gain) loss, (gain) loss from a deconsolidation of a subsidiary, equity method investment (gain) loss, changes in the fair value of acquisition related contingent consideration, and restructuring charges. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

Forward-Looking Statements

This press release and the accompanying earnings call contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Although we believe that the expectations reflected in the forward-looking statements contained in this release and the accompanying earnings call are reasonable, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or outcomes to be materially different from any future results or outcomes expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions, and other factors include, but are not limited to the following:

• our ability to appropriately manage future growth;
• our revenue growth rate in the future;
• our ability to achieve and sustain profitability, our business, financial condition, and operating results;
• our intense competition and loss of market share to our competitors;
• the market for our services may not grow;
• a decline in our customer renewals and expansions;
• fluctuations in our operating results;
• our ability to manage our growth effectively;
• our transparency;
• our publicly available company Handbook;
• security and privacy breaches;
• customers staying on our open-source or free SaaS product offering;
• our limited operating history;
• our ability to respond to rapid technological changes;
• our ability to accurately predict the long-term rate of customer subscription renewals or adoption, or the impact of these renewals and adoption;
• our hiring model;
• the effects of the armed conflict in Ukraine on our business; and
• general economic conditions (including changes in interest rates and inflation) and slow or negative growth of our markets.

Further information on these and additional risks, uncertainties, and other factors that could cause actual outcomes and results to differ materially from those included in or contemplated by the forward-looking statements contained in this release are included under the caption “Risk Factors” and elsewhere in the filings and reports we make with the Securities and Exchange Commission. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

Operating Metrics

Annual Recurring Revenue (“ARR”): We define annual recurring revenue as the annual run-rate revenue of subscription agreements, including our self-managed and SaaS offerings but excluding professional services, from all customers as measured on the last day of a given month. We calculate ARR by taking the monthly recurring revenue (“MRR”) and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts of subscriptions, including our self-managed license, self-managed subscription, and SaaS subscription offerings but excluding professional services.

Dollar-Based Net Retention Rate: We calculate Dollar-Based Net Retention Rate as of a period end by starting with our customers as of the 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these customers as of the current period end (“Current Period ARR”). The calculation of Current Period ARR includes any upsells, price adjustments, user growth within a customer, contraction, and attrition. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the Dollar-Based Net Retention Rate.


GitLab Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)

  January 31, 2023(1)   January 31, 2022(1)
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents         $ 295,402     $ 884,672  
Short-term investments           641,249       50,031  
Accounts receivable, net of allowance for doubtful accounts of $1,564 and $1,098 as of January 31, 2023 and January 31, 2022, respectively           130,479       77,233  
Deferred contract acquisition costs, current           26,505       24,363  
Prepaid expenses and other current assets           24,327       15,544  
Total current assets           1,117,962       1,051,843  
Property and equipment, net           5,797       3,271  
Operating lease right-of-use assets           998        
Equity method investment           12,682        
Goodwill           8,145       8,145  
Intangible assets, net           3,901       6,285  
Deferred contract acquisition costs, non-current           15,628       14,743  
Other long-term assets           4,087       7,151  
TOTAL ASSETS         $ 1,169,200     $ 1,091,438  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
CURRENT LIABILITIES:      
Accounts payable         $ 5,184     $ 4,984  
Accrued expenses and other current liabilities           25,954       24,571  
Accrued compensation and benefits           20,776       32,820  
Deferred revenue, current           254,382       179,224  
Total current liabilities           306,296       241,599  
Deferred revenue, non-current           28,355       32,568  
Other non-current liabilities           9,824       18,002  
TOTAL LIABILITIES           344,475       292,169  
STOCKHOLDERS’ EQUITY:      
Preferred stock, $0.0000025 par value; 50,000 shares authorized as of January 31, 2023 and January 31, 2022; no shares issued and outstanding as of January 31, 2023 and January 31, 2022                  
Class A Common stock, $0.0000025 par value; 1,500,000 shares authorized as of January 31, 2023 and January 31, 2022; 94,655 and 27,141 shares issued and outstanding as of January 31, 2023 and January 31, 2022, respectively                  
Class B Common stock, $0.0000025 par value; 250,000 shares authorized as of January 31, 2023 and January 31, 2022; 56,489 and 119,747 shares issued and outstanding as of January 31, 2023 and January 31, 2022, respectively                  
Additional paid-in capital           1,497,373       1,320,479  
Accumulated deficit           (725,648 )     (553,337 )
Accumulated other comprehensive income (loss)           (705 )     7,724  
Total GitLab stockholders’ equity           771,020       774,866  
Noncontrolling interests           53,705       24,403  
TOTAL STOCKHOLDERS’ EQUITY           824,725       799,269  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY         $ 1,169,200     $ 1,091,438  

__________
(1) As of January 31, 2023 and January 31, 2022, the consolidated balance sheet includes assets of the consolidated variable interest entity, GitLab Information Technology (Hubei) Co., LTD (“JiHu”), of $62.8 million and $17.7 million, respectively, and liabilities of $8.9 million and $3.7 million, respectively. The assets of JiHu can be used only to settle obligations of JiHu and creditors of JiHu do not have recourse against the general credit of the Company.

GitLab Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

  Three Months Ended January 31,   Fiscal Year Ended January 31,
    2023       2022       2023       2022  
Revenue:          
Subscription—self-managed and SaaS         $ 105,055     $ 69,621     $ 369,349     $ 226,163  
License—self-managed and other           17,852       8,175       54,987       26,490  
Total revenue           122,907       77,796       424,336       252,653  
Cost of revenue:              
Subscription—self-managed and SaaS           11,124       7,302       40,841       23,668  
License—self-managed and other           3,114       1,871       10,839       6,317  
Total cost of revenue           14,238       9,173       51,680       29,985  
Gross profit           108,669       68,623       372,656       222,668  
Operating expenses:              
Sales and marketing           81,513       57,192       309,992       190,754  
Research and development           43,680       28,610       156,143       97,217  
General and administrative           29,750       23,378       117,932       63,654  
Total operating expenses           154,943       109,180       584,067       351,625  
Loss from operations           (46,274 )     (40,557 )     (211,411 )     (128,957 )
Interest income           6,249       510       14,496       736  
Other income (expense), net           (1,024 )     (9,598 )     21,585       (30,850 )
Loss before income taxes and loss from equity method investment           (41,049 )     (49,645 )     (175,330 )     (159,071 )
Loss from equity method investment, net of tax           (693 )           (2,468 )      
Provision for (benefit from) income taxes           379       (2,881 )     2,898       (1,511 )
Net loss         $ (42,121 )   $ (46,764 )   $ (180,696 )   $ (157,560 )
Net loss attributable to noncontrolling interest           (3,388 )     (979 )     (8,385 )     (2,422 )
Net loss attributable to GitLab         $ (38,733 )   $ (45,785 )   $ (172,311 )   $ (155,138 )
Net loss per share attributable to GitLab Class A and Class B common stockholders, basic and diluted         $ (0.26 )   $ (0.32 )   $ (1.16 )   $ (1.95 )
Weighted-average shares used to compute net loss per share attributable to GitLab Class A and Class B common stockholders, basic and diluted           150,133       144,929       148,407       79,755  


GitLab Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

    Fiscal Year Ended January 31,
      2023       2022  
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss, including amounts attributable to noncontrolling interest           $ (180,696 )   $ (157,560 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Stock-based compensation expense             122,567       30,009  
Operating lease non-cash expense             562        
Gain from the fair value change of acquisition related contingent consideration             (1,722 )      
Amortization of intangible assets             2,362       665  
Depreciation expense             3,231       543  
Amortization of deferred contract acquisition costs             44,958       33,368  
Gain from deconsolidation of Meltano Inc.             (17,798 )      
Loss from equity method investment             3,189        
Net amortization of premiums or discounts on short-term investments             (6,077 )      
Unrealized foreign exchange (gain) loss             (3,727 )     20,389  
Other non-cash expense, net             594       197  
Changes in assets and liabilities:        
Accounts receivable             (54,169 )     (38,223 )
Prepaid expenses and other current assets             (8,909 )     (8,219 )
Deferred contract acquisition costs             (48,555 )     (42,575 )
Other long-term assets             3,012       (3,374 )
Accounts payable             287       1,877  
Accrued expenses and other current liabilities             4,619       13,953  
Accrued compensation and benefits             (11,693 )     19,755  
Deferred revenue             73,003       79,074  
Other long-term liabilities             (2,446 )     307  
Net cash used in operating activities             (77,408 )     (49,814 )
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of short-term investments             (821,622 )     (100,031 )
Proceeds from maturities of short-term investments             231,626       50,000  
Purchases of property and equipment             (6,070 )     (3,541 )
Deconsolidation of Meltano Inc.             (9,620 )      
Payments for business combination, net of cash acquired and consideration withheld in an escrow                   (323 )
Net cash used in investing activities             (605,686 )     (53,895 )
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from initial public offering, net of underwriting discounts                   654,552  
Proceeds from the issuance of common stock upon exercise of stock options, including early exercises, net of repurchases             24,515       25,354  
Issuance of common stock under employee stock purchase plan     14,378        
Proceeds from warrants exercised                   86  
Repurchase of common stock in a tender offer                   (590 )
Contributions received from noncontrolling interests, net of issuance costs             61,726       26,450  
Partial settlement of acquisition related contingent cash consideration             (3,137 )      
Payments of deferred offering costs                   (4,667 )
Net cash provided by financing activities             97,482       701,185  
Impact of foreign exchange on cash and cash equivalents             (3,658 )     6,846  
Net increase (decrease) in cash and cash equivalents             (589,270 )     604,322  
Cash, cash equivalents, and restricted cash at beginning of period             887,172       282,850  
Cash, cash equivalents, and restricted cash at end of period           $ 297,902     $ 887,172  
Reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above:        
Cash and cash equivalents           $ 295,402     $ 884,672  
Restricted cash, included in prepaid expenses and other current assets             2,500        
Restricted cash, included in other long-term assets                   2,500  
Total cash, cash equivalents and restricted cash           $ 297,902     $ 887,172  


GitLab Inc.
Reconciliation of GAAP to Non-GAAP
(in thousands, except per share data)
(unaudited)

  Three Months Ended January 31,   Fiscal Year Ended January 31,
    2023       2022       2023       2022  
Gross profit on GAAP basis          $ 108,669     $ 68,623     $ 372,656     $ 222,668  
Gross margin on GAAP basis           88 %     88 %     88 %     88 %
Stock-based compensation expense           1,455       578       5,078       1,300  
Amortization of acquired intangibles           521       334       2,067       334  
Gross profit on non-GAAP basis          $ 110,645     $ 69,535     $ 379,801     $ 224,302  
Gross margin on non-GAAP basis           90 %     89 %     90 %     89 %
               
Sales and marketing on GAAP basis          $ 81,513     $ 57,192     $ 309,992     $ 190,754  
Stock-based compensation expense           (13,194 )     (4,862 )     (48,001 )     (10,550 )
Sales and marketing on non-GAAP basis          $ 68,319     $ 52,330     $ 261,991     $ 180,204  
               
Research and development on GAAP basis          $ 43,680     $ 28,610     $ 156,143     $ 97,217  
Stock-based compensation expense           (9,920 )     (3,652 )     (36,325 )     (8,305 )
Research and development on non-GAAP basis          $ 33,760     $ 24,958     $ 119,818     $ 88,912  
               
General and administrative on GAAP basis          $ 29,750     $ 23,378     $ 117,932     $ 63,654  
Amortization of acquired intangibles           (74 )     (80 )     (295 )     (331 )
Stock-based compensation expense           (9,072 )     (3,675 )     (33,163 )     (9,854 )
Changes in the fair value of acquisition related contingent consideration           1,722             659        
General and administrative on non-GAAP basis          $ 22,326     $ 19,623     $ 85,133     $ 53,469  
               
Loss from operations on GAAP basis          $ (46,274 )   $ (40,557 )   $ (211,411 )   $ (128,957 )
Stock-based compensation expense           33,641       12,767       122,567       30,009  
Amortization of acquired intangibles           595       414       2,362       665  
Changes in the fair value of acquisition related contingent consideration           (1,722 )           (659 )      
Loss from operations on non-GAAP basis          $ (13,760 )   $ (27,376 )   $ (87,141 )   $ (98,283 )
               
Other income (expense), net on GAAP basis         $ (1,024 )   $ (9,598 )   $ 21,585     $ (30,850 )
Gain from deconsolidation of Meltano Inc.                       (17,798 )      
Foreign exchange (gain) loss           997       9,437       (4,364 )     29,140  
Other income (expense), net on non-GAAP basis         $ (27 )   $ (161 )   $ (577 )   $ (1,710 )
               
Net loss attributable to GitLab common stockholders on GAAP basis         $ (38,733 )   $ (45,785 )   $ (172,311 )   $ (155,138 )
Stock-based compensation expense           33,641       12,767       122,567       30,009  
Amortization of acquired intangibles           595       414       2,362       665  
Changes in the fair value of acquisition related contingent consideration           (1,722 )           (659 )      
Gain from deconsolidation of Meltano Inc.                       (17,798 )      
Loss from equity method investment, net of tax           693             2,468        
Foreign exchange (gain) loss           997       9,437       (4,364 )     29,140  
Net loss attributable to GitLab common stockholders on non-GAAP basis         $ (4,529 )   $ (23,167 )   $ (67,735 )   $ (95,324 )
               
Net loss per share on GAAP basis         $ (0.26 )   $ (0.32 )   $ (1.16 )   $ (1.95 )
Non-GAAP adjustments to net loss per share           0.23       0.16       0.70       0.75  
Net loss per share on non-GAAP basis         $ (0.03 )   $ (0.16 )   $ (0.46 )   $ (1.20 )
Shares used in per share calculation – diluted on GAAP and non-GAAP basis           150,133       144,929       148,407       79,755  
                               

Media Contact:
Lisa Boughner
VP, Global Communications
GitLab Inc.
[email protected] 

Investor Contact:
Jack Andrews
VP, Investor Relations
GitLab Inc.
[email protected] 

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.



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