Overview of GitLab’s Financial Performance

GitLab is an intelligent platform that helps software teams and their AI agents work together more efficiently across the entire software development lifecycle. The company has seen strong growth, with revenue increasing 21% to $286.3 million in the three months ended July 31, 2026, and 22% to $550.4 million in the six months ended July 31, 2026, compared to the same periods in the prior year.

This growth has been driven by GitLab’s ability to acquire new customers and expand its relationships with existing ones. As of July 31, 2026, GitLab had 11,114 customers with over $5,000 in Annual Recurring Revenue (ARR), up 8% from the prior year. The number of customers with over $100,000 in ARR also increased 17% to 1,571.

GitLab’s strong performance is a result of several key factors:

Sustaining Innovation and Technology Leadership GitLab has built a highly differentiated platform that empowers teams across the organization to collaborate on software development. The company continues to invest heavily in research and development to enhance the platform and maintain its technology leadership. GitLab has a history of releasing new software updates monthly and plans to continue this pace of innovation.

Acquiring New Customers GitLab is focused on expanding its customer base, both in the United States and internationally. The company is making investments in sales and marketing to reach more teams and organizations. GitLab believes it has a significant market opportunity as more companies adopt a single application approach to software development.

Retaining and Expanding Existing Customers GitLab employs a “land and expand” strategy, efficiently acquiring new customers and then growing its relationships with them over time. The company’s Dollar-Based Net Retention Rate, which measures the percentage change in ARR from existing customers, was 117% as of July 31, 2026, indicating strong customer loyalty and expansion.

Partnerships and Integrations GitLab is continuously investing in developing its ecosystem of cloud and technology partners, resellers, and system integrators. These partnerships help extend GitLab’s sales reach and provide product and technology integrations that accelerate the adoption of its platform.

Scaling the Business GitLab plans to continue investing in its business to capitalize on its market opportunity, although these investments may adversely affect its operating results in the short term. The company also expects its general and administrative expenses to increase as it operates as a public company.

Key Metrics GitLab tracks several key metrics to measure its performance:

Dollar-Based Net Retention Rate and ARR GitLab’s Dollar-Based Net Retention Rate, which measures the percentage change in ARR from existing customers, was 117% as of July 31, 2026. This indicates that existing customers are expanding their use of GitLab’s platform over time.

Customers with ARR of $100,000 or More The number of customers with ARR of $100,000 or more increased 17% to 1,571 as of July 31, 2026, reflecting GitLab’s ability to penetrate larger organizations.

Financial Results GitLab’s financial results for the three and six months ended July 31, 2026 and 2025 are summarized in the tables below:

Revenue

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Subscription - self-managed and SaaS	$258,311	$45,627 (21%)	$497,617	$90,452 (22%)
License - self-managed and other	$27,943	$4,667 (20%)	$52,795	$9,491 (22%)
Total Revenue	$286,254	$50,294 (21%)	$550,412	$99,943 (22%)

Cost of Revenue, Gross Profit, and Gross Margin

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Cost of Revenue	$45,638	$17,133 (60%)	$83,126	$29,586 (55%)
Gross Profit	$240,616	$33,161 (16%)	$467,286	$70,357 (18%)
Gross Margin	84%	(4%)	85%	(3%)

The increase in revenue was primarily driven by the addition of new customers and expansion within GitLab’s existing customer base. However, the decrease in gross margin was mainly due to an increase in third-party hosting costs for GitLab’s SaaS and cloud offerings.

Operating Expenses

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Sales and Marketing	$134,363	$24,780 (23%)	$253,721	$36,551 (17%)
Research and Development	$94,980	$23,492 (33%)	$166,462	$29,564 (22%)
General and Administrative	$68,208	$23,473 (52%)	$119,787	$23,965 (25%)
Total Operating Expenses	$297,551	$71,745 (32%)	$539,970	$90,080 (20%)

GitLab’s operating expenses increased significantly, driven by investments in sales and marketing, research and development, and general and administrative functions. These investments are aimed at supporting the company’s growth initiatives, but they have also put pressure on its short-term profitability.

Stock-Based Compensation Expense

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Total Stock-Based Compensation Expense	$75,006	$20,722 (38%)	$125,067	$14,956 (14%)

Stock-based compensation expense increased due to the granting of performance stock units (PSUs) and restricted stock units (RSUs) to employees, reflecting GitLab’s efforts to attract and retain talent.

Other Income and Expenses

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Interest Income	$12,202	$691 (6%)	$24,149	$1,776 (8%)
Other Income (Expense), Net	$5,406	$6,317 (-693%)	$5,661	$16,543 (-152%)

Interest income increased due to higher average balances in cash, cash equivalents, and short-term investments. Other income (expense), net improved primarily due to foreign exchange gains and a tax benefit related to the formation of GitLab’s joint venture, JiHu.

Provision for (Benefit from) Income Taxes

Metric	Three Months Ended July 31	Change	Six Months Ended July 31	Change
Provision for (Benefit from) Income Taxes	$(3,195)	$(5,440) (-242%)	$(1,163)	$(5,947) (-124%)
Effective Tax Rate	8.0%	40.2%	2.7%	14.6%

GitLab recognized a tax benefit in the current periods due to the settlement of a withholding tax matter related to the formation of JiHu.

Liquidity and Capital Resources As of July 31, 2026, GitLab had $1,257.0 million in cash, cash equivalents, and short-term investments, which the company believes will be sufficient to support its working capital and capital expenditure requirements for at least the next 12 months.

GitLab generated $146.1 million in net cash from operating activities during the six months ended July 31, 2026, primarily driven by improvements in accounts receivable collections and customer subscription growth. The company used $5.4 million in net cash for investing activities, mainly for purchases of short-term investments and property and equipment.

In terms of financing activities, GitLab used $143.3 million in net cash, primarily for the repurchase of $154.7 million in common stock, partially offset by proceeds from the issuance of common stock upon stock option exercises and under the employee stock purchase plan.

GitLab also monitors a non-GAAP metric called “Adjusted Free Cash Flow,” which was $156.5 million for the six months ended July 31, 2026. This metric provides additional insight into the company’s liquidity and cash generation capabilities.

Outlook and Risks GitLab’s strong financial performance and growth initiatives position the company well for the future. However, the company faces several risks and challenges that could impact its results:

• Sustaining its rapid pace of innovation and technology leadership
• Continuing to acquire new customers and expand within existing accounts
• Effectively managing the investments in sales, marketing, research and development, and general and administrative functions
• Navigating potential fluctuations in interest rates and foreign currency exchange rates

Overall, GitLab’s financial results demonstrate its ability to execute on its strategic priorities and capitalize on the growing demand for its intelligent DevSecOps platform. The company’s focus on innovation, customer acquisition and expansion, and operational efficiency should position it for continued success in the future.