Gitlab Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. You should review the section titled “Special Note Regarding Forward-Looking Statements” above in this Quarterly Report on Form 10-Q for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview In today’s world, software defines the speed of innovation. Every industry, business, and function within a company is dependent on software. To remain competitive and survive, nearly all companies must digitally transform and become experts at developing, delivering, and securing software. To meet these market needs, GitLab created The DevSecOps platform, a fundamentally new approach to software development and delivery. Built with a unified data model, our platform brings together all stakeholders in the software delivery lifecycle – from development teams to operations teams to security teams. With GitLab, all stakeholders can build better, more secure software, faster. GitLab is the solution for significant business transformation needs. Across every industry – and across companies of every size – technology leaders want to make developers more productive so they can deliver better products faster; they want to measure productivity so they can increase operational efficiency; they want to secure the software supply chain so they can reduce security and compliance risk; and, they want to accelerate secure cloud migration, so they can unlock digital transformation results. These technology leaders need a platform that enables a value stream-driven mindset that shortens the time from idea to customer value and establishes a powerful flywheel for data collection and aggregation. They are looking for a platform approach that unifies the entire development experience, so that customers can outpace and out-innovate their competition. We believe GitLab offers the shortest path to unlock technology transformation and business value. GitLab accelerates our customers’ ability to innovate by accelerating their software development cycles from weeks to minutes. It removes the need for point tools and delivers enhanced operational efficiency by eliminating manual work, increasing productivity, and creating a culture of innovation and velocity. Embedding security earlier in the development process, GitLab enables customers to improve software security, quality, and overall compliance. GitLab is available to any team, regardless of the size, scope, and complexity of their deployment. As a result, we have more than 50 million registered users, and more than 50% of the Fortune 100 companies are GitLab customers. For purposes of determining the number of our active customers, we look at our customers with more than $5,000 of Annual Recurring Revenue, or ARR, in a given period, who we refer to as our Base Customers. For purposes of determining our Base Customers, a single organization with separate subsidiaries, segments, or divisions that use The DevSecOps platform is considered a single customer for determining each organization’s ARR. GitLab is the only DevSecOps platform built on an open-core business model. We enable any customer and contributor to add functionality to our platform. In calendar year 2024, nearly 900 people contributed more than 3,000 merge requests back to the core product, extending GitLab’s in-house R&D efforts and empowering our most passionate users to make improvements to the DevSecOps solution they use every day. Our open-core approach engenders trust with our customers and enables us to maintain our high velocity of innovation. 29 Table of Contents Our transparent business value also helps us grow the open source community. We make our strategy, direction, and product roadmap available to the wider community in order to encourage and solicit their feedback. Through responsible transparency, we create a deeper level of trust with our customers and make it easier to solicit contributions and collaboration from our users and customers. GitLab offers a flexible deployment model for our customers. For our self-managed offering, the customer installs GitLab in their own on-premise or hybrid cloud environment. For our SaaS offering, the platform is managed by GitLab and hosted either in our public cloud or in our private cloud based on the customer’s preference. We also offer GitLab Dedicated, our single tenant SaaS solution, well suited for organizations with complex security and compliance requirements. See the section entitled “ Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for additional information about how we define ARR. Factors Affecting Our Performance Sustaining innovation and technology leadership We believe we have built a highly differentiated platform that gives us an advantage over our competitors by empowering business, development, security, operations, and IT teams to collaborate in a single application across the entire DevSecOps lifecycle. Our technology leadership is an outcome of various factors, including our strong community, network of contributors, and continued enhancement of The DevSecOps platform by developing new features and expanding the functionality of existing features with speed and consistency. We have had a history of releasing enhanc ements to The DevSecOps platform every month and, as of October 31, 2025, had done so for the last 169 months. We intend to continue releasing new software on a monthly cadence. We also intend to continue investing in research a nd development to further enhance The DevSecOps platform and sustain our innovation and technology leadership. We have a history of investing in our open source community and intend to continue to leverage our open core software to accelerate innovation. We also intend to continue to add headcount to our research and development team to extend the functionality and range of The DevSecOps platform by bringing new and improved products and services to our customers. We expect our research and development expenses to increase on an absolute basis in future periods. We foresee that such investment in research and development will contribute to our long-term growth, but may also negatively impact our short-term profitability. As engaged members of the GitLab open-source community, our contributors often serve as subject matter experts at market-leading developer events and The DevSecOps platform is presented on the cutting edge of innovation. We intend to continue to invest in building out this community to foster more contributions and collaboration in the space. Our open source community, in turn, accelerates our ability to innovate and provide a better platform to our customers. We intend to expend additional resources in the future to continue enhancing The DevSecOps platform and introducing new products, features and functionality. Acquiring New Customers Our future growth depends in large part on our ability to acquire new customers. This, in turn, relies on our ability to reach teams and organizations through our marketing and sales efforts. To this end, we are making investments in our sales and marketing efforts to expand our reach and differentiate The DevSecOps platform from competitive products and services. We believe that eventually the vast majority of organizations will switch to a DevSecOps platform and embrace a single application approach, creating a substantial opportunity to continue to grow our customer base. As a result, our Base Customers increased to 10,475 as of October 31, 2025 from 9,519 as of October 31, 2024, an increase of 10% and our $100,000 ARR customers increased to 1,405 as of October 31, 2025 from 1,144 as of October 31, 2024, an increase of 23%. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for information about how we define ARR. 30 Table of Contents Our operating results and growth prospects will depend in part on our ability to attract new customers. While we believe we have a significant market opportunity that The DevSecOps platform addresses, we will need to continue to invest in sales and marketing, research and development, and customer support to further grow our customer base, both in the United States and internationally. We believe that we have more than 50 million registered users, which includes users of our free tier offering, providing a base of potential new customers. We intend to continue to add headcount to our global sales and marketing team to acquire new customers and to increase sales to existing customers. Retaining and Expanding Our Existing Customers We employ a “land and expand” business strategy that focuses on efficiently acquiring new customers and growing our relationships with existing customers over time. We believe that as our customers realize the benefits of a single application approach, they will increase the use of The DevSecOps platform, enhancing our ability to expand revenue generation within our existing customers over time. As a result of our approach, as of October 31, 2025 and 2024, our Dollar-Based Net Retention Rate was 119% and 124%, respectively. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR ” below for information about how we define Dollar-Based Net Retention Rate. We plan to continue investing in sales and marketing, with a focus on expanding usage of our platform with our existing customers. We believe that this expansion will provide us with substantial operating leverage because the costs to expand sales within existing customers are significantly less than the costs to acquire new customers. Our future revenue growth and our ability to achieve and maintain profitability is dependent upon our ability to continue landing new customers, expanding the adoption of The DevSecOps platform by additional users within their organizations, selling add-on offerings, and upgrading customers to higher-priced tiers. Ultimately, our ability to increase sales to existing customers will depend on several factors, including our customers’ satisfaction with The DevSecOps platform, our pricing, competition, and overall changes in our customers’ spending levels. Partnerships, Alliances, Channels, and Integrations We believe that our further growth depends in part on our ability to build and maintain successful partnerships, alliances, channels and integrations. We are continuously investing in developing a strong ecosystem and partner network, comprised of cloud and technology partners, resellers, and system integrators, as a way to expand our go-to-market strategy. We plan to continue investing in and developing these relationships to broaden our distribution footprint and drive greater awareness of our brand and The DevSecOps platform. We believe that these partnerships will extend our sales reach and provide product and technology integrations that will accelerate implementation of The DevSecOps platform in the United States and internationally. While expending resources in developing these partnerships and alliances may adversely impact our short-term profitability, we believe these investments will lead to longer term growth for the business as a whole. Continuing to Scale our Business We plan to continue investing in our business so that we can capitalize on our market opportunity. We believe that these investments will contribute to our long-term growth, although they may adversely affect our operating results in the near term. Furthermore, we expect our general and administrative expenses to increase in absolute amount for the foreseeable future given the additional expenses for accounting, compliance, and insurance as a public company. We plan to balance these investments in future growth with a continued focus on managing our operating results. Key Business Metrics We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. 31 Table of Contents Dollar-Based Net Retention Rate and ARR We believe that our ability to retain and expand our revenue generated from our existing customers is an indicator of the long-term value of our customer relationships and our potential future business opportunities. Dollar-Based Net Retention Rate measures the percentage change in our ARR derived from our customer base at a point in time. Our calculation of ARR and by extension Dollar-Based Net Retention Rate, includes both self-managed and SaaS subscription revenue. We report Dollar-Based Net Retention Rate on a threshold basis of 130% each quarter or the actual number if below 130%. We calculate ARR by taking the monthly recurring revenue, or 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 and SaaS offerings but excluding professional services. 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, or the Prior Period ARR. We then calculate the ARR from these customers as of the current period end, or the 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. As of October 31, 2025 2024 Dollar-Based Net Retention Rate 119% 124% Customers with ARR of $100,000 or More We believe that our ability to increase the number of $100,000 ARR customers is an indicator of our market penetration and strategic demand for The DevSecOps platform. A single organization with separate subsidiaries, segments, or divisions that use The DevSecOps platform is considered a single customer for determining each organization’s ARR. We do not count our reseller or distributor channel partners as customers. In cases where customers subscribe to The DevSecOps platform through our channel partners, each end customer is counted separately. As of October 31, 2025 2024 $100,000 ARR customers 1,405 1,144 Components of Our Results of Operations Revenue Subscription - self-managed and SaaS Subscription revenue primarily consists of support, maintenance, upgrades, and updates on a when-and-if-available basis for our self-managed customers and the right to access our product in a cloud-based-infrastructure that we host for our SaaS customers. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. The typical term of a subscription contract is one to three years. License - self-managed and other The license component of our self-managed subscriptions reflects the revenue recognized by providing customers with access to proprietary software features. License revenue is recognized up-front when the software license is made available to our customers. 32 Table of Contents Other revenue consists of professional services revenue which is derived from fixed fee and time and materials engagements. Revenue from professional services is recognized as the services are performed and control is transferred. For fixed fee engagements that include acceptance clauses, control is deemed to transfer upon customer confirmation, as defined in the respective contract. Accordingly, revenue is recognized upon satisfaction of all contractual requirements. Cost of Revenue Subscription - self-managed and SaaS Cost of revenue for self-managed and SaaS subscriptions consists primarily of allocated cloud-hosting costs paid to third-party service providers, personnel-related costs associated with our customer support personnel, including contractors, third-party payment processing fees, and allocated overhead. Personnel-related expenses consist of salaries, benefits, bonuses, and stock-based compensation. We expect our cost of revenue for self-managed and SaaS subscriptions to increase in absolute dollars as our self-managed and SaaS subscription revenue increases. As our SaaS offering makes up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and managing costs, which may adversely impact our gross margins. License - self-managed and other Cost of self-managed license and other revenue consists primarily of contractor and personnel-related costs, including stock-based compensation expense, associated with the professional services team, third-party payment processing fees, and allocated overhead. We expect our cost of revenue for self-managed license and other to increase in absolute dollars as our self-managed and other revenue increases. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and sales commissions. Operating expenses also include IT overhead costs. Sales and Marketing Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing personnel, advertising, travel and entertainment related expenses, branding and marketing events, promotions, software subscriptions, and our allocated cloud infrastructure expenses for our free tier. Sales and marketing expenses also include sales commissions paid to our sales force. Such costs incurred on acquisition of an initial contract are capitalized and amortized over an estimated period of benefit of three years, and any such expenses paid for the renewal of a subscription are capitalized and amortized over the contractual term of the renewal. However, prorated costs for sales commissions that are incremental to obtain a self-managed license contract are expensed immediately. We expect sales and marketing expenses to increase in absolute dollars as we continue to make strategic investments in our sales and marketing organization to drive additional revenue, further penetrate the market, and expand our global customer base, but to decrease as a percentage of our total revenue over time, although our sales and marketing expenses may fluctuate as a percentage of our total revenue from period-to-period depending on the timing of these expenses. Research and Development Research and development expenses consist primarily of personnel-related expenses, including contractors, as well as cloud infrastructure expenses to support our internal development efforts, and software and subscription services. Costs related to research and development are expensed as incurred. 33 Table of Contents We expect research and development expenses to increase in absolute dollars as we continue to increase investments in our existing products and services. However, we anticipate research and development expenses to decrease as a percentage of our total revenue over time, although our research and development expenses may fluctuate as a percentage of our total revenue from period-to-period depending on the timing of these expenses. General and Administrative General and administrative expenses consist primarily of personnel-related expenses for our executives, finance, legal, and human resources teams. General and administrative expenses also include external legal, accounting, and director and officer insurance, as well as other consulting and professional services fees, software and subscription services, in-person company-wide event expenses, and any contract termination fees. We incur expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, costs related to Sarbanes-Oxley compliance, and expenses for insurance, investor relations, and related professional services. We expect that our general and administrative expenses will increase in absolute dollars as our business grows but will decrease as a percentage of our total revenue over time, although our general and administrative expenses may fluctuate as a percentage of our total revenue from period-to-period depending on the timing of these expenses. Interest Income, and Other Income (Expense), Net Interest income consists primarily of interest earned on our cash equivalents and short-term inve stments. Other income (expense), net consists primarily of foreign currency transaction gains and losses and indirect tax credit expense related to the JiHu formation. Provision for (Benefit from) Income Taxes Provision for (benefit from) income taxes consists primarily of income taxes in the foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance against our deferred tax assets in certain jurisdictions because we have concluded that it is not more likely than not that the deferred tax assets will be realized. 34 Table of Contents Results of Operations The following table sets forth our results of operations for the periods presented (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Revenue: Subscription—self-managed and SaaS $ 223,262 $ 175,257 $ 630,427 $ 489,617 License—self-managed and other 21,091 20,790 64,395 58,201 Total revenue 244,353 196,047 694,822 547,818 Cost of revenue: (1) Subscription—self-managed and SaaS 25,184 17,170 66,205 47,639 License—self-managed and other 7,037 4,955 19,556 14,632 Total cost of revenue 32,221 22,125 85,761 62,271 Gross profit 212,132 173,922 609,061 485,547 Operating expenses: Sales and marketing (1) 104,974 95,340 322,144 285,542 Research and development (1) 68,715 61,354 205,613 176,767 General and administrative (1) 50,799 45,960 146,621 146,615 Total operating expenses 224,488 202,654 674,378 608,924 Loss from operations (12,356) (28,732) (65,317) (123,377) Interest income 11,704 12,586 34,077 37,443 Other income (expense), net (6,334) 4,799 (17,216) 5,170 Loss before income taxes (6,986) (11,347) (48,456) (80,764) Provision for (benefit from) income taxes 1,811 (39,152) 6,595 (65,330) Net income (loss) $ (8,797) $ 27,805 $ (55,051) $ (15,434) Net loss attributable to noncontrolling interest (2) (521) (1,298) (1,692) (2,216) Net income (loss) attributable to GitLab $ (8,276) $ 29,103 $ (53,359) $ (13,218) (1) Includes stock-based compensation expense as follows: Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 (in thousands) (in thousands) Cost of revenue $ 2,300 $ 1,993 $ 6,490 $ 5,924 Sales and marketing 17,354 17,012 59,395 54,290 Research and development 15,560 14,384 49,029 42,834 General and administrative 16,468 14,653 46,879 36,215 Total stock-based compensation expense $ 51,682 $ 48,042 $ 161,793 $ 139,263 35 Table of Contents (2) Our results of operations include our variable interest entity, JiHu. The ownership interest of other investors is recorded as a noncontrolling interest. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details. The following table sets forth the components of our condensed consolidated statements of operations as a percentage of total revenue for each of the periods presented: Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Revenue 100 % 100 % 100 % 100 % Cost of revenue 13 11 12 11 Gross profit 87 89 88 89 Operating expenses: Sales and marketing 43 49 46 52 Research and development 28 31 30 32 General and administrative 21 23 21 27 Total operating expenses 92 103 97 111 Loss from operations (5) (15) (9) (23) Interest income 5 6 5 7 Other income (expense), net (3) 2 (2) 1 Loss before income taxes (3) (6) (7) (15) Provision for (benefit from) income taxes 1 (20) 1 (12) Net income (loss) (4) % 14 % (8) % (3) % Net loss attributable to noncontrolling interest — % (1) % — % — % Net income (loss) attributable to GitLab (3) % 15 % (8) % (2) % Comparison of the Three and Nine Months Ended October 31, 2025 and 2024 Revenue Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Subscription—self-managed and SaaS $ 223,262 $ 175,257 $ 48,005 27 % $ 630,427 $ 489,617 $ 140,810 29 % License—self-managed and other 21,091 20,790 301 1 64,395 58,201 6,194 11 Total revenue $ 244,353 $ 196,047 $ 48,306 25 % $ 694,822 $ 547,818 $ 147,004 27 % Revenue increased $48.3 million, or 25%, to $244.4 million for the three months ended October 31, 2025 from $196.0 million for the three months ended October 31, 2024. Revenue increased $147.0 million, or 27%, to $694.8 million for the nine months ended October 31, 2025 from $547.8 million for the nine months ended October 31, 2024. The increase was primarily due to the ongoing demand for The DevSecOps platform, including adding new customers, the expansion within our existing paid customers, and an increase in our number of customers with $100,000 or greater in ARR. As of October 31, 2025 36 Table of Contents and 2024, our expansion is reflected by our Dollar-Based Net Retention Rate being 119% and 124%, respectively. We had 1,405 customers with ARR over $100,000 as of October 31, 2025, increasin g from 1,144 customers with ARR over $100,000 as of October 31, 2024. Revenue attributed to our variable interest entity, JiHu, was $2.3 million and $1.9 million for the three months ended October 31, 2025 and 2024, respectively, and $6.4 million and $5.3 million for the nine months ended October 31, 2025 and 2024 , respectively . See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details. Cost of Revenue, Gross Profit, and Gross Margin Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Cost of revenue $ 32,221 $ 22,125 $ 10,096 46 % $ 85,761 $ 62,271 $ 23,490 38 % Gross profit 212,132 173,922 38,210 22 609,061 485,547 123,514 25 Gross margin 87 % 89 % (2) % 88 % 89 % (1) % Cost of revenue increased by $10.1 million, to $32.2 million for the three months ended October 31, 2025 from $22.1 million for the three months ended October 31, 2024, primarily due to an increase of $5.7 million in hosting expenses for increased SaaS and cloud usage. The remaining change was primarily attributable to an increase of $2.2 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $0.3 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), an increase of $1.6 million in fees associated with professional services revenue delivery and an increase of $0.5 million of marketplace transaction processing fees. Gross margin decreased by 2% at 87% for the three months ended October 31, 2025 compared to 89% for the three months ended October 31, 2024 . Cost of revenue increased by $23.5 million, to $85.8 million for the nine months ended October 31, 2025 from $62.3 million for the nine months ended October 31, 2024, primarily due to an increase of $12.1 million in third-party hosting costs for increased SaaS and cloud usage. The remaining change was primarily attributable to an increase of $4.7 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $0.6 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), an increase of $3.3 million in fees associated with professional services revenue delivery, and an increase of $1.8 million of marketplace transaction processing fees. Gross margin decreased by 1% to 88% for the nine months ended October 31, 2025 compared to 89% for the nine months ended October 31, 2024 . Cost of revenue attributed to our variable interest entity, JiHu, wa s $0.5 million for each of the three months ended October 31, 2025 and 2024, and $1.4 million and $1.5 million for the nine months ended October 31, 2025 and 2024 , respectively . See “Note 10. Joint Venture” to our condensed consolidated financial statements for additiona l details. 37 Table of Contents Sales and Marketing Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Sales and marketing expenses $ 104,974 $ 95,340 $ 9,634 10 % $ 322,144 $ 285,542 $ 36,602 13 % Sales and marketing expenses increased by $9.6 million, to $105.0 million for the three months ended October 31, 2025 from $95.3 million for the three months ended October 31, 2024, primarily due to an increase of $6.6 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount and an increase of $0.3 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below) and an increase of $0.8 million in sales commissions expense. The remaining change was primarily attributed to an increase of $1.6 million in hosting expenses. Sales and marketing expenses increased by $36.6 million, to $322.1 million for the nine months ended October 31, 2025 from $285.5 million for the nine months ended October 31, 2024, primarily due to an increase of $28.7 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount and an increase of $5.1 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below) and an increase of $5.8 million in sales commissions expense. The remaining change was primarily attributed to an increase of $4.3 million in hosting expenses. Sales and marketing ex penses attributed to our variable interest entity, JiHu, were $1.7 million and $1.8 million for the three months ended October 31, 2025 and 2024, respectively, and $4.7 million and $4.9 million for the nine months ended October 31, 2025 and 2024 , respectively . See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details. Research and Development Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Research and development expenses $ 68,715 $ 61,354 $ 7,361 12 % $ 205,613 $ 176,767 $ 28,846 16 % Research and development exp enses increased by $7.4 million, to $68.7 million for the three months ended October 31, 2025 from $61.4 million for the three months ended October 31, 2024, primarily due to an increase of $5.4 million in personnel-related expenses, driven by an increase in our average research and development headcount and an increase of $1.2 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below). The remaining change was primarily attributed to an increase of $1.9 million in hosting expenses. Research and development expen ses increased by $28.8 million, to $205.6 million for the nine months ended October 31, 2025 from $176.8 million for the nine months ended October 31, 2024, primarily due to an increase of $22.9 million in personnel-related expenses, driven by an increase in our average research and development headcount and an increase of $6.2 million in stock-based 38 Table of Contents compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below). The remaining change was primarily attributed to an increase of $5.2 million in hosting expenses. Research and development expenses attributed to our variable interest entity, JiHu, were $0.5 million and $0.6 million for the three months ended October 31, 2025 and 2024, respectively, and $0.7 million and $1.0 million for the nine months ended October 31, 2025 and 2024 , respectively . See “Note 10. Joint Venture ” to our condensed consolidated financial statements for additional details. General and Administrative Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) General and administrative expenses $ 50,799 $ 45,960 $ 4,839 11 % $ 146,621 $ 146,615 $ 6 — % General and administrative e xpenses increased by $4.8 million , to $50.8 million for the three months ended October 31, 2025 from $46.0 million for the three months ended October 31, 2024 , primarily driven by an increase of $5.7 million in personnel-related expenses, driven by an increase in our average general and administrative headcount and an increase of $1.8 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below). This was partially offset by a decrease of $1.0 million in charitable donation of common stock. General and administrative e xpenses were $146.6 million for both the nine months ended October 31, 2025 and 2024. This reflects a decrease of $15.4 million in expense related to our in-person company-wide event that took place in the nine months ended October 31, 2024, a decrease from the prior year $3.8 million expense related to fair value remeasurement of acquisition-related contingent consideration and a decrease of $3.4 million in charitable donations of common stock. This was offset by an increase of $18.0 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $10.7 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below) and an increase of $3.0 million in consulting and software expense. General and administrative expenses attributed to our variable interest entity, JiHu, were $1.3 million and $1.6 million for the three months ended October 31, 2025 and 2024, respectively, and $4.3 million and $3.4 million for the nine months ended October 31, 2025 and 2024 , respectively . See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details. 39 Table of Contents Stock-Based Compensation Expense Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Cost of revenue $ 2,300 $ 1,993 $ 307 15 % $ 6,490 $ 5,924 $ 566 10 % Sales and marketing 17,354 17,012 342 2 59,395 54,290 5,105 9 Research and development 15,560 14,384 1,176 8 49,029 42,834 6,195 14 General and administrative 16,468 14,653 1,815 12 46,879 36,215 10,664 29 Total stock-based compensation expense $ 51,682 $ 48,042 $ 3,640 8 % $ 161,793 $ 139,263 $ 22,530 16 % Stock-based compens ation expense increased by $3.6 million, to $51.7 million for the three months ended October 31, 2025 from $48.0 million f or the three months ended October 31, 2024 , primarily due to an increase of $4.1 million of expense from RSUs, partially offset by a $1.0 million decrease in PSUs. Stock-based compensation ex pense increased by $22.5 million, to $161.8 million for the nine months ended October 31, 2025 from $139.3 million for the nine months ended October 31, 2024, primarily due to an increase of $19.3 million of expense from RSUs and $3.2 million related to stock options. Stock-based compensati on attributed to our variable interest entity, JiHu, were $0.7 million net expense and $1.0 million expense for the three months ended October 31, 2025 and 2024, respectively, and $1.4 million net expense and $0.8 million net expense for the nine months ended October 31, 2025 and 2024, respectively. See “Note 10. Joint Venture” to our condensed consolidated financial sta tements for additional details. Interest Income and Other Income (Expense), Net Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Interest income $ 11,704 $ 12,586 $ (882) (7) % $ 34,077 $ 37,443 $ (3,366) (9) % Foreign exchange gains (losses), net (2,362) 5,074 (7,436) (147) (13,433) 5,556 (18,989) (342) Other expense, net (3,972) (275) (3,697) 1,344 (3,783) (386) (3,397) 880 Total other income (expense), net $ (6,334) $ 4,799 $ (11,133) (232) % $ (17,216) $ 5,170 $ (22,386) (433) % 40 Table of Contents Interest income decreased f or the three and nine months ended October 31, 2025 compared to the three and nine months ended October 31, 2024 , primarily due to income earned from our cash, cash equivalents and short-term investments as a result of lower interest rates during the three and nine months ended October 31, 2025 compared to the three and nine months ended October 31, 2024 . Foreign exchange losses increased for the three and nine months ended October 31, 2025 compared to the three and nine months ended October 31, 2024 p rimarily related to the revaluation of non-functional currency denominated monetary assets and liabilities. Other expense, net for the three and nine months ended October 31, 2025 includes a $3.5 million indirect tax credit expense related to the JiHu formation, reflecting a change in accounting estimate. Provision for (Benefit from) Income Taxes Three Months Ended October 31, Change Nine Months Ended October 31, Change 2025 2024 $ % 2025 2024 $ % (in thousands, except percentages) (in thousands, except percentages) Provision for (benefit from) income taxes $ 1,811 $ (39,152) $ 40,963 (104.6)% $ 6,595 $ (65,330) $ 71,925 (110.1)% Effective tax rate (28.0)% 389.6% (417.6)% (14.1) % 83.2 % (97.3)% On July 4, 2025, the United States enacted OBBBA which extended or modified certain corporate tax provisions under the TCJA. The OBBBA modified certain business deductions, including allowing for immediate expensing of U.S. research & development expenditures, effective in our current fiscal year. The OBBBA also modified various international tax provisions which were set to change or expire after 2025 under the TCJA. Such modifications, including U.S. taxation of profits derived from foreign operations and associated foreign tax credit limitations, are effective in our next fiscal year. The deduction of domestic R&D expenditure significantly reduced U.S. taxable income to a loss position, resulting in a material reduction in the current provision for the quarter. We will continue to evaluate the impact of the OBBBA on our condensed consolidated financial statements. Our effective tax rate decreased by approximately 417.6% for the three months ended October 31, 2025 as compared to the three months ended October 31, 2024 . A tax expense is expressed as a negative rate because of our pretax loss. The increase in tax expense from 2024 to 2025 in the same three month period was primarily due to the tax benefit recorded in the three months ended October 31, 2024 related to the BAPA negotiations between the United States and Dutch tax authorities, and the Company’s recurring foreign operations. Our effective tax rate decreased by approximately 97.3% for the nine months ended October 31, 2025 as compared to the nine months ended October 31, 2024. A tax expense is expressed as a negative rate because of our pretax loss. The increase in tax expense from 2024 to 2025 for the same nine month period was primarily due to the tax benefit recorded in the nine months ended October 31, 2024 related to the BAPA negotiations between the United States and Dutch tax authorities, and the Company’s recurring foreign operations. Our effective tax rate for the three and nine months ended October 31, 2025 was different than the U.S. federal statutory tax rate of 21%, primarily due to the Company’s foreign and domestic operations and losses not benefited. We executed the BAPA agreements with the U.S. IRS and the Netherlands DTA on October 10, 2024, and October 22, 2024, respectively. On October 28, 2024, we paid $187.7 million to satisfy the tax 41 Table of Contents assessment issued by the DTA, including accrued interest, which reflected the BAPA negotiations and the agreement to reduce the rate of tax on the gain from the transfer of economic IP rights. As a result of the BAPA and DTA assessment, the 2015 through 2017 tax years are closed for GitLab B.V. Pursuant to the terms in the BAPA, we have filed amended returns for the 2018 through 2023 fiscal years. All U.S. federal and state tax net operating losses (“NOLs”) and credits, as well as Netherlands NOLs, are not yet recognized due to the determination that they are not more likely than not to be realized. Liquidity and Capital Resources Since inception, we have financed operations primarily through proceeds received from issuances of equity securities, preferred stock and payments received from our customers. As of October 31, 2025 and January 31, 2025, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating t o $1.2 billion and $992.4 million , respectively, which were held for working capital and strategic investment purposes. As of October 31, 2025 , cash and cash equivalents consist of cash in banks, money markets funds, treasuries , and commercial paper, while short-term investments mainly consist of treasuries, corporate debt securities, agency securities, and commercial paper. We believe that our existing cash, cash equivalents, and short-term investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the price at which we are able to procure third-party cloud infrastructure, expenses associated with our international expansion, the introduction of platform enhancements, and the continuing market adoption of The DevSecOps platform. In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operating results, and financial condition. The following table shows a summary of our cash flows for the periods presented: Nine Months Ended October 31, 2025 2025 2024 (in thousands) Net cash provided by (used in) operating activities $ 187,099 $ (127,193) Net cash used in investing activities $ (214,243) $ (8,553) Net cash provided by financing activities $ 23,332 $ 20,927 Operating Activities Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and m arketing expenses, third-party cloud infrastructure expenses, and overhead expenses. We have generated positive and negative cash flows for the nine months ended October 31, 2025 and 2024 from operating activities, respectively. 42 Table of Contents Cash provided by operating activities during the nine months ended October 31, 2025 was $187.1 million, primarily consisting of our net loss of $55.1 million, adjusted for non-cash items of $222.9 million (mainly attributable to stock-based compensation expense of $161.8 million and amortization of deferred contract acquisition costs, net of $40.7 million), and net cash inflows of $19.2 million provided by changes of our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease of accounts receivable of $46.3 million, the increase in deferred revenue of $17.5 million and the increase in accrued expenses and other liabilities of $1.9 million, partially offset by the decrease in deferred contract acquisition costs of $36.3 million and the decrease in accrued compensation and related expenses of $7.9 million. These changes primarily reflect improved operational performance with successful collections driving lower accounts receivable, higher accrued expenses for research and development spending, ongoing customer subscription growth contributing to increased deferred revenue, and the seasonal payment of prior period sales commissions and bonuses impacting accrued compensation balances. Cash used in operating activities during the nine months ended October 31, 2024 was $127.2 million, primarily consisting of our net loss of $15.4 million, adjusted for non-cash items of $178.2 million (mainly attributable to stock-based compensation expense of $139.3 million and amortization of deferred contract acquisition costs, net of $35.7 million), and net cash outflows of $290.0 million used in changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the increase of accounts receivable of $31.7 million, the increase in deferred contract acquisition costs of $35.7 million, the decrease in accrued expenses and other liabilities of $240.6 million (mainly attributable to $187.7 million for the BAPA payment), the decrease in accrued compensation and related expenses of $8.8 million, and the decrease in other non-current liabilities of $11.1 million, partially offset by the decrease in prepaid expenses and other current assets of $2.5 million, and the increase in deferred revenue of $34.5 million. Investing Activities Cash used in investing activities during the nine months ended October 31, 2025 was $214.2 million, primarily consisting of $207.4 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $6.9 million in a dditions to property and equipment . Cash used in investing activities during the nine months ended October 31, 2024 was $8.6 million, primarily consisting of $21.5 million in proceeds from maturities, net of purchases of short-term investments, partially offset by a $20.2 million payment for a business combination, net of cash acquired, a $7.7 million payment for an asset acquisition, and $2.6 million in a dditions to property and equipment . Financing Activities Cash provided by financing activities during the nine months ended October 31, 2025 was $23.3 million, attributable to $15.5 million proceeds from the issuance of common stock upon stock options exercises and $8.4 million of proceeds from the issuance of common stock under the ESPP, partially offset by $0.5 million of p ayments for taxes related to net share settlement of equity awards . Cash provided by financing activities during the nine months ended October 31, 2024 was $20.9 million, attributable to $17.9 million proceeds from the issuance of common stock upon stock options exercises, and $7.9 million of proceeds from the issuance of common stock under the ESPP, partially offset by $4.9 million of settlement of acquisition related contingent cash consideration. 43 Table of Contents Adjusted Free Cash Flow Adjusted free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for a dditions to property and equipment, plus any non-recurring income tax payments related to the BAPA or minus any non-recurring income tax refunds related to the BAPA, plus any non-recurring payments related to the formation of JiHu. We believe that adjusted free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after the investments in a dditions to property and equipment, any non-recurring income tax payments or refunds related to the BAPA, and any non-recurring payments related to the formation of JiHu, can be used for strategic initiatives, including investing in our business, and strengthening our financial position. One limitation of adjusted free cash flow is that it does not reflect our future contractual commitments. Additionally, adjusted free cash flow does not represent the total increase or decrease in our cash balance for a given period. The following table presents a reconciliation of adjusted free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, for the periods presented (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Computation of adjusted free cash flow (1) GAAP net cash provided by (used in) operating activities $ 31,428 $ (177,028) $ 187,099 $ (127,193) Less: Additions to property and equipment (3,038) (1,057) (6,854) (2,608) Add: Income tax payments (refunds) related to BAPA (1,146) 187,735 (2,451) 187,735 Non-GAAP adjusted free cash flow $ 27,244 $ 9,650 $ 177,794 $ 57,934 (1) No non-recurring payments related to the formation of JiHu were recorded during the periods presented. Contractual Obligations and Commitments For more information regarding our contractual obligations, refer to “Note 13. Commitments and Contingencies” to our condensed consolidated financial statements . Critical Accounting Estimates Our condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP. The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows will be affected. For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, which was filed with the SEC on March 21, 2025. 44 Table of Contents Recently Issued Accounting Pronouncements See “ Note 2. Basis of Presentation and Summary of Significant Accounting Policies ” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding recently issued accounting pronouncements. 45 Table of Contents