What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-17 compared with 2025-03-21 · 111 added, 147 removed, 239 unchanged (52% of the section changed)

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A discussion regarding our financial condition and results of operations for the year ended January 31, 2025 compared to the year ended January 31, 2024 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” 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.

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 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.

GitLab is the intelligent orchestration platform for DevSecOps, where software teams and their Artificial Intelligence (“AI”) agents stay in flow to ship software faster.

Built with a unified data model, our platform brings together development, operations, Information Technology (“IT”), security, and business teams across the entire software development lifecycle to deliver better, more secure software faster.

AI has accelerated individual coding, but teams lose momentum coordinating across planning, testing, security, deployment, and operations.

Fragmented toolchains and tool-specific AI agents create bottlenecks that slow software delivery.

GitLab's intelligent orchestration helps solve this by enabling teams to orchestrate AI agents to execute tasks autonomously across the software lifecycle while maintaining quality, security, and speed.

GitLab accelerates customer innovation by reducing software development cycles from weeks to minutes.

The platform eliminates the need for point tools, increases productivity, and embeds security into development workflows with automated enforcement to improve software security, quality, and compliance while enabling faster delivery.

We serve teams of all sizes, scopes, and complexities.

As a result, we have more than 50 million registered users, and more than 50% of the Fortune 100 companies are GitLab customers 1 .

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.

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, ideally suited for organizations with complex security and compliance requirements.

We define our active customers as those with more than $5,000 of Annual Recurring Revenue, or ARR, in a given period, who we refer to as our Base Customers.

A single organization with separate subsidiaries, segments, or divisions that uses our platform is considered a single customer for determining ARR.

GitLab is the only intelligent orchestration platform for DevSecOps built on an open-core business model.

Any customer or contributor can add or enhance functionality by contributing code to the core product or extending our Continuous Integration (“CI”)/Continuous Delivery (“CD”) Catalog and AI Catalog.

In calendar year 2025, users contributed more than 6,500 merge requests, extending our in-house research and development (“R&D”) and empowering our users to improve the DevSecOps solution they use daily.

Our open-core approach builds trust with our customers and enables us to maintain our high velocity of innovation.

We make our strategy, direction, and product roadmap publicly available.

GitLab offers flexible deployment options.

Customers can install self-managed GitLab instances in their own on-premises or hybrid cloud environments , use our fully managed SaaS offering in public or private clouds, or deploy GitLab Dedicated, our single - tenant SaaS solution for organizations with complex security and compliance requirements.

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1 Fortune 500® is a registered trademark of Fortune Media IP Limited, used under license.

Claim based on GitLab data.

Fortune 100 refers to the top 20% ranked companies in the 2025 Fortune 500 list, published in June 2025.

Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of GitLab.

See the section entitled “ Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for additional information about how we define ARR.

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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.

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 GitLab platform.

A single organization with separate subsidiaries, segments, or divisions that use The GitLab 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 GitLab platform through our channel partners, each end customer is counted separately.

As of January 31,

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Subscription - self-managed and SaaS

Subscription - self-managed

Our self-managed subscriptions include support, maintenance, upgrades, and updates on a when-and-if-available basis.

Revenue for self-managed subscriptions is recognized ratably over the contract period based on the stand-ready nature of subscription elements.

The typical term of a subscription contract for self-managed offerings is one to three years.

Our SaaS subscriptions provide access to our latest managed version of our product hosted in a public or private cloud based on the customer’s preference.

Revenue from our SaaS offerings is recognized ratably over the contract period when the performance obligation is satisfied.

The typical term of a subscription contract for SaaS offerings is one to three years.

Subscription revenue primarily consists of support, maintenance, upgrades, and updates on a when-and-if-available basis for our self-managed offering and the right to access our product in a cloud-based-

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infrastructure that we host for our SaaS offering.

Subscription revenue is recognized ratably over the contractual term 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.

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.

The license component of our self-managed offering provides the right to use our proprietary software.

License revenue is recognized up-front when control of the software license transfers to the customer.

Other revenue consists of professional services, including consulting, implementation, and training which is recognized as services are performed.

Cost of Revenue

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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.

As our SaaS and Duo Agent Platform offerings make 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 and customer support team, third-party payment processing fees, and allocated overhead.

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.

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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 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.

However, prorated costs for sales commissions that are incremental to obtain a self-managed license contract are expensed immediately.

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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

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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 consist primarily of personnel-related expenses for our finance, legal, human resources, and corporate administrative functions.

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.

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.

Loss from Equity Method Investment, Net of Tax

Loss from equity method investment, net of tax, consists of our share of losses from the results of operations of Arch , following its deconsolidation.

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

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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.

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Results of Operations

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Other income (expense), net (23,291) 9,187 (12,241)

Loss before income taxes and loss from equity method investment (85,793) (160,567) (175,294)

Loss before income taxes (48,065) (85,793) (160,567)

Loss from equity method investment, net of tax — — (3,824)

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Total stock-based compensation expense $ 214,951 $ 185,899 $ 163,049

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(2) Our results of operations include our variable interest entity, JiHu.

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Other income (expense), net (2) 1 (2)

Loss before income taxes and loss from equity method investment (11) (28) (41)

Loss before income taxes (5) (11) (28)

Loss from equity method investment, net of tax — — (1)

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Revenue increased $196.0 million, or 26%, to $955.2 million for fiscal year 2026 from $759.2 million for fiscal year 2025 .

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 January 31, 2025 and 2024, our expansion

is reflected by our Dollar-Based Net Retention Rate being 123% and 130%, respectively.

The increase was primarily due to the ongoing demand for the GitLab 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 January 31, 2026 and 2025, our expansion is reflected by our Dollar-Based Net Retention Rate being 118% and 123%, respectively.

We had 1,456 customers with ARR over $100,000 as of January 31, 2026, increasin g from 1,229 customers with ARR over $100,000 as of January 31, 2025.

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Revenue attributed to our variable interest entity, JiHu, was $9.3 million and $7.6 million for fiscal year 2026 and 2025 , respectively .

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Gross margin 87 % 89 % (2) %

Cost of revenue increased by $25.4 million, to $85.1 million for fiscal year 2025 from $59.7 million for fiscal year 2024, primarily due to an increase of $7.9 million in third party hosting costs for SaaS and cloud usage, an increase of $6.9 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $1.5 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), and $6.1 million in the amortization of intangible assets.

Gross margin decreased by 1% to 89% for fiscal year 2025 compared to fiscal year 2024 .

Cost of revenue increased by $35.6 million, to $120.7 million for fiscal year 2026 from $85.1 million for fiscal year 2025, primarily due to an increase of $18.4 million in third party hosting costs for SaaS and cloud usage, an increase of $9.0 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount, an increase of $2.4 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), an increase of $3.7 million in fees associated with professional services revenue delivery and an increase of $1.7 million of marketplace transaction processing fees.

Gross margin decreased by 2% to 87% for fiscal year 2026 compared to 89% for fiscal year 2025 .

Cost of revenue attributed to our variable interest entity, JiHu, wa s $2.5 million and $2.3 million for fiscal year 2026 and 2025 , respectively .

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Sales and marketing expenses $ 434,725 $ 384,295 $ 50,430 13 %

Sales and marketing expenses increased by $27.9 million, to $384.3 million for fiscal year 2025 from $356.4 million for fiscal year 2024, primarily due to an increase of $28.6 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount and an increase of $4.2 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), partially offset by a $2.7 million decrease in restructuring expense.

Sales and marketing expenses attributed to our variable interest entity, JiHu, were $6.3 million and $7.4 million for fiscal year 2025 and 2024, respectively.

Sales and marketing expenses increased by $50.4 million, to $434.7 million for fiscal year 2026 from $384.3 million for fiscal year 2025, primarily due to an increase of $33.8 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount, an increase of $6.0 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below) and an increase of $6.1 million in sales commissions expense.

The remaining change was primarily attributed to an increase of $6.9 million in hosting expenses.

Sales and marketing ex penses attributed to our variable interest entity, JiHu, were $6.4 million and $6.3 million for fiscal year 2026 and 2025 , respectively .

See “Note 11.

Joint Venture and Equity Method Investment” to our consolidated financial statements for additional details.

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Research and Development

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Research and development expenses $ 274,574 $ 239,652 $ 34,922 15 %

Research and development expenses increased by $38.8 million, to $239.7 million for fiscal year 2025 from $200.8 million for fiscal year 2024, primarily due to an increase of $34.3 million in personnel-related expenses, driven by an increase in our average research and development headcount and an increase of $7.5 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below).

The remaining change was mainly due to an increase of $4.1 million in hosting costs for internal usage partially offset by a decrease of $1.7 million in restructuring costs.

Research and development expen ses increased by $34.9 million, to $274.6 million for fiscal year 2026 from $239.7 million for fiscal year 2025, primarily due to an increase of $27.6 million in personnel-related expenses, driven by an increase in our average research and development headcount and an increase of $5.4 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 $6.3 million in hosting expenses.

Research and development expenses attributed to our variable interest entity, JiHu, were $1.4 million and $1.8 million for fiscal year 2026 and 2025 , respectively .

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General and administrative expenses $ 195,663 $ 192,877 $ 2,786 1 %

General and administrative expenses increased by $42.5 million , to $192.9 million for fiscal year 2025 from $150.4 million for fiscal year 2024 , primarily driven by an increase in expense of $14.3 million related to our in-person company-wide event, $11.0 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $9.6 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below).

Other factors contributing to the increase included $3.9 million from an accrual for indirect taxes on certain international sales, $3.8 million from a loss attributable to the fair value remeasurement of acquisition related contingent consideration, $2.4 million in consulting expenses, $1.7M in acquisition related expenses and $1.1 million in charitable donation of common stock.

General and administrative e xpenses increased by $2.8 million to $195.7 million for fiscal year 2026 from $192.9 million for fiscal year 2025, primarily driven by an increase of $27.1 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $15.2 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 $15.4 million in expense related to our in-person company-wide event that took place in fiscal year 2025 , a decrease of $4.7 million in charitable donation of common stock, and a decrease from the prior year $3.8 million expense related to fair value remeasurement of acquisition-related contingent consideration.

General and administrative expenses attributed to our variable interest entity, JiHu, were $5.4 million and $4.5 million for fiscal year 2026 and 2025 , respectively .

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Joint Venture and Equity Method Investment” to our consolidated financial statements for additional details.

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Stock-Based Compensation Expense

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Total stock-based compensation expense $ 214,951 $ 185,899 $ 29,052 16 %

Stock-based compensation expense increased by $22.9 million, to $185.9 million for fiscal year 2025 from $163.0 million f or fiscal year 2024 , primarily due to an increase of $39.6 million of expense from RSUs, offset by decreases of $4.2 million for grant modifications, $7.3 million related to our ESPP, and $5.7 million related to stock options.

Stock-based compensation attributed to our variable interest entity, JiHu, was a net expense of $1.8 million and a net gain of $1.5 million for fiscal 2025 and 2024, respectively.

Stock-based compensation ex pense increased by $29.1 million, to $215.0 million for fiscal year 2026 from $185.9 million for fiscal year 2025 , primarily due to an increase of $28.0 million of expense from RSUs.

Stock-based compensati on attributed to our variable interest entity, JiHu, was an expense of $2.3 million and $1.8 million for fiscal 2026 and 2025, respectively.

See “Note 11.

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Interest income $ 45,707 $ 47,735 $ (2,028) (4) %

Impairment loss of equity method investment in Arch, formerly Meltano — (8,858) 8,858 100

Foreign exchange gains (losses), net (19,465) 9,416 (28,881) (307)

Other expense, net (3,826) (229) (3,597) 1571

(229) (512) 283 (55)

Total other income (expense), net $ (23,291) $ 9,187 $ (32,478) (354) %

For fiscal year 2025 compared to fiscal year 2024, interest income increased primarily due to income earned from our cash equivalents and short-term investments as a result of higher interest rates during fiscal year 2025 compared to fiscal year 2024.

The increase in other income (expense), net is mainly due the increase in interest income, an increase in foreign exchange gains and impairment loss of equity method investment in fiscal year 2024.

The increase in foreign exchange gains is primarily related to the revaluation of non-functional currency denominated monetary assets and liabilities, and realized foreign exchange gain upon the payment of the BAPA tax assessment in fiscal year 2025.

Loss from Equity Method Investment, Net of Tax

Fiscal Year Ended January 31, Change

2025 2024 $ %

(in thousands, except percentages)

Loss from equity method investment, net of tax $ — $ (3,824) $ 3,824 (100) %

We recorded an impairment charge of $8.9 million in other income (expense), net in the consolidated statement of operations during the year ended January 31, 2024 which reduced the equity method investment value to zero as of January 31, 2024 .

As a result there is no loss from equity method investment f or fiscal year 2025.

Interest income decreased f or fiscal year 2026 compared to fiscal year 2025 , primarily due to income earned from our cash, cash equivalents and short-term investments as a result of lower interest rates during fiscal year 2026 compared to fiscal year 2025 .

Foreign exchange losses increased for fiscal year 2026 compared to fiscal year 2025 p rimarily related to the revaluation of non-functional currency denominated monetary assets and liabilities.

Other expense, net for fiscal year 2026 compared to fiscal year 2025 includes a $3.5 million indirect tax credit expense related to the JiHu formation, reflecting a change in accounting estimate.

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Provision for (Benefit from) Income Taxes

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Effective tax rate (21.8) % 89.4 % (111.2)%

Our effective tax rate increased by approximately 254.5% for fiscal year 2025 as compared to fiscal year 2024.

A tax benefit is expressed as a positive rate because of our pretax loss.

The increase in tax benefit was primarily due to the tax effects of the BAPA negotiations between the United States and Dutch tax authorities, as well as the execution of an agreement between GitLab B.V.

On July 4, 2025, the United States enacted One Big Beautiful Bill Act (“OBBBA”) which extended or modified certain corporate tax provisions under the 2017 Tax Cuts and Jobs Act (“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 year.

We will continue to evaluate the impact of the OBBBA on our consolidated financial statements.

Our effective tax rate decreased by approximately 111.2% for fiscal year 2026 as compared to fiscal year 2025.

A tax expense is expressed as a negative rate because of our pretax loss.

The increase in tax expense from fiscal year 2025 to fiscal year 2026 was primarily due to the tax benefit recorded in fiscal year 2025 related to the Bilateral Advanced Pricing Agreement (”BAPA”) negotiations between the United States and Dutch tax authorities (“DTA”), as well as the execution of an agreement between GitLab B.V.

and the Dutch tax authority to reduce the rate of tax imposed on the tax gain recognized upon the transfer of the economic rights of the Company’s intellectual property from the Netherlands to the United States.

Our effective tax rate for the year ended January 31, 2025 was higher than the U.S.

federal statutory tax rate of 21%, primarily due to the tax effects of the BAPA negotiations between the United States and Dutch tax authorities, and the Company’s foreign and domestic operations.

Our effective tax rate for fiscal year 2026 was different from the U.S.

federal statutory tax rate of 21%, primarily due to the Company’s foreign and domestic operations, Base Erosion Anti-abuse Tax (“BEAT”), nondeductible expenses and losses not benefited, offset by tax credits.

We executed the BAPA agreements with the U.S.

and Dutch tax authorities on October 10, 2024, and October 22, 2024, respectively.

On October 28, 2024, we paid the tax assessment issued by the Dutch Tax Authority, or the DTA, 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 Dutch assessment, the 2015 through 2017 tax years are closed for GitLab B.V.

Pursuant to the terms in the BAPA, the Company will file amended returns for the 2018 through 2023 fiscal years;

the tax returns for the fiscal year ended January 31, 2024 were not yet due as of the end of the current fiscal year.

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.

Under the provisions of ASC 740, Income Taxes , the determination of our ability to recognize our deferred tax assets requires an assessment of both negative and positive evidence when determining our ability to recognize deferred tax assets.

Consistent with prior years, we maintain that it is not more likely than not that we can recognize deferred tax assets in certain jurisdictions.

The evidence we evaluated included operating results during the most recent three-year period and future projections.

More weight is given to historical results than to expectations of future profitability, which are inherently uncertain.

Certain entities’ net losses in recent periods represented sufficient negative evidence to require a valuation

allowance against its net deferred tax assets.

This valuation allowance will be evaluated periodically and could be reversed partially or totally if business results have sufficiently improved to support realization of deferred tax assets.

As of January 31, 2025 , our U.S.

federal 2018 through 2024 tax years were open and subject to potential examination in one or more jurisdictions.

In addition, in the United States, any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination.

Our Netherlands tax years are currently open for the tax years from 2018 to 2024, subject to adjustments as a result of the recently negotiated BAPA.

We believe that we have adequately reserved for the outcome of the BAPA.

We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.

We continue to monitor the progress of ongoing discussions with tax authorities and the effect, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.

As of January 31, 2025, unrecognized tax benefits were $25.6 million, of which $9.5 million would affect the effective tax rate if recognized.

As of January 31, 2024 , the unrecognized tax benefits were $402.7 million, of which $213.7 million would affect the effective tax rate if recognized.

We have settled and paid the BAPA tax liability with the DTA, thereby reducing the current tax liability previously classified as an unrecognized tax benefit to an immaterial amount.

For unrecognized tax benefits unrelated to the BAPA, we are unable to reasonably estimate the timing of the remaining long-term payments or the amount by which the liability will increase or decrease.

It is our policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes.

For the years ended January 31, 2025, 2024 and 2023, t he Company recognized interest and penalties of $5.3 million, $56.3 million and $1.3 million, respectively.

Internal Revenue Service (“IRS”) and the DTA on October 10, 2024, and October 22, 2024, respectively.

On October 28, 2024, we paid $187.7 million to satisfy the tax 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 2018 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.

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 January 31, 2025 and January 31, 2024, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating t o $992.4 million and $1.0 billion , respectively, which were held for working capital and strategic investment purposes.

As of January 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.

As of January 31, 2026 and January 31, 2025, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating t o $1,259.9 million and $992.4 million , respectively, which were held for working capital and strategic investment purposes.

As of January 31, 2026 , cash and cash equivalents consist of cash in banks and money markets funds, while short-term investments mainly consist of treasuries, corporate debt securities, agency securities, and commercial paper.

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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.

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, the continuing market adoption of the GitLab platform, and the amount and timing of any share repurchases.

In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies.

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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 marketing expenses, third-party cloud infrastructure expenses, and overhead expenses.

We have generated positive cash flows in fiscal year 2024 and negative cash flows in fiscal years 2025 and 2023 from operating activities.

We have supplemented working capital through net proceeds from the issuance of equity securities.

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 cash flows in fiscal year 2026 and 2024, and negative cash flows for fiscal year 2025 from operating activities, respectively.

Cash provided by operating activities during the year ended January 31, 2026 was $232.9 million, primarily consisting of our net loss of $58.6 million, adjusted for non-cash items of $299.9 million (mainly attributable to stock-based compensation expense of $215.0 million and amortization of deferred contract acquisition costs, net of $54.9 million), and net cash outflow of $8.5 million used in changes of our operating assets and liabilities.

The main drivers of the changes in operating assets and liabilities were the increase in deferred contract acquisition costs of $59.3 million, accounts receivable of $35.7 million and prepaid expenses and other current assets of $8.1 million, partially offset by the increase in deferred revenue of $93.3 million.

These changes primarily reflect our strong revenue growth, which is driving higher accounts receivable and increased amortization of deferred contract acquisition costs due to a higher volume of contracts with capitalizable sales incentives and ongoing customer subscription growth contributing to increased deferred revenue.

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Cash used in operating activities during the year ended January 31, 2025 was $64.0 million, primarily consisting of our net loss of $9.1 million, adjusted for non-cash items of $236.8 million (mainly attributable to stock-based compensation expense of $185.9 million and amortization of deferred contract acquisition costs, net of $49.7 million), and net cash outflows of $291.7 million used in changes of our operating assets and liabilities.

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These changes primarily reflect our strong sales growth driving higher accounts receivable, and increased deferred contract acquisition costs, the aforementioned BAPA payment impact driving lower accrued expenses and other liabilities, and continued expansion of our customer subscription base leading to increased deferred revenue.

Cash provided by operating activities during the year ended January 31, 2024 was $35.0 million, primarily consisting of our net loss of $429.5 million, adjusted for non-cash items of $222.2 million (mainly attributable to stock-based compensation expense of $163.0 million and amortization of deferred contract acquisition costs, net of $43.5 million), and net cash inflows of $242.3 million provided by changes in our operating assets and liabilities.

The main drivers of the changes in operating assets and liabilities were the increase in accrued expenses and other liabilities of $259.4 million, the increase in deferred revenue of $79.3 million and the increase in accrued compensation and related expenses of $15.2 million, partially offset by the increase in deferred contract acquisition costs of $53.1 million, the increase in accounts receivable of $36.3 million, and the increase in prepaid expenses and other current assets of $23.7 million.

Investing Activities

Cash used in investing activities during the year ended January 31, 2025 was $30.5 million, primarily consisting of a $20.2 million payment for a business combination, net of cash acquired, a $7.7 million payment for an asset acquisition, and $3.8 million in purchases of property and equipment, partially offset by $0.7 million in proceeds from maturities, net of purchases of short-term investments.

Cash used in investing activities during the year ended January 31, 2024 was $86.2 million, primarily consisting of $81.7 million in purchases of short-term investments, net of proceeds from maturities, $2.5 million outflow as a result of an escrow payment related to a prior business combination, $1.6 million in purchases of property and equipment, and $0.5 million of other investing activities.

Cash used in investing activities during the year ended January 31, 2026 was $267.3 million, primarily consisting of $256.5 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $10.8 million in a dditions to property and equipment .

Cash used in investing activities during the year ended January 31, 2025 was $30.5 million, primarily consisting of a $20.2 million payment for a business combination, net of cash acquired, a $7.7 million payment for an asset acquisition, and $3.8 million in additions of property and equipment, partially offset by $0.7 million in proceeds from maturities, net of purchases of short-term investments.

Financing Activities

Cash provided by financing activities during the year ended January 31, 2026 was $34.8 million, attributable to $21.8 million proceeds from the issuance of common stock upon stock options exercises and $14.0 million of proceeds from the issuance of common stock under the ESPP, partially offset by $0.9 million of payments for taxes related to net share settlement of equity awards.

Cash provided by financing activities during the year ended January 31, 2025 was $32.6 million, attributable to $24.0 million proceeds from the issuance of common stock upon stock options exercises, and $13.6 million of proceeds from the issuance of common stock under the ESPP, partially offset by $4.9 million for the settlement of acquisition related contingent cash consideration.

Cash provided by financing activities during the year ended January 31, 2024 was $45.2 million, attributable to $32.3 million of proceeds from the issuance of common stock upon stock options exercises, and $12.9 million of proceeds from the issuance of common stock under the ESPP.

Adjusted Free Cash Flow

Adjusted free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities less cash used for purchases of property and equipment, plus any non-recurring income tax payments related to 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 property and equipment, any non-recurring income tax payments related to 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.

Adjusted free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for additions 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 additions 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, repurchasing shares of our common stock, and strengthening our financial position.

One limitation of adjusted free cash flow is that it does not reflect our future contractual commitments.

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The following table presents a reconciliation of adjusted free cash flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated in accordance with GAAP, for the periods presented (in thousands):

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Fiscal Year Ended January 31,

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GAAP net cash provided by (used in) operating activities $ 232,856 $ (63,971) $ 35,040

Purchases of property and equipment (3,765) (1,598) (6,070)

Income tax payments related to BAPA 187,735 — —

Additions to property and equipment (10,827) (3,765) (1,598)

Income tax payments (refunds) related to BAPA (2,479) 187,735 —

Non-GAAP adjusted free cash flow $ 219,550 $ 119,999 $ 33,442

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Revenue Recognition

For contracts that contain multiple performance obligations, we allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price or SSP for each performance obligation.

We use judgment in determining SSP for our products and services.

To determine SSP, we maximize the use of observable standalone sales and observable data, where available.

In instances where performance obligations do not have observable standalone sales, we utilize available information that may include other observable inputs or use the expected cost-plus margin approach to estimate the price we would charge if the products and services were sold separately.

Self-managed subscriptions include both (i) a right to use the underlying software and (ii) a right to receive post-contract customer support during the subscription term.

Post-contract customer support comprises maintenance services (including updates and upgrades to the software on a when and if available basis) and support services.

We have concluded that the right to use the software, which is recognized upon delivery of the license, and the right to receive technical support and software fixes and updates, which is recognized ratably over the term of the arrangement, are two distinct performance obligations.

Since neither of these performance obligations are sold on a standalone basis, we estimate the stand-alone selling price for each performance obligation using a model based on the “expected cost plus margin” approach and update the model on an annual basis or when facts and circumstances change.

This model uses observable data points to develop the main inputs and assumptions which include the estimated historical costs to develop the paid features in the software license and the estimated future costs to provide post-contract customer support.

Based on this model, we determined the SSP allocation for each of our paid tiers across various subscription tenures.

Compensation Recovery Analysis

As disclosed in “Note 2.

Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements, this Form 10-K reflects our identification and correction of certain errors in our prior year financial statements.

The Compensation Committee of our Board of Directors, consisting entirely of independent directors, conducted a recovery analysis of incentive-based compensation received by our executive officers during the relevant period, as contemplated by Rule 10D-1 under the Exchange Act and in accordance with our Executive Officer Clawback Policy.

Based on this analysis, no recovery of incentive-based compensation is required, as the financial statement adjustments did not impact the metrics used to determine incentive compensation during the relevant recovery period, and thus there was no erroneously awarded compensation.

For contracts with multiple performance obligations, we allocate transaction price based on relative standalone selling prices (SSP).

We determine SSP by maximizing the use of observable standalone sales when available.

When observable prices are unavailable, we estimate SSP considering our overarching pricing objectives and strategies, market and industry conditions, product-specific factors, and historical sales data.

For the license and subscription components of self-managed arrangements, which are never sold separately, we utilize an expected cost-plus margin approach that has various inputs and assumptions to estimate the value relationship between these performance obligations.

Assumptions include the historical development costs for licensed features and estimated cost to provide support, maintenance, and software updates.

Evaluating the assumptions and inputs in the cost-plus margin approach requires significant judgment.

Recently Issued Accounting Pronouncements

See “ Note 2.

Basis of Presentation and Summary of Significant Accounting Policies ” to our consolidated financial statements included elsewhere in this Annual Report for more information regarding recently issued accounting pronouncements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis