Summary
GitLab's fiscal 2024 second quarter, ended July 31, 2023, delivered fast top-line growth while GAAP losses remained. Revenue was $139.6 million, up 38.1% from the prior-year quarter. Year-to-date revenue was $266.5 million, up 41.4%. Gross profit was $124.9 million, up 41.9% for the quarter, and gross margin improved 2.4 percentage points to 89.5%. Year-to-date gross profit was $237.8 million, up 43.6%. The quarter's operating loss narrowed 17.2% to $54.1 million, and operating margin rose 25.9 percentage points to -38.7%. Year-to-date operating loss widened 3.8% to $112.3 million. Net loss attributable to GitLab narrowed 15.2% to $50.1 million. Diluted loss per share narrowed 17.5% to $(0.33). Year-to-date net loss widened 20.5% to $102.5 million, and year-to-date diluted loss per share widened 15.5% to $(0.67).
Cash generation was a clear bright spot. Operating cash flow was $27.1 million for the quarter, up 174.6% from the prior-year quarter. Year-to-date operating cash flow was $16.1 million, up 125.0%. Capital expenditures were $0.3 million for the quarter, down 79.6%, and $0.5 million year to date, down 83.5%. Deferred revenue was $268.9 million, up 33.5% from a year earlier. Remaining performance obligations were $495.8 million, up 37.0%. On a non-GAAP basis, the operating loss was $4.3 million, compared with $27.0 million in the prior-year quarter. Non-GAAP net income was $1.9 million, compared with a $21.5 million loss a year earlier. Non-GAAP net income per share was $0.01, compared with a $(0.15) loss.
Customer metrics remained solid even as expansion slowed from earlier levels. Customers with more than $5,000 of ARR increased to 7,815, up 33% from the second quarter of fiscal 2023. Customers with more than $100,000 of ARR rose to 810, up 37%. Dollar-Based Net Retention Rate was 124%, compared with over 130% a year earlier. GitLab was named a leader in the inaugural Gartner Magic Quadrant for DevOps Platforms and the only leader in The Forrester Wave Integrated Software Delivery Platforms, Q2 2023 report. The company appointed Chris Weber as chief revenue officer, released GitLab 16.0 with AI-powered workflows and supply chain security features, launched the DevSecOps World Tour across 14 global cities, and published its first ESG and diversity, inclusion, and belonging reports.
Guidance points to steady near-term growth. For the third quarter of fiscal 2024, GitLab expects revenue of $140.0 million to $141.0 million. For the full fiscal year 2024, revenue is guided to $555.0 million to $557.0 million. The company also guided to a third-quarter non-GAAP operating loss of $6.0 million to $5.0 million and a full-year non-GAAP operating loss of $33.0 million to $30.0 million. Non-GAAP net loss per share is expected to be $(0.02) to $(0.01) in the third quarter and $(0.08) to $(0.05) for the full fiscal year. GitLab did not provide a reconciliation of these non-GAAP guidance measures to the closest GAAP measures. Management flags several risks. They include intense competition and potential loss of market share, a decline in customer renewals and expansions, the ability to achieve and sustain profitability, fluctuations in operating results, security and privacy breaches, customers staying on free self-managed or SaaS offerings, rapid technological changes, the company's hiring model, and general economic conditions such as interest rates, inflation, capital markets volatility, instability in the global banking sector, and armed conflict in Ukraine. The MD&A also notes that continued investments in research and development, sales and marketing, and general and administrative functions may pressure near-term profitability.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $139.6M | $126.9M | +10.0% | $101.0M | +38.1% |
| Gross profit | $124.9M | $112.9M | +10.6% | $88.0M | +41.9% |
| Gross margin | 89.5% | 89.0% | +0.5 pp | 87.1% | +2.4 pp |
| Research & development | $49.0M | $50.4M | -2.7% | $39.5M | +24.0% |
| Sales & marketing | $92.1M | $86.5M | +6.4% | $80.7M | +14.2% |
| General & administrative | $37.8M | $34.2M | +10.4% | $33.1M | +14.2% |
| Total operating expenses | $178.9M | $171.2M | +4.5% | $153.3M | +16.7% |
| Operating income (loss) | -$54.1M | -$58.2M | +7.2% | -$65.3M | +17.2% |
| Operating margin | -38.7% | -45.9% | +7.2 pp | -64.6% | +25.9 pp |
| Net income (loss) | -$50.1M | -$52.5M | +4.6% | -$59.0M | +15.2% |
| Net margin | -35.9% | -41.4% | +5.5 pp | -58.4% | +22.5 pp |
| Diluted EPS | -$0.33 | -$0.35 | +$0.02 | -$0.40 | +$0.07 |
| Customers | 810 | 760 | +6.6% | — | — |
| Net retention rate | 124.0% | 128.0% | -4.0 pp | 130.0% | -6.0 pp |
Risks
Dollar-Based Net Retention Rate was 124% as of July 31, 2023 compared with over 130% as of July 31, 2022, and the filing says customers may downtier or decline to renew after GitLab discontinued starter and bronze tiers and implemented a Premium tier price increase in the first quarter of fiscal 2024.
GitLab is implementing generative AI features throughout its services, which the filing says presents regulatory, litigation, ethical, reputational, and financial risks, including under proposed EU AI rules and uncertain intellectual property treatment of AI-generated content.
GitLab has incurred net losses of approximately $155.1 million in fiscal 2022, $172.3 million in fiscal 2023, and $102.5 million in the six months ended July 31, 2023, with an accumulated deficit of approximately $828.2 million as of July 31, 2023, and expects operating expenses to increase while SaaS mix may raise cloud-related costs and pressure gross margins.
The filing says GitLab faces intense competition from well-established providers such as Atlassian and Microsoft and from companies offering AI and point solutions, many with greater financial resources, which could lead to reduced sales, reduced margins, or loss of market share.
The filing repeatedly cites inflation, rising interest rates, volatility in debt and equity markets, instability in the global banking sector, and the ongoing armed conflict in Ukraine as factors that may reduce customer spending, lengthen sales cycles, and make forecasting difficult.
GitLab's commitment to transparency includes a publicly available Handbook and public use of The DevSecOps Platform, which the filing says may let competitors exploit innovations or lead to litigation and Regulation FD disclosure risks.
The filing expands security risk to include AI-related sensitive data exposure such as insufficient data anonymization during training, and notes that GitLab uses third-party service providers and open source code, which may increase supply-chain cyber-attack exposure.
GitLab is subject to potential changes in U.S. and international tax law, including the OECD's 15% minimum tax framework, digital services taxes, and the Inflation Reduction Act's 15% minimum tax on adjusted financial statement income, which could increase its effective tax rate and cash tax obligations.
GitLab regularly maintains cash balances at third-party financial institutions in excess of FDIC insurance limits and similar non-U.S. limits, and a depository institution failure could impair operating liquidity.
As of July 31, 2023, holders of Class B common stock, including directors, executive officers, and 5% stockholders, held 65.8% of the voting power, which limits other stockholders' ability to influence corporate matters such as director elections and change-of-control transactions.
GitLab's Base Customers grew to 7,815 as of July 31, 2023 from 5,864 as of July 31, 2022, and the filing says this rapid growth places significant strain on management and operational and financial resources and may make forecasting revenue and expenses difficult.
The filing says future success depends on converting users of free self-managed or SaaS offerings into paying customers, but enforcement of user limits and planned fiscal 2024 storage and transfer limits on the free SaaS product may cause free users to decline or fail to convert.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
Customers with more than $100,000 of ARR
Customers with more than $5,000 of ARR
Non-GAAP Gross Margin
Registered Users
Summary, forecast, risks and KPIs are extracted from Gitlab Inc.'s SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.