Summary
GitLab reported third quarter fiscal 2022 revenue of $66.8 million, up 58% from the prior-year quarter. For the first nine months of fiscal 2022, revenue was $174.9 million, up 65% from the prior-year period. The company ended the quarter with 4,057 customers generating more than $5,000 of annual recurring revenue, up 66% from the prior-year quarter. Customers with more than $100,000 of ARR rose to 427, up 73%. Dollar-Based Net Retention Rate remained above 130%. GitLab also completed its initial public offering in October 2021, raising $654.6 million in net proceeds after underwriting discounts. Gross margin was 89.2%, up 0.2 percentage points from the prior-year quarter. Operating margin was negative 48.7%, up 9.3 percentage points from the prior-year quarter.
Profitability remains the main pressure point. The operating loss widened to $32.5 million. Net loss attributable to GitLab widened to $41.2 million, and diluted EPS fell to -$0.62. Gross profit was $59.6 million, up 58.9% from the prior-year quarter. Operating cash flow was negative $10.1 million for the quarter. Year-to-date operating cash flow was negative $48.7 million, up 26.4% from the prior-year nine-month period. Deferred revenue, current portion, was $147.4 million. Remaining performance obligations were $242.5 million. The company continues to invest heavily in sales and marketing, research and development, and general and administrative functions, which keeps GAAP profitability under pressure. Revenue growth was driven by ongoing demand for The DevOps Platform, new customer additions, expansion within existing paid customers, and an increase in $100,000 ARR customers.
For the fourth quarter of fiscal 2022, GitLab guided revenue to $69.5 million to $70.5 million. The company expects a non-GAAP operating loss of $33 million to $32 million and non-GAAP net loss per share of $0.26 to $0.25. For the full fiscal year 2022, guidance calls for a non-GAAP operating loss of $104 million to $103 million and non-GAAP net loss per share of $1.43 to $1.42. These non-GAAP figures exclude stock-based compensation expense, amortization of acquired intangible assets, and non-cash unrealized foreign exchange gain or loss. GitLab did not provide a reconciliation of the non-GAAP guidance to the corresponding GAAP measures because certain items are out of its control or cannot be reasonably predicted. The guidance is for the next quarter and the full fiscal year, respectively.
The quarter came with familiar risks for a high-growth software company. GitLab faces intense competition and possible loss of market share. The market for its services may not grow as expected. Customer renewals and expansions could decline. Security and privacy breaches remain a threat. Some customers may stay on the open-source or free SaaS offering. The company has a limited operating history and must manage future growth effectively. It also needs to respond to rapid technological changes and accurately predict long-term customer subscription renewals or adoption. The hiring model is another risk. On the cost side, GitLab expects research and development and general and administrative expenses to increase in absolute dollars, which may hurt short-term profitability. Foreign exchange losses also weighed on results. Operational highlights included new and expansion customers such as Suzuki Motor Corporation, Smartsheet, and Lockheed Martin. GitLab released versions 14.2, 14.3, and 14.4, marking 121 consecutive months of innovation. It ranked #11 on the Forbes Cloud 100 and appointed Sunny Bedi to its board of directors.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $66.8M | — | — | — | — |
| Gross profit | $59.6M | — | — | — | — |
| Gross margin | 89.2% | — | — | — | — |
| Research & development | $24.7M | — | — | — | — |
| Sales & marketing | $50.5M | — | — | — | — |
| General & administrative | $16.9M | — | — | — | — |
| Total operating expenses | $92.1M | — | — | — | — |
| Operating income (loss) | -$32.5M | — | — | — | — |
| Operating margin | -48.7% | — | — | — | — |
| Net income (loss) | -$41.2M | — | — | — | — |
| Net margin | -61.7% | — | — | — | — |
| Diluted EPS | -$0.62 | — | — | — | — |
| Net retention rate | 130.0% | — | — | — | — |
Risks
GitLab has a history of losses, including a net loss of $109.4 million for the nine months ended October 31, 2021 and an accumulated deficit of approximately $507.6 million as of October 31, 2021. It expects operating expenses to increase in future periods and may not achieve or sustain profitability.
The DevOps market is highly competitive with limited barriers to entry, and GitLab faces well-established providers such as Atlassian and Microsoft that are significantly larger and have more capital. Pricing pressures and aggressive competitor pricing could reduce sales, margins, or market share.
Customers may stay on GitLab's free or open-source offering instead of converting to paid subscriptions, and the company has discontinued its starter and bronze tier product offerings. Users of those tiers may upgrade, switch to the free product, or discontinue use, which could slow revenue growth.
GitLab's Base Customers grew to 4,057 as of October 31, 2021 from 2,438 as of October 31, 2020, and headcount has increased significantly. This rapid growth strains management, operational, and financial resources, and failure to improve systems, processes, and controls could harm forecasting and results.
The DevOps Platform processes, stores, and transmits customers' proprietary, sensitive, and personal data, and GitLab uses third-party service providers and open source technologies. A security or privacy breach could lead to litigation, regulatory enforcement, fines, reputational harm, and loss of customers.
Transparency is a core value, and GitLab maintains a publicly available company Handbook and encourages open communication. This may expose confidential information to competitors, create Regulation FD or disclosure control failures, and lead to litigation or reputational harm.
Other income (expense), net changed primarily due to foreign currency exchange losses on intercompany loans, with foreign exchange losses, net of $19.7 million for the nine months ended October 31, 2021 compared with gains of $13.2 million in the prior-year period. This volatility can adversely affect results.
As GitLab's SaaS offering makes up an increasing percentage of total revenue, it expects increased cloud-related costs such as hosting and managing costs, which may adversely impact gross margins. Gross margin was 88% for the nine months ended October 31, 2021 and 2020.
GitLab is an all-remote company and contracts with team members directly, through professional employer organizations, and as independent contractors. It must attract and retain talent to support growth, and failure to do so could affect customer service, product enhancement, and business execution.
GitLab uses channel partners to sell and support products, and these partners may deliver poor services or a poor selling experience, delay customer purchases, or fail to prioritize GitLab's products. The company may not successfully identify, train, or retain suitable channel partners.
GitLab relies significantly on independent open source contributors and leadership committees outside its direct control to develop and enhance open source technologies. If these parties fail to adequately develop or oversee the codebases, GitLab may face increased development expenses and delayed releases.
The dual-class structure gives Class B common stock ten votes per share, and as of October 31, 2021 holders of Class B stock held approximately 99% of voting power, with directors, executive officers, and 5% holders holding about 67.1%. This concentrates control and limits other stockholders' ability to influence corporate matters.
Lock-up and market standoff agreements restrict transfers for a substantial majority of outstanding stock, with 20% of locked-up securities released after Q3 fiscal 2022 earnings and the remainder after Q4 fiscal 2022 earnings or April 11, 2022. Sales of substantial amounts of Class A common stock after expiration could cause the market price to decline.
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
Summary, forecast, risks and KPIs are extracted from Gitlab Inc.'s SEC filings for Q3 FY2022 (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 1, 2026.