Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2026 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40895 GITLAB INC. (Exact name of registrant as specified in its charter) (Address of Principal Executive Office ...

Madison Investments, an investment advisor, released its fourth-quarter 2025 investor letter for “Madison Small Cap Fund”. A copy of the letter can be downloaded here. The fourth quarter was challenging for the fund and continued to underperform its benchmark, the Russell 2000 Index. The fund (Class I) returned -0.4%, lagging the benchmark’s 2.2% return. Sector allocation negatively impacted the Fund's performance this quarter, with healthcare being the weakest sector. The Fund remains optimistic that the s ...

Core Viewpoint - GitLab's stock experienced a significant decline of 24.8% in February, influenced by broader market trends and macroeconomic concerns, despite no major company-specific news [1][2][4]. Market Performance - The S&P 500 and Nasdaq Composite also faced declines of 0.9% and 3.4%, respectively, during the same period [1]. - GitLab's stock price fell further by 6.5% in March, despite reporting better-than-expected Q4 results [8]. Financial Results - In Q4, GitLab reported a non-GAAP profit of $0.30 per share on sales of $260.4 million, exceeding analyst expectations of $0.23 per share on sales of $252.22 million [7]. - For the current quarter, GitLab anticipates sales between $253 million and $255 million, slightly below the analyst estimate of $256.69 million [9]. - The full-year sales target is set between $1.099 billion and $1.118 billion, which is below the average analyst estimate of $1.13 billion [10]. Guidance and Market Sentiment - The forward guidance provided by GitLab was weaker than expected, contributing to the stock's decline [8][10]. - Geopolitical tensions, particularly the conflict involving the U.S. and Israel with Iran, along with disappointing U.S. payroll figures, have added to market volatility and investor concerns regarding GitLab's growth outlook [11].

Core Viewpoint - GitLab's stock has faced significant declines, down approximately 60% over the past year, following conservative guidance issued after its fourth-quarter earnings report, raising questions about whether it is a good time to invest or divest [1][2]. Financial Performance - For fiscal Q4, GitLab reported a revenue increase of 23% year over year, reaching $260.4 million, surpassing its forecast of $251 million to $252 million [3]. - Subscription revenue grew by 26% year over year to $234.3 million, while license revenue saw a modest increase of 1% to $26.1 million [3]. Customer Metrics - The company achieved a dollar-based net retention rate of 118%, indicating strong growth within its existing customer base [4]. - The number of customers generating $100,000 or more in annual recurring revenue (ARR) increased by 18% to 1,456, and those with $1 million in ARR rose by 26% to 155 [4]. Future Guidance - GitLab's guidance for full-year fiscal 2027 revenue is projected between $1.099 billion and $1.118 billion, reflecting a growth rate of 15% to 17%, which is below the analyst consensus of $1.12 billion [5]. - For fiscal Q1, the company forecasts revenue between $253 million and $255 million, indicating approximately 18% growth at the midpoint, with adjusted EPS expected to be between $0.20 and $0.21 [5]. Strategic Initiatives - Management plans to stimulate growth by increasing the sales headcount and attracting new customers, along with offering more à la carte options to enhance average revenue per user (ARPU) without pressuring price-sensitive customers to upgrade [6].

Core Thesis - GitLab Inc. is viewed positively despite being labeled an "AI loser," with the belief that the rise of AI-generated code will actually increase the need for integrated DevSecOps platforms rather than diminish it [2][3]. Company Overview - GitLab Inc. develops software for the software development lifecycle both in the United States and internationally [2]. - The company's stock was trading at $26.70 as of March 3rd, with trailing and forward P/E ratios of 485.56 and 23.58 respectively [1]. Market Position and Strategy - The market has pushed GitLab's stock toward 52-week lows due to fears surrounding AI's impact on human developers, but this narrative is considered fundamentally flawed [2]. - GitLab's all-in-one model differentiates it from competitors like GitHub by providing a unified lifecycle solution, which is increasingly important as AI-generated code complicates compliance and security [3]. Product and Revenue Insights - GitLab's Duo AI suite is integrated across various stages of the software development process, positioning the platform as AI-native [4]. - 54% of GitLab's revenue now comes from its higher-margin Ultimate tier, highlighting the growing importance of security and compliance in enterprise adoption [4]. Financial Performance - The company has achieved an 18% non-GAAP operating margin in its most recent quarter while maintaining approximately 25% revenue growth [5]. - As GitLab approaches $1 billion in revenue, the operating leverage from its single-platform architecture is expected to become more apparent [5]. Investment Strategy - The stock is trading near all-time low forward price-to-sales multiples, reflecting market skepticism despite improving fundamentals [6]. - A bullish investment strategy involves a September 2026 $60/$75 call spread, which offers defined downside with asymmetric upside potential as the market may re-rate GitLab in light of AI's role in enterprise software development [6]. Historical Context - GitLab's stock price has decreased by approximately 43.19% since previous bullish coverage due to IT sector weakness and conservative guidance, despite earnings that beat estimates [7]. - The current analysis emphasizes the AI mispricing narrative and the potential for asymmetric upside through a 2026 call spread strategy [7].

Core Insights - GitLab is positioned as an intelligent orchestration platform for software engineering, aiming to unify the software life cycle management for organizations [2]. Company Overview - GitLab has transitioned to a new positioning that emphasizes its role in managing the entire software life cycle within a single platform, which was launched about a month ago [2]. - The company has been providing solutions for over a decade, addressing the fragmented nature of the software development space [2]. Industry Context - The software development industry has historically been characterized by fragmentation, with developers utilizing a mix of open source and commercial tools for various tasks, leading to the use of multiple tools within enterprises [3]. - In many organizations, there can be a dozen or more tools employed to handle different aspects of software development, including planning, coding, version control, building, testing, and deployment [3].

GitLab Conference Call Summary Company Overview - **Company**: GitLab - **Positioning**: GitLab is an intelligent orchestration platform for software engineering, providing a unified platform to manage the entire software lifecycle, addressing the fragmentation in the industry [5][6]. Key Financial Metrics - **Annual Recurring Revenue (ARR)**: Reached $1 billion [6]. - **Revenue Growth**: 26% year-over-year growth, with total revenue of $955 million [7]. - **Free Cash Flow**: Increased by 83% year-over-year to $220 million [7]. - **Customer Growth**: Million-dollar customer cohort grew by 26% year-over-year, while the 100K customer cohort grew by 18% [7]. Market Dynamics - **Developer Time Allocation**: Developers spend only 10%-20% of their time writing code; the remaining 80%-90% is spent on surrounding tasks [9]. - **AI Impact**: The introduction of AI tools is leading to increased code generation, creating bottlenecks in code reviews and compliance [12]. Growth Strategy - **Five-Point Action Plan**: GitLab has identified five areas to invest in to reinvigorate growth: 1. **First Orders**: Focus on stabilizing and re-accelerating first order growth, which had been decelerating [19][21]. 2. **Sales Capacity**: Increasing sales capacity to meet growing demand [24]. 3. **Pricing and Packaging**: Introducing new monetizable SKUs to provide more granular options for customers [25][26]. 4. **Price-Sensitive Cohort**: Addressing budget pressures on a specific cohort of customers by offering credits and adjusting coverage ratios [28][30]. 5. **Duo Agent Platform**: Launching a new platform that integrates AI across the software lifecycle [31]. Product Development and Innovation - **Duo Agent Platform**: Launched to provide agentic AI capabilities across the software lifecycle, enhancing customer engagement and value delivery [14][31]. - **Internal Productivity**: GitLab's own engineers using Duo have shown up to 4 times more merge requests per developer compared to those who do not engage heavily with the tool [51]. Capital Allocation - **Share Repurchase Program**: GitLab announced a $400 million share repurchase program [58]. - **Investment Priorities**: Focus on organic growth through R&D, sales and marketing, and maintaining balance sheet resilience with $1.3 billion in cash and short-term investments [58][59]. Competitive Landscape - **Defensibility Against AI Startups**: GitLab's comprehensive platform integrates both AI capabilities and the necessary infrastructure for software development, providing a competitive edge against AI-native startups [46][49]. Conclusion - GitLab is positioned for growth with a clear strategy to address market dynamics, enhance product offerings, and improve customer engagement while maintaining a strong financial position and capital allocation strategy. The upcoming fiscal year 2027 is anticipated to be pivotal for the company [60].

Core Viewpoint - Fears of slowing growth and AI disruption have led to GitLab shares reaching long-term lows, but the sell-off is seen as overdone, presenting a significant investment opportunity [1] Company Growth and Positioning - Despite AI-related concerns affecting the near-term outlook, GitLab continues to grow and is well-positioned for the AI inference era, embedding AI functionality throughout the software lifecycle to enhance efficiency and outcomes while maintaining security and compliance [2] - GitLab's strong cash flow and balance sheet support its growth, allowing for a share buyback authorization of up to $400 million, which is approximately 10% of its post-release market cap [2][3] Financial Health - The balance sheet shows a strong capital position with current assets increasing across all categories, cash and equivalents exceeding liability levels, and no long-term debt, with total liabilities less than equity and a 27% increase in equity for the year [3] - GitLab's shares could potentially double from their March lows based on earnings estimates, with forecasts indicating a compound annual growth rate (CAGR) in the high teens to low 20% through the middle of the next decade [4] Market Sentiment and Analyst Outlook - Tepid guidance and a weak analyst response have contributed to the decline in shares, but institutional investors are likely to buy at these low levels, indicating confidence in GitLab's future performance [5]

Core Insights - GitLab Inc. reported fourth-quarter results that exceeded analyst expectations, but shares fell over 7% intra-day due to lower-than-expected fiscal 2027 earnings guidance [1][2] Financial Performance - The company posted adjusted earnings per share of $0.30 for the quarter ended January 31, surpassing the analyst consensus of $0.23 [1] - Revenue increased by 23% year over year to $260.4 million, exceeding the $252 million estimate [1] - For the full fiscal year 2026, revenue totaled $955.2 million, marking a 26% year-over-year increase [4] Earnings Guidance - GitLab projected fiscal 2027 adjusted earnings per share between $0.76 and $0.80, significantly below the analyst consensus of $1.03, representing a 24% shortfall [2] - The company forecast fiscal 2027 revenue between $1.1 billion and $1.12 billion, with the midpoint of $1.11 billion exceeding the $1 billion consensus estimate by about 11% [2] Future Projections - For the first quarter of fiscal 2027, GitLab expects revenue of $253 million to $255 million and adjusted earnings per share between $0.20 and $0.21 [3] - Adjusted operating income is projected at $32 million to $34 million [3] Operational Metrics - Adjusted operating margin improved to 21% in the fourth quarter, up from 18% in the same period a year earlier [3] - GitLab generated $45.8 million in operating cash flow and $41.8 million in adjusted free cash flow during the quarter [3] Shareholder Actions - The board authorized a $400 million share repurchase program, reflecting confidence in the company's long-term growth outlook [4]

Group 1: Earnings Report Highlights - GitLab's Q4 2026 report exceeded analyst expectations, with actual sales rising 23% year over year to $260 million, surpassing the expected revenue of approximately $252 million [2] - Adjusted earnings per share fell from $0.33 to $0.30, still above the consensus projection of $0.23 [2] - Management's revenue guidance for 2027 is set at $1.1 billion, which is 16% higher than the reported 2026 total, while earnings guidance is more conservative at a midpoint of $0.78 per share, below the analyst consensus of $1.03 [3] Group 2: Market Reaction and Stock Performance - Following the earnings report, GitLab's shares started trading 13.5% lower and were down 7% by 1:20 p.m. ET [1] - The stock has dropped to new all-time lows, down 60% over the last year, and currently trades at 17 times free cash flow [6] - Despite the price drop, growth investors may view this as a potential buying opportunity, although further declines in share prices are anticipated in the short term [6] Group 3: Competitive Landscape and Management Commentary - Concerns exist regarding the impact of AI tools on traditional software development systems like GitLab, with CEO Bill Staples addressing these fears during the earnings call [4] - Staples emphasized that while code generation may become a commodity, the need for human supervision and quality assurance remains critical, which is the core of GitLab's business [5]