Gitlab (US:GTLB)2024-06-03 23:19Customer Growth - GitLab's Base Customers increased to 8,976 as of April 30, 2024, from 7,406 as of April 30, 2023, representing a 21% increase[131] - Customers with Annual Recurring Revenue (ARR) of $100,000 or more rose to 1,025 as of April 30, 2024, up from 760 as of April 30, 2023, marking a 35% increase[132] - The Dollar-Based Net Retention Rate was 129% as of April 30, 2024, compared to above 130% in the previous year[134] - The Dollar-Based Net Retention Rate was 129% as of April 30, 2024, reflecting strong customer expansion[164] - The number of customers with ARR over $100,000 increased to 1,025 as of April 30, 2024, up from 760 in the same period last year[164] Financial Performance - Total revenue increased by $42.3 million, or 33%, to $169.2 million for the three months ended April 30, 2024, compared to $126.9 million for the same period in 2023[164] - Subscription revenue from self-managed and SaaS grew by $39.99 million, or 36%, reaching $151.18 million for the three months ended April 30, 2024[164] - Gross profit for the three months ended April 30, 2024, was $150.41 million, with a gross margin of 89%[166] - Net loss attributable to GitLab was $54.64 million for the three months ended April 30, 2024, compared to a net loss of $52.47 million for the same period in 2023[161] - Interest income for the three months ended April 30, 2024, was $12.03 million, compared to $7.32 million for the same period in 2023[161] - Interest income rose by 64% to $12.0 million for the three months ended April 30, 2024, up from $7.3 million in the same period in 2023, driven by higher interest rates and investments from the IPO proceeds[177] - The provision for income taxes increased significantly by 755.3% to $12.7 million for the three months ended April 30, 2024, compared to $1.5 million in 2023, with an effective tax rate of (30.1)%[180] Operating Expenses - Sales and marketing expenses increased by $5.89 million, or 7%, to $92.42 million for the three months ended April 30, 2024[168] - Research and development expenses rose by $3.75 million, or 7%, to $54.14 million for the three months ended April 30, 2024[170] - General and administrative expenses surged by $23.24 million, or 68%, to $57.49 million for the three months ended April 30, 2024, primarily due to a company-wide event[173] - GitLab's operating expenses are expected to increase due to additional costs associated with being a public company[137] Cash Flow and Investments - Cash provided by operating activities was $38.1 million for the three months ended April 30, 2024, compared to a cash outflow of $11.0 million in the same period in 2023[192] - Cash provided by investing activities increased to $89.4 million for the three months ended April 30, 2024, compared to $24.4 million in the same period in 2023, primarily from proceeds of short-term investments[196] - Adjusted free cash flow for the three months ended April 30, 2024, was $37.4 million, compared to $(11.2) million in the same period in 2023[200] - As of April 30, 2024, the company had cash, cash equivalents, and short-term investments totaling $1.1 billion, up from $1.0 billion as of January 31, 2024[189] - Cash equivalents and short-term investments increased to $971.7 million as of April 30, 2024, compared to $711.8 million in the same period of 2023[207] Future Outlook and Strategy - The company plans to continue investing in research and development, expecting R&D expenses to increase in absolute terms in future periods[130] - The company intends to expand its sales and marketing efforts to acquire new customers and increase sales to existing customers[133] - The company aims to build and maintain successful partnerships and alliances to broaden its distribution footprint[136] - The company anticipates that existing cash and investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months[191] Currency and Foreign Exchange Risks - A hypothetical 1% increase or decrease in interest rates would result in a fair value change of approximately $4.1 million in the company's investment portfolio[207] - The weighted-average life of the investment portfolio was approximately 5 months as of April 30, 2024[207] - The company has $54.4 million in cash and cash equivalents denominated in currencies other than the U.S. dollar as of April 30, 2024[209] - A hypothetical 10% change in foreign currency exchange rates would have a material impact on the company's financial statements[209] - The company has not engaged in hedging foreign currency transactions to date but may consider it in the future[210] - All sales contracts to date have been denominated in U.S. dollars, except for the variable interest entity, JiHu, which operates in local currency[208] - Operating expenses in the U.S. are primarily in U.S. dollars, while those outside the U.S. are in local currencies, exposing the company to foreign currency exchange risks[208] - The company's financial results may be adversely affected by fluctuations in foreign currency exchange rates in the future[208] Community and Contributions - GitLab's open-core business model allows for community contributions, with nearly 700 contributors making over 2,100 merge requests in 2023[124]