Gitlab (GTLB) Q4 Results

For a primer on Gitlab, including some great replies on pros/cons of Gitlab, it’s competitors, and DevOps in general, I’d check out the full thread from John Wayne’s original post here -


Revenue $77.8M, 69% YoY
Gross Margin 89% (adj)
Customer Growth $1M(TTM) 95% YoY to 39 total customers, $100k(TTM) 74% YoY to 492 customers, and $5k(TTM) 67% to 4,593 customers
DBNRR 152%


Operating leverage is improving (though choppy). R&D is down to 37% of revenue, lowest yet. S&M spend is 74% of revenue, also lowest yet, but still in line with where they want to be for the near term to capture market share.

Gross Margins have been pretty consistent for the last 2 years, hovering at a hyper-growth standout of 88-90%.

The YoY growth on revenue hasn’t necessarily shown a consistent upward trend, but this quarter is back pointing up. Last 4 quarters of YoY growth have gone 69%, 69%, 58%, 69%.

Taking guidance with a HEAVY grain of salt since this is a new company, they went with $78M on the Q1 top end. They beat the top end of the Q4 $70.5M guide by 10.35%, so take that for what you will going forward.

DBNRR is a stellar number at 152%, but it’s not unprecedented for them. Gitlab bounces around a bit more than most other companies here, but generally they’ve been between 130% and 155%

To my knowledge, this is the first quarter they’ve reported $1M TTM customers, but I’ll take the 95% YoY number they reported any day of the week. The other explicit tracking they do is against $100k TTM and $5k TTM customers, and both were up (by 1% point) on a YoY basis from last quarter.

Their last 5 quarters of QoQ growth are 9%, 8%, 16%, 15%, and 16% respectively. To put some framing around next Q, if they do $85M next quarter (a 9% beat off their top line guide, lower than their beat this Q), they’d be at an accelerated YoY of 70%, and QoQ of 9%. Again, take that with a serious grain of salt, since Gitlab has very little historical reporting to go off of.


I find this company and this report pretty compelling. I know the industry compare is apples to oranges, but I still find it interesting to compare GTLB to MNDY for several reasons.

First MNDY and GTLB trade at similar valuations, though after market today, GTLB is slightly more expensive on a TTM basis, trading at P/S(TTM)~=20 vs MNDY P/S(TTM)~=17. Depending on your (subjective) FWD P/S calculation, MNDY may stretch out the advantage here as well.

Second, they both have identical gross margin profiles, with scorching hot ~90% non-GAPP GM’s.

Third, they both are in hyper-competitive environments. MNDY has stiff competition from ASAN as well as ClickUp in the private markets (among others). GTLB has stiff competition with Github (MS owned), JFrog (FROG), Atlassian (TEAM) and others.

Fourth, they both spend a S*** ton of money on OpEx, but MNDY has been improving this number 4 quarters in a row, whereas GTLB has been choppy with no consistent operating leverage trend seen yet, and greater losses as a % of revenue overall on an absolute basis at this point in time.

Fifth, GTLB has a stellar 152% DBNRR, I can only think of SNOW that has higher. MDNY is pretty great too at 135% but 150+ is pretty elite.

Sixth, MNDY is growing their customers at a torrid pace, with their $50k (TTM) cohort growing 203% YoY and 31% QoQ last quarter. GTLB, while still impressive and accelerating, is nowhere close to matching that customer growth.

So you’d think MNDY is a better buy right? For me personally, I don’t trust a solid winner (or assumption of winner(s)) in either the Productivity Software or DevOps space necessarily, but call me crazy, it’s completely anecdotal, but I like the DevOps space for Gitlab and the potential there for future TAM growth more than I do the Productivity Software space.

FlixFool mentioned this in the John Wayne thread I posted above, but it’s worth highlighting - “GitLab’s strength and moat, in my opinion, is its pipeline implementation.“. I tend to agree with this, but also think Gitlab has created a software platform that is much more robust than any competitor, in a way that I don’t think MNDY has relative to ASAN and ClickUp.

Regrettably, I wasn’t able to listen to the Conference Call, so I’ll reserve further judgment on how I position until I have a chance to fully consume that transcript. I will also reply to this post and add conference call notes when I have the opportunity (unless someone else gets to it before I do)

Hope this helps, and as always, happy to hear any critical feedback/thoughts on this report.

-Chris (Long MNDY 1.4%, about to be long GTLB)


Thank you Chris.

Just a quick question, do you know what happened to GTLB’s Q4 2021 and Q1 2022 quarter?

They had Q4 grew only 9.2% QoQ and Q1 only 6.9% QoQ which made the current Q4 2022 quarter and Q1 2023 an easy comparison.


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Quick correction from my original post. I said they hand’t reported $1M+ TTM customers in the past. That was incorrect. This was the first public quarter where they listed it in their press release.

Now, onto the CC notes…


CEO Sid Sijbrandij had a few opening remarks I thought worth noting…

”We continue to achieve success in both upgrading and signing new customers to Ultimate which remains our fastest-growing tier. We believe these results demonstrate the market is moving from DIY DevOps that is composed of different tools to a DevOps platform. This shift enables organizations to accelerate the time to market of their most important software and applications, providing them with a distinct competitive advantage.

”The Gartner Market Guide for value stream delivery platforms further supports our view. It states that by 2024, 60% of organizations will have switched to a platform approach. This would represent 300% growth from a 20% adoption rate in 2021.

”GitLab is the DevOps platform, eliminates this problem of digital duct tape and moves organizations out of DIY DevOps.

”The DevOps platform also enables our customers to manage and secure the entire DevOps workflow across any hybrid and multi-cloud environment. This enables our customers to select the best cloud provider for their applications and it allows our customers to avoid vendor lock-in and overreliance on any single cloud provider.

He went through a litany of platform and tooling improvements they’ve been working on, all of which he wanted to highlight as pointing to Github as being the most mature DevOps platform on the market, and noted a Bain & Company study that showed 90% of companies have DevOps as a priority, but only 12% consider their current practices mature, and thus the opportunity for Gitlab.

He also went through a few customer adds, 2 of which are from vertices you wouldn’t traditionally equate to having a keen DevOps focus (Automotive and Construction).

CFO Brian Robbins

On their customer net expansion…

”Most of our customers start using GitLab with small teams with just one to two stages of our platform. From there, they typically increase their spend with us 2x over the first year as our platform has adopted across multiple teams. Customers then continue to increase their spend as our platform expands to more teams across their organizations or they upgrade to a higher paid tier.”

Regarding their “Ultimate” paid tier…
”The Ultimate tier is our fastest-growing tier, now representing 37% of our annual recurring revenue for the fourth quarter compared with 26% of annual recurring revenue in the fourth quarter of FY 2021 and growing in excess of 100%.

On revenue growth and profitability…

”We believe that the investments we are making in our business will enable us to sustain significant revenue growth rates for the next several years while continuing to improve our margins to ultimately drive long-term profitability.”

”Total RPO grew 95% year-over-year to $312 million.”

Guiding towards higher OpEx in FY2023, but still OpMargin improvements on non-GAAP basis…

”We recognize that it’s important to exercise a disciplined approach to investments and note that our operating expenses are anticipated to rise in FY 2023 due in part to the resumption of travel and in-person customer and marketing events as well as new public company costs which, combined, we anticipate will be approximately $20 million. In addition, we also are forecasting approximately $30 million of expenses related to our joint venture and majority-owned subsidiary, up from $12 million in FY 2022………Our annual FY 2023 guidance implies non-GAAP operating margin improvement of almost 300 basis points year-over-year at the midpoint of our guidance ranges”


There was a question on the source of 152% DBNRR. The CEO mentioned that a lot of upsell is being driven by the Ultimate pricing tier, and that specifically the security capabilities is the common reason for the upgrade to Ultimate. He mentioned that Create and Verify are heavily used as well in Ultimate. He also mentioned that Packaging and Release is continuing to pull more and more customers away from JFrog Artifactory.

They did provide an important disclosure on DBNRR though going forward in terms of how they will report it: ”We are also effective at retaining our customers. When our customers deploy the DevOps platform, it becomes a central platform from which all their DevOps workflows originate from, making it sticky and difficult to replace. The result is that we ended our fourth quarter with a dollar-based net retention rate exceeding 152% which is higher than the disclosure we provided in our S-1 at the time of our IPO.
Moving forward, we anticipate disclosing a tighter threshold for this metric on an annual basis each fourth quarter as we believe this will allow our investors to fine-tune their models. Next quarter, we will revert back to reporting this as a threshold metric using 130% as a threshold.”

The last bit of color on DBNRR was given at the end as sort of the reassurance on the underlying retention strength: “And so all I can say is the cohorts that we’ve landed six years ago are still expanding. Our customers are seeing a lot of benefits such as security and portfolio management and so forth with our Ultimate feature and so we’re continuing to see expansions either through seats or up-tiering. And back in second quarter, when we talked about our logo retention, it was extremely high and so the contraction is relatively low. And so I can’t give a specific number but I can tell you the elements and how that’s been trending.”

He later talked more about the security features being a significant investment they’ve made in differentiating their solution for DIY DevOps, as well as what the focus on these features means for engaging with C-level execs: “Every company needs to become a software company, so it’s higher on the radar of the executives. Security is getting more important, right? If you get breached, you’re in the newspaper, so that’s driving the priority. It’s also because it needs C-level involvement sometimes because companies are stuck on DIY DevOps and there’s people in the company working on that.”

Given their 55% high end FY2023 growth outlook was higher than consensus, analysts asked about the confidence here, and the CFO pointed primarily to the fact that they and their largest competitors combined still have captured less than 5% of the market opportunity.

On Opstrace, the open source observability application they acquired, the CEO said: ”we wanted to accelerate how fast we got there and we love the team and the product that Opstrace already built. So we acquired them to rebuild that inside GitLab and we think that closing that loop will help our customers achieve better business outcomes. If you get feedback faster, you reduce your cycle time and you get better outcomes.

CEO had another interesting comment on the competition with DIY DevOps, again reinforcing a Gitlab as the single, unified platform approach: “We’re competing with point solutions that get integrated by the customer in DIY DevOps. So any of the regular monitoring vendors come to mind. But we’re competing with like customers having to do a lot of effort and we make that easier by giving them one interface, one single product.

On their customer spread, the CEO said they’re investing most in Enterprise and that makes up 60% of total ARR. He said they do very little SMB.


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