0001628280-25-030546
SEC filingGitLab's Q1 FY26 revenue grew 27% YoY to $214.5M, driven by subscription strength, while operating loss narrowed to $34.6M from $53.6M, reflecting improved operating leverage.
GitLab reported strong financial results for the first quarter of fiscal year 2026, with total revenue increasing 27% year-over-year to $214.5 million. The growth was primarily driven by subscription revenue, which rose 29% to $194.5 million, reflecting ongoing demand for The DevSecOps platform and expansion within the existing customer base. License and other revenue grew 11% to $20.0 million.
Gross profit increased 26% to $189.5 million, while gross margin slightly contracted to 88.3% from 88.9% in the prior year, primarily due to increased hosting expenses for SaaS and cloud usage. Operating loss improved significantly to $34.6 million from $53.6 million, driven by revenue growth and disciplined expense management. Net loss attributable to GitLab narrowed to $35.9 million from $55.2 million, and diluted loss per share improved to -$0.22 from -$0.35.
As of April 30, 2025, GitLab held $1.1 billion in cash, cash equivalents, and short-term investments, up from $992.4 million at January 31, 2025. The company maintains a strong liquidity position with no debt. Total assets increased to $1.44 billion from $1.40 billion, driven by higher cash and short-term investments. Total liabilities rose modestly to $589.4 million from $578.0 million, primarily due to increases in deferred revenue and accrued expenses. Stockholders' equity grew to $852.6 million from $821.3 million.
Operating cash flow more than doubled to $106.3 million from $38.1 million in the prior year, reflecting improved profitability and working capital management. The primary driver was a $65.9 million decrease in accounts receivable, indicating strong collections. Adjusted free cash flow, which excludes BAPA-related tax refunds, reached $104.1 million. Capital expenditures remained minimal at $0.9 million, representing just 0.4% of revenue. The company's cash conversion cycle continues to benefit from its subscription-based business model.
Management attributed the strong performance to the ongoing adoption of The DevSecOps platform, with a focus on acquiring new customers and expanding within existing ones. Dollar-Based Net Retention Rate was 122%, down from 129% a year earlier, but still indicating strong expansion. The number of customers with $100,000 or more in ARR grew 26% to 1,288, and Base Customers (those with more than $5,000 ARR) increased 13% to 10,104.
The company continues to invest in research and development, sales and marketing, and its partner network to drive long-term growth. Management expects operating expenses to increase in absolute dollars but decrease as a percentage of revenue over time. Key risks include intense competition, security breaches, and the company's history of losses. The company is also defending against securities class action and shareholder derivative lawsuits.
Revenue by geography: United States contributed $176.9 million (82% of total), Europe $33.1 million (15%), and Asia Pacific $4.5 million (2%). Subscription revenue comprised 91% of total revenue, with self-managed subscriptions at 61% and SaaS at 30%. Deferred revenue increased to $476.6 million from $469.0 million at year-end. Remaining performance obligations totaled $955.1 million, with 61% expected to be recognized over the next 12 months.
Stock-based compensation expense rose 32% to $55.8 million, driven by increases in RSUs ($45.1 million), PSUs ($3.5 million), and stock options ($4.9 million). The company recorded a $1.7 million charitable donation of common stock. Foreign exchange losses were $10.0 million, primarily related to the revaluation of non-functional currency denominated monetary assets. The effective tax rate was -7.6%, compared to -30.5% in the prior year, primarily due to the tax effects of BAPA negotiations in the prior period.