0001628280-25-054840
SEC filingRevenue grew 25% YoY driven by subscription strength, but net income swung to a loss due to higher costs and a tax benefit reversal.
For the three months ended October 31, 2025, GitLab reported total revenue of $244.4 million, a 25% increase from $196.0 million in the same period last year. The growth was primarily driven by subscription revenue (self-managed and SaaS), which rose 27% to $223.3 million, reflecting ongoing demand for The DevSecOps platform, new customer acquisition, and expansion within existing accounts. License and other revenue was essentially flat at $21.1 million.
Gross profit increased 22% to $212.1 million, but gross margin contracted 200 basis points to 87% from 89%, as cost of revenue grew 46%—faster than revenue—due to a $5.7 million increase in hosting expenses for higher SaaS and cloud usage.
Operating loss improved significantly to $12.4 million from a loss of $28.7 million in the prior year, driven by revenue growth outpacing operating expense increases. Operating margin improved to -5% from -15%. However, net income attributable to GitLab swung to a loss of $8.3 million from a profit of $29.1 million, primarily due to a $41.0 million unfavorable swing in the provision for income taxes. The prior year benefited from a $39.2 million tax benefit related to the Bilateral Advance Pricing Agreement (BAPA) with U.S. and Dutch tax authorities.
GitLab reports two revenue segments: Subscription (self-managed and SaaS) and License (self-managed and other). Subscription revenue remains the dominant driver, accounting for 91% of total revenue in the quarter, up from 89% a year ago. The 27% growth in subscriptions was fueled by a 10% increase in Base Customers (to 10,475) and a 23% increase in customers with ARR over $100,000 (to 1,405). Dollar-Based Net Retention Rate moderated to 119% from 124%, indicating slower expansion within the existing customer base but still strong retention. License and other revenue grew only 1%, reflecting the lumpy nature of upfront license recognition and professional services.
Management's outlook emphasizes continued investment in innovation, sales and marketing, and partnerships to sustain growth. They expect research and development expenses to increase in absolute dollars but decrease as a percentage of revenue over time. Sales and marketing expenses are also expected to increase in absolute terms but decline as a percentage of revenue. The company plans to balance growth investments with a focus on managing operating results. No specific quantitative guidance was provided in the MD&A section. The company believes its existing cash, cash equivalents, and short-term investments ($1.2 billion) will be sufficient for at least the next 12 months.
As of October 31, 2025, GitLab held $224.2 million in cash and cash equivalents and $980.1 million in short-term investments, totaling $1.2 billion in liquidity. Total assets were $1.57 billion, with stockholders' equity of $968.0 million. The company has no debt, with total liabilities of $602.8 million, primarily deferred revenue and accrued expenses.
Purchase obligations stood at $242.6 million, covering non-cancelable hosting infrastructure, subscription arrangements, and other commitments. During the nine months, GitLab entered into two new cloud infrastructure agreements: a five-year $130 million minimum commitment and a one-year $42.5 million minimum contract. An estimated liability of $1.6 million for labor matters is recorded in other non-current liabilities.
No share buybacks or dividends were disclosed. Capital expenditures (property and equipment additions) totaled $6.9 million for the nine months, representing 1.0% of revenue. Stock-based compensation was $162.2 million for the nine months, capitalized $0.4 million as internal-use software.
GitLab operates as a single reportable segment. Revenue for the three months ended October 31, 2025 was $244.4 million, up 24.6% year-over-year. Geographic breakdown: United States $201.4 million (82%), Europe $37.1 million (15%), Asia Pacific $5.8 million (3%). Subscription revenue (self-managed and SaaS) accounted for 91% of total revenue, with SaaS growing to 31% from 29%.
GitLab's operating cash flow (CFO) of $187.1M for the nine months ended October 31, 2025 significantly exceeded the net loss of $55.1M, indicating strong cash generation from operations. The primary drivers were non-cash charges including stock-based compensation ($161.8M), amortization of deferred contract acquisition costs ($40.7M), and depreciation/amortization ($8.2M). Working capital changes contributed positively, notably a $46.3M decrease in accounts receivable and a $17.5M increase in deferred revenue, partially offset by a $36.3M increase in deferred contract acquisition costs.
Capital expenditures (capex) were minimal at $6.9M, resulting in a free cash flow (FCF) of $180.2M, representing a FCF margin of approximately 96% relative to CFO. The company did not pay dividends or repurchase shares, and financing activities were limited to stock option exercises and ESPP issuances.
Investing cash flow was negative $214.2M, primarily due to net purchases of short-term investments ($207.4M), indicating active cash management. The swing from negative to positive operating cash flow year-over-year highlights improved operational efficiency and working capital management. No one-time items materially distorted cash flows, though the prior year included $187.7M in income tax payments related to a bilateral advance pricing agreement, which did not recur.