0001653482-25-000010
SEC filingRevenue grew 29% YoY, driven by subscription strength and customer expansion, while operating loss narrowed significantly.
For the three months ended July 31, 2025, total revenue was $236.0 million, up 29% from $182.6 million in the same period last year. Subscription revenue (self-managed and SaaS) grew 30% to $212.7 million, while license and other revenue increased 20% to $23.3 million. Gross margin remained flat at 88%. Operating loss narrowed to $18.4 million from $41.0 million, reflecting improvement in operating leverage. Net loss was $10.0 million compared to net income of $12.2 million in the prior-year quarter, which included a significant tax benefit of $39.2 million from the BAPA negotiations. Adjusted free cash flow improved to $46.5 million from $10.8 million, driven by strong collections and operational efficiency.
GitLab reports subscription revenue (self-managed and SaaS) and license revenue (self-managed and other). The subscription segment continues to be the primary growth driver, with revenue increasing 30% YoY, supported by 11% growth in Base Customers (to 10,338) and 25% growth in customers with $100k+ ARR (to 1,344). The Dollar-Based Net Retention Rate was 121%, down from 126% a year ago, indicating a slight softening in net expansion but still healthy. License revenue growth of 20% reflects continued success in selling proprietary software features and professional services. The company noted that revenue attributed to its variable interest entity, JiHu, was $2.2 million for the quarter.
Management provided no specific forward guidance in this MD&A. However, they outlined several strategic priorities: continued investment in R&D to sustain innovation (expecting R&D expenses to increase in absolute dollars but decrease as a percentage of revenue over time), expansion of sales and marketing to acquire new customers and drive upsells, and scaling of partnerships and alliances. The company expects operating expenses to grow in absolute terms but decrease as a percentage of revenue as the business scales. They highlighted the impact of the OBBBA (enacted July 4, 2025) which modified R&D expensing provisions, benefiting near-term taxable income. The company believes existing cash and investments ($1.2 billion) are sufficient for at least the next 12 months, and they continue to focus on balancing growth investments with profitability improvements.
GitLab maintains a strong liquidity position with $261.4 million in cash and cash equivalents and $903.8 million in short-term investments, totaling $1.17 billion. The company has no debt. Shareholders' equity stands at $911.6 million. Short-term investments consist mainly of U.S. Treasury securities ($569.9M), corporate debt securities ($244.2M), and commercial paper ($22.7M). The weighted-average remaining maturity of investments is less than two years.
As of July 31, 2025, GitLab has $226.9 million in purchase commitments, primarily for third-party hosting and cloud infrastructure. Notably, during the six months ended July 31, 2025, the company entered into a new $130 million, five-year cloud infrastructure agreement with annual minimum commitments ranging from $17.3 million to $36.3 million. Other obligations include subscription arrangements and operational commitments. Additionally, the company has $1.5 million in estimated liabilities for labor matters in foreign countries.
GitLab does not have any share buyback programs or dividends. Capital expenditures were $3.8 million for the six months (0.84% of revenue), primarily for property and equipment. There is no debt issuance or repayment. The company's primary capital allocation is toward organic growth and strategic investments, as evidenced by the Oxeye Security acquisition in March 2024 for $20.3 million and the ongoing cloud infrastructure commitments.
GitLab operates as a single reporting segment; however, revenue is disaggregated by type and geography. Subscription revenue (self-managed and SaaS) accounts for 90% of total revenue, with self-managed at 60% and SaaS at 30%. License and other revenue make up the remaining 10%. Geographically, the United States generates 82% of revenue, Europe 15%, and Asia Pacific 3%. The company's joint venture in China (JiHu) contributed $2.2 million in revenue for the quarter but incurred a net loss of $47.4 million, primarily due to other expenses.
Net loss widened slightly to $(46.3M) from $(43.2M), yet operating cash flow surged to $155.7M from $49.8M, reflecting strong cash generation. The primary driver was stock-based compensation of $110.1M ($91.2M in prior year), which is non-cash but recurring. Working capital provided a net inflow of $70M, led by a $69.8M reduction in accounts receivable. Capital expenditures were $3.8M, up from $1.6M, but still low relative to operating cash flow. Investing activities used $138.5M, mainly for short-term investment purchases, while financing activities provided $15.7M from stock option exercises and ESPP. No free cash flow was explicitly stated, but implied FCF (CFO minus capex) is $152M. No share repurchases or dividends were observed. Overall, cash flow quality is good with operating cash flow far exceeding net loss, though stock-based compensation heavily distorts the comparison.