0001628280-26-039793
SEC filingRevenue grew 23% YoY to $264.2M, but gross margin contracted 200 bps to 86% due to higher cloud costs.
For the three months ended April 30, 2026 (Q1 FY27), GitLab reported total revenue of $264.2 million, a 23% increase from $214.5 million in the prior-year period. The growth was broad-based: subscription revenue (self-managed and SaaS) rose 23% to $239.3 million, while license and other revenue grew 24% to $24.9 million. The expansion was attributed to ongoing demand for the GitLab platform, new customer acquisitions, and increasing average revenue per customer, as reflected by the Dollar-Based Net Retention Rate of 117% (down from 122% in Q1 FY26).
Gross profit increased 20% to $226.7 million, but gross margin contracted 200 basis points to 86% from 88%. The decline was primarily due to a $7.5 million increase in third-party hosting costs for SaaS and cloud usage, driven by the growing mix of SaaS and Duo Agent Platform offerings. Cost of revenue rose 50% to $37.5 million, outpacing revenue growth.
Operating expenses grew 8% to $242.4 million, but as a percentage of revenue they improved from 104% to 92%. Sales and marketing expenses increased 11% to $119.4 million, driven by higher hosting costs and company events, partially offset by lower stock-based compensation. Research and development expenses rose 9% to $71.5 million, primarily due to increased hosting and headcount costs. General and administrative expenses were nearly flat at $51.6 million, with higher personnel costs offset by lower charitable donations of stock. Total stock-based compensation fell 10% to $50.1 million.
The net loss attributable to GitLab narrowed to $5.0 million from $35.9 million, a 86% improvement, driven by higher revenue and operating leverage. Interest income increased to $11.9 million, and foreign exchange gains swung from a $10.0 million loss to a $0.5 million gain. The effective tax rate improved to -57.3% from -7.6% due to lower pre-tax loss.
GitLab operates as a single reporting segment, but revenue is disaggregated into two main streams. Subscription revenue, which accounts for 91% of total revenue, grew 23% YoY, reflecting strong renewal rates and upsells. License revenue grew 24% but remains a smaller component. The mix shift toward subscription and SaaS is expected to continue, with management noting that increased cloud-related costs may pressure gross margins. Customer metrics underscore momentum: $100K ARR customers increased 18% to 1,519, and total Base Customers (ARR >$5K) grew 7% to 10,831.
Management expects research and development expenses to increase in absolute dollars as they continue investing in platform enhancements and headcount. Similarly, sales and marketing expenses will grow in absolute terms but decline as a percentage of revenue over time. General and administrative expenses are also expected to rise in absolute dollars due to public company costs. However, these investments are intended to drive long-term growth, even if they impact short-term profitability.
The company highlighted its "land and expand" strategy and the importance of partnerships, alliances, and channels for future growth. No specific numerical guidance was provided for the next quarter or fiscal year. Liquidity remains strong, with $1.36 billion in cash, cash equivalents, and short-term investments. The company repurchased $50 million of common stock during the quarter, leaving $350 million under the repurchase program. Management believes existing resources are sufficient for at least the next 12 months.
As of April 30, 2026, GitLab held $335.4 million in cash and cash equivalents and $1.02 billion in short-term investments, totaling $1.36 billion in liquid assets. Total stockholders' equity stood at $1.03 billion, including $46.2 million in noncontrolling interests. The company carries no debt, maintaining a fortress balance sheet.
GitLab's purchase obligations primarily consist of non-cancelable hosting infrastructure and subscription agreements. During Q1 FY2027, the company entered into a new $10.0 million one-year cloud services agreement. As of April 30, 2026, total remaining performance obligations (RPO) were $1.1 billion, with 64% expected to be recognized within 12 months and 90% within 24 months. The company also has $0.9 million accrued for labor matters related to contractor use in foreign countries.
In March 2026, the Board authorized a $400.0 million share repurchase program. During the three months ended April 30, 2026, GitLab repurchased 2,378,892 shares for $50.0 million at an average price of $21.04 per share, leaving $350.0 million remaining. No dividends were declared or paid. Capital expenditures from the cash flow statement (not in Notes) were $2.4 million, but no Note disclosure exists; thus not included here.
GitLab operates as a single reportable segment. Revenue disaggregation shows subscription revenue (self-managed and SaaS) accounted for 90% of total revenue ($239.3 million), with license and other at 10% ($24.9 million). Geographically, the United States contributed $217.6 million (82%), Europe $39.9 million (15%), and Asia Pacific $6.6 million (3%). These figures are from Note 3 and represent the only segment-level detail provided.
Operating cash flow of $149.2M significantly exceeded the net loss of $5.6M, indicating strong cash conversion. Key non-cash items included $50.1M in stock-based compensation and $12.9M in amortization of deferred contract acquisition costs. Working capital provided a net inflow of $93.1M, primarily due to a $103.4M reduction in accounts receivable, partially offset by a $14.3M decline in deferred revenue. Capital expenditures of $2.4M were modest, representing a 1.6% capex-to-CFO ratio. Free cash flow (not explicitly stated) would be approximately $146.8M, covering share repurchases of $50.0M by a wide margin. The company ended the period with $335.4M in cash and equivalents, up from $229.6M at the start. No dividends were paid. Overall, cash flow generation remains robust and self-funded.