GitLab Inc at Barclays Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Bill, pretty whirlwind, I'm sure, over the past couple of weeks. Now, congrats on the taking the new role. I guess, I'd love to start with like your thoughts on this GitLab opportunity and some of the reasons why you decided to move over to GitLab.

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : We just do our jobs. So I appreciate that. Reviews have been good so far. That's just rolling out. It's always great to be on stage five days after. But look, I mean, just at a high level, I'd love to hear kind of any early thoughts on how you think your first few months will look like and maybe your strategy from the start? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 10:30PM, GTLB.OQ - GitLab Inc at Barclays Global Technology Conference

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Excellent. And next year, this fireside, it will be like a hard mode for questions for us, but most of those are going to go to Brian today. But before them, I just love to hear like your past background has been in software. Anything that you think could correlate to the GitLab opportunity?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Excellent. And then as a sell-side analyst, I can sometimes pretend to be a lot of things, but one of them is not a New Relic expert. But I would just love to hear, we heard about you made some pricing changes in your past role, had some consumption pricing. Obviously, super early days. I'm not trying to break news here on the fireside. So you would like to, I'm always encouraging. But I guess, like let's just hear about your past experience with SaaS pricing and maybe like if you see any tweaks or anything early for GitLab?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Fair enough. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 10:30PM, GTLB.OQ - GitLab Inc at Barclays Global Technology Conference

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Yeah. And that makes a lot of sense for use cases, especially, right? Like, get people adding more value, adding their own workloads and then we can figure out the pricing afterwards. Brian, this one might be for you. Just on the CRO search, been ongoing? Like any update there or how you guys are thinking about it?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Excellent. And then just on -- I mean, I got the CFO right before the end of the year. I got to try. It's very least. Anything that we can get crunch you from a top line perspective on how to think about next year? Or like maybe what are some of the things that you're seeing in your business that can help investors as they're trying to figure out their model?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : That's perfect. Just to stay with the third quarter, what happened. You talked about federal as a vertical that has performed really well for GitLab. I'm sure there's a lot of efficiency that you guys can help with across our government. But how should investors think about like the TAM for that federal business? Or how do you think about like -- how that can be a bigger vertical for GitLab going forward?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And look, I'm happy to plug my own research, but we published the developer hiring trends this morning, I can do every month. And you've seen some pretty strong year-over-year growth over the last few months. We track GitLab job postings as well. And your results track in line with that sentiment as well. I know that might not be a part of your guidance, but at least within your full customer base, are you seeing early signs of seat stabilization, like maybe larger customers doing better receipts like any commentary --

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : So even with your largest customers then like because there's so few that are wall-to-wall, still seat opportunities for even them to continue to expand?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Perfect. And just on pricing for this year, we previously talked about like $10 million to $20 million in total contribution for this year. Is that the right way to think about it for FY25 or any updates there?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And just with that dynamic, your average customer duration is like 15 months, right? So like you previously mentioned that next year, you should see a stronger price increase benefit than this year as those contract renewals come through. That's still kind of traffic that you're seeing?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : So that will be like a stronger pricing benefit next year. Bill, to tag you back in, as you kind of did your homework on GitLab, and you talk to customers and suppliers and resellers and all that. Was there anything that stuck out to you like a common theme or anything that you hold was interesting from those conversations?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And to Brian's point, I mean, you guys are midway through a two-legged price increase, and you saw like lows for churn in This most recent quarter. So it just shows your customers are getting more value of the platform. When it comes to the ultimate strength that you've seen, would you attribute this to like AI is still early days, so like more people wanting to adopt security? Or do they feel like they need to go to Ultimate anyway. So like they get those Ultimate AI features. Like how did you say where that strength is coming from?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Yes, that's a good point. And like the developer that they're attaching to, right? Like that salary is going to be a lot higher than 1,200. Just when it comes to that Ultimate shift, like I'd think that's what you just described as a broader deployment and a larger decision than just beyond like we saw a price increase in Premiums, so let's move to Ultimate. Like do you think the Premium price increase had like a minimal impact on that Ultimate shift?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And just on like which also leads to better unit economics from your perspective, and you've seen improving margin growth, especially in the most recent quarter. It looks like some of that savings also you got much more leverage on the sales and marketing line for this quarter. Do you think you're comfortable with your sales capacity now? Or is that in the right spot? Or like is that what the trend of like you guys seeing better Ultimate, seeing better revenue growth, so getting more leverage on that line.

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And we can expect that every quarter going forward, right? Like --?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Yes, I'm going to keep going. I mean, so you could say your margins are under reps because you have JiHu, right? And I know it's tough to put timing around like if you could consolidate or not. But maybe for investors like that are unfamiliar with dynamic, can you just talk about like what that looks like for GitLab and like how you guys are trying to consolidate JiHu today?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : The expenses for JiHu. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 10:30PM, GTLB.OQ - GitLab Inc at Barclays Global Technology Conference

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : Excellent. A question coming from the audience. You can look at the GitLab website, and you guys have been very open about some of the what you guys are working internally and you could see like kind of the product road map for like security features for Ultimate or some of the observability features. But the question from the investor broadly is, what's next in the product road map to increase the breadth of the platform?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : No, I completely agree. And that's a pretty crunchy comment around the like your existing customer cohorts are all growing around your retention rate. I mean, I guess, that goes back to what we talked about at the beginning, which is like your customer base really is in wall to wall GitLab largely. So they're still -- like even within your existing base, like a larger seat count opportunity from there. Just on Duo, since you brought it up, we can't go the whole time without talking about AI. I know there's a lot of excitement, and you gave some good stats on -- like how new customers adopt the Duo product. So can you just help us with like where Duo stands today? Any metrics around -- it's like utilization and then we'll go on to like how to think about it from here.

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : No, I mean, that's a great point. Like for instance, like if you're adopting a new workflow and going GitLab, you might be more willing to let's -- okay, let's start with AI features where existing customers might be setting your ways will start a little smaller. But at least on a like-for-like basis, that new customer has better ARPU because you're adding the Duo on top. Just from a monetization standpoint, on my side, if we like to get over our skis and feel all excited about these things, but what's kind of the best way to at least to help us initially framing like the Duo opportunity?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : And at least from my side, through your third quarter, you posted better-than-expected results. You've had a stronger beat in the past few quarters, RPO really held up. So I'm not picking on here, but I did save this question for the last, which is like -- no, but I mean like the one thing that you could bring up is like maybe the net new customer adds for your base customers is was a little smaller in the past quarters. I know you're more focused on bigger enterprise deployments now. But I guess, how should we think about that metric here?

Question: Ryan MacWilliams - Barclays Caipital Inc - Analyst : I appreciate that breakdown. Bill, having a trial was a good reason for me to get out of this conference last year. And you just started. So I'm sure the next time we'll talk, I'll much more follow on your end, but I want to say, looking forward to seeing what you guys are going to be doing GitLab the next few quarters. So thanks for the time, and investors if you have any questions, we can get with the GitLab team. But thanks again for being here.