GitLab Inc Q4 2025 Earnings Call Transcript

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

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay. Congrats on the nice results, particularly the NRR mix from a seat expansion stood out to me, but, Bill and Brian, I'd love to ask about the code gen space. Maybe Brian, if you can offer any -- even qualitative color about the contribution from Duo, Duo Enterprise in that 24%. And then Bill, just maybe a question for you about the market development. It sounds like you've had some good success. You called out obviously Barclays and Capgemini, among others, but the code gen market from our vantage point is looking increasingly competitive with, obviously GitHub Copilot, but you've got some standalone tools like Cursor that are already at $100 million in revenues. Even Anthropic is launching their own version of Claude code. How do you differentiate Duo Enterprise in what's likely to be a more competitive code gen market throughout the year? Thank you.

Question: Kash Rangan - Goldman Sachs & Co. LLC - Analyst : Hey, thank you very much. Congrats, Bill, on your first full quarter of the company. Clearly, your tone sounds quite encouraging. You're encouraged by AI, Duo, and the workflow agentic technology and also the impact of pricing, I assume a new CRO, not to mention that. Yet when I look at the reported results, is there something that is not reported in the reported results that is representative of the broader enthusiasm that you share? And also, when I look at the guidance, the sequential growth in CRP, as good as it is in Q4 and the guidance, maybe the tone there in the financial outlook is not matched by the tone that you optimistically share with all the changes you're making. Granted that it's all super early; it's just one quarter. And hopefully, it's a very, very long, amazing career. But help us understand why the fundamental conviction in the company is not quite expressed in the financial -- although I'm sure Brian would agree to disagree with me that you would say that the guidance is very, very good, and I agree. But maybe there's some bridge between the optimism and the numbers the way we look at it, and there's something else underneath the surface that is behind your conviction. What is that? Thank you.

Question: Robbie Owens - Piper Sandler & Co. - Analyst : Great. Thanks, Kelsey, and good afternoon, everyone. Bill, would love to drill down on some of these conversations that you had with customers throughout the quarter -- I think you cited 50 customers -- and especially relative to your view about increasing the number of software developers, because I guess in other areas of the Enterprise stack, we're seeing more optimization as a result of AI. And so help us understand kind of the view of a lot of these customers and why it doesn't creep into a less developer type of argument versus taking the other side of the coin in terms of increasing the number of software creators. Thanks.

Question: Matt Hedberg - RBC Capital Markets Wealth Management - Analyst : Great. Thanks, Kelsey. Thanks for the time, guys, and Bill, congrats on joining. Look forward to working with you. I had a question on Ultimate. It was a big part of the prepared remarks, and we've seen a pretty dramatic increase in the mix there, which is really great to see. I think it really resonates -- especially the SecOps piece. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 9:30PM, GTLB.OQ - Q4 2025 GitLab Inc Earnings Call I'm wondering, you talked about a couple of nice wins and a couple of upsells there, how should we think about the sustainability, because it's done quite well on an improvement in mix over the last year. Is that something that you think continues into fiscal '26? And maybe just like if you could summarize the one or two items why customers are so drawn to Ultimate, I think that would be helpful.

Question: Joel Fishbein - Truist Securities - Analyst : Thanks for taking the question, and congrats on the great results. I guess it's a question for both of you guys. Congrats on hiring Ian to be your CRO. I'm just curious to see if there's -- you expect any significant changes to go-to-market sales comp, any of that? And is that already baked into the guidance that you've given? Thanks

Question: Derrick Wood - TD Securities (USA) LLC - Analyst : Great. Thanks. And Brian, 18% operating margin in Q4, congrats. That is impressive and really just leads me to want to ask about the balance growth investments versus margin expansion if you're thinking about that in calendar 2025 versus the last couple of years given that you've had such a big improvement on margins. And I know Bill mentioned some things that you're doing on the R&D side. But we just looking to double-click on the go-to-market side, just get a sense of how active you have been in building up sales capacity, how you're thinking about driving more growth to make sure you've got the right growth in capacity going forward. And I know, Bill, you just mentioned some of the tweaks you're making, but just would love to hear about the balance of investment growth and margins.

Question: Koji Ikeda - BofA Global Research - Analyst : Yeah. Hey, guys. Thanks so much for taking the questions. I wanted to ask about how you drive strong utilization of the GitLab platform offering across the DevSecOps workflow. And the reason why I ask that is I totally get it, you can sell the Premium and Ultimate versions from a high-value proposition consolidation theme. But how do you drive higher utilization of the platform? And does utilization of the platform need to come first? And is that the key to unlock adoptions of add-ons like Duo and Agile planning? Thank you.

Question: Kingsley Crane - Canaccord Genuity LLC - Analyst : Hey. Thanks. Just to expand on that, it's nice to hear that you're expanding customer success initiatives in fiscal '26. It sounds like it's also a big focus for Ian. So just to double-click, what's the state of that organization today? How much transformation do you think needs to occur, if any, or is it really just about finding more scale and adding more resources to the existing framework? Thanks.

Question: Gregg Moskowitz - Mizuho Securities USA, LLC - Analyst : Great. Thanks, Kelsey. Hi, everyone. Bill, it's encouraging that every customer you met with so far is actively evaluating the incorporation of AI tools into their DevSecOps strategy. If you were to look out maybe a couple of years from now, how often might you expect or might we expect GitLab to upsell entire DevOps workforces to Duo Pro or Duo Enterprise versus a mix and match type of outcome? How do you see this evolving?

Question: Pinjalim Bora - J.P. Morgan Securities LLC - Analyst : Thank you for taking the question. Brian, just a two-parter for you. Could you maybe talk about the assumptions around the guidance, especially around NRR has kind of reached around 123%? I'm trying to think if we have reached kind of a trough. Are you seeing underneath kind of the seat growth stabilizing? Are you expecting any kind of a ramp? And then lastly, what did you see with respect to the pricing benefit in fiscal '25 versus initial expectations? And are you baking in any for fiscal '26?

Question: Ryan MacWilliams - Barclays Capital Inc. - Analyst : Hey, guys. Thanks for taking the question. Following the third quarter's strong public sector deal result, any update on your public sector business and pipeline under this new administration? And is there any extra conservatism baked into your guide for the sector for this year? Thanks.

Question: Nick Altmann - Scotia Capital (USA), Inc. - Analyst : Awesome. Thanks, guys. There were some great commentary around the Dedicated SKU. And so can you just talk about the underlying drivers there and why Dedicated is resonating with those larger customers? And then going forward, kind of going back to Matt's question around the Ultimate ARR mix this year, how impactful can Dedicated be to that Ultimate mix moving higher? Thank you.