GitLab (GTLB) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue grew 33% year-over-year to $169.2 million, with significant margin expansion and positive operating and adjusted free cash flow for the first time in Q1.

• Dollar-based net retention rate was 129%, driven by seat expansion, price increases, and tier upgrades; customers with ARR >$100,000 grew 35% to 1,025, and customers with ARR >$5,000 increased 21% to 8,976.

• Platform differentiation advanced with security, compliance, and AI features, including the launch of GitLab Duo Chat and GitLab 17, and expansion of the total addressable market.

• Closed the second-largest deal in company history, won major industry awards, and expanded partnerships with Google Cloud and AWS.

• Completed acquisitions of Oxeye and Rezilion to enhance security and vulnerability management offerings.

Financial highlights

• Q1 FY25 revenue was $169.2 million, up 33% year-over-year; subscription revenue was $151.2 million, and license/other revenue was $18.0 million.

• Non-GAAP gross margin was 91%; GAAP gross margin was 89%.

• Non-GAAP operating loss improved to $(3.8) million from $(15.0) million YoY; GAAP operating loss was $(53.6) million.

• Adjusted free cash flow was $37.4 million, a significant improvement from negative $11.2 million in the prior year quarter; cash from operating activities was $38.1 million.

• Cash and cash equivalents at quarter-end were $420.3 million; total RPO grew 48% YoY to $681.2 million, and cRPO grew 34% to $436.1 million.

Outlook and guidance

• Q2 FY25 revenue guidance: $176.0–$177.0 million; non-GAAP operating income: $10.0–$11.0 million; non-GAAP EPS: $0.09–$0.10.

• FY25 revenue guidance raised to $733.0–$737.0 million, absorbing a $4 million SSP headwind; non-GAAP operating income: $34.0–$38.0 million; non-GAAP EPS: $0.34–$0.37.

• Management expects continued investment in R&D and sales to drive long-term growth, with short-term profitability impacted by these investments.

• JiHu JV expenses forecast at $14 million for FY2025, down from $18 million in FY2024.

• Liquidity position is sufficient to support operations and capital requirements for at least the next 12 months.