GitLab's Co-Founder and CEO, Sid Sijbrandij, and Chief Financial Officer, Brian Robbins, will provide insights on the quarter and the fiscal year. We will open the call for panelist questions, so please use the chat feature to send your questions directly to IR Questions using the drop-down menu. Before we start, I want to mention our safe harbor statement. During this conference call, we might make forward-looking statements as defined by federal securities laws. These statements involve assumptions and come with known and unknown risks and uncertainties that could lead to results that differ significantly from what we discuss or expect. For a detailed discussion of the risks linked to these forward-looking statements, please refer to our earnings release distributed today in our SEC filings, including our latest quarterly report on Form 10-Q. Our forward-looking statements are based on information currently available to us, and we advise you not to place undue reliance on them. We have no obligation to update or revise any forward-looking statements or to report on future events or circumstances. We may also discuss financial performance measures that differ from those in our financial statements prepared in accordance with U.S. GAAP. These non-GAAP measures are not meant to replace our GAAP results. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is included in our earnings press release, which, along with the reconciliations and additional information, is available on ir.gitlab.com. A replay of today's call will also be posted on ir.gitlab.com. Now, I will hand the call over to GitLab's Co-Founder and CEO, Sid Sijbrandij.

Thank you for joining us for our fiscal year 2023 third quarter earnings presentation. GitLab's value proposition as a mission-critical DevSecOps platform has always been clear. In today's turbulent economic climate, it's even more so. Companies cannot, and we believe will not slow down their software innovation. They are turning to solutions like GitLab to reduce costs, drive efficiencies and fuel a fast pace of innovation and meet customer demands. We executed well in the third quarter, exceeding our guidance for both revenue growth and our non-GAAP profitability. We continue to demonstrate our ability to achieve high growth with improving incremental margins. In the third quarter of fiscal year 2023, we generated revenue of $113 million. This represents growth of 69% year-over-year. Our dollar-based net retention rate exceeded our reporting threshold of 130%. Our third quarter results also continue to demonstrate improving operating leverage in our business. Our non-GAAP operating margin improved by 1,666 basis points year-over-year. We stated this before, but it's worth repeating. We remain committed to growing in a responsible manner. With these business results, there are three main topics I will cover today. First, I will delve deeper into GitLab's value proposition, specifically why customers are choosing us to be a core part of their business and technology innovation strategy. Second, I will provide an update on our latest product innovations and how they feel the differentiated value customers receive from GitLab. And third, I will share how our partners and alliances are accelerating our go-to-market strategy. Every company needs to excel at developing, securing, and operating software or they will be disrupted. They are increasingly turning to DevSecOps as a central pillar of their software innovation strategy. We see a shift from a legacy approach where IT managers stitch together a patchwork of homegrown and third-party tools. While some of these tools may be best-in-class, the market is clearly moving away from point solutions towards a single application, a platform for the entire software delivery lifecycle. Analyst firm Gartner has also seen this trend. They predicted that 60% of the market will have adopted a value stream delivery platform by the end of 2024. We believe this shift in the market is happening for three reasons. First, IT executives and managers realize the costs and the inefficiencies inherent in the patchwork DevSecOps point solution approach. This approach leads to unwieldy and ungovernable tool chain sprawl, especially as there are more applications and tools to integrate. Second, executives rely on visibility to address significant business challenges, suggesting the need to move faster from planning and initiatives to seeing a result. Moving to the cloud and securing the entire software supply chain is essential. Without a DevSecOps platform, leaders struggle to get end-to-end visibility into these initiatives. Finally, the headwinds in the global economy continue driving the need for greater automation and productivity. Many companies are either no longer hiring or actually reducing their workforces. At the same time, the imperative to drive more customer value remains constant. This means that everyone needs to do more with less. Put simply, in this economic environment, it's no longer optional, but required to be faster from an idea to an outcome, to remove legacy technology, and to move to one development tool chain. The market is looking for a DevSecOps platform to build better software faster. By prioritizing movement to a single application, companies can reduce their budget while still delivering on their business commitments. A powerful example comes from our customer, UBS. In their most recent earnings investor deck, UBS shared a compelling story about upgrading technology in order to drive digitalization and differentiation for clients. Specifically, they removed 50 different development tool teams, moving to one with frequent app delivery through automation. They also transitioned approximately 18,500 people to a uniform agile model to increase the speed from idea to outcome. We've introduced a set of industry-standard metrics to measure the efficiency of the software development process. Last quarter, we announced the results of a recently commissioned Total Economic Impact study conducted by Forrester Consulting. We turned to Forrester to better understand the return on investment that can be realized from GitLab Ultimate, which is the fastest-growing part of our business. We want to see how companies save on costs and achieve business and technology goals with GitLab. Forrester found that as a result of implementing GitLab, a composite company based on interviewed customers saw a 12x increase in the number of annual releases for revenue-generating applications, and an 87% improvement in development and delivery efficiency. The total return on investment was 427% over three years. Even more critical in this economic environment, they saw a payback on the investment in less than six months. These business results are rooted in four main areas: reducing costs of software as a result of choosing a single platform vendor over multiple point solutions, reducing costs associated with tool chain integration, creating higher developer productivity and a better user experience, and increasing revenue due to faster cycle time of application releases. In a single application, GitLab provides all the functionality of a complete DevSecOps platform. We allow organizations to deliver software faster while strengthening security and compliance, thereby maximizing the return on software development. The story of CARFAX is a powerful example of these benefits. CARFAX, which owns the world's largest vehicle history database and helps millions of people daily shop for vehicles, wanted to consolidate its software development tool chain and reduce security vulnerabilities. Purchasing GitLab Ultimate enabled CARFAX to automate security practices, including SaaS, dependency scanning, container scanning, and secret detection. This resulted in accelerating and simplifying deployment processes, reducing tool chain complexity, and improving visibility of performance metrics. CARFAX has increased the number of software builds by 341% in one year using GitLab. In Q3, we continued to deliver new solutions to the market. For instance, we announced GitLab Govern, which combines our security and compliance capabilities. We introduced GitLab Govern because we see that organizations across many industries are facing increasingly stringent regulatory and compliance requirements. GitLab Govern includes vulnerability management, audit events, compliance management, dependency management, and security policy management. These capabilities help organizations achieve continuous security and compliance of their software supply chain without compromising on speed and agility. With this solution, we help customers proactively identify vulnerabilities by integrating and automating vulnerability management within the development life cycle. Issues can be identified, locked, triaged, tracked, and remediated all in the same application. Developers can address vulnerabilities in real time, avoiding release delays. The story of Agoda, one of the world's largest and fastest-growing online travel booking platforms, demonstrates many of these benefits. Agoda had been employing a multitude of both free and paid tools in their software development life cycle. With most of these products in silos, Agoda experienced a poor developer experience and a slow pace of new product development, along with governance and compliance challenges. Consolidating many of these systems on GitLab's single application resulted in increased productivity and visibility, a single source of truth for governance, security, audit, and compliance, and greater empowerment and retention of developers. Agoda can now process over 1 million pipelines per month. The average bill queue time has decreased from 40 minutes to 32 seconds, and their developer NPS score has increased. In Q3, we also advanced our machine learning capabilities with the release of Suggested Reviewers, which represents GitLab's first ML-powered feature. Recommending the right person to review a merge request eliminates potential delays, issues with quality control, and a lack of compliance. As we move further into ModelOps and beyond, we're unlocking next-gen DevSecOps practices for organizations. Another product innovation is GitLab Dedicated, which we officially announced and launched in limited availability at AWS re:Invent. GitLab Dedicated is a new way to use our enterprise DevSecOps platform as a single-tenant SaaS offering. This new offering provides all the benefits of an enterprise DevSecOps platform with a focus on data residency, isolation, and private networking to meet complex compliance needs. With the planned general availability of GitLab Dedicated anticipated next year, our DevSecOps platform will be available in three deployment methods: GitLab.com, a multi-tenant SaaS platform; GitLab Dedicated, a single-tenant SaaS platform; and Self-Managed, a download that provides users the ability to run GitLab anywhere. That brings us to our partnerships with cloud hyperscalers. We view the hyperscalers as increasingly important partners for GitLab. In our conversations with them, we know they view GitLab as an accelerant for their customers to move faster to the cloud. This symbiotic relationship makes cloud hyperscalers a core part of our success in go-to-market. They accelerate time to market for GitLab customers on the cloud of their choice, and they broaden the depth and breadth of our market reach. You can see our cloud migration value proposition with customers like the Dunelm Group, the U.K.'s market leader in homewares. Dunelm was challenged with ensuring application security while rapidly transforming their digital footprint. As their engineering teams accelerated their move to their target architecture of serverless technologies and cloud-first, they identified significant gaps in their existing CI/CD tooling. These included a lack of automation, governance, security, and visibility, which created strains on administrative management and performance. Comparative evaluations led Dunelm to choose GitLab SaaS Ultimate to integrate tools and seamlessly deploy secure pipelines on the AWS cloud. The resulting benefits included increased pipeline volume, accelerated productivity, reduced administrative burden, turbocharged team collaboration, and an upfront security focus to capture vulnerabilities much earlier. Dunelm can now deploy software 50 to 70 times per week rather than 10 to 20 times, and onboarding now takes hours rather than days. Additionally, last quarter, we partnered with Google Cloud to launch Cloud Seed, a new capability that simplifies the developer experience for procuring and consuming cloud services. Cloud Seed is built into the GitLab web UI and leverages our CI/CD pipeline capabilities to give developers a frictionless experience and make it easier to deploy their web applications directly to Google Cloud from GitLab. In our annual DevSecOps survey, we found that cloud adoption remains a high priority for organizations. It is the second highest investment area for DevSecOps teams. Innovations like Cloud Seed enable organizations to accelerate their shift to the cloud. In summary, I’m very pleased with the quarter. We continue to innovate and create new capabilities for an expanded set of customers. We continue to demonstrate the benefits of a platform over point solution approach. We show that GitLab is mission-critical, and we continue to believe we are early in a large and growing market. Our Q3 results demonstrate that we are well-positioned to drive durable growth with improving unit economics. I'm grateful to all our team members, our partners, the wider GitLab community, and customers who contributed to our results. I’ll now turn the call over to Brian Robbins, GitLab's Chief Financial Officer.

Thank you, Sid, and thank you again for everyone joining us. I'd like to spend a moment reviewing the key characteristics of our business model and what we are seeing in the macro environment. Then I'll quickly recap our third quarter financial results and key operating metrics and conclude with our guidance. Our third quarter results continue to demonstrate our ability to drive high growth with improving incremental margins. Fueling these results are a number of key aspects of our business model that I would like to discuss briefly. These include the predictability of a subscription model that provides high visibility, a platform sale rather than a point solution with very little revenue based on consumption, a diversified customer base across industry verticals, customer sizes, and geographic regions, and a short implementation cycle with an established and well-documented ROI. These attributes contribute to the results we are seeing. To illustrate this, customer cohorts from seven years ago are still expanding today. Despite the ongoing volatility in the macroeconomic environment in the third quarter, we see customers continuing to prioritize the need to leverage a mission-critical platform to build software better, faster, cheaper, and in a more secure manner. We're also pleased with how we executed on hiring. We added over 200 new team members in Q3, and we continue to experience lower attrition than the industry. We view the uncertainty in the macro economy as a benefit for hiring new team members, and we continue to be active in recruiting, primarily focusing on adding new team members in sales and R&D. Next, turning to the numbers. Revenue of $113 million this quarter represents an increase of 69% organically from the prior year. We ended Q3 with over 6,400 customers with an ARR of at least $5,000 compared to over 5,800 customers in the prior quarter and over 4,000 customers in the prior year. This represents a year-over-year growth rate of approximately 59%. Currently, customers with $5,000 or greater in ARR represent approximately 95% of our total ARR. We also measure the performance and growth of our larger customers, who we define as those spending more than $100,000 in ARR with us. At the end of the third quarter of FY 2023, we had 638 customers with ARR of at least $100,000 compared to 593 customers in the prior quarter and 427 customers in the third quarter of FY 2022. This represents a year-over-year growth rate of approximately 49%. As many of you know, we do not believe calculated billings to be a good indicator for our business, given that prior period comparisons can be impacted by a number of factors, most notably our history of large prepaid multiyear deals. This quarter, total RPO grew 62% year-over-year to $393 million, and CRPO grew 67% to $278 million. We ended our third quarter with a dollar-based net retention rate consistent with previous quarters. This exceeded our reporting threshold of 130%, which we believe remains best-in-class and consistent with our track record as a public company. The ultimate tier continues to be our fastest-growing tier, representing 39% of ARR for the third quarter of FY 2023 compared with 32% of ARR in the third quarter of FY 2022. Non-GAAP gross margins were 89% for the quarter, which compares to 89% in the immediately preceding quarter and 90% for the third quarter of FY 2022. As we move forward, we estimate a moderate reduction in this metric due to the rapid year-over-year growth rate of our SaaS offering. We saw improved operating leverage across the business this quarter, largely driven by revenue outperformance. Non-GAAP operating loss is $21.6 million or negative 19% of revenue compared to a loss of $23.9 million or negative 36% of revenue in Q3 of last fiscal year. FY 2023 includes $5 million of expenses related to our joint venture and majority-owned subsidiaries. In addition, we incurred $2.1 million in termination payments relating to events that were canceled. Operating cash use was slightly over $1 million in the third quarter of FY 2023 compared to $10.1 million used in the same quarter last year. In summary, we're pleased with our performance during the third quarter of FY 2023 on both the top and bottom line, and we believe our business is set up for continued strength. Now let's turn to guidance. For the fourth quarter of FY 2023, we expect total revenue of $119 million to $120 million, representing a growth rate of 53% to 54% year-over-year. We expect non-GAAP operating loss of $27 million to $26 million, and we expect non-GAAP net loss per share of $0.15 to $0.14, assuming 150 million weighted average shares outstanding. For the full year FY 2023, we now expect total revenue of $420.5 million to $421.5 million, representing a growth rate of 66% to 67% year-over-year. We expect a non-GAAP operating loss of $100 million to $99 million, and we expect non-GAAP net loss per share of $0.56 to $0.55, assuming 148 million weighted average shares outstanding. On a percentage basis, our new annual FY 2023 guidance implies non-GAAP operating margin improvement of approximately 1,525 basis points year-over-year at the midpoint of our guidance ranges. Over the longer term, we believe that a continued targeted focus on growth initiatives and scaling the business will yield further improvements in unit economics. A few more details on guidance in our model. We now estimate that we will incur approximately $16 million of incremental expenses related to the resumption of travel and in-person customer and marketing events as well as new public company costs that were not incurred during FY 2022. In addition, we forecast approximately $20 million of expenses related to JiHu, our China joint venture. This compares with $12 million of combined JiHu and Meltano costs in FY 2022. We are in the early stages of our FY 2024 planning process, but would like to provide an update on FY 2024 revenue growth and our path to achieving free cash flow breakeven. Based on everything we know today, we are currently comfortable with the Street estimates, which have us growing revenue over 40%. On the expense side, we continue to evaluate our hiring plans going forward as we monitor leading indicators in our business as it relates to the macro economy. As Sid and I have said over the last several quarters, our number one priority is growth, but we'll do it responsibly. There has been no philosophical change in how we run the business to maximize shareholder value over the long term. We continue to be focused on growth while driving improvements in the unit economics of our business. In addition, we're targeting to be free cash flow breakeven for FY 2025. We hope this provides some greater visibility into our financial targets. On our next earnings call, we'll provide more detailed guidance for FY 2024. We believe we're addressing a very substantial market opportunity that is currently underpenetrated and that we'll be well positioned to capture an outsized portion of it. We continue to drive positive business outcomes, time to value, and ROI for our customers.

With that, we'll now move to Q&A. To ask a question, please use the chat feature and post your question directly to IR questions. We're ready for the first question.

Sterling Auty, SVB MoffettNathanson. So really appreciate not only the results but the color on next year. And that kind of brings me to my one question, which is investors are concerned in light of the macroeconomic backdrop that what we're going to see is declining IT budgets for next year. What gives you the confidence beyond what you kind of gave in the prepared remarks driving demand? Or maybe it's the same thing. Why should we see that durability of growth continue throughout next fiscal year?

Thank you, Sterling, for the question. Let's briefly touch on the overall macro environment. We are beginning to feel some impact from it. I’ll outline both the positives we’re seeing and some areas of concern. On the positive side, we continue to grow small and expand. The cohort from seven years ago is still expanding at the same rate as the cohort from two years ago. We’ve also achieved our largest first quarter in company history, with first orders increasing over 75% year-over-year in absolute terms. There's a clear trend towards platforms, and we offer strong ROI, are cost-efficient, and provide quick results. However, we have some concerns to monitor. Like many companies today, we are looking closely at expenses. It reminds me of the cautious approach taken at the start of COVID when companies tightened their budgets. While our first orders remained strong due to the essential nature of our platform, some efficiency-seeking measures are causing a minor contraction. Our gross retention has remained stable over the last four quarters, with no significant changes. Furthermore, while the sales cycle has not prolonged and actually shortened this quarter, we are seeing increased scrutiny on deals. We have emphasized that our primary goal is to grow the company, but we will do so responsibly, as reflected in the improved unit economics of our business. We have two key controls: one is the pipeline, which we monitor closely with comprehensive data on win rates and coverage ratios, and the other is open headcount. We will continue to pursue growth in a responsible manner and regularly assess the factors driving demand.

Thank you for the transparency. I appreciate it.

Thank you very much. Congratulations on a fantastic finish to the year. Sid, I am interested in your thoughts on AWS. The AWS re:Invent conference was enormous. One of the many announcements made, which stood out due to a lack of news, was related to developers. How does that position GitLab? Can you share more about your insights from AWS re:Invent and the opportunities it presents for GitLab, given that AWS did not provide clarity on their strategic investments in the development life cycle space?

Yes. Thank you so much. For sure, like DevOps is hot, like everyone understands that this is the way to make an impact and to bring it closer together to make it more usable, people see that, that is the way to get ahead. So that's great to see. We're getting closer to every single hyperscaler. For us, it was a great event as a company, a very successful event where we connected to a ton of customers. We were also very excited about GitLab Dedicated that we announced. GitLab Dedicated is our single-tenant SaaS platform, and we announced limited availability with general availability in the coming year. GitLab Dedicated addresses a ton of customer use cases for us. Customers can get data residency to get more isolation, private networking, and we're excited to have that in the market and talking with customers. For people wondering about pricing, it's going to be mainly per user with an infrastructure component as well, and we were excited to announce that at re:Invent.

Hi, thanks for taking my question. This is Ethan on for Rob. Sid, I wanted to ask a question around open source projects. It seems like right now, one of your larger competitors hosts a lot of the bigger open source projects that are out there. And so I was curious if you are focusing at all on trying to migrate some of these projects over, trying to encourage new open source projects to be hosted on the GitLab platform as a way to gain more visibility and interaction with the developer community on your platform? Or are you kind of more focused on the commercial side of things right now?

Yes. Thanks for that. We do have a program to host open source projects, and that has many different open source projects on it. Not as many as our biggest competitor. We are focused on winning commercial business. One of our imperatives is to ensure that people also contribute back to GitLab. So we have hundreds of users and customers who contribute back to GitLab every quarter. We're starting a leading organizations program to help them contribute back and to help them even more in doing that. If you want to contrast it, we are focused on hosting closed source software, the software that makes our customers' money, and we are an open core platform, one that benefits from the innovation of all of the users.

Thank you for taking my questions. Brian, this question is for you. We clearly understand that growth is the priority, but you've also mentioned the path to profitability. I would like to learn more about the factors contributing to operating leverage as you aim for free cash flow profitability. I realize this is set for fiscal year 2025, but what will influence that trajectory?

Yes, absolutely. Thanks, Joe. Yes, I guess, number one is, we want to win the DevSecOps platform category, and we're doing that through growth and doing that responsibly. We'll continue to invest as long as our unit economics remain strong. I think we demonstrated that quarter-over-quarter. If you look at the third quarter this year over the third quarter last year, we added $46 million of incremental revenue and did that for $2.3 million less. We also had increased public company expenses, JiHu increases and so forth in there. And so we're continuing to get more leverage out of the model. The more efficiency and scale, the better unit economics we can provide. We land relatively small. But as I mentioned, we expand with those customers over time. Our sales and marketing is getting more efficient as we grow. I think gross margin, we're best-in-class, and there's not a lot to do there. On G&A this year, we absorbed a lot of public company expenses. Thank goodness, D&O insurance has gone down. We have our management and G&A. And so we're building up more at the staff level. And then in R&D, we're just continuing to invest in the platform. As we get larger, we don't have to grow R&D as high in relation to revenue growth. We're looking at things across the entire company and measuring them. We have a lot of internal metrics that we look at, and we're continuing to drive profitability.

Our next question comes from Karl at UBS.

We can skip to the next person and then come back to Karl.

Thanks for taking my question. Sid, first of all, I love the change in your tagline from DevOps platform to the DevSecOps platform, something I think we've all sort of heard in checks in terms of how you guys are resonating with security use cases. Can you just talk about, I guess, the significance of that and how you think about even a security-led sale and maybe even adding even more SecOps functionality?

Yes. Thanks for that, Matt. Security is getting more and more important. And not only is security becoming more important, but people are recognizing that security needs to be an integral part of the DevSecOps life cycle. You need to shift security left. As a DevOps platform, we are leading in the number of features we offer within that security tier. Static and dynamic analysis, container scanning, secret detection; we have the best security offering, and that is resonating in the market. This quarter, we also focused on Govern because it's not enough to just have all the security functionality. When the auditors walk into your company and say, 'Hey, that environment tell me what runs there, who signed off on that code? Did another person sign off on the code? Did you run all the tests?' You need answers. You need documented responses that demonstrate you did that. The alternative for GitLab is building that yourself, and no company wants to do that, especially not in this economy. So, we're super excited that we not only have the most security technology, but we also allow you to prove it did happen.

I wanted to ask about sort of the macro question in the sense that, obviously, headcount expansions are going to reverse. In some cases, there are other cuts. How is it that you're doing well to expand with customers within that? Is that because you're getting greater penetration? Or is it more a function of expansion from an ARPU perspective? And so, we'll start to see that in more ultimate percentage at some point, which has flattened a bit.

Thanks, Michael. I appreciate the question. We have previously discussed that when we acquire a new customer, it usually involves 50 to 100 licenses, although some may have thousands of engineers and grow over time. This is why our cohorts continue to expand. The primary driver behind our net dollar retention rate is seat expansion, followed by upgrades to our Ultimate tier, and then increased revenue from customers. In setting our sales compensation, we do not make a distinction between Premium and Ultimate tiers; our goal is to streamline the buying and selling process. Hence, whether you purchase Self-Managed or SaaS, the pricing remains the same. In terms of accounting, both follow similar revenue recognition principles and require cash upfront. From a sales perspective, our focus is on delivering quick value and business outcomes, allowing customers to achieve strong ROI, as highlighted in the Forrester report we mentioned earlier, which showed a 427% return over three years. While we are not completely shielded from macroeconomic impacts, we are noticing some effects, such as increased scrutiny on expenses. However, since we offer a mission-critical platform that enables faster value realization, companies are shifting towards it, and those investments are proving beneficial.

Great. Congrats on a solid quarter. Brian, could you double-click on the macro and talk about kind of what you're seeing across enterprise versus mid-market versus SMB and maybe kind of U.S. versus international? Just kind of tease out a little bit more around where there's more macro pressure. And then I guess just as a follow-up, we've heard of instances when people make expense reductions. This can be a catalyst to replatform to GitLab. I'm sure that's not a common reason. But are you seeing this as being the case more frequently in this environment?

Yes, let me address the last question first and then move back to the first. This quarter marked our highest first-order volume in company history. The increasing trend towards platform consolidation is a significant factor in the surge of new customers we experienced. As for your initial question regarding enterprise, mid-market, and SMB, our pipeline is robust globally, with no specific regions like Europe indicating difficulties. Our customer base is diverse, so we don’t rely heavily on a few customers for our revenue, and all customer segments are performing similarly. Our exposure to the tech industry is limited, at about 20%, and for startups, it’s under 5%, particularly those with fewer than 200 employees. The unified nature of our platform, whether self-managed or SaaS, with no customization, supports our strategy. The shift towards cloud adoption and cost reduction is beneficial for us. However, we are noticing a slight increase in customer contraction, particularly among companies that previously had significant penetration and made layoffs, leading them to reduce their licenses. We are also experiencing some deals that require more rigorous scrutiny, where approvals from CFOs or other top executives may now be necessary for new software acquisitions.

Can you explain the factors influencing Net Revenue Retention in relation to seat expansion and upsell? Where do you currently see strengths? It appears that some contraction in seats may have impacted you this quarter. You mentioned that upsell might be facing some pressure as well, yet your NRR seems to have remained stable. How is this situation developing? What are the various factors at play here? Please help clarify.

Yes, absolutely. Thanks, Jason. We haven't seen too much change in our net dollar retention rate overall. Seat expansion remains the biggest driver. As I mentioned, the cohort seven years ago that's still expanding at the same rate as a cohort two years ago. Seat expansion is the biggest driver there as well. The second biggest is tier upgrades. We mentioned Ultimate is still 39% of ARR, but growing in excess of 100%. We had a — like I said, we had a really great first order quarter, so that did well. The expansion, as I mentioned, some deals are getting greater scrutiny. So this quarter, we saw a little bit more scrutiny on expansion. But I would say there hasn't been too many dramatic changes in the net dollar retention rate. It's been fairly consistent for the last several quarters.

Thanks for taking my question. Maybe one for Sid. I wanted to go back to the GitLab Govern product that you're talking about. You mentioned vulnerability management. Also, in the press release, you mentioned the supply chain of software. So just curious, does this vulnerability management go to the binary level, the source code level? And the vulnerability management or maybe the visibility, does it go across all applications that may be using similar blocks of source code or binaries? Any sort of help there would be helpful.

Yes, for sure. Thanks for the question. So GitLab Govern vulnerability management, it goes as deep as you expect. We do, for example, container scanning, which are typically binaries. Additionally, in GitLab Govern is also audit events, compliance management. We're working on security policy management, which is in the product but still has some maturing to do. What it helps companies do is to prove their auditing but also to do it every single time. So we see a lot of companies. They bought multiple point solutions for security and use it for some of their applications, some of the time. GitLab helps them do it for every application, all of the time, and prove that to the auditors. That's a big benefit. The ways to do this are to be able to provide the visibility, enforce it, and make it frictionless for the developers and the security personnel.

Yes, it was more towards the end of the quarter. I will note, though, that in the closed deals, the overall deal cycle did not elongate. It actually shortened by a couple of days, but we are starting to notice more scrutiny on some of the deals and requiring more sign off at higher sort of seniority. And so, the linearity for the quarter has been the same as our historicals.

Thank you so much for taking the question. Two parts. One, Sid, can you talk about maybe the significance of the Cloud Seed with Google? Could it further help you maybe competitively against GitHub? And should we think of maybe you adding AWS at some point? And the second part is the GitLab Dedicated. How are you pricing it relative to the multi-tenant offering as I'm assuming that it has maybe a lower gross margin as it's single tenant?

Yes. Thanks for those questions. So Cloud Seed makes it easier to set up all the services that you need with a hyperscaler. It does two things. It simplifies the setup of applications in a way that allows you to do day two operations. Instead of outsourcing everything, you now have control. You have Terraform and everything else that you need to do later on. We're doing it first with GCP, very excited to work with them. We're open to doing it with any hyperscaler, AWS, or Azure. We want to meet our customers where they are, irrespective of the cloud they are using. For Dedicated, it's a great offering. It has additional infrastructure costs. As it's a single-tenant offering, you're not sharing infrastructure like databases with other customers, which comes at a higher cost, and we are pricing that in. Compared to GitLab.com, it's going to be at a higher price. There are certain minimums in the number of seats, and there's an infrastructure cost component to it.

Brian, I wanted to ask about some of your assumptions for the 40% or over 40% revenue growth guidance for next year. NRR has remained around 130% or over 130%. You said land ASPs are up 75% year-over-year. When you think about that over 40% growth guidance for next year, what are some of your assumptions around the expansion side of the equation versus the 130% NRR today? And on the higher land ASP side of the equation, as it relates to the 40% growth guidance?

Let me clarify that the first quarter net ARR grew 75% year-over-year, not the ASP. I want to ensure we have clarity on this. It's encouraging to see such strong demand for first orders in this environment. We are still early in our FY 2024 planning. I am very pleased that we have a predictable business model where about 90% of our revenue is recurring. As of now, there are no changes to our guidance loss, and we can align with current consensus expectations.

Thanks for having me, everyone. I value the insights on fiscal '24 growth and the free cash flow target for fiscal '25. It's great to have those goals outlined, and I appreciate the clarity you’re providing. I want to revisit your point about the sales cycles compressing. At the same time, you mentioned there's increased scrutiny regarding deals. Can you help clarify how this deal scrutiny relates to the accelerating sales cycles? Are the approvals really just more of a minor issue? How does this interplay between sales cycles and the scrutiny you mentioned work? Please help us understand.

Absolutely. There are several different stages in closing a deal, and the review process is getting a little longer, but the overall closed deal sales cycle has shortened by a couple of days. It doesn't have any impact on the financials or the way that you do revenue recognition. Just as we go through it, I wanted to call that out. We called out last quarter. I also want to address that we are starting to feel some of the impacts of the macro and some of the watch points that we're looking at.

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Thanks again once more for joining us, and have a great day.