Thank you for joining us today for GitLab's Second Quarter of Fiscal Year 2024 Financial Results Presentation. GitLab's Co-Founder and CEO, Sid Sijbrandij; and GitLab's Chief Financial Officer, Brian Robins will provide commentary on the quarter and fiscal year. Please note, we will be opening up the call for panelist questions. Before we begin, I'll cover the safe harbor statement. During this conference call, we may make forward-looking statements within the meaning of the federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of the risks associated with these forward-looking statements in our business, please refer to our earnings release distributed today in our SEC filings, including our most recent quarterly report on Form 10-Q and our most recent annual report on Form 10-K. Our forward-looking statements are based upon information currently available to us. We caution you to not place undue reliance on forward-looking statements and we undertake no duty or obligation to update or revise any forward-looking statement or to report any future events or circumstances or to reflect the occurrence of unanticipated events. We may also discuss financial performance measures that differ from comparable measures contained in our financial statements prepared in accordance with U.S. GAAP. These non-GAAP measures are not intended to be a substitute for our GAAP results. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release, which along with these reconciliations and additional supplemental information are available at ir.gitlab.com. A replay of today's call will also be posted on ir.gitlab.com. I will now turn the call over to GitLab's Co-Founder and Chief Executive Officer, Sid Sijbrandij.

Thank you for joining us today. We delivered a strong quarter. Revenue grew 38% year-over-year and we continue to demonstrate significant operating leverage in our model. We also reached a major milestone. Gartner and Forrester issued reports officially recognizing DevOps platforms. This is the category we created, and these reports validate the category's significance and importance. We also proved that the market is moving from point solutions to platforms. I'm thrilled with where these industry analysts place GitLab within the category. We were named a leader in the Gartner Magic Quadrant for DevOps platforms and we scored the highest in our ability to execute of all the participants. We were also the only leader in the Forrester Wave integrated software delivery platforms. These reports show significant momentum for GitLab. We also reinforced a consistent team right here. Customers want to develop better, faster, and more secure software and we want to do more with less. I'd like to discuss key topics today. First, how we're innovating to create further differentiation for our DevSecOps platform. Second, how we're capturing the large DevSecOps opportunity with a strong go-to-market motion. And third, how we are continuing to drive responsible growth in the business, and Brian will cover this topic in even more detail. We helped our GitLab 16 product launch event last quarter. We shared new features and capabilities of our AI-powered DevSecOps platform. We'll also discuss the roadmap for the coming year. GitLab is uniquely able to help companies overcome the complexity of developing software. One area on which we focused was compliance. Our DevSecOps platform helps compliance leaders set the right controls and governance frameworks. We shared several new compliance capabilities. These include centralized policy management, expanded reports and controls, and compliance dashboards. Another focus area was security; GitLab enables companies to strengthen their software supply chain security. Point solutions make it difficult for teams to ship software faster while maintaining strong security. In contrast, our DevSecOps platform enables companies to shift their security practices left and do it earlier in the life cycle. It helps developers catch vulnerabilities earlier in the development process. Please let me provide a customer example. BetterCloud is a market-leading SaaS workflow automation platform. They turned to GitLab to secure their software supply chain. In Q2, they renewed their business with GitLab to consolidate the fragmented tool chain. As a result, BetterCloud deprecated multiple security point solution providers. This strengthened data security posture while also enhancing automation and increasing developer satisfaction. GitLab enables customers to make their software more secure without sacrificing speed. This differentiated value proposition resonates across all verticals. One particular example is the public sector. Speed to mission is imperative in this vertical. GitLab customer Navy Black Pearl demonstrates this value proposition well. Navy Black Pearl is a DevSecOps service developed and managed by Sigma Defense. This service creates mission applications for the U.S. Department of Navy. Black Pearl uses GitLab to quickly create new applications and continuously modify code in response to evolving requirements and priorities. Using GitLab, Navy Black Pearl's teams have designed and created custom operational software environments within days rather than months. Many of our customers have complex security compliance and regulatory requirements. We address these needs with GitLab Dedicated. This is a single-tenant SaaS offering that became generally available in Q2. With GitLab Dedicated, we fully manage and deploy the DevSecOps platform, and this enables customers to save on operational costs. It also provides the control and compliance of a self-hosted solution. GitLab Dedicated offers full data and source code isolation, data residency, and private networking. Let me provide another customer example. One of the world's leading advisory and asset management firms chose GitLab Dedicated over GitHub in Q2. They had a SaaS first initiative. Their security teams would not allow a multi-tenant SaaS solution. They chose us because GitLab Dedicated met their security and compliance requirements. GitLab Dedicated also enabled this customer to accomplish other objectives. These include eliminating duplicate tools, increasing operational efficiency, and accelerating their move to the cloud. GitLab integrates all aspects of software development into the same platform. Customers can improve their productivity and efficiency across the entire life cycle. This includes enterprise agile planning and value stream management. In Q2, we expanded business with a multinational financial services company. The customer wanted to drive greater efficiency by integrating an enterprise agile planning solution with the rest of their software development practices. They moved thousands of business users from Jira to GitLab. AI continues to be a key area of product innovation. We are developing AI-powered capabilities across the entire software development life cycle. Let me share just a few of these capabilities. Code suggestions use generative AI to suggest code to developers; suggested reviewers leverage AI to identify the most appropriate reviewers of code; explain this vulnerability provides details about potential security vulnerabilities in code; and code suggestions are on track to be generally available later this year. We differentiate our approach to AI in several ways. We have a commitment to privacy and transparency in our use of AI and we also deliver AI throughout the entire software development life cycle. Today, we released the findings of our state of DevSecOps study. This study illustrates the importance of our AI differentiation even further. In June 2023, we surveyed more than 1,000 respondents. These included individual contributors and leaders in software development, IT operations, and security. We found that 79% of respondents are concerned about AI tools accessing private information or intellectual property. We also found that developers only spend 25% of their time writing code; that's why we believe delivering AI beyond just code suggestions is essential. The second topic I want to discuss is how we intend to capture the large DevSecOps market opportunity with a strong go-to-market motion. Strategic partnerships are an important part of our go-to-market execution, and I would like to highlight Google Cloud and AWS as two of the most significant. GitLab and Google Cloud are strongly committed to delivering secure enterprise AI offerings across the software development life cycle. We are thrilled to be working with Google Cloud on delivering our vision of AI-powered workflows. We are leveraging foundational models, including the new coding model family to deliver new AI-powered experiences to all users involved in creating secure software. Our partnership with Google extends even further. At this year's Google Cloud Next, we announced our plans to integrate GitLab into the Google Cloud console. GitLab also received the 2023 Google Cloud Partner of the Year Award for the third consecutive year. Google recognized GitLab for our achievements in application development within the Google Cloud ecosystem. Another key partner is AWS. In Q2, AWS introduced support for GitLab in AWS CodePipeline. This is a fully managed continuous integration and continuous delivery service. This new AWS capability allows developers to leverage their gitlab.com source code repository to build, test, and deploy code changes with AWS CodePipeline. Last quarter, we also embarked on our DevSecOps world tour. We're taking GitLab on the road to 14 cities in four countries. These events bring together developers, security, and operations technology leaders. They can learn how organizations use GitLab to build more secure software faster; we're happy to feature many partner and customer speakers. Examples include Delta Airlines, Lendlease, and Cisco. In Q2, we announced the appointment of Chris Weber as our Chief Revenue Officer. Chris brings more than 20 years of sales leadership experience from Microsoft. This includes building multi-billion-dollar sales organizations. Chris’ customer-first approach will be instrumental as GitLab scales in our next phase of growth. In closing, I'm pleased with our second quarter results. They demonstrate continued momentum and solidify our category leadership. With our recent analyst and customer validation, we are well positioned to win in the estimated $40 billion market opportunity. I'd like to thank our customers for trusting GitLab. I would also like to thank our team members, partners, and the wider GitLab community for their contributions this quarter. I'll now turn it over to Brian Robins, GitLab's Chief Financial Officer.

Thank you, Sid, and thank you again for everyone joining us today. I'm very happy with our key metrics in Q2 and that our revenue grew 38% year-over-year. I'd like to emphasize, it’s important driving responsible growth as we achieved over 2,300 basis points of non-GAAP operating margin expansion. We continue to find ways to become more efficient while scaling the business to address our large market opportunity. We also continue to make targeted investments in key product areas. These include security, compliance, AI, and agile planning. Part of our responsible growth strategy is to continue to optimize our pricing and packaging. In April of this year, we raised the price of our premium SKU for the first time in five years. Over that time frame, we added over 400 new features. We believe this better aligns price with value for our customers and the investment we made over the past five years. In the first four months post-launch, customer behavior was in line with our expectations. As a reminder, we anticipate minimal impact to our financials from this change in the current year. We expect the price increase to have a much larger impact in FY '25 and beyond. Looking back at the quarter, I want to touch on customer buying patterns, contraction, and ultimate trends. First, customer purchasing behavior in Q2 was consistent with Q1 of FY '24. We believe buying patterns appear to have stabilized. Second, contraction was lower than Q1 of FY '24 and appears to be stabilizing. Third, and ultimate, our top tier continues to see strong adoption driven by customer wins for security and compliance use cases. Now turning to the numbers. Revenue of $139.6 million this quarter represents an increase of 38% organically from Q2 of the prior year. We ended Q2 with over 7,800 customers with ARR of at least $5,000 compared to over 7,400 customers in the first quarter of FY '24. This compares to over 5,800 customers in Q2 of the prior year. This represents a year-over-year growth rate of approximately 33%. Currently, customers with greater than $5,000 in ARR represent approximately 95% of our total ARR. We also measure the performance and growth of our larger customers, who we define as spending more than $100,000 in ARR with us. At the end of the second quarter of FY '24, we had 810 customers with ARR of at least $100,000 compared to 760 customers in Q1 of FY '24. This compares to 593 customers in the second quarter of FY '23. This represents a year-over-year growth rate of approximately 37%. As many of you know, we do not believe calculated billings to be a good indicator of our business given that our prior period comparisons can be impacted by a number of factors, most notably our history of large prepaid multi-year deals. This quarter, total RPO grew 37% year-over-year to $496 million. cRPO grew 34% to $335 million for the same time frame. We ended our second quarter with a net dollar-based retention rate of 124%. As a reminder, this is a trailing 12-month metric that compares the expansion activity of customers over the last 12 months with that same cohort of customers during the prior 12-month period. The ultimate tier continues to be our fastest-growing tier, representing 42% of ARR for the second quarter of FY '24, compared with 39% of ARR in the second quarter of FY '23. Non-GAAP gross margins were 91% for the quarter, which is consistent with the preceding quarter. This is a slight improvement from the second quarter of FY '23. SaaS represents over 25% of ARR. We have been able to maintain best-in-class non-GAAP gross margins despite the higher cost of SaaS delivery. This is another example of how we continue to drive efficiencies in the business. We saw improved operating leverage this quarter, largely driven by realizing greater efficiencies as we continue to scale the business. Non-GAAP operating loss of $4.3 million or negative 3% of revenue compared to a loss of $27 million or negative 27% of revenue in 2Q of last year. This includes an operating loss of $3.2 million for JiHu, our JV and majority-owned subsidiary. On a stand-alone GitLab basis, the operating loss was $1.1 million. We generated positive operating cash flow of $27.1 million in the second quarter of FY '24, compared to a $36.3 million use of cash in operating activities in the same quarter of last year. Now let's turn to guidance. We're assuming that the trends in the business we have seen over the last few quarters continue. There has been no change to our overall guidance. For the third quarter of FY '24, we expect total revenue of $140 million to $141 million, representing a growth rate of 24% to 25% year-over-year. We expect a non-GAAP operating loss of $6 million to $5 million, and we expect a non-GAAP net loss per share of $0.02 to $0.01, assuming 155 million weighted average shares outstanding. For the full year FY '24, we now expect total revenue of $555 million to $557 million, representing a growth rate of approximately 31% year-over-year. We expect a non-GAAP operating loss of $33 million to $30 million, and we expect the non-GAAP net loss per share of $0.08 to $0.05, assuming 154 million weighted average shares outstanding. Excluding the impact of JiHu, it's likely that GitLab will reach breakeven on a non-GAAP operating income basis in the third quarter of FY '24. On a percentage basis, our new annual FY '24 guidance implies a non-GAAP operating improvement of approximately 1,500 basis points year-over-year at the midpoint of our guidance. We believe that our continued focus on responsible growth will yield further improvements in our unit economics. We remain on track to achieve free cash flow breakeven for FY '25. There are a number of drivers we are introducing that we believe should help fuel our business in FY '25. I touched on the first one earlier, which is the price increase in our premium tier. Additionally, in Q2, we started enforcing user limits on our free size tier. It's early, but we have seen additional free users upgrade to premium. The third driver is the launch of Dedicated. This allows us to address new opportunities for companies with complex security and compliance requirements. Finally, we plan to monetize our AI capabilities by launching an add-on that will include code suggestion functionality later this year. Separately, I would like to provide an update on JiHu, our China joint venture. Our goal remains to deconsolidate JiHu. However, we cannot predict the likelihood or timing of when this may potentially occur. Thus, for modeling purposes for FY '24, we now forecast approximately $25 million of expenses related to JiHu compared with $19 million in FY '23. In closing, I'm pleased with our continued business momentum. We believe the value proposition of our market-leading DevSecOps platform is resonating in the market. Looking forward, we continue to prioritize driving revenue growth in a responsible manner.

To ask a question, please use the chat feature and post your questions directly to IR questions. We're ready for the first question.

Hey, guys. This is actually Billy Fitzsimmons on for Sterling Auty. I kind of say you look great, and I hope you're doing well. In terms of the question, Sid for you, obviously, a few months ago, the firm had discussions with investors to talk through the generative AI-based products, and then you gave us an update on Duo in AI in the prepared remarks. But maybe double-clicking and going a little deeper, and I can imagine we're still in the early innings here. But curious if you could talk through early customer feedback on these products' adoption trends, what you're hearing and seeing? And then if I could sneak another one in, maybe for you Brian. Obviously, earlier this year, you announced a price increase and in the way that's structured a lot of that won't be felt until fiscal 2025 and 2026. But now that it's been several months, can you maybe give us an update on kind of what you're seeing and hearing from customers on the price increase, retention trends, and stuff like that? Thank you.

Thanks for the question. And the early feedback to Duo has been very positive. Customers get that they need AI features not just for coding, but they need it throughout the DevOps life cycle. We've just published a report actually, we're publishing it today, the state of DevOps. Even for developers, which is only kind of a third of a DevSecOps platform, only 25% of their time is spent coding, 75% of their time is elsewhere. So it's really important to have a set of features throughout the life cycle. We're really happy that we have 10 features out there already, and some of the oldest feature we have, suggested reviewers, has over 100,000 users today. So we're excited about progressing that further. It's great to see that customers recognize that they need a suite of AI features, and therefore, we're excited about Duo.

Regarding the price increase, during our last quarter call, we only had a month of data available. I'm pleased to report that we now have three months of data for this quarter, and I am satisfied with the results, which have met or slightly exceeded our expectations. We implemented the price increase to align with the addition of 400 new features to our platform, reflecting the value we offer our customers. The guidance we provided for this quarter and the full year incorporates this impact. When we announced the price increase, we mentioned that due to the predictable nature of our revenue and upcoming renewals throughout the year, the impact in fiscal year 2024 would be minimal, with the majority of the effect anticipated in fiscal year 2025 and all effects fully realized in fiscal year 2026.

Hey, good evening everyone. From a broader viewpoint, could you discuss our current position regarding a couple of factors? First, the speed of new application development, especially with cloud optimization appearing to slow, but still ongoing. Also, what is your perception of developer seats as a driving factor for us?

Yeah. I'm happy to go through the seats and then Sid, if you want to go through application development that would be great. Just on the seats in general, I would say that we've seen more stabilization in Q2 over Q1. With that said though, the buying patterns of customers have changed, right? And we talked about this a number of different quarters. People are buying for what they have currently hired today and they're only buying for products that they have funded in the plan. We factor that into our guidance, the overall macro. And so that's included in our third-quarter guidance as well as the full year guidance. Maybe you can just repeat your question on the application development for Sid, that would be great.

Sure. Sid, the question was to the extent that we've seen cloud optimization slowing, I think, but maybe not done. Where do you think we are in terms of the pace of application development in the cloud and how that is or isn't helping to drive your business? I think cloud optimization has impacted consumption patterns significantly, but we were less affected by that. We have seen a decline in the expansion of hiring more developers, which has been a challenge for us. Regarding the transition of application development to the cloud, I believe we still have a long journey ahead. We frequently collaborate with major companies, and they still have numerous systems that need to adopt modern practices. Many are not yet using DevOps or cloud-native solutions, so there is still substantial progress to be made.

Thank you for taking my question. Hey, Brian, one for you. Just a great job on the operating leverage side. Just wanted to understand puts and takes in 3Q and the rest of the year on that operating margin line, notwithstanding JiHu, which I know is going to hopefully be deconsolidated at some point.

Yeah, absolutely. Thanks, Joel, for the question. Sid and I have been very consistent in our messaging before we went public in every quarter since going public, that our number one goal is to grow, but we'll do that responsibly. I'm super happy with the increased operating leverage that we continue to get in the business. This was a big milestone for GitLab this quarter. We achieved a non-GAAP EPS of positive $0.01. Every other quarter, we've actually lost money. In Q2, just to show the operating leverage, we delivered approximately $39 million of incremental revenue over 2Q of last year. We did that with $16 million of additional expense. If you look at the first half of this year versus first half of last year, we've delivered approximately $130 million of revenue with only $70 million of additional expense, and both of those were adjusted for JiHu. In my prepared remarks, I did say it's likely that we'll reach non-GAAP operating income positive in 3Q. We also reconfirmed and committed to being free cash flow positive in FY '25.

Great. Thank you very much and thanks for taking my question. Brian, I just wanted to touch on the macro a little bit more. I appreciate the commentary and noting that NRR contracted again a little bit sequentially. So any guideposts you can put or rails around where that might go? I think you gave us a lot of indications around stabilization with behavior being consistent, some of the other metrics that you threw out. So just want to understand maybe where that NRR might bottom? And then for Sid, as you talk a little bit about the SaaS offering, noting it's still only 25% of your ARR, maybe help us understand what some of those key features might be that will drive more incremental SaaS demand. Thanks, guys.

I'll address the NRR question first and then let Sid respond to your second question. As I mentioned earlier, we noticed some stabilization in Q2 compared to Q1. Customers are buying only what they need right now. The decrease in the net dollar retention rate is due to the fact that last year, they were purchasing much more. I'm pleased to report that every year since our launch, we have continued to grow. Customers are still increasing their purchases year-over-year compared to their historical buying patterns. I've previously mentioned that a critical point in our business was around contraction, especially in our premium seats. This quarter, I'm pleased to say we experienced a strong expansion period. Contraction has stabilized, and churn has consistently been low. Both factors are considered in our guidance moving forward. We didn't specify a target number or predict where it might level off. However, contraction began in the last quarter of last year, and we are about three quarters into that trend. The average contract length is just over 14 months, so I anticipate it will take another quarter to a quarter and a half to fully adjust to the new buying patterns.

Thanks for that question. Rob, I understood it as like what's going to drive self-managed revenue to SaaS revenue. I see two big things: I see Dedicated, our new offering, which is single-tenant SaaS. We have gitlab.com, a multi-tenant SaaS, but to address the most complex compliance requirements. We're super excited about this new offering, and it's a great way to get our biggest customers with the most complex requirements up to the SaaS platform where we maintain it for them. Another driver of the move to SaaS can be additional functionality for self-managed. We call this GitLab Plus, and for example, some of the AI features will require a connection to GitLab SaaS in order to consume them. There are more features that we've thought about but not yet launched, but additional features to kind of get a hybrid installation. Some of it is on-prem, and some of the new features are SaaS provided in the cloud and kind of gradually move those customers over.

Hey, guys. Thanks for taking the question. I wanted to ask about the analyzed category. When I looked at the investor presentation, it looks like this is a new category on the product page in the investor deck, and I really wanted to focus on the metrics logging and tracing. And I guess could you categorize what type or maybe category of vendor would you be competing with this product? And why would a customer go to GitLab for metrics, logging, and traces versus maybe some of the other traditional vendors in that category? Thank you.

Thank you for the question. Specifically regarding metrics logging and tracing, which falls under the application performance management category, we recognize competitors like Datadog and New Relic. Initially, our features will be quite basic with early functionality, so we are not directly competing with these larger vendors at this stage; rather, we are addressing non-consumption. Many customers might opt not to implement logging and metrics at all, given the initial simplicity of our offerings. However, due to our open core model that encourages customer contributions, we expect to see increased input over time. For instance, our latest monthly release, GitLab 16.3 in August, featured 237 contributions from our customers throughout the platform. As we move forward over the years, we anticipate substantial improvements in functionality, with the objective of becoming a best-in-class option that can effectively compete with established solutions.

Just one follow-up, if I may there. You mentioned APM just thinking a little bit further out; would there be any plans to maybe go into infrastructure monitoring or log analytics too? Thanks, Sid.

Yeah. If we do logging, logging analytics makes sense to me as a category. If you look at infrastructure, we already have infrastructure scope functionality. For example, our Terraform support. So certainly something that has our attention.

Great. Thanks, guys. You've talked about vendor consolidation as a key opportunity for GitLab for some time. That theme has definitely popped up more across the software landscape since the macro hit over the last few quarters. Just wondering if that kind of cadence of business for you guys just picked up, if you have any metrics to share at all in terms of like a percentage of expansion business growing in terms of vendor displacement? And then I have a quick follow-up.

Yeah. Thanks for that. I'll let Brian add to my answer, but I think what we're seeing is that the market is starting to get it. I think the introduction by Gartner and Forrester of this category of DevOps platform is going to be a real tailwind for us because it signifies to customers that this is the future. If you look at our 2022 state of DevOps report, 69% of organizations said they wanted to consolidate tool chains, but they don't want to compromise on functionality. So as GitLab gets more complete and is able to take on more point solutions, that is an amazing trend that the customers want to consolidate. Now that the analysts are saying it, we hope to go from kind of the early adopters to the early majority in that.

Yeah. Just to say a couple of extra words to what Sid said is absolutely. I think we're seeing this sort of in the customer journey. They're landing on premium; they're landing relatively small; they're actually then expanding to division departments within the company then ultimately upgrading Ultimate. The customer journey continues to show. Despite the macro when you think that people wouldn't be selecting a new technology or a new platform, this has really caused people to evaluate how they're developing software and exploring ways to make software better, faster, cheaper, and more secure.

Great. And just a follow-up is last quarter; you guys talked about more C-level involvement in purchase decision-making. Just curious how you've maybe tweaked the go-to-market to adopt to that environment, especially in light of kind of new leadership in place and maybe what kind of tweaks you'd be looking in the second half of this year?

Yeah. We don't have any major disruptions planned. It's been a very seamless transition in our go-to-market. But we are focused on those C-level buyers. One thing we do is a value stream assessment where we go in to the customer, map all their existing tools and kind of how we can gradually replace that so that it's not a big bang, but they get it as renewals come up as we solve their biggest problems. Their biggest problems can be like my Jenkins installation can be upgraded, and it's a problem; or I'm behind on security, so I need to integrate a set of security tools. Where I have the security tools, is the compliance there? I can prove that. Depending on what their needs are, we make a plan with them, and that frequently goes up to the highest level in the organization. Typically, middle management is engaged with kind of keeping their DIY solution up in the kind of up and running. So it's important for us to talk to those decision-makers at the top.

Okay. Great. I have a question for Brian and one for Sid. Brian, your revenue forecast for the third quarter is $141 million at the high end, which is only a slight increase from your actual results in the second quarter. Usually, we see a double-digit percentage increase. I wanted to know if there was anything in the second quarter that seemed like a one-time event or if there's anything on your mind for the third quarter that you would like to mention. After that, I’ll ask Sid.

Yeah. Thanks for that, Karl. There was nothing there was, if you look at 2Q revenue and go through, there was nothing that was anomalous in the revenue. I would just say 2Q is an actual and 3Q's guidance.

Yeah. Okay. Makes sense. Hey, Sid, you called out a Jira displacement in a large multinational bank. You don't often hear that, and I think you and Brian have often said over the last couple of years that it's very early stage for GitLab to be displacing Jira software. Is there a change in that cadence?

We're getting closer now. This was a proof point for us. The customer, as far as I know, is very happy with the change. So we've gone from this being something we hoped for to something that's happening. And what's happening is that people are moving from point solutions to a platform because you can get the cycle time up. Our enterprise portfolio management is good enough to replace Jira in any instances. Companies are also going from having very complex work streams in Jira that need lots of human sign-offs to automating more. For example, all those security scans or compliance management that, for example, you're going to force that every piece of code is reviewed by two people. Instead of signing off and checking boxes in Jira with people, you can automate that, and that's what is also enabling us to do that.

Thank you for taking my questions. Sid, it's great to see you looking well. I wanted to follow up on Brian's comment regarding customer behavior and the premium price increases being in line with expectations. Can you elaborate on that? Does it mean customers are accepting the price increases? Are you observing any movement towards the Ultimate plan? I'd appreciate some clarification on what "in line with your expectations" signifies.

Yeah. Absolutely, Matt. When we did the price increase, we did an internal model that looked at bookings, churn, and we came up with what we thought our forecast would be on the overall net bookings. I would say overall bookings are more positive than our internal forecast, and churn is less. So we're seeing positive signs on every element of how we modeled it from a bookings and churn perspective. Thanks, everyone. We appreciate your time today, and please reach out if you have any further questions.

That concludes our 2Q FY 2024 earnings presentation. Thanks again once more for joining us, and have a great day.