Thank you for joining us today for GitLab's Fourth Quarter of Fiscal Year 2024 Financial Results Presentation. GitLab's Co-Founder and CEO, Sid Sijbrandij; and GitLab's Chief Financial Officer, Brian Robbins, will provide commentary on the quarter and the 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 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 US 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 had a strong fourth quarter with 33% revenue growth. We now have 96 customers with ARR over $1 million, up from 63 one year ago. And we continue to see that large enterprises, like Barclays and Blue Halo, are standardizing on GitLab. Speed, productivity, and security are critical for our customers. With GitLab, customers see seven times faster cycle times with 80% fewer code defects. Today, I'd like to discuss our progress this quarter in three key areas. First is our security and compliance capabilities. From secure source scope management and security scanning to GitLab Dedicated, our platform helps customers establish more secure and compliant software development practices. Second is our AI offering, GitLab Duo, which integrates AI throughout the software development life cycle. And third is our Enterprise Agile Planning offering, which expands our platform to users outside of software engineering. Let's start with security and compliance. These are at the heart of our platform and set us apart from the competition. This quarter, we released Remote Development Workspaces into general availability. These workspaces are consistent, reproducible environments that help developers get started faster. This also increases security because it limits the need to clone code to end-user devices. Customers come to GitLab to replace security point solutions. With most point solutions, code isn't scanned at the time it's written that causes friction for developers and increases the time required to find and fix vulnerabilities. T-Mobile recently moved 25,000 projects into GitLab over just two months and increased their security scans to hundreds of thousands per month. Now that they are integrated into GitLab, T-Mobile is looking forward to leveraging GitLab Duo to increase engineering efficiency even more. Oxa, a global provider of autonomous vehicle software, upgraded to GitLab Ultimate in the quarter. The company wanted to modernize multiple developer and security tools, including version control, CI/CD, and more. With GitLab Ultimate, Oxa is now able to detect potential security issues earlier in the development process, which is a major game for Oxa, which works in a complex and safety-first environment. Another example is CACI International, a national security company and a leader in agile software development. GitLab allows CACI to deliver more efficiently in an agile development environment and makes it easier to comply with emerging federal regulations. GitLab Dedicated is our single-tenant SaaS solution for customers who need to comply with data isolation and residency requirements. I'm excited to see adoption grow since we made it generally available last year. Organizations like Southwest Airlines are choosing GitLab Dedicated to get the best of both worlds. The security of a single-tenant environment plus the benefits of a SaaS offering that's updated and backed up by GitLab. On to AI. Secure AI is a core part of our platform vision. We enable our customers to adopt AI responsibly. AI helps teams write more code faster. But more code isn't better if it's not secure and high quality. That's why GitLab Duo helps teams not only write code but also understand code and fix vulnerabilities more effectively. Having the broadest DevSecOps platform allows us to add more AI features and deliver more value to our customers. In a recent Omdia Market Radar report on AI-assisted software development, GitLab Duo had the most currently available features of any DevOps platform. Organizations like NatWest, Ultragaz, and Magic Leap have invested in GitLab Duo to help them drive efficiency while also ensuring robust security and code quality. Another example is a major telecommunications company in Asia that was looking to boost productivity with AI-powered features, not only in coding but across the entire software development life cycle. After testing Code Suggestions for one month and seeing positive results, in Q4, the company invested in thousands of GitLab Duo licenses to improve engineering productivity. After releasing GitLab Duo Code Suggestions into general availability last quarter, we recently released the beta of GitLab Duo Chat. GitLab Duo Pro now also includes organizational controls that help companies adopt AI responsibly, and we are now selling GitLab Duo Pro for $19 per user per month. We recently launched the GitLab AI Transparency Center to enable our customers to confidently harness the potential of AI with GitLab. The AI Transparency Center documents how we built GitLab Duo Pro to accommodate the right model for the right use cases. It also demonstrates our commitment to transparency and protection of customer data and intellectual property. I'd now like to discuss our improvements in Enterprise Agile Planning. We're hearing from more and more customers who want to rethink how they do planning. They want the planning in the same platform where the engineering work to deliver on the planning is happening. Early in Q4, we launched a new Enterprise Agile Planning SKU. Now customers can get even more value out of GitLab by bringing everyone into a single secure platform. For example, a leading 3D modeling software company upgraded to GitLab Ultimate in Q4 and purchased additional Enterprise Agile Planning seats so they can move their sales team out of Jira and onto GitLab. Finally, on the leadership side, we're excited to welcome Sabrina Farmer as Chief Technology Officer. Sabrina has 25 years of experience and joins us from Google, where she was directly responsible for the reliability and performance of Google's products and infrastructure. I look forward to the impact Sabrina will have across the company. In closing, we're well positioned to win in the estimated $40 billion market opportunity in front of us. I'd like to thank all our customers, partners, team members, community members, and investors for their support. And with that, I'll turn it over to Brian Robbins, GitLab's Chief Financial Officer.

Thank you, Sid, and thank you again for everyone joining us today. I'll start with a brief recap of our full year and quarter results. In FY 2024, total revenue grew 37% to $580 million. Our growth continues to be driven by our land and expand motion. Our dollar based net retention was 130% in Q4. We delivered on breakeven free cash flow a year ahead of our commitment with free cash flow of $33 million in FY'24. In addition, on a standalone basis, excluding the impact of JiHu, our JV and majority-owned subsidiary, we recorded our first year of non-GAAP operating profit. We are thrilled to have achieved these milestones. These are a testament to our philosophy for responsible growth. Our fourth quarter revenue grew 33% year-over-year, and we delivered over 1,900 basis points of non-GAAP operating margin expansion. Looking back at the quarter, I want to share some of the areas we've been closely monitoring. These include customer buying behavior, contraction, and Ultimate performance. In comparing Q4 with Q3 of FY'24, we've seen improved buying behavior across all customer sizes. In particular, performance with our enterprise customers exceeded expectations. We had a record quarter for $100,000 ARR and $1 million ARR customer net adds. While the spending environment remains cautious, we believe we are starting to see buying behavior normalize with accelerated adoption of our DevSecOps platform. Churn and contraction during Q4 also improved for the fourth consecutive quarter and is even better than levels we saw six quarters ago. And finally, we continue to see strong growth in Ultimate, our top tier. Ultimate represented over 50% of Q4 ARR bookings driven by customer wins for security and compliance use cases. Now turning to the numbers for the quarter. Revenue of $164 million this quarter represents an increase of 33% organically from Q4 of the prior year. We ended Q4 with over 8,600 customers with ARR of at least $5,000 compared to over 8,100 customers in the third quarter of FY'24. This compares to over 7,000 customers in Q4 of the prior year and a year-over-year growth rate of approximately 23%. Currently, customers with over $5,000 in ARR represents 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 and $1 million in ARR with us. At the end of the fourth quarter of FY'24, we had 955 customers with ARR of at least $100,000 compared to 874 customers in Q3 of FY'24. This compares to 697 customers in the fourth quarter of FY'23, a year-over-year growth rate of approximately 37%. At the end of FY'24, we had 96 customers with ARR of at least $1 million compared to 63 at the end of the prior year, which represents a year-over-year growth rate of 52%. As many of you know, we don't believe calculated billings to be a good indicator of 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 55% year-over-year to $674 million. cRPO grew 40% to $430 million for the same time frame. We ended our fourth quarter with a dollar based net retention rate of 130%. As a reminder, this is a trailing 12 month metric that compares the expansion activity of customers over the last 12 months with the same cohort of customers during the prior 12 month period. Non-GAAP gross margins were 92% for the quarter. SaaS represents over 25% of total revenue and grew 52% year-over-year. 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. Q4 non-GAAP operating profit was $13.2 million or 8% of revenue compared to a loss of $13.8 million or negative 11% of revenue in the fourth quarter of last year. This includes an operating loss of $2.1 million for JiHu. On a standalone GitLab basis, Q4 non-GAAP operating income was $15.3 million or 9% of revenue. Cash from operating activities was $24.9 million in the fourth quarter of FY'24 compared to a $11.7 million use of cash in operating activities in the same quarter of last year. Free cash flow was $24.5 million in the fourth quarter of FY'24 compared to negative $12.8 million in the same quarter of last year. Free cash flow is defined as net cash from operating activities less cash used for property and equipment, excluding nonrecurring items. Turning to guidance, I'd like to make a couple of comments. First, we are entering our third year as a public company. As I mentioned, we are seeing normalization buying behavior as a result. I expect our guidance philosophy to be less conservative this year than in the first two years. We want to communicate the right expectations and are sharing guidance accounting for the current environment. Second, as a reminder, every year, we evaluate our standalone selling price or SSP, which determines our upfront revenue recognition rate for license revenue. We have not finished our SSP analysis for the new year so we have not factored any change to SSP in the FY'25 guide. We will share an update at the next earnings call once we have the results of the SSP analysis. With that said, our guidance for the first quarter of FY 2025. We expect total revenue of $165 million to $166 million, representing a growth rate of 30% to 31% year-over-year. We expect a non-GAAP operating loss of $13 million and $12 million. The loss includes an approximately $15 million expense related to our in-person company-wide Summit. As an all-remote company, we're thrilled to bring team members together in the same location for the first time since 2019. And we expect non-GAAP net loss per share of $0.05 to $0.04, assuming 158 million weighted average basic shares outstanding. For the full year FY 2025, we expect total revenue of $725 million to $731 million, representing a growth rate of approximately 26% year-over-year. We expect a non-GAAP operating income of $5 million to $10 million, and we expect non-GAAP net income per share of $0.19 to $0.23, assuming 168 million weighted average diluted shares outstanding. We believe that our continued focus on responsible growth will yield further improvements in our unit economics. We plan to be free cash flow positive again in FY'25, excluding any nonrecurring cash tax payments related to the bilateral advanced pricing agreement. There are a number of drivers we believe will fuel our business in FY'25, which we have included in our guidance. At our core, we see that continuing to deliver customer value with our DevSecOps platform aligns our success with our customer success. Additionally, in April last year, we raised the price of our Premium tier for the first time in five years. Thus far, customer behavior has been in line with our expectations, and we expect to be $10 million to $20 million of incremental revenue in FY'25. Another driver is GitLab Dedicated. GitLab Dedicated allows us to serve companies in highly regulated industries with complex security and compliance requirements. We continue to sign large enterprises on Dedicated. For example, a leading US airline expanded on Dedicated with a seven-figure deal during Q4. The final driver for FY'25 is the monetization of our AI capabilities. GitLab Duo Pro is now in the market at $19 per user per month. Separately, I'd 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 when this may potentially occur. Thus, for modeling purposes for FY'25, we forecast approximately $15 million of expenses related to JiHu compared with $18 million in FY'24. In closing, I'm pleased with our business momentum driven by our market-leading platform approach and commitment to capturing our large market opportunity. We hit major milestones for free cash flow and non-GAAP operating income profit while growing the business. I'm proud of the consistent execution of FY'24. 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.

Great. Thanks for taking my question. I'll ask the kind of the broader economic outlook question right now because, Brian, you did indicate improved buying behavior, record deals above $100,000, above $1 million. And we have seen some unevenness out there. There's still some layoffs happening in high tech. And if I look at your open reqs, it does appear you have somewhat accelerated hiring over the last couple of months. Maybe frame for us, is this your view that things have bottomed in the economy? And maybe provide high-level thoughts around just planning for the upcoming fiscal year relative to sales capacity or other functional areas that you're putting these bodies into. Thanks.

Yes. Absolutely, Rob. Thanks for the question. We are seeing customer buying behavior normalize with particular strength in enterprise. This showed up in our numbers this quarter. A couple of examples I'll go through. One is we're seeing strong expansion within the existing customer base. With dollar based net retention, we had an uptick up to 130% from 128% last quarter. Churn and contraction also continues to improve. It's even better than rates that we saw six quarters ago. In terms of investing in the business, as we said, we're long-term focused as a business, and we plan to continue to grow responsibly. The areas that we're adding new head count within the company are sales capacity and key R&D roles.

Hey, guys. Thanks for taking the question. I wanted to ask a question on operating margin guidance. You finished the year here in the fourth quarter at 8% operating margin, guiding the full year next year at 1%. And then, Brian, given your comment on maybe a little bit less conservative in the guidance for next year, can you maybe walk us through some of the upcoming levers to drive operating margin expansion from here? Thank you.

Yes. Absolutely, Koji. We mentioned in the prepared remarks, we're having our in-person summit this year. That's in first quarter. The estimated expense for that is $15 million. We haven't had an in-person event at the company since 2019. Being an all-remote company, it's really important that we have that. Also in the guidance numbers, we have JiHu, which is roughly $15 million as well. And so for the full year, we guided positive $5 million to $10 million, and that includes the $15 million for JiHu as well as the $15 million for the in-person event.

Thank you very much. We had a great finish to the fiscal year, showing a turnaround from how we started out and ending on a very strong note. It’s encouraging to see the net expansion rate metric rebound. I believe we are among the first in software to experience this positive shift in net expansion rates. cRPO, RPO, everything looks good. Sid, with your new head of go-to-market, what changes should we expect in this full fiscal year as a result of introducing new products, quotas, competitive win rates, new product contributions, and pricing? There are so many positive developments happening at GitLab. How should we prioritize the impact of these factors in your growth strategy for this year? Thank you.

Yes. Thanks, Kash. We're super excited that Chris is doing so well. Him joining is evolution, not revolution. So he is continuing the line. We continue to focus on the customers where we can have the most impact, which are typically the largest customers in regulated industries. And we're super excited about the things you mentioned, all the extra things that we now have that we can start selling. Duo Pro, we introduced but also the planning features that allow customers to put their planning in the platform as well the Enterprise Agile Planning SKU and GitLab Dedicated. I think all these extra offerings we can have are a great addition on top of Ultimate, which is more and more important to us and which resonates more and more in the markets.

So Brian, I have a question for you as I wrap up. Considering all the factors Sid mentioned, why does the guidance appear to be cautious? Is it because we are taking into account the potential impact of these new features and products but lack sufficient data, or are you waiting to see how it unfolds? How should we interpret the guidance? Thank you.

Yes. Thanks, Kash. Yes, we do have a number of growth drivers for FY'25 and beyond. I think you've named a number of them. It takes a while to build pipeline and close deals on new products. And so the total number of revenue that we have for next year for it to make a meaningful impact in a ratable business model is going to take a little while for that to come to fruition. And so we've put all the new products into the guidance. They're relatively new. And so didn't want to put a lot in right now. With the Premium price increase, we're still saying it's roughly $10 million to $20 million of incremental revenue in FY 2025. And then we have Dedicated, Enterprise Agile Planning, and Duo Pro as well. So lots of new growth vectors for next year. It will just take a little while for them to impact the top line.

Thanks for taking the question. One for Sid and one for Brian. Sid and guys, thanks for the continued partnership with Barclays. Look, just on the early indications of Duo Pro, we'd love to hear how demand has trended there. And then how do you think about monetizing AI outside of Duo Pro? Like are you seeing customers who are interested in AI, also more interested in your security features or up-tiering to Ultimate? And then for Brian, just really quick, love to hear what the incremental price increase contribution was for the fourth quarter. Thanks.

Yes. Thanks for that, Ryan. So Duo is resonating in the market and we were really pleased with the Omdia report that we had more AI features than any other platform. We could add value in more cases. And you talk about security and Ultimate, we have the most comprehensive security offering of any DevOps platform that allows us to also release more AI features. And some of these features are not in Duo Pro, but they're part of Ultimate. So Ultimate now has more and more AI features. So AI is helping to drive Ultimate as well because Ultimate, the number one reason why people buy that is because it helps them get more secure, and every feature that is in Ultimate and that is now getting enhanced with AI that AI we give to the customers of Ultimate by default.

We haven't broken out towards the fourth quarter. We just said for next year, it will be roughly $10 million to $20 million in incremental revenue is what we included in our guidance.

Thank you for taking the questions and congratulations on the excellent execution. Sid, I have a question for you regarding whether you are noticing any increased conversions related to agile planning as the end-of-life for the Atlassian server approaches.

Yes. For us, it's a new market. And Brian just talked about new markets. They start slowly and then they accelerate in the outer years. But we talked about a customer switching from Jira to GitLab again in the last quarter. So that's really exciting that we get to talk about that. And we see an increasing pipeline. If customers are able to bring planning to the same platform, they don't have to create all these different connections between their planning tooling and their software creation tooling. With GitLab, it works by default. It's a better experience. There's less ceremony that they need to do. It is one interface, one data source, and that's appealing to customers. We're very excited about our Enterprise Agile Planning SKU that we can sell along with the rest of GitLab.

Thank you for taking the question. I have a two-part question for Brian. Could you explain how much of the 55% growth in RPO is due to price increases versus longer contract lengths? Is there a way to break down those components? Additionally, while I know you won't disclose the Q4 number, since you've wrapped up FY'24, can you provide insight into the pricing impact for the entire year in dollar terms? Is it around 1% or 2% of growth? Any information you can share would be appreciated.

Yes. Let me start with the RPO growth of 55%. The cRPO growth was 40%. Overall, we had a very strong quarter and I am pleased with the performance from a bookings standpoint. As we mentioned earlier, billings and RPO within a quarter do not effectively reflect our core business momentum, as they can vary in relation to revenue based on invoice timing and the length of customer contracts. We had several multiyear deals this quarter, which contributed to the RPO growth. Regarding the pricing benefit, I mentioned it will be between $10 million to $20 million for next year, but we haven't specified the breakdown by quarter and do not plan to do so in the future.

Awesome. Thanks, guys. So you guys talked about how buyer behavior is normalizing, contractions improving. But kind of going off Pinjalim's question around the Premium price increase in that, the impacts that's kind of had in the model. If you look at NRR and you sort of backed out the price increase, would that still sort of be up on a sequential basis? Or is that kind of down excluding the price increases?

Yes, I am happy to discuss the increase in the dollar-based net retention rate, which rose to 130% this quarter. We attribute this increase to three factors: 40% from additional seats, 40% from pricing changes, and 20% from tier adjustments, which is fairly consistent with last quarter. It's worth noting that churn and contraction continue to improve and are better than the rates we observed six quarters ago.

Okay. Thank you.

Yes. Thanks. I think customers have been responding well to Duo. So they're mostly excited about the breadth of our GenAI capabilities, including things like vulnerability summary, vulnerability resolution, root cause analysis. An example is a major telco in Asia. They wanted to boost their AI workflow across their entire development life cycle. And they saw positive results after testing Code Suggestions. And in Q4, they committed thousands to thousands of GitLab Duo licenses to improve engineering productivity all the way through the process.

Thank you very much. So I think in prior quarters, you noted that sales cycles for the SMB mid-market had been elongated. And this quarter, you said enterprise is better than expected. So did SMB continue to be more challenged? Did the sales cycles improve? Just elaborate on what you're seeing in the SMB mid-market segment.

Thanks for that, Shebly. We're seeing customer buying behavior normalizing across the board. We didn't break out the sales cycles for SMB and mid-market in particular. But as I said the churn and contraction, it's best that we see in six quarters. And sales cycles have normalized across the board.

Thanks for that. Brian, regarding your decision to adopt a less conservative stance on the guidance, could you explain the reasoning behind that? Is it because GitLab has grown into a larger organization with a broader scale and customer base, giving you greater clarity? Or is it a response to the current market conditions? I also have a follow-up related to this topic.

Yes. Thanks for that, Karl. Going into our third year as a public company and also seeing the normalization of buying behavior, we'll just be less conservative in the guidance that we're giving out.

Okay. As a follow-up, did you implement that change for the fourth quarter indicating that the stronger performance in January may represent the beginning of this more cautious guidance approach, or is this a shift for the future?

No, it's more going forward. Very happy with the bookings this quarter. We had the largest bookings quarter in company history. There is many first within the quarter. Largest hyperscaler contribution, largest first order, largest Ultimate, and we had a greater number of $1 million-plus deals. There was some linearity in the quarter. Things came more back in, in the quarter than expected.

Hey, great. Thanks for taking my question. Congrats on the results. You mentioned a number of the drivers in the prepared remarks. One that I don't think you talked about was free-to-pay, and I know there's been an increased focus on that. Any update on that sort of focus? Because it really does feel like that's a real long-tail opportunity, but curious if there's anything to mention there.

Yes. Thanks, Matt. We are getting a lot of free-to-pay conversion. However, the numbers are relatively low so they don't come into the base customer count. And if you look at the overall sort of ARR that they're contributing, it's relatively small at this point.

Thank you and congratulations on another great quarter. Really looking forward to the momentum you're seeing. Maybe I build on an earlier question around Duo. Can you help us kind of understand how the attach rate initially is working? And if you look at customers and their use of the product, are you seeing that type of thing where it's getting into people's workflows and kind of the accelerating usage? Or is it still more kind of in experimental stages with customers? And then I guess maybe the adjunct to this is if you look further forward, what do you think makes it sticky? In other words, like once people really get into there, is it going to be easy to switch away eventually? Or is there some reason why this thing like just really becomes like a tick in the system?

Yes. To start with the last part of your question, we are enthusiastic about the number of AI features we can integrate into GitLab because we offer the most comprehensive platform. This allows us to cater to the widest range of use cases. According to the Omdia report, we address more use cases than any other DevOps platform, which I believe will make our solution more appealing to customers. The feedback we've received has been encouraging. Customers like NatWest have chosen GitLab to enhance efficiency while maintaining strong security and code quality. Our clients have reported efficiency improvements of over 50%. We're still in the early stages of our AI journey and anticipate further developments as we roll out Duo throughout the entire lifecycle.

Thank you. So stepping back a little bit in terms of margins, you're going to do more than $700 million of revenue this year and you have 90% gross margins. At your scale, isn't there more margin upside at this scale? I think you may have gotten a little bit of a pass when you were growing more than 30%. But if we're guiding to closer to 25%, 26% revenue growth, you gave a lot of margin expansion last year, shouldn't there be more margin expansion this year?

Yes. Gil, thanks for the question. Super happy with the operating leverage that we've been able to get in the model. This is our second quarter of non-GAAP operating income positive. If you look for the full year FY'24, we generated roughly about $33 million of cash. And even with JiHu, for the full year, we're almost non-GAAP operating income breakeven. And so there's two things I talked about in the prepared remarks that go into the guidance number that we gave for FY 2025. The first thing is our in-person summit, which will be a $15 million expense in the first quarter that we didn't have last year. And then the second thing is we have JiHu that's still in our numbers, which is a noncash expense, which is roughly $15 million as well. And for the full year, $5 million to $10 million is the guidance. And there's $30 million sort of in those numbers, one is noncash JiHu and the other is the in-person summit that will happen in the first quarter.

Great, thanks. Hey, Brian, this is for you. I guess, just looking at these numbers, really impressive, 40% cRPO growth. That was an acceleration from 34%. Last quarter, you had a two-point uptick in net revenue retention rate at 1.30. I guess in the context of this, it looks like your guidance of 25% to 26% revenue growth for fiscal '25 would be conservative. So just two questions. Are there any drags in the model we should be aware of that may not be reflected in the backlog or the trailing 12-month NRR numbers? And then is it fair to say you think that growth tailwinds from pricing and from AI will be higher in fiscal '26 versus fiscal '25?

Yes. Thanks for that, Derrick. As we mentioned earlier, billings and RPO are not very reliable indicators. They are directionally accurate. I am very pleased with the quarter overall. The points you raised are all accurate and valid. The revenue growth of 33% leads us to project 26% next year. This accounts for the buying behavior and the normalization we have observed in the market. We do have a ratable model, and as we enter our third year as a public company, we indicated our guidance would be less conservative than in the previous two years. I believe the combination of new products, the normalization of buying behavior, and the metrics we achieved this quarter creates a strong foundation for next year.

Hey, guys. Thanks for taking the question here. I want to follow up on the comments provided around normalizing trends. Looks like customers with over 5,000 ARR accelerated more than 23%. And while you pointed out strength in enterprise, can you just kind of give us the story in the quarter with respect to enterprise versus last Q4? Was there a higher volume of smaller deals or more big deals? And can you help us think about what a good year would be with respect to net customer add?

Yes. A couple of different points there that I'll talk about. One is the 427 that we add in base customers is pretty much been our run rate. As we indicated in the past, we try to make the selling as well as the buying as friction-free as we can. And so we don't set a quota for Ultimate versus Premium nor do we say you have to sell gitlab.com versus self-managed. And so the amount of customers that come out within a given quarter is just sort of an output of how the quarter gets put together. I did mention very happy with the bookings this quarter. We had a number of first in first order expansion, Ultimate hyperscaler contribution and really happy with the 100,000 customer adds as well as a greater than 1 million customer adds, which was up 52% year-over-year.

Great, thanks for taking the question. So a follow-up question on the price increases that we've been talking about. You're implementing the price increases on GitLab Premium in two phases. The next one kicks in April. So just how should we think about the net benefit of this second phase versus the first phase? And specifically, is it safe to assume that the second phase has less churn, and therefore, a greater net benefit relative to what we've seen so far?

Yes. Thanks for your question, Gray. Overall, we're pleased with the results of the price increase. The impact of the Premium price increase exceeded our internal expectations. We went through and modeled that prior to doing the price increase. And for FY 2024, it came in above what we modeled internally. And so what we told you for FY 2025 was $10 million to $20 million of incremental contribution in revenue over FY 2024. And we've built in the benefit that you've alluded to on the churn and sort of the second tier and so forth of what the assumptions are for that.

Thank you for having me. Brian, my first question is about the guidance, and it's somewhat twofold. I understand you're indicating that there's less conservatism in the guidance now, and I want to clarify that. Is this less conservative outlook applicable to both revenue and operational expenses, or is it mainly focused on revenue? The follow-up is regarding the company's emphasis on profitable growth. Even if I exclude the $15 million from Summit, and I won't remove JiHu since it seems to be a regular expense until it's taken out in the consolidated statement, there's still a significant increase in the implied operational expenses when I consider your guidance. That's what I'm trying to understand on my end.

Yes, thank you. You are right. We have been very consistent since the IPO road show, and our primary goal is to grow, but we will do that in a responsible manner. We have surpassed profitability expectations every quarter, so our focus is more on increasing revenue than on profits. However, the main priority of the company remains growth, and we will continue to pursue that responsibly. You can expect this from us.

Thank you. Hey, guys. Nice to see you both. Brian, just trying to square, I guess, with everybody else the guidance with the less conservative posture comment. In particular, if NRR is trending up and is around 130%, doesn't this imply that NRR would have to decline from here for revenue growth to be in the mid-20s?

There's a number of factors that go into our guidance. We build it from a bottoms-up perspective. And I would just say that what we reported was actuals and what we're guiding to is guidance, right? So it's not comparing apples-to-apples.

Yes. Thanks for that opportunity. So we're winning deals against GitHub because we have the most comprehensive platform. In security and compliance, only we have DAST the dynamic scanning, the container scanning, the API security and the compliance management, the ability to prove that you've done all of that. For example, T-Mobile moved 25,000 software projects to GitLab in two months, and then they were able to start hundreds of thousands of security scans. In planning and management, only we have Enterprise Agile Planning, value stream management, DORA metrics. And because we are better able to address those use cases, we're also able to build AI features that build on that. For example, the ability to explain vulnerabilities and to have the AI suggest a fix. So we're really bullish in competing because we have the broadest platform and because that enables us to do more with AI.

Hi. Thanks for taking the question. When we speak with customers, we hear that consumption associated with compute minutes has the potential to be a really meaningful part of the customer's total spend once they start adopting products like CI/CD. How often are compute and storage considerations factoring into their customer upselling into Premium and Ultimate? And how do you expect newer products like GitLab Duo Pro or Enterprise Agile Planning to affect these needs?

So GitLab does have consumption pricing for that. For us, it's not a material part of our revenue yet. We do allow people to bring their own runners, so to bring their own compute to bear for CI and CD. We expect a lot out of our new SKUs, but the impact is going to be seen over time. So for Duo, the AI features for planning. For Dedicated, the biggest impact is not going to be in the coming fiscal years but in the outer years.

Thank for taking my question and congrats on a very strong finish. Questions for either Sid or Brian. There's more of a back-to-basic question. I know Sid mentioned at the beginning of the call that consolidation is very healthy, right? At GitLab, I was wondering, can you discuss what are the legacy solutions you're consolidating? And what inning are we in now? And how much is left in the tank?

Yes. If you're looking, for example, at Enterprise Agile Planning, by far, the most popular incumbent is Jira from Atlassian. And we're in the very early innings. We've only just started offering this. And we're very encouraged by the progress. A leading 3D modeling company upgraded to GitLab Ultimate in Q4, and they purchased additional Enterprise Agile Planning seats, so they could move their sales teams out of Jira and into GitLab. But it's early innings. Our market share there is just starting to ramp up, and it will take some time. Thanks for the question.

Yes. No, absolutely. Fourth quarter of last year, there was a change in the quarter or two prior to that. And so we actually looked just relatively short-term opposed to over four quarters. Since the buying behavior has more normalized and churn and contraction has been back to where it was six quarters ago, we looked over the entire year to develop our FY 2025 plan.

Okay. Save the best for last. Good. I wanted to talk about the growth drivers, monetizing AI and GitLab regulated were two things that were brought up on the call. I think we tackled profitability with Brian, so let's do growth. When you think about the AI piece, you've said in the past, 25% is spent on coding and 75% is spent on other tasks. I think a lot of attention gets paid to coding with AI. So I'm just curious your observations and feedback, especially on the other tasks piece and how you built that or continue to build that into the product.

Thanks. Yes. So you're exactly right. Developers spend 25% of their time coding, and we're helping them with Code Suggestions, but there's also all these other tasks we can help them with. 75% of their time is spent elsewhere. And for example, GitLab helps you to review an issue. So if there's an issue like this is where you got to work on, GitLab will help you to summarize that issue. There might sometimes be hundreds of comments from stakeholders, and we'll help you kind of digest all of that. And for every developer, there's a security or operations person that we can make more effective as well. For example, GitLab allows you to not only kind of see what vulnerabilities you have, but the AI will help you explain what the impact is and how you could potentially remediate it. We're super excited that the Omdia market radar report shows that we have 38 out of the 43 areas where you could have AI features in the DevOps platform. We have them covered already. That's the best coverage of any vendor. And that's possible because we have the broadest platform to build that on. In closing, I'd like to thank all our customers, partners, team members, community members, and investors for their support. And with that, I'll turn it back to the operator.

That concludes our Q4 FY'24 earnings presentation. Thanks, again, for joining us and have a great day.