GitLab Inc.

Hello to those of you just joining, we will be starting in about one minute welcome to today's call again, please stand by will be starting momentarily thanks very much. Thanks for joining us today for GitLab's third quarter 2022 financial results. Today, GitLab's co-founder and CEO, Sidzi Brandi, and GitLab's chief financial officer, Brian Robbins, will provide commentary on the quarter. Please note, we will be opening up the call for panelist questions. To ask a question, please use the chat feature. Post your question directly to the IR chat channel using the dropdown menu. With that, I'll turn the call over to Taylor Giles of the Blue Shirt Group to cover the safe harbor.

Thank you, Kevin. Before we begin, 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, we encourage you to refer to our earnings release distributed today and our SEC filings, including our quarterly report on Form 10-Q for the fiscal quarter, which ended October 31st, 2021. Our forward-looking statements are based upon information currently available to us. We caution you not to place undue reliance on forward-looking statements and we do not undertake any duty or obligation to update or release any revisions to any forward-looking statements or to report any future events or circumstances or to reflect the occurrence of unanticipated events. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. generally accepted accounting principles. referred to by the Securities and Exchange Commission as non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for our GAAP results. We believe these non-GAAP financial measures assist management and investors in evaluating our performance and comparing period-to-period results of operations as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release submitted to the SEC. These reconciliations together with additional supplemental information are available at the investor relations section of our website. A replay of today's call will also be posted on the website. I will now turn the call over to GitLab's co-founder and chief executive officer, Sid Sebrandy.

Thank you for joining us for our first quarterly earnings call as a public company. We had a great quarter and we're excited to share today we exceeded our own expectations for the third quarter of fiscal year 2022 with revenue of $66.8 million. This represents revenue growth of 58% year over year this quarter. Our dollar-based net retention rate was above 130%, reflecting the significant return on investment that GitLab provides to our customers. As we look forward, we are seeing continued strong momentum for customers adopting the DevOps platform, and we feel we are still early in a large and growing market. I want to take a moment to express my gratitude to our investors, customers, the wider community, and team members. We are excited to share more details with you about the quarter and our overall business. But first, I want to reflect on our initial public offering. I believe we are the first all remote and most transparent company to go public. Our value of transparency has been prevalent as we've scaled the business. One example of this transparency is our publicly accessible handbook, which is more than 2000 web pages documenting how we run GitLab. Another example of our transparency took place on listing day, October 14th, 2021. GitLab was the first company to publicly stream its entire end-to-end listing day at NASDAQ. You can watch the recording of the live stream by searching GitLab history. While our IPO was a major milestone for GitLab, it was one of the many important steps in the evolution of the company. Because this is our first earnings call, I thought it might be helpful to go over the history of DevOps. I'll explain the value that GitLab provides and tell you about the large market opportunity with enduring tailwinds that we believe we have in front of us. In a world where software defines the speed of innovation, we believe every company has to be great at developing, securing, and operating software. We also believe that to remain competitive, organizations in every industry must digitally transform. This represents a dramatically different approach to software development and operations, known as DevOps. DevOps is a set of practices that allow development, security, and operation teams to collaborate and work together to shorten the software development lifecycle, typically from months to hours. As DevOps adoption increases, the tools for it continue to evolve. I'll explain the evolution of DevOps tool sets in four phases. The first phase was bring your own DevOps, where each team selected their own tools, which caused problems when teams tried to work together. This was because each team was not familiar with the tools of the other teams. The second phase was best-in-class DevOps, where organizations standardized on the same set of tools, but struggled to quickly move software changes through the tools. So teams moved to a third phase, which required doing a set of custom work to integrate DevOps point solutions together in a do-it-yourself DevOps solution. In this phase, tools were not designed to use the same concepts, so they never fit quite right and were hard to maintain. I believe the true potential of DevOps was not fully realized in any of these phases. A single platform approach is needed to improve the team experience and to improve business efficiency. GitLab, the DevOps platform, is the fourth phase of this evolution, replacing DIY DevOps and allowing for visibility and control over all stages of the DevOps lifecycle. According to Gartner, by 2024, 60% of organizations will have switched to a DevOps value stream delivery platform to streamline application delivery versus 20% in 2021. Based on our own calculations, and as we mentioned during our IPO, we believe we have a $40 billion market opportunity for our DevOps platform. GitLab as the DevOps platform allows teams to collaboratively and efficiently plan, build, secure, and deploy software in one application. With one user interface and a unified data model, teams across development, security, and operations can use GitLab for every stage of the software development lifecycle. GitLab replaces the need for teams to switch between tools, allowing companies to cut their complex point solution tool chain. We believe our single application helps companies to deliver software faster, improve organizational efficiency, and reduce security and compliance risks. The DevOps platform also enables our customers to manage and secure their entire DevOps workflow across any hybrid or multi-cloud environment. This enables our customers to select the best cloud provider for their applications, and it allows our customers to avoid vendor locking and over-reliance on a single cloud vendor. We believe this provides us with a competitive advantage to help empower our customers to embrace the full benefits of a multi-cloud strategy. In 2020, Gartner created a new market category for DevOps tools called the value stream delivery platforms. GitLab's position as the pioneer in the market of DevOps platforms is evidenced by the fact that in October 2021, Gartner listed GitLab as a representative vendor for their market guide for value stream delivery platforms for the second year in a row. At GitLab, we prioritize and are extremely effective in improving the platform. We have a dual flywheel development strategy that leverages both our research and development group and our open core community. By leveraging the power of each, we create a cycle and more contributions lead to more features, which leads to more users, leading back to more contributions. As an example of this innovation, in the third quarter, we introduced over 100 new features. A few of our top new features are GitLab Operator, which enables customers to standardize their deployment and manage the full lifecycle of GitLab on Kubernetes-based platforms, including Red Hat OpenShift. In addition, this feature lays the foundation for automating common tasks, which we believe ultimately reduces the total cost of ownership. Another new feature is GitLab's proprietary next-generation static application security testing engine. This new engine was built in-house to enable customers to detect and eliminate security risks faster than before. We also released improvements to the Wiki experience with the new what you see is what you get markdown editor. This rapid increase in features in the DevOps platform enables customers to use GitLab for more tasks, replace more point solutions, and achieve a faster cycle time. The DevOps platform delivers positive business outcomes for a very wide range of customers, from single users to tens of thousands of users, from small organizations to Fortune 500 companies. GitLab's wider community is spread across every geography and across a wide number of verticals, including the public sector. most people start using GitLab with our industry-leading source control and testing functionality. After they start using GitLab, customers often expand their usage in the platform, realizing that they no longer need the custom toolchain with individual point solutions. I'm proud to share that in the third quarter, we added 425 base customers. Some of the new and expand logos include Suzuki Motor Corporation, Smartsheet and Lockheed Martin. Let me give you a few examples of expansion at other companies. In Q3, we had many expansions with our public sector clients. We continue to play a critical role for our government contractors supporting a military program. The contractor migrated 2000 users to a single integrated DevSecOps environment. Another key license expansion was with one of the largest logistics, e-commerce and business services companies in the world. They continue to expand enterprise modernization initiatives with GitLab in Q3. This expansion of GitLab DevOps platform reduced development cycle time from ideas to release and accelerated their data center consolidation efforts. I'd like to highlight another expansion from a major telecommunications customer. The customer added more development teams to GitLab, which further simplifies their tool chain infrastructure. The team was able to reduce their complete data center deploy process to under eight hours. And because of that streamlined deploy and build process they enabled using GitLab, I believe that a platform solution that integrates security is the future. In today's threat landscape, you need to secure 100% of your applications and 100% of the time. We believe that the only practical way to do that is to integrate security into the platform. And GitLab's DevOps platform does this. In Q3, we also welcomed our newest board member, Sonny Betty. Sonny is the chief information officer and chief data officer at Snowflake, and we're very pleased to welcome him to the GitLab board of directors. On November 10, we shared that my co-founder and the creator of GitLab, Dmitry Zaporozhets, made the decision to leave his position as engineering fellow after completing his personal commitment of 10 years to GitLab. I'm excited to continue to lead GitLab and build on what we created. I would like to thank Dmitry for all of his contributions. And I'll now turn the call over to Brian Robbins, GitLab's Chief Financial Officer.