Good afternoon, Rob Owens with Piper, and I head up our security infrastructure software research. Really pleased to welcome our next firesighting. I created that word today 'cause you're not presenting. We're firesighting. We're firesighting, but we don't have a fire. Our next chatting company, which is GitLab, and Brian Robins, the CFO. Brian, welcome. Thanks, Rob. Appreciate you having us here this year. Welcome back to Nashville. City's grown quite a bit since you were here years ago. A couple years ago, I attended a conference here. So that's awesome. So at the end of last year, I guess if we, if we go back to last year here, when we sat- Mm-hmm ... on stage in this room, you were at a point where you just weren't seeing it yet, right? I don't think the macro had really impacted your business, and then the end of the year, there was a pretty stark shift in the macro environment. Fast-forward nine months from then, or a year from when you were sitting next to me, and you've talked about stability in the second quarter. I think to help frame the rest of the conversation, speak to the evolution that you guys have seen in terms of customer behavior, sales cycles, and what have you. Yeah. No, absolutely. Thank you, everyone, for joining today. I know it's a busy conference, and you have a lot of places to be, so thank you for coming here. You know, when we talked about last year, we saw that basically, you know, you buy GitLab, and you pay a year in advance, and you're under a year contract. And so, you know, when I was saying we weren't seeing contraction, we may have been having some small contraction in the base, but when they were coming up for their year renewal is when we really saw it. And, you know, what we're seeing now is people are just buying differently. I don't know if in your other software companies you've seen this, but, you know, I call it the executive VIX for spending has been really, really high. And so with all the layoffs and rush to get profitable and free cash flow break even, a lot of companies are just buying what they need. Historically, procurement departments for my whole career would try to buy as much as they need for a year to two years. They would buy for future hires, future projects, and then they would—you wouldn't see them again until renewal time. And now what you're seeing is a lot of procurement departments are buying just what's needed, and they're fine buying two, three, or four times a year. And so one of the things I've talked about is churn and contraction are very two different things. Usually in companies, people have bundled them together. Churn has remained relatively low, but we've seen contraction primarily in Premium and lack of expansion Premium, and this is really attributed to the way that people are actually buying today versus how they bought in the previous year. How does that metric baseline in two quarters, if you will, just kind of following the timeline? Yeah. So fourth quarter is when we saw it, so first, second quarter, and so now we've classified second quarter as stabilized. And so when we look at the buying in second quarter versus first quarter, we're seeing very similar patterns. We saw a departure from that in fourth quarter, and so we're happy with the quarter. You know, we delivered 38% year-over-year revenue growth, and we've been really consistent in the messaging that we'll continue to do that. Number one thing that we wanna do at the company is growth, but we'll do that with responsibly. Yeah. And it's... Is it still your view that DevOps being a category that should see one of the quickest bounce backs relative to the macro? You know, DevSecOps is. You know, you have to underwrite the thesis that every company has to become a software company. And, you know, regardless what geography you're in, what vertical you're in, you know, consumers are demanding, like, data, like, quicker and sooner. You know, how many people in the room today have received something from Amazon in the last week? Raise your hand. Like, and, and so now you get pictures of where your box is. You're getting texts that your Amazon driver- My Ring is going off right now. And I know it's the Amazon driver, so. You see that the, you know, the Amazon driver is just a couple doorsteps away and so forth. And so, you know, the consumers are thirsting for data. Data is moving into the cloud. Applications are moving in the cloud. So companies are required to rewrite all these applications and put them into the cloud. GitLab, being a full end-to-end software development lifecycle platform, allows people to do this much better, faster, cheaper, and secure. And so that's why I believe that with the price point, the payback period for Ultimate, break even six months. ROI in three years is over 400%. We saw our first order of business during the height of the pandemic do really, really well, and people were actually going and selecting a new platform to actually achieve those savings. That's great. That's great. One of the big themes in software, two of the big themes, have been consolidation and platformization. Mm-hmm. Another new word for us. Maybe talk about where GitLab plays into that opportunity, especially as we look at DevOps, which I think historically has been a mess. You know, when you look at just the development cycle and software supply chain, seems like trends are kind of moving your way as we're seeing stabilization. Yeah, you know, you're hearing a lot about cloud optimization and so forth. I mean, people are trying to optimize our cloud spend, but, you know, we're helping people put software into the cloud, by creating new software. Yeah, I think there's a number of different things that happened from a macro trend perspective that have been positive for us and, and basically, driving companies to evaluate a platform solution, to create their software. Great. And then, as we talk about stabilization, this last quarter, you announced a $30 million TCV deal. Seems like a pretty big deal in this environment, so maybe you can elaborate on the use case, the vertical- Yeah ... if you're willing to share it, and then just, you know, some of the metrics around that too, 'cause that obviously is gonna prop up... RPO, CRPO- Yep. Those types of measures. Yeah, absolutely. You know, a couple things you said on the earnings call that I want to call out for the crowd here today is, you know, one is we had the largest deal in company history. We signed over a $30 million TCV deal, and I was also asked, as a follow-up, you know, "What is your largest customers?" And I talked about we had several customers nearing $10 million a year in ARR. And so on the $30 million deal, this was a customer we already had. They had a five-year contract. They're end of year 3 of the contract, and based on the savings that they're realizing, the rollout they're doing, they wanted to re-up for another five years, and basically, you know, signed up for over a $30 million deal. And so, on the follow-up to the call, there were some questions about RPO and CRPO. If you backed out $30 million, it looked flat sequentially. Because it was a five-year deal, and there was already some CRPO in there and some RPO in there, you just can't subtract one from the other to get... You know, as I tell people, when you look at our billings and RPO and CRPO number, directionally, they're correct, but there's some noise within a given quarter. I'm super happy that an existing customer, three years into their journey, felt enough conviction to sign up for another five years and to commit to over $30 million with GitLab. And Brian, we've known each other now for 20 years, ish. It's about 20. Mm-hmm. You were at probably one of the most predictable businesses we've ever seen in Verisign- Mm-hmm ... as the CFO. Talk about GitLab's kind of predictability around the business and just the dynamics of the model here. And Verisign had inherent unit economics that came along with it, which were fantastic. I guess, a granted monopoly will do that for you. Talk about GitLab in that regard, because you mentioned earlier, your words were, "The rush to get profitable." And you guys just put up your first positive Free Cash Flow quarter since being public and probably in history. I don't know the old history. But just speak to some of those dynamics around the business model, the predictability, and then the profitability, and the fact that you- Yeah ... haven't had to do anything unnatural to rush to get profitable like others. Yeah, lots to unpack there, so- Sure ... couple, couple questions in there. So, first thing is, Sid and I have been crystal clear in the messaging pre-IPO, after the IPO, and today, we haven't deviated, you know, really one degree. And we basically said the number one objective at the company is to grow, but we'll do that responsibly. And I'm super happy that we've been able to show increased operating leverage in the model, sort of quarter-over-quarter. And so the big milestone this past quarter is we're non-GAAP EPS positive, and so that was a really big milestone. We've committed to being free cash flow breakeven in FY 2025. And then in my prepared remarks, I said it was likely that we'll be non-GAAP operating income positive this coming up quarter. I think that is really super positive, you know, in the company since, you know, like I said, we grew 38% year-over-year, but if you remove JiHu, GitLab, on a standalone basis in the second quarter, just lost over $1 million, and so I think that's great. We've been very disciplined as a management team on where we want to spend the money and how we're getting that leverage out of the business. You know, we're investing primarily in sales and marketing and R&D, and those are the two areas that we're investing in. From a CFO perspective, one of the things that I really like about GitLab is the ratable nature of the business model. And so at Verisign, it was very ratable as well, and so it's easy to water flow out, waterfall out, you know, what your revenue is gonna be. You know, here, it's, it's very similar that about 90% of our revenue is ratable in nature. And so as we enter a given quarter, a lot of the, a lot of the revenue that we recognize is already under contract and on the books. And then as we, we have over 30 quarters of, obviously, data in the company, and about 80% of the bookings within a given quarter is from existing clients. Cohorts from eight years ago are still expanding today, cohorts from seven years ago, six years ago, five years ago. And so once we get people on the product and they see the benefits of that product, they continue to expand with us, either buying more seats or tier upgrades. And so when you have that data, you can build some- Mm-hmm ... some models to actually say what you're gonna do within a given quarter on a GAAP revenue basis. Great. And you've said publicly that revenue is backward-looking. You said, "Don't look at your billings." You tell us that every quarter when you disclose billings because they're lumpy, and then just admitted that CRPO can be lumpy. So what's the best forward-looking metric for investors as we try to analyze your business? I'm gonna ask you the impossible question. This is when I ask Rob a question. Rob? You know, I think you have to look at the business holistically, right? And so, you know, this past quarter, you know, we thought we delivered a nice, clean print, a good beat and raise, when many companies wasn't doing that. And so to me, I would look at, you know, revenue growth, you know, even though it is backwards-looking. You know, CRPO is directionally correct. Short-term calculated billings is directionally correct by the nature of what they are. There's some noise in there quarterly, so I wouldn't take one quarter of data and extrapolate that out to be a trend. I would take a couple quarters of data, and then I'd look at the company and what the company is talking about long-term guidance and where the guidance is for the year. And so, you know, this past quarter, we had a CRO transition. We welcomed a new CRO, Chris. He's been with us for eight weeks. But, you know, even with a new CRO and some of the macro uncertainty, we had the confidence enough to raise the full beat through for the full year and also raise the year. ... And you mentioned investing in sales and marketing, so my next question was, of course, going to be around the new CRO and- Yep. The opportunity and what you foresee GitLab evolving into with his influence, what he brings to the table? Yeah, so we, Chris has over 20 years of really great experience leading multi-billion dollar organizations and growing them at scale. He spent most of his career at Microsoft, which works out well for us in the sense that, you know, he knows how the Microsoft engine works. And so, we met with a number of different candidates, and Chris, on a number of different levels, culture, experience, space, really fit in well. And so he's been with us for eight weeks, there's been very little disruption. There was a really great seamless handoff from our former CRO to Chris, and super happy he's here. Great. And then, I guess, with regard to Microsoft, maybe talk a little bit about competition with GitHub. And I think there's the perception that there's only the two of you, but I think you, in a lot of situations, go in and replace open source and other types of folks- Yeah - than GitHub. So how much are they really in the equation when you're going in and selling? Yeah, you know, our, our biggest competition is DIY DevOps, and so it's a do-it-yourself DevOps, where people are actually taking all the point solutions, putting them together themselves, creating the UI and the orchestration to actually have that be their software development platform, and that's who we compete against most. When you come to a named competitor, GitHub is a named competitor that we compete against most. You know, I, what I tell people is it's, it's a big market. You know, it's an estimated $40 billion TAM. If you look at us and GitHub combined, we're less than 5% of the market. And so if everyone has to become a software company, people want to create software better, faster, cheaper, more secure. It's an extremely big market. You know, I think there's room for two. And so the... You know, there are some inherent differences between the two. We don't have anything on the GitLab platform that's developed solely for one cloud provider. We can really reside on any cloud provider. Some of the GitHub feature functionality, to get the full benefit out of it, you have to be an Azure client. We're open source, and so anybody can contribute to our platform. If you want to write code and contribute to our platform, we have a wider community of roughly about 30 million registered users. We'd love for you to actually come contribute and write code to it. You know, a really interesting thing last quarter is, Gartner and Forrester just produced their first DevOps writeup, and this was a category that we created at GitLab, and so we're super happy that we're a leader in both, and we're the only leader in the Forrester report. And so I think you'll see more and more companies move to a platform for the benefits that we provide, and, you know, it's a, it's a super big market. I mean, it's 17 minutes, we haven't talked about GenAI, so- What's that? Yeah. What would you like to discuss? Oh, boy. What should we unpack on this? I think obviously the street's perception has changed, that we're not going to asymptotically approach one developer, right? It's not going to kill development, and that there is the more is more proposition. More is more is more proposition, I should say. To your business, you're going to release something either at the end of Q3, which is coming up, or sometime in Q4. Mm-hmm. So between the next 20 and 110 days, I guess, you'll have a product in the market at $9 a month. How did you choose the pricing? Do you think you're effectively monetizing that? And what could this do to that free open source base that you have out there? Because it feels like there's a massive opportunity to go after the estimated 90% of seats that are using kind of a free-ish version. Yeah. So, you know, GitLab's pricing, the way that we've priced our product, you know, historically, has been per seat per month. And so we had Ultimate and Premium, which you pay per seat per month. Everybody in the company has to be on the same tier. Then we had the free version, and we, we've steered away from consumption, and we actually don't price differently between SaaS and Self-Managed, even though SaaS is a little bit more expensive to deliver. We wanted to move the friction out of the selling and buying process to allow people to choose what they want. You know, we want time to value and business outcomes for our customers. And so as we were thinking about the Code Suggestions and how to price that, we wanted to price it on a per user, per month basis, but we didn't want to make you have to buy that with your sort of- For every seat ... core, core product. Yeah. And so you can buy it for just who you want. You can buy it for the free tier, too. And so if you're on free and you want Code Suggestions, you can buy it if you're on Premium or Ultimate. And so, super happy with all the things we're doing today around AI. We have 10 products in development. One is actually GA, called Suggested Reviewers. It's around workflow and suggesting who you should, who should be the next person in the workflow. It's in Ultimate today. It's bundled with Ultimate. Code Suggestions, we price at $9 per user per month. And then the other eight, we're working more on the technology, but look forward to them coming out and, you know, helping developers, operations, and security professionals be more efficient. Great. Questions from the floor? We've got about five minutes left. Please. Yeah, there's... Good question. There's been a big debate about that, and I believe, and the company believes that, you know, you know, we put out a DevOps report on the day of earnings, and through that report, when we went and talked to a bunch of developers, only about 25% of their time is actually spent on coding. 75% is spent on everything else. I've heard that number as low as 10%, and so if you make the coding aspect 20% more efficient or 30% more efficient, it's really a small part of the overall process. I do believe, though, with AI, that more code comes more complexity. You know, with every technological advancement, I believe that consumers and businesses are going to demand more, so just more code will be created, right? Then also, it will open up to more personas as well. So historically, it's only been a developer, so some non-developers now may be doing some developer-like things. And so I actually believe that companies won't say, "Hey, I got a 15% benefit on my AI tool, and so I'm going to reduce staff by 15%." I think they're gonna try to see how much more they can get out of their staff and how much more stuff that they can push out to their customers. Good. Ethan? Yeah. I think you mentioned earlier about how customers buying up front are coming back to you throughout the year. Have you had to, like, shift your go-to-market operations at all to accommodate to that? Or do you see that being a healthy kind of pattern going forward? So net retention and all those metrics. Yeah. You have to adjust to basically what's happening in the industry. It doesn't change our go-to-market motion, per se, but you will follow up with that customer on a more regular basis. And so our average contract length is just over 14 months. When I got to the company, I pushed for shorter duration opposed to longer duration, because we had such a high gross retention rate. And so, you know, as they come up for renewal or during that process, we reach out to them more. Because of our contract duration, we started seeing some of this in fourth quarter. We expect that, you know, we'll lap that sort of into this fourth quarter or first quarter of next year. Yeah, please. Um, Not yet. You have to... We're working on the technology right now. We're training on Google's models, their large language models, and, you know, you have to get the code quality to a certain point to where you can actually then go test that. There are tools out there where you can actually take, you know, our Code Suggestions, Copilot, Tabnine, and others, and compare the code quality to them on sort of an apple-to-apple basis by taking raw code and putting it into your Code Suggestions. It will pop it out, and it will actually grade them. And so there's a way to actually do a comparison, but we've been working on getting the code quality up to a level that we can actually run that. And with the shorter durations that you mentioned, relative to Ethan's question, we should be getting really excited about this price increase then next year. And, and I think we're modeling the knee and the curve to hit maybe middle of next year. Any, any thoughts or directionally how we can think about that? I'm gonna watch you dance, Brian. With the price increase, you know, we have four months of data now, and so last earnings call, we only had a month, and so it wasn't really a lot that we could talk about. There was some confusion on impact this year versus next year. Due to the ratable nature of the revenue that we talked about, we'll only get a small impact this year, and so you have to look at your raw bookings. Part of that goes Ultimate, the rest is Premium. 80% of what you got is existing customers, and so they go—it's a stair step up. And so we talked about the amount of impact this year being nominal, and most of the impact coming next year, and then the remaining impact coming the following year. We haven't done our annual operating plan for next year, and so I look forward on our fourth quarter earnings call to give out our guidance for FY 2025. Great. Well, with that, we'll close. Thank you all, and please stick around for our lunchtime keynote. Thanks so much.