GTLB 10-K & 10-Q changes, risk factors and insider trading

We have experienced rapid growth, both in terms of employee headcount and customer growth, as well as increased demand for our products. We anticipate that we will continue to expand our operations and responsibly grow our headcount in the near term, and our success will depend in part on our ability to manage that growth effectively, although there is no assurance that our rate of growth will continue at its current pace. Our total number of Base Customers has grown to 10,682 as of January 31, 2026 from 9,893 as of January 31, 2025 from 8,602 as of January 31, 2024.2025. The growth and expansion of our business places a continuous significant strain on our management and operational and financial resources. In addition, as customers adopt our products for an increasing number of use cases, we have had to support more complex commercial relationships. To effectively manage and capitalize on our growth periods, we need to manage headcount capital and processes efficiently, while continuing to make investments to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with various partners and other third parties. Our rate of growth may also be impacted as a result of global business or macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto,shutdowns, volatility of the global debt and equity markets, and investment decisions by our customers.

Our total revenue for the years ended January 31, 20252026 and 20242025 was $759.2$955.2 million and $579.9$759.2 million, respectively, representing a growth rate of 31%.26%. You should not rely on the revenue growth of any prior quarter or annual period as an indication of our future performance. As a result of our limited history operating as a public company, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.growth, and our usage (or consumption) billing model. Our historical revenue growth should not be considered indicative of our future performance.

Further, in future periods, our revenue could decline or our revenue growth rate could slow. Many factors may contribute to this decline, including changes to technology, such as increased AI adoption, our usage billing models, increased competition, slowing demand for The DevSecOps platform, the maturation of our business, a failure by us to continue capitalizing on growth opportunities, our failure, for any reason, to continue to take advantage of growth opportunities and a global economic downturn, among others. If our growth rate declines, investors’ perceptions of our business and the market price of our Class A common stock could be adversely affected.

Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth.growth and our usage billing models. We have encountered in the past, and may encounter in the future, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If we fail to achieve the necessary level of efficiency in our organization as it grows, or if we are not able to accurately forecast future growth, our business would be harmed. Moreover, if the assumptions that we use to plan our business are incorrect or change in reaction to changes in our market, or we are unable to maintain consistent revenue or revenue growth, our share price could be volatile, and it may be difficult to achieve and maintain profitability.

We have incurred losses in each year since our inception, including net losses of approximately $173.4$425.7 million, $425.7$6.3 million and $6.3$56.0 million in fiscal year 2023,2024, 20242025 and 2025,2026, respectively. As of January 31, 2025,2026, we had an accumulated deficit of approximately $1.2 billion. While we have experienced significant growth in revenue in recent periods, we cannot assure you that we will achieve profitability in future periods or that, if at any time we are profitable, we will sustain profitability. We also expect our operating and other expenses to increase in the foreseeable future as we continue to invest in our future growth, including implementing usage billing, expanding our research and development function to drive further development of The DevSecOps platform (including related to AI capabilities), expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations, which will negatively affect our operating results if our total revenue does not increase. While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities. In addition to the anticipated costs to continue to grow our business, we also expect to continue to incur significant legal, accounting, and other expenses as a public company. These efforts and expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses. Our revenue growth may slow or our revenue may decline for a number of reasons, including reduced demand for The DevSecOps platform, increased competition, an increased use of our free product offerings, a decrease in the growth or reduction in size of our overall market, usage billing, or any inability on our part to capitalize on growth opportunities. Further, as our SaaS offering makes up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and infrastructure costs, which may adversely impact our gross margins. Any failure to increase our revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or achieving or maintaining positive operating cash flow at all or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.

Security incidents of oursour or our third-party service provider’s information technology systems that compromise the confidentiality, integrity, and availability of our data could result from AI relatedin sensitive data exposureexposure. suchCyber asattacks insufficientmay dataalso anonymization during the training process, system misconfiguration, or from cyber attacks,occur, including, but not limited to, denial-of-service attacks, reverse-engineering of AI algorithms, web scraping, ransomware attacks, application security attacks, software-supply chain attacks, compromised credentials, business email compromises, computer malware, viruses, and social engineering (including phishing), which are prevalent in our industry and our customers’ industries. AI has shifted previously defined security boundaries for GitLab and our providers, including new and novel language-based attack vectors. AI incorporated into our and our third-party service provider’s products may introduce security risks including, but not limited to, AI-enabled social engineering, automated vulnerability exploitation, inadvertent data exposure due to model training, inappropriate data access using AI-enabled features, and AI supply-chain attacks. On the other hand, we could increase our vulnerability to cybersecurity incidents or other technology related failures due to, or as a result of, the timing of our evaluation, updating, or integration of new technology or AI enabled systems used in our business. Any security breachbreach, disruption or disruptionother technology related failure could result in the loss or destruction of or unauthorized access to, or use, alteration, disclosure, or acquisition of confidential and/or personal data, which may result in damage to our reputation, early termination of our contracts, litigation, regulatory investigations, or other liabilities. If our, our customers’, or our partners’ security measures are breached as a result of third-party action, team member error, misconfiguration, malfeasance (including bribery) or otherwise and, as a result, someone obtains unauthorized access to The DevSecOps platform, including personal and/or confidential informationdata of our customers, our reputation could be damaged, our business may suffer loss of current customers and future opportunities and we could incur significant financial liability including fines, cost of recovery, and costs related to remediation measures.

Techniques used to obtain unauthorized access or to sabotage systems change frequently.frequently, Asincluding anovel result,AI-specific attack vectors and vulnerabilities. The use of agentic AI is changing the fundamental ways that we secure and defend our platform and operations as both threat actors and security teams are using AI to industrialize their attacks. Traditional perimeter controls and static security rules are no longer the most effective security mechanisms and we, in alignment with our industry, are reinforcing our defensive capabilities in areas such as, but not limited to, behavioral analysis, automated detection response, and zero-trust. However, we may be unable to fully anticipate these techniques or to implement adequate preventative measures. If an actual or perceived security breach occurs, the market perception of our security measures could be harmed, and we could lose sales and customers. If we are, or are perceived to be, not in compliance with data protection, consumer privacy, or other legal or regulatory requirements or operational norms bearing on the collection, processing, storage, or other treatment of data records, including personal data, our reputation and operating performance may suffer. Further, we need to continually monitor and remain compliant with all applicable changes in local, state, national, or international legal or regulatory requirements. Any significant violations of data privacy could result in the loss of business, litigation, and regulatory investigations and penalties that could damage our reputation and adversely impact our results of operations and financial condition.

We face heightened risk of security breaches because we use third-party open source technologies and incorporate a substantial amount of open source and community contributed code in our products.

The DevSecOps platform is built using open-source technology.technology and GitLab accepted community code contributions. Using or incorporating any third-party technology can become a vector for supply-chain cyber attacks. Such attacks are prevalent in our industry and our customers’ industries, and our use of open-source technology may, or may be perceived to, leave us vulnerable to security attacks. We have previously been, and may in the future become, the target of cyber attacks by third parties seeking unauthorized access to our or our customers’ data or to disrupt our operations or ability to provide our services. If we are the target of cyber attacks as a result of our use of open source code, it may substantially damage our reputation and adversely affect our business, financial condition, and operating results.

The markets for our services are highly competitive, with limited barriers to entry. Competition presents an ongoing threat to the success of our business. We expect competition in the software business generally, and in all of the stages of the software development lifecycle that our product covers,covers in particular, to continue to increase. We expect to continue to face intense competition from current competitors, as well as from new entrants into the market or from adjacent markets. If we are unable to anticipate or react to these challenges, our competitive position would weaken, and we would experience a decline in revenue or reduced revenue growth, and loss of market share that would adversely affect our business, financial condition, and operating results.

We face competition in several areas due to the nature of our product. Our product offering is broad across all stages of the software development lifecycle which hasmeans uswe competingcompete with many providers with offerings across all stages. We compete with well-established providers such as Microsoft and Atlassian as well as other companies with offerings in fewer stages, including with respect to both code hosting and code collaboration services, as well as file storage, distribution services, and AI. Competition in these markets may intensify further as advances in AI enable rapid, low-cost development of software applications.

•our ability to price our products competitively, including our usage billing model and our ability to transition users of our free product offering to a paid version of The DevSecOps platform;

In addition, some of our competitors may offer their products and services at a lower price or for free, or may offer a competing product with other services or products that together result in offering the competing product for free. If we are unable to achieve our target pricing levels,levels or successfully implement usage billing, our operating results would be negatively affected. Pricing pressurespressures, usage billing, and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.

•loss of customer data;

Because of the nature and importance of the data that our customers collect and manage by means of our services, it is possible that failures or errors in our systems could result in data loss or corruption, and/or cause the information that we or our customers collect to be incomplete or contain inaccuracies that our customers regard as material. Furthermore, the availability or performance of our products could be adversely affected by a number of factors, including: customers’ inability to access the internet, customers’ inappropriate use of our software, the failure of our network or software systems, security breaches, or variability in user traffic for our services. We may be required to issue credits or refunds for prepaid amounts related to unused services or otherwise be liable to our customers for damages they may incur resulting from certain events. If a customer’s internet service provider fails to provide sufficient capacity to support our products, otherwise experiences service outages, interruption or disruption, or intentionally or unintentionally restricts or limits our ability to send, deliver, or receive electronic communications or provide services, such failure could interrupt our customers’ access to our products, adversely affect their perception of our products’ reliability and reduce our revenues. In addition to potential liability, if we experience interruptions in the availability of our products or services, our reputation could be adversely affected and we could lose customers. Our production systems might not be sufficiently resilient against regional outages and recovery from such an outage might take an extended period of time. Further, while we have in place a data recovery plan, our data backup systems might fail and our data recovery plans may be insufficient to fully recover all of ours or our customers’ data hosted on our system.

The market for our services is relatively new and rapidly evolving with uncertain growth expectations which would adversely affect our future results and the trading price of our Class A common stock.

Because the market for our services is relatively new and rapidly evolving, it is difficult to predict customer adoption, customer demand for our services, the size and growth rate of this market, the entry of competitive products or the success of existing competitive services. Any expansion or contraction in our market depends on a number of factors, including the cost, performance and perceived value associated with our services and the appetite and ability of customers to use and pay for the services we provide. Further, even if the overall market for the type of services we provide continues to grow, we face intense competition from larger and more well-established providers and we may not be able to compete effectively or achieve market acceptance of our products. If we or other software and SaaS providers experience security incidents, loss of customer data, or disruptions in delivery or service, the market for these applications as a whole, including The DevSecOps platform and products, may be negatively affected. If the market for our services does not achieve widespread adoption, we do not compete effectively in this market, or there is a reduction in demand for our software or our services in our market caused by a lack of customer acceptance, implementation challenges for deployment, technological challenges, lack of accessible data, competing technologies and services, decreases in corporate spending, including as a result of global business or macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto,shutdowns, volatility of the global debt and equity markets, actual or perceived instability in the global banking sector, or otherwise, it could result in reduced customer orders and decreased revenues, which could require slowing our rate of headcount growth and would adversely affect our business operations and financial results.

In future periods, our growth could slow or our profits could decline for several reasons, including decreased demand for our product offerings and our professional services, usage billing, increased competition, a decrease in the growth of our overall market, a decrease in corporate spending, including as a result of global business or macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto,shutdowns, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or otherwise, or our failure, for any reason, to continue to capitalize on growth opportunities. We may be forced to change or abandon our subscription based revenue model in order to compete with our competitors’ offerings.

It could also become increasingly difficult to predict revenue and timing of collections asgiven our usage billing model and our mix of annual, multi-year and other types of transactions changes as a result of our expansion into cloud-based offerings. Our failure to execute on our revenue projections could impair our ability to meet our business objectives and adversely affect our results of operations and financial condition.

Our future success also depends in part on our ability to increase usage or consumption, sell more subscriptions and additional services to our current customers. Even if customers choose to renew their current subscriptions with us, they may decline to purchase additional services or they may choose to downtier or otherwise decrease the number of seats or usage in their subscription. If our customers do not purchase additional subscriptions and services from us, our revenue may decline and our operating results may be harmed. Paying customers may decline or fluctuate as a result of a number of factors, including their satisfaction with our services and our end-customer support, the frequency and severity of product outages, our product uptime or latency, their satisfaction with the speed of delivering new features, the pricing of our, or competing, services, and the impact of macroeconomic conditions on our customers and their corporate spending. We have limited historical data with respect to rates of paying customers buying more seats, uptiering, downtiering and churning, so we may not accurately predict future customer trends.

Our customer expansions and renewals may decline or fluctuate, and conversely, contractions and downtiersdown-tiers may increase, or fluctuate, as a result of a number of factors, including: quality of our sales efforts, customer usage, customer satisfaction with our services and customer support, our prices (including price increases we have implemented in the past, the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or reductions in our customers’ spending levels generally (including, our customers that have or may have to downsize their operations or headcount). If we cannot use our marketing strategies in a cost-effective manner or if we fail to promote our services efficiently and effectively, our ability to acquire new customers or expand the services of our existing customers may suffer. In addition, an increase in the use of online and social media for product promotion and marketing may increase the burden on us to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.

Further, we have previously discontinued certain lower priced product offerings, requiring users of these products to switch to another paid offering, switch to our free productproduct, or discontinue using our products. Additionally, we have implemented user limits on our free SaaS product. To the extent we discontinue or add additional limits on our free or lower-priced product offerings, we cannot assure you that our customers will purchase our products, and if our end customers do not purchase our products, our revenues may grow more slowly than expected or decline.

•the timing of recognition of revenues and impact of usage billing;

•general economic, industry and market conditions, in both domestic and our foreign markets, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, the potential effects of health pandemics or epidemics and other global events, including the impacts of the U.S. presidential election and ongoing armed conflicts in different regions of the world;

In addition, we experience seasonal fluctuations in our financial results as we typically receive a higher percentage of our annual orders from new customers, as well as renewal orders from existing customers, in our last two fiscal quarters as compared to the first two fiscal quarters due to the annual budget approval process of many of our customers, the timing of our customers’ decisions to make a purchase, changes our customers experienced, or may experience, in their businesses, and other variables some of which are outside of our and our customers’ control, such as macroeconomic and general economic conditions, including inflationinflation, tariffs, and volatile interest rates.

As our product offerings mature and expand, our pricing and packaging for new and existing products may result in existing customers purchasing new products on terms less favorable to us in order to replace the products they currently purchase or subscribe for from us.

As our product offerings and the markets for our services mature, or as new competitors introduce new products or services that are similar to or compete with ours, we may be unable to attract new customers at the same price or based on the same pricing model as we have used historically. Moreover, some customers may demand greater price concessions or additional functionality at the same price levels.levels, and some customers may choose to adjust their usage rates due to our usage billing. As a result, in the future we may be required to reduce our prices or adjust existing products or packaging, or provide more features without corresponding increases in price, which could adversely affect our revenues, gross margin, profitability, financial position and cash flow.

We have implemented AI capabilities throughout GitLab’s services, including as part of the GitLab Duo suite of AI features. The technologies underpinning these features are in the early stages of commercial use and exist in a rapidly-evolving regulatory and commercial environment which presents regulatory, litigation, ethical, reputational, and financial risks.

Many states, regions, and supranational bodies have proposed or enacted regulations related to the use of AI and machine learning technologies, such as the E.U. Artificial Intelligence Act, which came into effect on August 1, 2024.technologies. These regulations may impose onerousprescriptive obligations related to our, and our vendors’,the development, offering, and use of AI technologies and expose us to an increased risk of regulatory enforcement and litigation.

Additionally, issues relating to intellectual property rights in AI-generated content have not been fully addressed by the courts, laws, or regulations and there has been an increase in litigation in this area. Accordingly, the implementation of generative AI technologies into our services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation.

Furthermore, many of our generative AI features involve the processing of personal data and mayany beprocessing of personal data is subject to laws, policies, legal obligations, and codes of conduct related to privacy and data protection. While there is current uncertainty about the extent to whichcomprehensive privacy and data protection lawslaws, including the E.U. General Data Protection Regulation, or the GDPR, and the California Consumer Privacy Act, or the CCPA. Specific obligations under these regulations, such as requirements for lawful basis, data minimization, automated decision-making, and storage limitation, apply equally to personal data processed by the GitLab Duo suite of AI technologies,features. anyAny delaydifficulties in addressing privacy or data protection concerns relating to our AI features may result in liability or regulatory investigations and fines, as well as damage to our sales and reputation.

Our generative AI features may also generate output or perform actions, as applicable, that isare misleading, insecure, inaccurate, harmful, or otherwise flawed, which may harm our reputation, business, or customers, or expose us to legal liability.

We rely on third-party vendors for the provision of the AI models which power many of our AI features. In the event those vendors encounter service disruption, materially and adversely change the terms on which they provide access to the models, are subject to regulatory or other national security actions by governmental authorities, or otherwise cease providing or change the basis on which they provide access to the models such that we can no longer obtain access, our ability to provide AI-powered features may be adversely affected. Any such events could also impact our customers’ ability to use GitLab features powered by specific third-party vendors’ AI models in certain deployment contexts.

The Handbookpublicly available GitLab Handbook, or Handbook, may not be up to date or accurate, which may result in negative third-party scrutiny or be used in ways that adversely affects our business.

Any failure to offer high-quality technical support services, including success plan services,tiers, or adequately sell such services, may adversely affect our relationships with our customers and our financial results.

Once our products are deployed, our customers depend on our technical support organization to resolve technical issues. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services, and customers may not purchase the success plan servicestiers that we offer. We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors. Increased customer demand for these services, without corresponding revenues, could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on our services and business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell our services to existing and prospective customers, and our business, operating results and financial position.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, allowance for doubtful accounts, deferred contract acquisition costs, income taxes, business combinations, and impairment of goodwill.goodwill and long-lived assets. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our common stock.

All web direct customers purchase our solution using online payment solutions such as credit cards, which represent the majority of the payment transactions we receive, and our business depends upon our ability to offer such payment options. The termination of our ability to process payments on any material payment optionsolution would significantly impair our ability to operate our business and significantly increase our administrative costs related to customer payment processing. If we fail to maintain our compliance with the data protection and documentation standards adopted by our payment processors and applicable to us, these processors could terminate their agreements with us, and we could lose our ability to offer our customers a credit card or other payment option. If these processors increase their payment processing fees because we experience excessive chargebacks or refunds or for other reasons, it could adversely affect our business and operating results. Increases in payment processing fees would increase our operating expense and adversely affect our operating results.

With respect to E.U. and U.K. team members, contractors and other personnel, as well as for our customers’ and prospective customers’ personal data, such as contact and business information, we are subject to the E.U. General Data Protection Regulation, or the GDPR,GDPR and applicable national implementing legislation of the GDPR, and the U.K. General Data Protection Regulation and U.K. Data Protection Act 2018, or the U.K. GDPR, respectively. We are a controller with respect to this data.

The GDPR and U.K. GDPR requires, among other things, that personal data only be transferred outside of the European Economic Area, or the E.E.A., or the U.K., respectively, to jurisdictions that have not been deemed adequate by the European Commission or by the U.K. data protection regulator, respectively, including the United States, if certain safeguards are taken to legitimize those data transfers. Legal developments in the E.U. have resulted in complexity and uncertainty regarding such transfers. For example, the European Court of Justice, or the CJEU, has previously advised that the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism) are not alone sufficient to protect data transferred to the United States or other countries not deemed adequate and the current E.U.-U.S. Data Privacy Framework, or the DPF, which permits certified U.S.-based organizations to receive transfers of personal data from the E.E.A. and the U.K, has previously been subject to proposed legal challenges before the CJEU. Thus, the Standard Contractual Clauses remain an important data transfer mechanism for transfers to countries outside of the E.E.A. and the U.K., but the use of Standard Contractual Clauses must still be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals, and additional measures and/or contractual provisions may need to be put in place. The European Data Protection Board has also issued a decision imposing higher burdens on the use of data transfer mechanisms, such as the Standard Contractual Clauses, for cross-border data transfers and the CJEU has stated that if a competent supervisory authority believes that the Standard Contractual Clauses cannot be complied with in the destination country and that the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer. Since the decision by the CJEU, supervisory authorities, including the CNIL and the Austrian Data Protection Authority, are now looking at cross-border transfers more closely, and have publicly stated that the transfer of data to the United States using certain analytics tools is illegal. While these decisions related specifically to analytics tools and may be inapplicable to organizations certified under the DPF, it has been suggested that it is far-reaching and applies to any transfer of E.U. personal data to the United States. We will continue to monitor this situation, and evaluate and utilize, where appropriate, all data transfer mechanisms available to us, but this may require the removal of tools from our services and websites where data is transferred from the E.U. to the United States, or impact the manner in which we provide our services, which could adversely affect our business. In addition, if participation in the DPF is deemed appropriate, then we would be required to update documentation and processes, which may result in further compliance costs.

Additionally, we are subject to the California Consumer Privacy Act, or the CCPA, as expanded by the California Privacy Rights Act, or the CPRA, which increases privacy rights for California consumers and imposes obligations on companies that process their personal data. The CCPA, among other things,CCPA requires covered companies to, among other things, provide new disclosures to California consumers and affords such consumers new privacy rights such as the ability to opt out of certain sales of personal data and expanded rights to access and deletion of their personal data, opt out of certain personal data sharing, and receive detailed information about how their personal data is collected, used and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase the likelihood of, and the risks associated with, security breach litigation and the CPRA expanded consumers’ rights with respect to certain personal data and established a state agency to oversee implementation and enforcement efforts, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. The CCPA has also prompted a number of passed laws and proposals for new federal and state privacy legislation that, if passed, could increase our potential liability and compliance costs, particularly in the event of a data breach, and adversely affect our business, including how we use personal data, our financial condition, and the results of our operations or prospects. Compliance with privacy legislation adds complexity and has required and may in the future require investment in additional resources for compliance programs, thus potentially resulting in additional costs and expense of resources to maintain compliance. Changing definitions of personal data and information may also limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data. Also, some jurisdictions require that certain types of data be retained on servers within these jurisdictions. Our failure to comply with applicable laws, directives, and regulations may result in enforcement action against us, including fines, and damage to our reputation, any of which may have an adverse effect on our business and operating results.

OurOne successof dependsour oncompetitive advantages is our ability to provide users of our products and services with access to an abundance of useful, efficient, high-quality code which in turn depends on the quality and volume of code contributed by our open source contributors.

We believe that one of our competitive advantages is the quality, quantity and collaborative nature of the code on GitLab, and that access to open source code is onean ofimportant thereason main reasonswhy users visit GitLab. In furtherance of the foregoing competitive advantages and access, we seek to foster a broad and engaged contributor community, and we encourage individuals, companies, governments, and institutions to use our products and services to learn, code and work. If contributors, including influential contributors, do not continue to contribute code, our customer base and contributor engagement may decline. Additionally, if we are not able to address user concerns regarding the safety and security of our products and services or if we are unable to successfully prevent abusive or other hostile behavior on The DevSecOps platform, the size of our customer base and contributor engagement may decline. If there is a decline in the number of contributors, customer or contributor growth rate or engagement, including as a result of the loss of influential contributors and companies who provide innovative code on GitLab, or due to the increased adoption of AI, paying customers of our online services may be deterred from using our products or services or reduce their spending with us or cease doing business with us, which would harm our business and operating results.

Historically, we have experienced seasonality in new customer contracts, as we typically enter into a higher percentage of subscription agreements with new customers and renewals with existing customers in the last two fiscal quarters of each year. We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers, along with variables outside of our and our customers’ control, such as macroeconomic and general economic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto,shutdowns, and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector. We expect that this seasonality, which can itself at times be unpredictable, will continue to affect our bookings, deferred revenue, and our results of operations in the future and might become more pronounced as we continue to target larger enterprise customers.

Our results of operations may fluctuate, in part, because of the length and variability of the sales cycle of our subscriptions and the difficulty in making short-term adjustments to our operating expenses. The length of our sales cycle, from initial contact from a prospective customer to contractually committing to our paid subscriptions can vary substantially from customer to customer based on deal complexity as well as whether a sale is made directly by us. It is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers, the timing of our customers’ decisions to make a purchase, greater deal scrutiny by our customers, changes our customers experienced, or may experience, in their businesses, and other variables some of which are outside of our and our customers’ control, such as macroeconomic and general economic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget andbudget, debt ceiling and potential government shutdowns related thereto,shutdowns, and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector. Our results of operations depend in part on sales to new large customers and increasing sales to existing customers. As a result, in particular, large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. Because a substantial proportion of our expenses are relatively fixed in the short term, our results of operations will suffer if revenue falls below our expectations in a particular quarter, which could cause the price of our Class A common stock to decline.

We plan to expand our operations internationally in the future. Outside of the United States, we currently have direct and indirect subsidiaries in Canada, Germany, France, India, Ireland, Israel, the Netherlands, Spain, the United Kingdom, Australia, India, Japan, South Korea, and Singapore, and have team members in over 60 countries. We also have a joint venture in China. There are significant costs and risks inherent in conducting business in international markets, including:

Maintaining effective ICFR and DC&P requires ongoing attention and resources. Our current controls may become inadequate because of changes in conditions in our business, personnel, IT systems and applications, or other factors. If we identify additional material weaknesses or fail to maintain effective controls, it could adversely affect our operating results, cause us to fail to meet our reporting obligations, result in a restatement of our financial statements, or adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports.

If we raise additional funds through equity or convertible debt issuances, our existing stockholders may suffer significant dilution and these securities could have rights, preferences, and privileges that are superior to those of holders of our common stock. If we obtain additional funds through debt financing, we may not be able to obtain such financing on terms favorable to us. Such terms may involve restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities, including potential acquisitions. The trading prices of technology companies have been highly volatile as a result of recent global events, including volatile interest ratesrates, andinflation, inflationtariffs and the ongoing armed conflicts in different regions of the world, which may reduce our ability to access capital on favorable terms or at all. In addition, a sustained adverse market event resulting from such global events could adversely affect our business and the value of our Class A common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired and our business may be adversely affected, requiring us to delay, reduce, or eliminate some or all of our operations.

We believe GitLab offers the shortest path to unlock technology transformation and business value. GitLab accelerates ourcustomer customers’ ability to innovateinnovation by accelerating theirreducing software development cycles from weeks to minutes. ItThe removesplatform eliminates the need for point toolstools, and delivers enhanced operational efficiency by eliminating manual work, increasingincreases productivity, and creating a culture of innovation and velocity. Embeddingembeds security earlier in theinto development process,workflows GitLabwith enablesautomated customersenforcement to improve software security, quality, and overallcompliance compliance.while enabling faster delivery.

GitLabWe isserve available to any team, regardlessteams of theall size,sizes, scope,scopes, and complexity of their deployment.complexities. As a result, we have more than 50 million registered users, and more than 50% of the Fortune 100 companies are GitLab customers.customers1. ForWe purposes of determining the number ofdefine our active customers,customers weas look at our customersthose with more than $5,000 of Annual Recurring Revenue, or ARR, in a given period, who we refer to as our Base Customers. For purposes of determining our Base Customers, aA single organization with separate subsidiaries, segments, or divisions that useuses The DevSecOpsour platform is considered a single customer for determining each organization’s ARR.

GitLab is the only DevSecOpsintelligent orchestration platform for DevSecOps built on an open-core business model. We enable anyAny customer andor contributor tocan add or enhance functionality by contributing code to the core product or extending our platform.Continuous Integration (“CI”)/Continuous Delivery (“CD”) Catalog and AI Catalog. In calendar year 2024,2025, nearly 900 peopleusers contributed more than 3,0006,500 merge requests back to the core product,requests, extending GitLab’sour in-house research and development (“R&D efforts”) and empowering our most passionate users to make improvements toimprove the DevSecOps solution they use every day.daily. Our open-core approach engendersbuilds trust with our customers and enables us to maintain our high velocity of innovation. We make our strategy, direction, and product roadmap publicly available.

GitLab offers a flexible deployment modeloptions. forCustomers ourcan customers. For ourinstall self-managed offering,GitLab the customer installs GitLabinstances in their own on-premiseon-premises or hybrid cloud environment.environments, Foruse our SaaS offering, the platform isfully managed bySaaS GitLab and hosted eitheroffering in our public cloud or in our private cloudclouds, basedor on the customer’s preference. We also offerdeploy GitLab Dedicated, our single tenantsingle-tenant SaaS solution, ideally suitedsolution for organizations with complex security and compliance requirements. See the section entitled “Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for additional information about how we define ARR.

We believe that our ability to increase the number of $100,000 ARR customers is an indicator of our market penetration and strategic demand for The DevSecOpsGitLab platform. A single organization with separate subsidiaries, segments, or divisions that use The DevSecOpsGitLab platform is considered a single customer for determining each organization’s ARR. We do not count our reseller or distributor channel partners as customers. In cases where customers subscribe to The DevSecOpsGitLab platform through our channel partners, each end customer is counted separately.

OurSubscription self-managedrevenue subscriptionsprimarily includeconsists of support, maintenance, upgrades, and updates on a when-and-if-available basis. Revenuebasis for our self-managed subscriptionsoffering and the right to access our product in a cloud-based-infrastructure that we host for our SaaS offering. Subscription revenue is recognized ratably over the contractcontractual periodterm based onas the stand-readyperformance natureobligation ofis subscription elements.satisfied.

The typical term of a subscription contract for SaaS offerings is one to three years.

The license component of our self-managed subscriptionsoffering reflectsprovides the revenue recognized by providing customers with accessright to use our proprietary software features.software. License revenue is recognized up-front when control of the software license is made availabletransfers to ourthe customers.customer.

Cost of revenue for self-managed and SaaS subscriptions consists primarily of allocated cloud-hosting costs paid to third-party service providers, personnel-related costs associated with our customer support personnel, including contractors, third-party payment processing fees, and allocated overhead. Personnel-related expenses consist of salaries, benefits, bonuses, and stock-based compensation. We expect our cost of revenue for self-managed and SaaS subscriptions to increase in absolute dollars as our self-managed and SaaS subscription revenue increases. As our SaaS offeringand makesDuo Agent Platform offerings make up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and managing costs, which may adversely impact our gross margins.

Cost of self-managed license and other revenue consists primarily of contractor and personnel-related costs, including stock-based compensation expense, associated with the professional services team and customer support team, third-party payment processing fees, and allocated overhead. We expect our cost of revenue for self-managed license and other to increase in absolute dollars as our self-managed and other revenue increases.

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing personnel, advertising, travel and entertainment related expenses, branding and marketing events, promotions, software subscriptions, and our allocated cloud infrastructure expenses for our free tier. Sales and marketing expenses also include sales commissions paid to our sales force. Such costs incurred on acquisition of an initial contract are capitalized and amortized over an estimated period of benefit of three years, and any such expenses paid for the renewal of a subscription are capitalized and amortized over the contractual term of the renewal. However, prorated costs for sales commissions that are incremental to obtain a self-managed license contract are expensed immediately.

General and administrative expenses consist primarily of personnel-related expenses for our executives, finance, legal, human resources, and humancorporate resourcesadministrative teams.functions. General and administrative expenses also include external legal, accounting, and director and officer insurance, as well as other consulting and professional services fees, software and subscription services, in-person company-wide event expenses, and any contract termination fees.

Other income (expense), net consists primarily of foreign currency transaction gains and losses.losses and indirect tax credit expense related to the JiHu formation.

Revenue increased $179.3$196.0 million, or 31%,26%, to $955.2 million for fiscal year 2026 from $759.2 million for fiscal year 2025 from $579.9 million for fiscal year 2024.2025. The increase was primarily due to the ongoing demand for Thethe DevSecOpsGitLab platform, including adding new customers, the expansion within our existing paid customers, and an increase in our number of customers with $100,000 or greater in ARR. As of January 31, 20252026 and 2024,2025, our expansion is reflected by our Dollar-Based Net Retention Rate being 123%118% and 130%,123%, respectively. We had 1,456 customers with ARR over $100,000 as of January 31, 2026, increasing from 1,229 customers with ARR over $100,000 as of January 31, 2025, increasing from 955 customers with ARR over $100,000 as of January 31, 2024.2025.

Cost of revenue increased by $25.4$35.6 million, to $120.7 million for fiscal year 2026 from $85.1 million for fiscal year 2025 from $59.7 million for fiscal year 2024,2025, primarily due to an increase of $7.9$18.4 million in third party hosting costs for SaaS and cloud usage, an increase of $6.9$9.0 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount andheadcount, an increase of $1.5$2.4 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), andan $6.1increase of $3.7 million in thefees amortizationassociated with professional services revenue delivery and an increase of intangible$1.7 assets.million of marketplace transaction processing fees. Gross margin decreased by 1%2% to 87% for fiscal year 2026 compared to 89% for fiscal year 2025 compared to fiscal year 2024.2025.

Sales and marketing expenses increased by $27.9$50.4 million, to $434.7 million for fiscal year 2026 from $384.3 million for fiscal year 2025 from $356.4 million for fiscal year 2024,2025, primarily due to an increase of $28.6$33.8 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount andheadcount, an increase of $4.2$6.0 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below), partiallyand offsetan byincrease aof $2.7$6.1 million decreasein sales commissions expense. The remaining change was primarily attributed to an increase of $6.9 million in restructuringhosting expense.expenses.

Research and development expenses increased by $38.8$34.9 million, to $274.6 million for fiscal year 2026 from $239.7 million for fiscal year 2025 from $200.8 million for fiscal year 2024,2025, primarily due to an increase of $34.3$27.6 million in personnel-related expenses, driven by an increase in our average research and development headcount and an increase of $7.5$5.4 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below). The remaining change was mainlyprimarily dueattributed to an increase of $4.1$6.3 million in hosting costs for internal usage partially offset by a decrease of $1.7 million in restructuring costs.expenses.

General and administrative expenses increased by $42.5$2.8 million,million to $195.7 million for fiscal year 2026 from $192.9 million for fiscal year 2025 from $150.4 million for fiscal year 2024,2025, primarily driven by an increase in expense of $14.3 million related to our in-person company-wide event, $11.0$27.1 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $9.6$15.2 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below). OtherThis factorswas contributingpartially tooffset the increase included $3.9 million from an accrual for indirect taxes on certain international sales, $3.8 million fromby a loss attributable to the fair value remeasurementdecrease of acquisition related contingent consideration, $2.4$15.4 million in consultingexpense expenses,related $1.7Mto our in-person company-wide event that took place in acquisitionfiscal relatedyear expenses2025, anda $1.1decrease of $4.7 million in charitable donation of common stock.stock, and a decrease from the prior year $3.8 million expense related to fair value remeasurement of acquisition-related contingent consideration.

Stock-based compensation expense increased by $22.9$29.1 million, to $215.0 million for fiscal year 2026 from $185.9 million for fiscal year 2025 from $163.0 million for fiscal year 2024,2025, primarily due to an increase of $39.6$28.0 million of expense from RSUs, offset by decreases of $4.2 million for grant modifications, $7.3 million related to our ESPP, and $5.7 million related to stock options.RSUs.

Stock-based compensation attributed to our variable interest entity, JiHu, was a netan expense of $1.8$2.3 million and a net gain of $1.5$1.8 million for fiscal 20252026 and 2024,2025, respectively. See “Note 11. Joint Venture and Equity Method Investment” to our consolidated financial statements for additional details.

ForInterest income decreased for fiscal year 20252026 compared to fiscal year 2024, interest income increased2025, primarily due to income earned from our cash, cash equivalents and short-term investments as a result of higherlower interest rates during fiscal year 20252026 compared to fiscal year 2024.2025.

The increase in other income (expense), net is mainly due the increase in interest income, an increase in foreignForeign exchange gainslosses andincreased impairment loss of equity method investment infor fiscal year 2024.2026 Thecompared increaseto infiscal foreignyear exchange gains is2025 primarily related to the revaluation of non-functional currency denominated monetary assets and liabilities, and realized foreign exchange gain upon the payment of the BAPA tax assessment in fiscal year 2025.liabilities.

Our effective tax rate increaseddecreased by approximately 254.5%111.2% for fiscal year 20252026 as compared to fiscal year 2024.2025. A tax benefitexpense is expressed as a positivenegative rate because of our pretax loss. The increase in tax benefitexpense from fiscal year 2025 to fiscal year 2026 was primarily due to the tax effectsbenefit ofrecorded in fiscal year 2025 related to the Bilateral Advanced Pricing Agreement (”BAPA”) negotiations between the United States and Dutch tax authorities,authorities (“DTA”), as well as the execution of an agreement between GitLab B.V. and the Dutch tax authority to reduce the rate of tax imposed on the tax gain recognized upon the transfer of the economic rights of the Company’s intellectual property from the Netherlands to the United States.

Our effective tax rate for thefiscal year ended January 31, 20252026 was higherdifferent thanfrom the U.S. federal statutory tax rate of 21%, primarily due to the tax effects of the BAPA negotiations between the United States and Dutch tax authorities, and the Company’s foreign and domestic operations.operations, Base Erosion Anti-abuse Tax (“BEAT”), nondeductible expenses and losses not benefited, offset by tax credits.

We executed the BAPA agreements with the U.S. Internal Revenue Service (“IRS”) and Dutchthe tax authoritiesDTA on October 10, 2024, and October 22, 2024, respectively. On October 28, 2024, we paid $187.7 million to satisfy the tax assessment issued by the DutchDTA, Taxincluding Authority,accrued or the DTA,interest, which reflected the BAPA negotiations and the agreement to reduce the rate of tax on the gain from the transfer of economic IP rights. As a result of the BAPA and DutchDTA assessment, the 2015 through 20172018 tax years are closed for GitLab B.V. Pursuant to the terms in the BAPA, thewe Companyhave will filefiled amended returns for the 2018 through 2023 fiscal years; the tax returns for the fiscal year ended January 31, 2024 were not yet due as of the end of the current fiscal year. All U.S. federal and state tax net operating losses (“NOLs”) and credits, as well as Netherlands NOLs, are not yet recognized due to the determination that they are not more likely than not to be realized.years.

As of January 31, 20252026 and January 31, 2024,2025, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating to $992.4$1,259.9 million and $1.0$992.4 billion,million, respectively, which were held for working capital and strategic investment purposes. As of January 31, 2025,2026, cash and cash equivalents consist of cash in banks,banks and money markets funds, treasuries, and commercial paper, while short-term investments mainly consist of treasuries, corporate debt securities, agency securities, and commercial paper.

We believe that our existing cash, cash equivalents, and short-term investments will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the price at which we are able to procure third-party cloud infrastructure, expenses associated with our international expansion, the introduction of platform enhancements, and the continuing market adoption of Thethe DevSecOpsGitLab platform.platform, and the amount and timing of any share repurchases. In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operating results, and financial condition.

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses, third-party cloud infrastructure expenses, and overhead expenses. We have generated positive cash flows in fiscal year 20242026 and 2024, and negative cash flows infor fiscal yearsyear 2025 and 2023 from operating activities.activities, We have supplemented working capital through net proceeds from the issuance of equity securities.respectively.

Cash used in investing activities during the year ended January 31, 20242026 was $86.2$267.3 million, primarily consisting of $81.7$256.5 million in purchases of short-term investments, net of proceeds from maturities,maturities $2.5and million outflow as a resultsales of anshort-term escrowinvestments, paymentand related to a prior business combination, $1.6$10.8 million in purchasesadditions ofto property and equipment, and $0.5 million of other investing activities.equipment.

Adjusted free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities less cash used for purchasesadditions ofto property and equipment, plus any non-recurring income tax payments related to the BAPA or minus any non-recurring income tax refunds related to the BAPA, plus any non-recurring payments related to the formation of JiHu. We believe that adjusted free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after the investments in additions to property and equipment, any non-recurring income tax payments or refunds related to the BAPA, and any non-recurring payments related to the formation of JiHu, can be used for strategic initiatives, including investing in our business, repurchasing shares of our common stock, and strengthening our financial position. One limitation of adjusted free cash flow is that it does not reflect our future contractual commitments. Additionally, adjusted free cash flow does not represent the total increase or decrease in our cash balance for a given period.

We have experienced rapid growth, both in terms of employee headcount and customer growth, as well as increased demand for our products. We anticipate that we will continue to expand our operations and responsibly grow our headcount in the near term, and our success will depend in part on our ability to manage that growth effectively, although there is no assurance that our rate of growth will continue at its current pace. Our total number of Base Customers has grown to 10,83111,114 as of AprilJuly 30,31, 2026 from 10,10410,338 as of AprilJuly 30,31, 2025. The growth and expansion of our business places a continuous strain on our management and operational and financial resources. In addition, as customers adopt our products for an increasing number of use cases, we have had to support more complex commercial relationships. To effectively manage and capitalize on our growth periods, we need to manage headcount capital and processes efficiently, while continuing to make investments to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with various partners and other third parties. Our rate of growth may also be impacted as a result of global business or macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget, debt ceiling and potential government shutdowns, volatility of the global debt and equity markets, and investment decisions by our customers.

Our total revenue for the threesix months ended AprilJuly 30,31, 2026 and 2025 was $264.2$550.4 million and $214.5$450.5 million, respectively, representing a growth rate of 23%.22%. You should not rely on the revenue growth of any prior quarter or annual period as an indication of our future performance. As a result of our limited history operating as a public company, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth, and our usage (or consumption) billing model. Our historical revenue growth should not be considered indicative of our future performance.

We have incurred losses in each year since our inception, including net losses of approximately $6.3 million, $56.0 million and $5.0$41.8 million in fiscal year 2025, 2026 and the threesix months ended AprilJuly 30,31, 2026, respectively. As of AprilJuly 30,31, 2026, we had an accumulated deficit of approximately $1.2$1.3 billion. While we have experienced significant growth in revenue in recent periods, we cannot assure you that we will achieve profitability in future periods or that, if at any time we are profitable, we will sustain profitability. We also expect our operating and other expenses to increase in the foreseeable future as we continue to invest in our future growth, including implementing usage billing, expanding our research and development function to drive further development of The DevSecOps platform (including related to AI capabilities), expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations, which will negatively affect our operating results if our total revenue does not increase. While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities. In addition to the anticipated costs to continue to grow our business, we also expect to continue to incur significant legal, accounting, and other expenses as a public company. These efforts and expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses. Our revenue growth may slow or our revenue may decline for a number of reasons, including reduced demand for The DevSecOps platform, increased competition, an increased use of our free product offerings, a decrease in the growth or reduction in size of our overall market, usage billing, or any inability on our part to capitalize on growth opportunities. Further, as our SaaS offering makes up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and infrastructure costs, which may adversely impact our gross margins. Any failure to increase our revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or achieving or maintaining positive operating cash flow at all or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.

Because of the nature and importance of the data that our customers collect and manage by means of our services, it is possible that failures or errors in our systems could result in data loss or corruption, and/or cause the information that we or our customers collect to be incomplete or contain inaccuracies that our customers regard as material. Furthermore, the availability or performance of our products could be adversely affected by a number of factors, including: customers’ inability to access the internet, customers’ inappropriate use of our software, the failure of our network or software systems, security breaches, or variability in user traffic for our services. We may be required to issue credits or refunds for prepaid amounts related to unused services or otherwise be liable to our customers for damages they may incur resulting from certain events. If a customer’s internet service provider fails to provide sufficient capacity to support our products, otherwise experiences service outages, interruption or disruption, or intentionally or unintentionally restricts or limits our ability to send, deliver, or receive electronic communications or provide services, such failure could interrupt our customers’ access to our products, adversely affect their perception of our products’ reliability and reduce our revenues. In addition to potential liability, if we experience interruptions in the availability of our products or services, our reputation could be adversely affected and we could lose customers. Our production systems might not be sufficiently resilient against regional outages and recovery from such an outage might take an extended period of time. Further, while we have in place a data recovery plan, our data backup systems might fail and our data recovery plans may be insufficient to fully recover all of oursour or our customers’ data hosted on our system.

In future periods, our growth could slow or our profits could decline for several reasons, including decreased demand for our product offerings and our professional services, usage billing, increased competition, a decrease in the growth of our overall market, a decrease in corporate spending, including as a result of global business or macroeconomic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget, debt ceiling and potential government shutdowns, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or otherwise, or our failure, for any reason, to continue to capitalize on growth opportunities. We may be forced to change or abandon our subscription based revenue model in order to compete with our competitors’ offerings.

It could also become increasingly difficult to predict revenue and timing of collections given our usage billing modelmodels and our mix of annual, multi-year and other types of transactionsbilling changesstructures, asincluding a result of our expansion into cloud-basedconsumption-based offerings. Our failure to execute on our revenue projections could impair our ability to meet our business objectives and adversely affect our results of operations and financial condition. Additionally, under applicable accounting rules, the timing of revenue recognition under Flex depends in part on the pace of conversion of our self-managed base onto Flex, customer adoption and usage patterns, which we cannot control. We may not be able to accurately forecast the timing or magnitude of revenue recognition, which could lead investors and analysts to misinterpret our performance and contribute to volatility in the price of our securities. There can be no assurance that our efforts to explain these dynamics will prevent adverse reactions in the market for our securities.

Our customer expansions and renewals may decline or fluctuate, and conversely, contractions and down-tiers may increase, or fluctuate, as a result of a number of factors, including: quality of our sales efforts, customer usage, customer satisfaction with our services and customer support, our prices (including price increases we have implemented in the past,past), the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, including inflation, tariffs, volatile interest rates, uncertainty with respect to the federal budget, debt ceiling and potential government shutdowns and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or reductions in our customers’ spending levels generally (including, our customers that have or may have to downsize their operations or headcount). If we cannot use our marketing strategies in a cost-effective manner or if we fail to promote our services efficiently and effectively, our ability to acquire new customers or expand the services of our existing customers may suffer. In addition, an increase in the use of online and social media for product promotion and marketing may increase the burden on us to monitor compliance of such materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.

•the timing of recognition of revenues (including from Flex) and impact of usage billing;

The implementation of AIAI, including agentic AI, and machine learning technologies in our services may result in reputational harm, liability, increased expenditures, or other adverse consequences to our business operations.

We have implemented AI capabilities throughout GitLab’s services, including as part of the GitLab Duo suite of AI features. AI, and particularly agentic AI, has become increasingly central to our business strategy. The technologies underpinning these features exist in a rapidly-evolving regulatory and commercial environment which presents regulatory, litigation, ethical, reputational, and financial risks.

In addition to our direct sales force, we use channel partners to sell and support our products. Channel partnerspartners, or concentration among certain channel partners, may become an increasingly important aspect of our business, particularly with regard to enterprise, governmental, and international sales. Our future growth in revenue and ability to achieve and sustain profitability may depend in part on our ability to identify, establish, and retain successful channel partner relationships in the United States and internationally, which will take significant time and resources and involve significant risk. If we are unable to maintain our relationships with these channel partners, or otherwise develop and expand our indirect distribution channel, our business, operating results, financial condition, or cash flows could be adversely affected.

The GDPR and U.K. GDPR requires, among other things, that personal data only be transferred outside of the European Economic Area, or the E.E.A., or the U.K., respectively, to jurisdictions that have not been deemed adequate by the European Commission or by the U.K. data protection regulator, respectively, including the United States, if certain safeguards are taken to legitimize those data transfers. Legal developments in the E.U. have resulted in complexity and uncertainty regarding such transfers. For example, the European Court of Justice,Justice of the European Union, or the CJEU, has previously advised that the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism) are not alone sufficient to protect data transferred to the United States or other countries not deemed adequate and the current E.U.-U.S. Data Privacy Framework, or the DPF, which permits certified U.S.-based organizations to receive transfers of personal data from the E.E.A. and the U.K, has previously been subject to proposed legal challenges before the CJEU. Thus, the Standard Contractual Clauses remain an important data transfer mechanism for transfers to countries outside of the E.E.A. and the U.K., but the use of Standard Contractual Clauses must still be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals, and additional measures and/or contractual provisions may need to be put in place. The European Data Protection Board has also issued a decision imposing higher burdens on the use of data transfer mechanisms, such as the Standard Contractual Clauses, for cross-border data transfers and the CJEU has stated that if a competent supervisory authority believes that the Standard Contractual Clauses cannot be complied with in the destination country and that the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer. Since the decision by the CJEU, supervisory authorities, including the CNIL and the Austrian Data Protection Authority, are now looking at cross-border transfers more closely, and have publicly stated that the transfer of data to the United States using certain analytics tools is illegal. While these decisions related specifically to analytics tools and may be inapplicable to organizations certified under the DPF, it has been suggested that it is far-reaching and applies to any transfer of E.U. personal data to the United States. We will continue to monitor this situation, and evaluate and utilize, where appropriate, all data transfer mechanisms available to us, but this may require the removal of tools from our services and websites where data is transferred from the E.U. to the United States, or impact the manner in which we provide our services, which could adversely affect our business.

We are also subject to evolving E.U. and U.K. privacy laws in multiple jurisdictions on cookies and e-marketing. In the E.U. and the U.K., regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive may increase fines for non-compliance. In the E.U. and the U.K., informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The U.K. GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. Further, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. In addition, in the United States, plaintiffs are increasingly asserting claims under state and federal wiretapping and privacy statutes, such as the California Invasion of Privacy Act and the federal Wiretap Act, alleging that cookies, pixels, session replay tools, chat features, software development kits, and similar tracking technologies constitute the unauthorized interception or recording of communications. Such claims are frequently brought not only as class actions but also as individual and mass arbitration demands and pre-litigation demand letters, and can carry statutory damages assessed on a per-violation basis. Regardless of their merit, these claims can be costly and time-consuming to defend, and the potential for aggregated statutory damages may create pressure to settle. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.

Competition for highly skilled personnel in our industry is intense, and we may not be successful in hiring or retaining qualified personnel to fulfill our current or future needs. We have, from time to time, experienced, and we may experience in the future, difficulty in hiring and retaining highly skilled team members with appropriate qualifications. In particular, recruiting and hiring senior product engineering personnel with AI and machine learning backgrounds has been, and we expect it to continue to be, challenging. OnIn June 1, 2026,addition, the board of directors of the Company approved a restructuring plan (thewe “Plan”).implemented Thein Company anticipates approximately 14% of its global workforce as of January 31,June 2026 may be impacted by the Plan. The Plan is intended to help position the Companyus for long-term success by realigning itsour operating structure to optimize execution against itsour strategic priorities.priorities; Anyhowever, futureit reduction in force couldmay be disruptive to our operationsoperations, may take longer to implement than anticipated, and couldmay yieldlead unanticipated consequences, such asto attrition beyond planned staff reductions, or disruptions in our day-to-day operations, or could negatively impact our ability to attract and retain qualified management, technology software professionals or other personnel who are critical to our business.

In the locations where we directly hire our team members into one of our entities, we must ensure that we are compliant with the applicable local laws governing team members in those jurisdictions, including local employment and tax laws. In the locations where we utilize professional employer organizations, or PEOs, we contract with the PEO for it to serve as “Employer of Record” for those team members engaged through the PEO in each applicable location. Under this model, team members are employed by the PEO but provide services to GitLab. We also engage team members through a PEO self-employed model in certain jurisdictions where we contract with the PEO, which in turn contracts with individual team members as independent contractors. In all locations where we utilize PEOs, we rely on those PEOs to comply with local employment laws and regulations. We also issue equity to a substantial portion of our team members, including team members engaged through PEOs and to independent contractors, and must ensure we remain compliant with securities laws of the applicable jurisdiction where such team members are located.

We plan to continue expandingto strategically structure our international operations in line with our business needs, which could subject us to additional costs and risks, and our continued expansion internationally may not be successful.risks.

We plan to expandcontinue to strategically structure our international operations internationally in the future. Outside of the United States, we currently have direct and indirect subsidiaries in Canada, Germany, France, India, Ireland, Israel, the Netherlands, Spain, the United Kingdom, Australia, India, Japan, South Korea, and Singapore, and have team members in over 60many countries. We also have a joint venture in China. There are significant costs and risks inherent in conducting business in international markets, including:

These factors and other factors could harm our international operations and, consequently, materially impact our business, operating results, and financial condition. In addition, we implemented a restructuring plan in June 2026, and, as a result, we expect to exit operations in approximately 22 countries. This restructuring, the actual charges for which may exceed estimates, subjects us to additional risks, including risks associated with winding down or transferring local employment arrangements and PEO relationships, potential adverse tax, regulatory, or contractual consequences of exiting these jurisdictions, disruption to customer support and service continuity in affected regions, and operational and reputational risks associated with the transition. The restructuring may take longer than anticipated, and we cannot assure that we will be able to complete the restructuring without adverse effects on our business, operating results, or financial condition, including that anticipated cost savings may not be realized. Further, we may incur significant operating expenses as a result of our international expansion,operations, which may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. If we are unable to continue to expand internationally and manage the complexity of our global operations successfully, our financial condition and operating results could be adversely affected.

In July 2025, the U.S. federal government enacted the One Big Beautiful Bill Act, or OBBBA, implementing significant corporate tax reforms. OBBBA provides immediate deductibility for domestic research and experimental expenses for tax years beginning after December 31, 2024, with elections available to accelerate deductions for previously capitalized research and experimental expenses from 2022 through 2024. Corporations may deduct remaining unamortized amounts either fully in their first taxable year beginning after December 31, 2024, or ratably over two years. OBBBA increased the tax rate associated with international operations and reduced the tax benefit associated with certain foreign-derived deduction eligible income of United States-domiciled corporations. OBBBA also increased the Base Erosion and Anti-Abuse Tax rate associated with payments from United States corporations to foreign subsidiaries treated as Controlled Foreign Corporations.

The dual class structureshares of our Class A common stock willare haveconcentrated the effect of concentrating voting control with those stockholders who hold our Class B capital stock, includingin our directors, executive officers, and beneficial owners of 5% or greater of our outstanding capital stock who hold in the aggregate a majority of the voting power of our capital stock, which willmay limit or preclude your ability to influence corporate matters, including the election of directors and the approval of any change of control transaction.

We believe we have built a highly differentiated platform that gives us an advantage over our competitors by empowering business, development, security, operations, and IT teams to collaborate in a single application across the entire DevSecOps lifecycle. Our technology leadership is an outcome of various factors, including our strong community, network of contributors, and continued enhancement of The GitLab platform by developing new features and expanding the functionality of existing features with speed and consistency. We have had a history of releasing enhancements to The GitLab platform every month and, as of AprilJuly 30,31, 2026, had done so for the last 175178 months. We intend to continue releasing new software on a monthly cadence.

Our future growth depends in large part on our ability to acquire new customers. This, in turn, relies on our ability to reach teams and organizations through our marketing and sales efforts. To this end, we are making investments in our sales and marketing efforts to expand our reach and differentiate The GitLab platform from competitive products and services. We believe that eventually the vast majority of organizations will switch to athe GitLab platform and embrace a single application approach, creating a substantial opportunity to continue to grow our customer base. As a result, our Base Customers increased to 10,83111,114 as of AprilJuly 30,31, 2026 from 10,10410,338 as of AprilJuly 30,31, 2025, an increase of 7%8% and our $100,000 ARR customers increased to 1,5191,571 as of AprilJuly 30,31, 2026 from 1,2881,344 as of AprilJuly 30,31, 2025, an increase of 18%.17%. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for information about how we define ARR.

We employ a “land and expand” business strategy that focuses on efficiently acquiring new customers and growing our relationships with existing customers over time. We believe that as our customers realize the benefits of a single application approach, they will increase the use of The GitLab platform, enhancing our ability to expand revenue generation within our existing customers over time. As a result of our approach, as of AprilJuly 30,31, 2026 and 2025, our Dollar-Based Net Retention Rate was 117% and 122%,121%, respectively. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for information about how we define Dollar-Based Net Retention Rate.

We calculate ARR by taking the monthly recurring revenue, or MRR, and multiplying it by 12. MRR for each month is calculated by aggregating, for all customers during that month, monthly revenue from committed contractual amounts of subscriptions, including our Flex, self-managed and SaaS offerings but excluding professional services. We calculate Dollar-Based Net Retention Rate as of a period end by starting with our customers as of the 12 months prior to such period end, or the Prior Period ARR. We then calculate the ARR from these customers as of the current period end, or the Current Period ARR. The calculation of Current Period ARR includes any upsells, price adjustments, user growth within a customer, contraction, and attrition. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the Dollar-Based Net Retention Rate.

Cost of revenue for self-managed and SaaS subscriptions consists primarily of allocated cloud-hosting costs paid to third-party service providers, personnel-related costs associated with our customer support personnel, including contractors, third-party payment processing fees, and allocated overhead. Personnel-related expenses consist of salaries, benefits, bonuses, and stock-based compensation. We expect our cost of revenue for self-managed and SaaS subscriptions to increase in absolute dollars as our self-managed and SaaS subscription revenue increases. As our SaaS and Duo Agent Platform offerings make up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and managing costs, which may adversely impact our gross margins.

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing personnel, advertising, travel and entertainment related expenses, branding and marketing events, promotions, software subscriptions, and our allocated cloud infrastructure expenses for our free tier. Sales and marketing expenses also include sales commissions paid to our sales force. Such costs incurred on acquisition of an initial contract are capitalized and amortized over an estimated period of benefit of three years, and any such expenses paid for the renewal of a subscription are capitalized and amortized over the contractual term of the renewal. However, prorated costs for sales commissions that are incremental to obtain a self-managed license contract are expensed immediately.years.

Other income (expense), net consists primarily of foreign currency transaction gains and losses and indirect tax credit expenseadjustments related to the JiHu formation.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists primarily of income taxes in the foreign and state jurisdictions in which we conduct business. We maintain a full valuation allowance against our deferred tax assets in certain jurisdictions because we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Comparison of the Three Monthsand EndedSix Aprilmonths 30,ended July 31, 2026 and 2025

Revenue increased $49.6$50.3 million, or 23%,21%, to $264.2$286.3 million for the three months ended AprilJuly 30,31, 2026 from $214.5$236.0 million for the three months ended AprilJuly 30,31, 2025. Revenue increased $99.9 million, or 22%, to $550.4 million for the six months ended July 31, 2026 from $450.5 million for the six months ended July 31, 2025. The increase was primarily due to the ongoing demand for the GitLab platform, including adding new customers, the expansion within our existing paid customers, and an increase in our number of customers with $100,000 or greater in ARR. As of AprilJuly 30,31, 2026 and 2025, our expansion is reflected by our Dollar-Based Net Retention Rate being 117% and 122%,121%, respectively. We had 1,5191,571 customers with ARR over $100,000 as of AprilJuly 30,31, 2026, increasing from 1,2881,344 customers with ARR over $100,000 as of AprilJuly 30,31, 2025.

Revenue attributed to our variable interest entity, JiHu, was $2.5$3.3 million and $1.9$2.2 million for the three months ended AprilJuly 30,31, 2026 and 2025, and $5.8 million and $4.1 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

Cost of revenue increased by $12.5$17.1 million, to $37.5$45.6 million for the three months ended AprilJuly 30,31, 2026 from $25.0$28.5 million for the three months ended AprilJuly 30,31, 2025, primarily due to an increase of $7.5$11.0 million in third party hosting costs for SaaS and cloud usage. The remaining change was primarily attributable to an increase of $3.8$4.3 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $0.9$1.6 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below)., and an increase of $1.0 million in restructuring costs. Gross margin decreased by 2%4% to 86%84% for the three months ended AprilJuly 30,31, 2026 compared to 88% for the three months ended AprilJuly 30,31, 2025.

Cost of revenue attributed to our variable interest entity, JiHu, was $0.5$0.8 million and $0.4 million for each of the three months ended AprilJuly 30,31, 2026 and 2025.2025, and $1.3 million and $0.9 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

Sales and marketing expenses increased by $11.8$24.8 million, to $119.4$134.4 million for the three months ended AprilJuly 30,31, 2026 from $107.6$109.6 million for the three months ended AprilJuly 30,31, 2025, primarily due to an increase of $6.3 million in hosting expenses and an increase of $5.9 million from company events. This was partially offset by a decrease of $2.0$9.3 million in personnel-related expenses, driven by aan decreaseincrease in our average sales and marketing headcount and an increase of $4.6$5.4 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below)., an increase of $5.2 million in restructuring costs, and an increase of $3.4 million in hosting expenses. The remaining change was primarily attributable to an increase of $1.7 million in marketing spend and an increase of $1.3 million in consulting expenses.

Sales and marketing expenses attributed to our variable interest entity, JiHu, were $0.6 million and $1.5 million for each of the three months ended AprilJuly 30,31, 2026 and 2025.2025, and $2.1 million and $3.0 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

Research and development expenses increased by $6.1$23.5 million, to $95.0 million for the three months ended July 31, 2026 from $71.5 million for the three months ended AprilJuly 30, 2026 from $65.4 million for the three months ended April 30,31, 2025, primarily driven by an increase of $2.6$8.0 million in hostingrestructuring expenses andcosts, an increase of $2.2$6.1 million in personnel-related expenses, driven by an increase in our average research and development headcount and a decrease of $0.6$2.6 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below)., and an increase of $4.2 million primarily from an in-person company event. The remaining change was primarily attributable to an increase of $3.6 million in hosting expenses and an increase of $1.6 million in software expenses.

Research and development expenses attributed to our variable interest entity, JiHu, were $0.6$0.5 million and $0.4$0.7 million for the three months ended AprilJuly 30,31, 2026 and 2025, and $1.1 million and $0.3 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

General and administrative expenses increased by $0.5$23.5 million to $51.6$68.2 million for the three months ended AprilJuly 30,31, 2026 from $51.1$44.7 million for the three months ended AprilJuly 30,31, 2025, primarily due to an increase of $2.4$16.7 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and aan decreaseincrease of $1.4$11.1 million in stock-based compensation expenses (as discussed in the section titled “Stock-Based Compensation Expense” below)., Thisan was partially offset by a decreaseincrease of $1.7$5.2 million mainlyin restructuring costs, and an increase of $1.3 million in charitablesoftware donations of common stock.expenses.

General and administrative expenses attributed to our variable interest entity, JiHu, were $1.3not millionmaterial for each of the three months ended AprilJuly 30,31, 2026, compared to $1.6 million for the three months ended July 31, 2025, and were $1.3 million and $2.9 million for the six months ended July 31, 2026 and 2025.2025, respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

Stock-based compensation expense decreasedincreased by $5.8$20.7 million, to $50.1$75.0 million for the three months ended AprilJuly 30,31, 2026 from $55.8$54.3 million for the three months ended AprilJuly 30,31, 2025,2025. The increase was primarily duedriven toby aan decreaseincrease of $3.7 million of expense from RSUs and $1.1$12.4 million related to stockPSU options.awards granted during the current fiscal year and an increase of $9.3 million in RSU expense.

Stock-based compensation attributed to our variable interest entity, JiHu, during the three and six months ended July 31, 2026 was ana net reversal of stock-based compensation expense of $0.9$1.2 million and net$0.3 gainmillion, ofrespectively, $0.2and million forduring the three and six months ended AprilJuly 30,31, 20262025 was $1.0 million and 2025,$0.8 million of stock-based compensation expense (net of forfeitures), respectively. See “Note 10.11. Joint Venture” to our condensed consolidated financial statements for additional details.

Interest income increased for the three and six months ended AprilJuly 30,31, 2026 compared to the three and six months ended AprilJuly 30,31, 2025, primarily due to income earned from our cash, cash equivalents, and short-term investments, driven by higher average balances during the three and six months ended AprilJuly 30,31, 2026 compared to the three and six months ended AprilJuly 30,31, 2025.

Foreign exchange gains (losses), net increased for the three and six months ended AprilJuly 30,31, 2026 compared to the three and six months ended AprilJuly 30,31, 2025 primarily related to the revaluation of non-functional currency denominated monetary assets and liabilities.

Provision for (Benefit from) Income Taxes

Our effective tax rate for the three and six months ended AprilJuly 30,31, 2026 was differentdiffered from the U.S. federal statutory tax rate of 21%, primarily due to the Company’smix foreignof income and domesticlosses operations,across the jurisdictions in which we operate, the Base Erosion and Anti-abuse Tax (“BEAT”), nondeductible expensesexpenses, discrete tax items, and losses notfor benefited,which no benefit was recognized, partially offset by tax credits.

As of AprilJuly 30,31, 2026 and January 31, 2026, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating to $1,357.5$1,257.0 million and $1,259.9 million, respectively, which were held for working capital and strategic investment purposes. As of AprilJuly 30,31, 2026, cash and cash equivalents consist of cash in banks and money markets funds, while short-term investments mainly consist of treasuries, corporate debt securities, agency securities, and commercial paper.

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for personnel-related expenses, sales and marketing expenses, third-party cloud infrastructure expenses, and overhead expenses. WeNet cash used in operating activities was $3.1 million for the three months ended July 31, 2026, primarily due to the timing of accounts receivable collections and cash payments associated with our restructuring activities, notwithstanding which we have generated positive cash flows for each of the threesix months ended AprilJuly 30,31, 2026 and 2025 from operating activities.

Cash provided by operating activities during the threesix months ended AprilJuly 30,31, 20252026 was $106.3$146.1 million, primarily consisting of our net loss of $36.3$41.7 million, adjusted for non-cash items of $81.2$153.9 million (mainly attributable to stock-based compensation expense of $55.8$125.1 million and amortization of deferred contract acquisition costs, net of $13.9$23.5 million), and net cash inflows of $61.4$33.9 million provided by changes ofin our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease ofin accounts receivable of $65.9$46.0 million, the decrease in prepaid expenses and other current assets of $7.7 million, the increase in accrued expensescompensation and other liabilitiesbenefits of $10.0$7.6 million andmillion, the increase in accountsdeferred payablerevenue of $3.6$4.5 million, partially offset by the decrease in accrued compensation and related expenses of $13.1 million and the decreaseincrease in deferred contract acquisition costs of $8.1$24.7 million and the decrease in accrued expenses and other current liabilities of $7.0 million. These changes primarily reflect ourimproved operational performance with successful collections driving lower accounts receivablereceivable, ongoing customer subscription growth contributing to increased deferred revenue, and the decrease in accrued compensation is largely due to the payment of prior period commissions and bonuses, while thean increase in accrueddeferred expensescontract primarilyacquisition relatescosts todriven ESPPby contributionssales commissions capitalized on new and accruedrenewed marketingcustomer andcontracts researchexecuted andduring developmentthe spending.period.

Cash used in investing activities during the threesix months ended AprilJuly 30,31, 20252026 was $81.9$5.4 million, primarily consisting of $81.0$2.8 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $0.9$2.6 million in purchasesadditions ofto property and equipment.

Cash used in financing activities during the threesix months ended AprilJuly 30,31, 2026 was $47.8$143.3 million, primarily attributable to $50.0$154.7 million in repurchases of common stock and $0.2$0.9 million of payments for taxes related to net share settlement of equity awards, partially offset by $2.4$5.4 million in proceeds from the issuance of common stock upon exercise of stock options.options and $6.9 million of proceeds from the issuance of common stock under the ESPP.

During the quartersix months ended AprilJuly 30,31, 2026, we repurchased 2,378,8925,840,297 shares of our Class A common stock for aggregate consideration of $50.0$154.7 million under our 2026 Repurchase Program, representing 12.5% of the $400.0 million authorized.Program. We funded these repurchases from the existing cash and short-term investments. As of AprilJuly 30,31, 2026, $350.0$245.3 million remained available for future repurchases.

Cash provided by financing activities during the threesix months ended AprilJuly 30,31, 2025 was $3.3$15.7 million, attributable to $7.3 million of proceeds from the issuance of common stock upon stock options exercises.exercises and $8.4 million of proceeds from the issuance of common stock under the ESPP.

Adjusted free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for additions to property and equipment, plus any non-recurring income tax payments related to the BAPA or minus any non-recurring income tax refunds related to the BAPA, plus any non-recurring payments related to the formation of JiHu.JiHu (see “Note 12. Income Taxes” for further discussion). We believe that adjusted free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after the investments in additions to property and equipment, any non-recurring income tax payments or refunds related to the BAPA, and any non-recurring payments related to the formation of JiHu, can be used for strategic initiatives, including investing in our business, repurchasing shares of our common stock, and strengthening our financial position. One limitation of adjusted free cash flow is that it does not reflect our future contractual commitments. Additionally, adjusted free cash flow does not represent the total increase or decrease in our cash balance for a given period.