GitLab's second quarter revenue forecast falling short of estimates, and still, the application software company's first quarter results beat expectations with revenue climbing 27% year over year. Joining me now, we've got Brian Robins, GitLab CFO. Brian, thanks so much for hopping on with us. We just saw a look at shares there. Right now, just oscillating between gains and losses here, investors trying to really get their minds around the quarter. Walk us through the state of the business right now from your lens.

Yeah, absolutely. Thanks, Brad, for having me on. It's great to be back. Um, as you know, we reported earnings, uh, two days ago. Uh, we reported revenue growth of 27% year over year. Uh, great, uh, non-GAAP operating margins and 90%, and we produce over $100 million of free cash flow. Uh, we beat our number, the consensus number, but it was a smaller beat than we usually beat. And then we kept the annual guidance, um, as what we committed to last quarter. And so there was, uh, on the callbacks, you know, the investors were looking for a larger raise and to pass through the beat that we had in 1Q.

What are you seeing among your largest client base right now? I know you talked about Super Micro and how they're scaling up and looking across some of the size of their software team upgrading from the free tier in Q1. And so now a large customer and also a paying large customer as well. What are you seeing among that cohort of your business partners?

Absolutely. Um, you know, GitLab between our enterprise business and our federal business represents about 72% of our overall business. Uh, the every company today has to be a software company. GitLab enables companies to build software better, faster, cheaper, and more secure. And so we're seeing a number of companies adopt the platform, which enables them to increase developer productivity, improve operational efficiency, reduce security and compliance risk, and also accelerate their digital transformation.

And so where are you seeing the opportunities right now to beyond that, that outside 72% of the revenue base expand further into other sectors where there's an opportunity for GitLab to entrench its own recurring business opportunity?

Yeah, you know, we are a ratable business model, so most, uh, you know, about 90% of our business is ratable. Uh, we have cohorts from 10 years ago are still expanding with us today at the same rate as cohorts were last year. We reported a net dollar retention rate of 122%, which is best in class for software companies. And so every company has to be a software company, and we're helping them do that. Uh, and so whether it's a large enterprise, whether it's a small financial institution, whether it's a transportation company, GitLab has approximately 50% of the Fortune 100 companies as customers today.

You've made it into the Kathy Wood portfolio. What is the significance when you know that there is such a kind of forward-looking and innovative focused type of portfolio and fund that's been put together that now has GitLab in it?

Absolutely. Uh, we spoke to Kathy yesterday. Her and our team are great, asked a lot of great questions. We have a lot of great, uh, shareholders and investors across the board. You know, I think it just really shows what the opportunity is for GitLab.

And so, all these things in mind, as you think out to the deal sizes and also deal scrutiny as there are some who you would like to see convert from that freemium model on into longer run paid subscribers and purchasing seats for within the GitLab platform, how is AI also fueling some of those conversations?

Yeah, uh, great question. Everybody's talking about AI today. There's been a number of companies who have grown very quickly related to AI. Um, GitLab is injecting AI in the entire software development lifecycle. One of the ways we're a little bit different is we're open source and allow code creation. Uh, we actually put security and privacy, uh, you know, at the forefront. We allow people to bring their own self-hosted models. Um, we have a knowledge graph that we're pasting where we're creating all the context to allow the AI to help developers become, uh, more productive. And then we're actually injecting that AI throughout the full software development lifecycle. So there's a number of different AI tools that we have today. One is Duo Pro. Uh, we have Duo Enterprise and we're also in the winter, uh, launching some of our Gentic AI features, which will allow the computer to actually go in and do bug fixes and various functions to help the developer become more efficient.

Great to have you here with us, Brian, and thanks for taking us into some of the key drivers of the quarter and the outlook. Appreciate it.

Thanks, Brad. Appreciate it. Have a great day.

You too.