The meeting focuses on the financial results report of Gitlab for the second quarter of the 2026 fiscal year, including business overview, financial analysis, and forecast for the third quarter and full year performance. The discussion emphasized the use of non-GAAP financial indicators and the risk factors that may impact the company's future performance.

The report showed a 29% year-on-year increase in revenue in the second quarter, reaching $236 million, while also raising the non-GAAP operating profit expectations, demonstrating steady growth and operational efficiency. The company is implementing a dual-track strategy of sales-driven and product-driven approaches to enhance new customer acquisition, especially in mid-end markets, while optimizing product experience to promote self-service growth. A new Chief Product and Market Officer has been appointed, with expectations of gradually improving performance.

By strengthening the sales team, optimizing sales and after-sales processes, and developing new product sales strategies, we accelerate the realization of customer value and platform adoption. At the same time, we utilize signals from qualified product leads to enhance the sales team's support for the customer value journey, and promote revenue growth through a two-pronged approach.

GitLab has successfully attracted a number of enterprise customers, including Virgin Media O2, a European fintech company, a top US bank, and a government technology agency in Singapore, through its comprehensive platform solution. These customers have not only increased their investment, but have also optimized their processes from code management to security scanning using GitLab, significantly reducing downtime and improving security scanning coverage. In addition, GitLab's Dedicated and Ultimate products have become key factors driving customer upgrades and extensions due to their high value features, especially in terms of security and automated compliance.

GitLab accelerates the delivery of high-quality, market-leading solutions through innovation in the areas of DevOps, security, and AI. The addition of 72 features, including Maven Virtual Registry, GitLab Runner 18.1, and SLSA compliance support, strengthens its competitive advantage in the market. Additionally, the GitLab Duo Agent platform and integration with Amazon Q showcase its strength in AI tool integration, attracting large enterprise customers like Emirates and HFM, further solidifying GitLab's position in the software development platform market.

Discussed the impact of AI on seat growth and future business model transformation, emphasizing that seat growth contributes to over 70% of revenue. AI tools are expected to increase GitLab usage, with plans to introduce a hybrid model based on usage-based fees to ensure continuous growth.

GitLab has established partnerships with multiple AI giants to launch the first model context protocol server, strengthen the integration of AI code generation tools, and strive to create an independent, optional cloud environment and AI provider DevSecOps platform to meet the security and compliance requirements of enterprise software development. Despite facing challenges in the quality and security of AI tool-generated code, GitLab is leading the industry towards a new stage of development with its platform interoperability and flexibility.

The company announced that Brian will resign, James Shen will temporarily serve as CFO, and Simon Mundy will be promoted to Chief Accountant, ensuring a smooth transition. In the second quarter, revenue reached 2.36 billion, a year-on-year increase of 29%. Customers with ARPU exceeding $5000 contribute over 95% of total revenue, with a continued increase in renewal rate and customer value. The platform value is significant, and financial health is stable.

The company reported that the second quarter non-GAAP gross margin remained at an industry-leading level, with rapid expansion of the SaaS business, significant increases in non-GAAP operating income and free cash flow. Despite facing market volatility and pressure from small business budgets, GitLab achieved sustainable growth and improved profitability by optimizing operational efficiency, investing in AI capabilities, and upgrading its platform. The company expects revenue and profits to continue to grow steadily for the full year, while adjusting full-year guidance to adapt to market changes.

Discussed the management changes since the new leader joined Gitlab, emphasizing the importance of team stability and expansion, as well as the opportunities and challenges in the field of AI. At the same time, updated financial guidance, explained the reasons for the strong performance in the second quarter, and cautiously adjusted expectations for the full year and subsequent quarters to adapt to market changes.

Discussed the positive impact of adjustments to the Go-to-Market strategy on revenue growth, including the establishment of new business departments, optimization of corporate sales processes, and enhancement of sales capabilities, aiming to lay the foundation for revenue targets for the coming years, while also emphasizing that the performance in the current quarter still aligns with the annual guidance.

Discussed adjustments to the company's sales strategy, including focusing on new business development, enhancing sales capabilities, and vertical and specialized market layout, aiming to accelerate market expansion and business growth, with the goal of achieving scale development in the coming fiscal year.

The conversation discussed the reasons why the softening of the SMB market may continue until the end of the year, including the transfer of budgets to efficiency tools, etc. The SMB market accounts for only about 8% of total revenue, and the company has responded by adjusting pricing and packaging strategies. In the future, it is necessary to focus on market changes, enhance product attractiveness, in order to promote growth in SMB market share.

Discussed the role of AI coding tools in the software development lifecycle, emphasizing the unique value of Gitlab as a change management platform, as well as integration strategies with AI tools like Cursor, Gem Andi CLI, etc. This demonstrates that Gitlab sees AI tools as supplementary rather than a threat, working together to create more opportunities.

The conversation discussed the reasons for the slowdown in customer growth for the software company, including inadequate sales incentives and excessive reliance on existing customers for expansion. In response to this trend, the company will take measures such as establishing a specialized sales team focusing on acquiring new customers and introducing a product-driven growth strategy. It is expected that these changes will bring preliminary results in the upcoming fiscal year.

During the Q&A session of the meeting, a question was first raised by a representative from JP Morgan about a certain topic, followed by a representative from BTG also raising a related question, showcasing the communication and discussion among different institutions at the meeting.

Discussed the transformation of Gitlab in terms of product and market strategy, aiming to accelerate customer acquisition, adoption, and innovation speed by combining sales-driven and product-driven growth approaches. Emphasized the importance of obtaining high-touch sales experience from servicing large enterprise clients, while leveraging product-driven growth methods such as directly gathering feedback from users to facilitate product iteration and market expansion.

The conversation discussed the adjustment plan for the sales team, including recruiting new team members and optimizing training processes, but did not involve changes in sales territories or client allocations, nor did it adjust the sales incentive plan. It is expected that these adjustments will not cause major disruptions, and they have been incorporated into the annual guidelines, aimed at laying a stronger foundation for the next fiscal year.

The conversation made it clear that the new team will focus on acquiring new customers, while the existing team will focus on realizing and expanding the value of existing customers, and also acquiring new customers when opportunities arise.

Discussed the importance of incentivizing employees' correct behavior through market expansion strategies, especially using salary as an incentive tool, and how to effectively utilize these strategies in practice.

The importance of discussing the shift in company sales strategy from serving existing customers to acquiring new ones was emphasized. It was proposed to promote growth in new customers by adjusting the incentive mechanism for compensation, while also highlighting the necessity of vertical market specialization and deepening services. The onboarding period for sales representatives was introduced as 6 to 9 months, as well as the company's recruitment plan set to launch in the second half of the year, aimed at supporting future growth goals.

Discussed the application of the GitLab Duo Agent platform in AI-driven project management and collaboration, emphasizing the platform's innovative direction, including monthly updates, integration with AI tools, providing customized solutions, as well as positive feedback from customers and future planning of the platform.

The conversation discussed the accelerated growth of the SaaS business in the second quarter, analyzed the driving factors behind the growth including new AI tools and sales team performance, and mentioned a one-time project that affected the performance of this quarter. In addition, it explained the reasonableness of the growth expectations for the fourth quarter as an indicator of future growth, emphasizing the importance of market strategy adjustments for long-term success.

The performance in the second quarter was influenced by two factors. First, the first month's orders hit a two-year high, accounting for over 20% of the total. Second, in terms of product structure, the SaaS model, due to its convenience and low total ownership cost, significantly promoted customers to quickly start projects and achieve return on investment. Compared to self-managed services, SaaS has shown a stronger growth momentum. The company has adopted a customer-oriented strategy, flexibly adapting to customer needs, and promoting growth in various areas such as SaaS, small and medium-sized services, and specialized services.

During the discussion, the strong financial condition of the company, the advantages of the unified DevSecOps platform, and the importance of team building were emphasized. The company's financial performance is excellent, the platform is unique and enhanced by AI, and it offers flexibility in cross-cloud selection. The team is growing, aiming to surpass $1 billion in revenue and move towards future growth.