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Good day, everyone, and welcome to today's GitLab Fourth Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] Please note, this call is being recorded. It is now my pleasure to turn the conference over to Yaoxian Chew.

Good afternoon. We appreciate you joining us for GitLab's Fourth Quarter and Fiscal Year 2026 Financial Results Conference Call. With me are Bill Staples, our CEO; and Jessica Ross, our CFO. During this afternoon's call, we will provide an overview of the business, commentary on our fourth quarter and full year results and guidance for the first quarter and fiscal year 2027. Before we begin, I'll cover the safe harbor statement. I would like to direct you to the cautionary statement regarding forward-looking statements on Page 2 of our presentation and in our earnings release issued earlier today, both of which are available under the Investor Relations section of our website. The presentation and earnings release include a discussion of certain risks, uncertainties, assumptions and other factors that could cause our results to differ from those expressed in any forward-looking statements within the meaning of the Private Securities Litigation Reform Act. As is customary, the content of today's call and presentation will be governed by this language. In addition, during today's call, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures exclude certain unusual or non-recurring items that management believes impact the comparability of the periods referenced. Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure. I will now turn the call over to Bill. Bill?

Thank you, Yao, and good afternoon, everyone. Fiscal 2026 was a significant year for GitLab. ARR surpassed $1 billion. We generated $220 million in free cash flow, an increase of over 80% and nearly 7 percentage points of margin expansion year-over-year. FY '26 and Q4 delivered our highest absolute net new ARR year and quarter ever, and we intend to build on that momentum. I'm really proud of the work the team is driving. Given our deep technological and structural advantages and the growing TAM ahead, we believe we can do even better. I believe we have the right team in place to execute the opportunity, and the rest of my remarks will lay out our plan. Jessica will then walk through the financials. Let me address our FY '27 outlook directly. We aren't satisfied with our revenue growth guidance. Like many companies reaching $1 billion in revenue, our focus has been shifting to scaling our growth. We've identified 5 specific strategies where we see the greatest opportunity to improve our growth at scale in FY '27. The 5 are: #1, reaccelerating first orders to fuel long-term expansion; #2, scaling sales capacity with dedicated leadership and investment; #3, expanding product packaging to unlock new monetization vectors; #4, engaging price-sensitive customers with greater value and coverage; and #5, continuing to execute an AI strategy aligned with our core platform strengths. We've already begun acting on all 5. FY '27 is all about execution and proving our hypothesis with results. Let me walk through each one. In FY '26, we reversed a long period of first order deceleration. This is critically important because our customers often land small but extend steadily, a pattern that's held for over a decade. Sales-led first orders began reaccelerating in Q2 FY '26 right after Ian joined. On the product side, Manav has reinvigorated product-led growth. First order logos inflected in October, and we've seen 4 consecutive months of improvement. For FY '27, we now see a clear path to sustained acceleration in first orders, driven by continued sign-up momentum, new product-led on-ramps and a dedicated first order sales team with a new global leader, 4 regional leads in place and rapid hiring underway. In fact, the team has already closed their first deals in Q1. As a proof point, this quarter, we secured a landmark deal with one of the semiconductor industry's most strategic players, a cornerstone supplier in the AI super cycle. After a competitive evaluation against incumbent tooling and AI-powered alternatives, they chose GitLab Premium and Duo Enterprise for over 5,000 users, validating our unified platform and AI capabilities. With regard to sales capacity, we began increasing headcount in FY '26, and we're entering FY '27 with more capacity than we've ever had. And we have a path to even stronger ramped capacity beginning in Q3. With FY '27 kickoff, we've overhauled territory design to also better serve all segments and strengthen enablement. When it comes to innovation, GitLab has a long history of delivering ongoing value with 172 consecutive months of new releases. Customers who've consolidated repos and CI on GitLab consistently want to do more with us but have told us our pricing is too coarse grained. In FY '27, we plan multiple new monetization opportunities each quarter, built-in artifact management, software supply chain security, integrated secrets management and more. These will be opt-in a la carte offerings that provide intermediate options for both Premium and Ultimate customers who've been asking for ways to opt into more value at incremental price. Most of these are anticipated throughout the year. So we expect modest FY '27 contribution, but meaningful impact for FY '28 and beyond. Our 50% Premium price increase a few years ago also coincided with rising AI code experimentation and flattish SaaS budgets. Simultaneously, our upmarket shift reduced technical resources at the lower end of the market. Together, these have slowed Premium growth, particularly among price-sensitive customers, which we estimate at roughly 20% of our ARR, including the SMB weakness that we've been discussing recently. We're responding here on multiple fronts. We now have an AI product and platform in market since mid-January that helps accelerate the full software life cycle. And we're including compelling GitLab DAP promotional credits with Premium and Ultimate users to increase the value they see. We have adjusted coverage models as well for this cohort, and we're investing in onboarding, adoption and self-service experiences that will help all customers get value faster. GitLab sits at the heart of how enterprises build and deliver software. In January, we launched GitLab Duo Agent Platform and repositioned GitLab for the AI era. Our intelligent orchestration platform lets users deploy AI agents across the software life cycle using the same context, permissions and security model that they already have in place today. This platform rests on 3 core pillars: workflows, a unified place where teams and AI agents collaborate on tasks across the software life cycle. Context, rich semantic access to full SDLC data for high-quality and more efficient outcomes. Guardrails, with GitLab, you can deploy anywhere and have security and compliance embedded directly in your software factory. GitLab is positioned where AI systems are best leveraged, the point of execution. We bring together the missing context and take action where the code lives, where it's merged, built, deployed, where compliance is enforced and where corrective actions prevent downstream bugs, technical debt and security issues. Before AI, our platform reduced friction for developers. Now it can unlock step function productivity gains by reducing friction for agents and the humans managing them. Duo Agent Platform also introduces usage-based pricing alongside our seat model. Customers pay for agent work where every engineer can delegate tasks to multiple agents in parallel. As agents automate more across the software life cycle, revenue grows with the value we deliver. Take one of our airline customers with a 3,000-person technology organization. They're deploying Duo Agent Platform to automate vulnerability remediation, dependency updates and cloud migrations. Roughly 90% of their component updates now run autonomously, freeing developers for customer-facing feature work. We have an ambitious road map and plan to deliver new value every single month with focused go-to-market to accelerate adoption. As a reminder, nearly 70% of revenue comes from self-managed customers who require an upgrade to release 18.8 or better, and we typically see it taking 2 quarters for over 50% to adopt the new release. We're investing alongside our partners to accelerate upgrades wherever possible. FY '27 is about converting pilots to production, not significant revenue contribution. We'll share metrics as they become material. The software development market is undergoing a fundamental shift. AI is accelerating. It's increasing code volume, delivery complexity and the stakes of getting it wrong are just higher than ever. Security, compliance and governance aren't optional. They're existential. This is the environment GitLab was built for. The changes I've described, rebuilding our go-to-market capacity, creating new monetization vectors and positioning GitLab at the center of Agentic AI, these aren't separate initiatives. They're one integrated plan to capture a market that's moving in our direction. And our data confirms this. In Q4, we added the most $1 million customers in GitLab's history. Gross retention is consistent with historical trends and churn is at its lowest it's been in 4 years. Ultimate is now 56% of ARR and accounted for 9 of the top 10 deals. We see more than 60% year-over-year growth in Ultimate projects with security scanning and nearly 30% more security projects per seat. Indeed operates the world's #1 job site. They started with GitLab in 2015 for source control, expanded to Premium in 2020 to support CI/CD adoption and upgraded to Ultimate in 2024 for advanced security, compliance and governance capabilities across thousands of GitLab users and saw an 80% increase in pipelines with lower infrastructure costs. This quarter, they're deepening their strategic partnership with a move to GitLab dedicated as part of their infrastructure modernization journey. Mercedes-Benz's expansion this quarter also illustrates our compounding growth potential. Today's vehicles contain more software code than fighter jets, driving companies like Mercedes to hire thousands of engineers. Our relationship began years ago with source code management. Today, GitLab serves as a central platform powering their software-defined vehicle transformation, supporting thousands of developers across regions. Now investor uncertainty is understandably high. When every developer has access to the same models, code generation becomes a commodity. The bottleneck shifts to everything after the code, reviews, security, pipelines, compliance, deployment. That's precisely where we live. And that position gets harder to replicate as AI proliferates. Some of our customers already carry decades of technical debt, thousands of repositories and compliance obligations tied to policies written years ago. GitLab holds all of that context, history, ownership, risk, intent, it's all getting indexed and connected across the software life cycle. In the world of autonomous agents, context is the difference between useful action and a potentially catastrophic one. Every commit, every scan, every deployment makes our graph richer and our agents more accurate. The longer a customer runs on GitLab, the smarter the platform gets. That is a moat that widens over time. And with GitLab Duo Agent Platform, we're not just a tool that agents use, we're the environment where they run, the orchestration layer that governs what they do in what order and within which guardrails. We have the ingredients for a generational company, a growing market, trusted distribution at scale, deep customer relationships and platform capabilities that have been built up over years. We operate from a strong financial position with approximately $1.3 billion in cash and investments and are sustainably generating free cash flow. I'm pleased to share that our Board has authorized GitLab's first share repurchase program at $400 million, reflecting confidence in our fundamentals and the growth plan ahead. We believe GitLab shares represent attractive value and remain committed to disciplined capital allocation. FY '27 is about demonstrating that this foundation can deliver value to customers, momentum through consistent performance and progress quarter-by-quarter. With that, I'd now like to turn it over to Jessica to walk through the financial results.

Thank you, Bill, and thank you to everyone for joining us today. This is my first earnings call as GitLab's CFO, and I'm excited to be here. I joined GitLab because I see an incredible business at the center of unprecedented industry transformation. The opportunity to help shape how AI transforms software development through intelligent orchestration is compelling. In my first few weeks, I've been impressed by the passionate customers and team members, the platform's technical depth and the leadership team Bill has assembled. My focus is on building the financial discipline and operational rigor to support our next chapter of growth. I look forward to getting to know many of you in the coming weeks. I'll start with our full year and fourth quarter results, then cover our capital allocation framework and FY '27 guidance. Fiscal 2026 was a strong year. Revenue grew 26% to $955 million. Non-GAAP operating margin reached 17%, up approximately 680 basis points year-over-year. Adjusted free cash flow grew 83% to $220 million with over 7 points of margin expansion. We now have 10,682 customers with ARR of at least $5,000, contributing over 95% of total ARR. Our $100,000-plus cohort grew 18% year-over-year to 1,456 customers, representing just over 75% of ARR. And as Bill mentioned, we added the largest number of $1 million-plus customers in GitLab's history in Q4, now more than 155, up 26% year-over-year. Now let me move to our fourth quarter results. Q4 revenue was $260 million, up 23% year-over-year, 3.5 points above guidance. Non-GAAP operating margin reached 20.5%, 5 points above guidance. The revenue beat was in part due to approximately $3 million of onetime items related to favorable foreign exchange and JiHu performance. First order bookings were healthy with particular strength in Asia Pacific. Enterprise win rates improved quarter-over-quarter and sales cycles remained consistent. We did see softer performance in the U.S. More broadly, we experienced a few large deals slipping from customers facing budget constraints and industry challenges. We also saw only a partial recovery in the public sector following the government reopening and continued weakness in the price-sensitive cohort Bill alluded to earlier. Dollar-based net retention was 118%. Gross retention remains well above 90% and consistent with historical trends. Our largest customers continue to expand, though we're seeing pressure in the mid-market and SMB segments that weighed on net retention. Total RPO grew 20% year-over-year to $1.1 billion. Current RPO grew 24% to $719.4 million. Non-GAAP gross margin was 89%. SaaS now represents approximately 32% of total revenue and grew 38% year-over-year, driven by continued strength in GitLab Dedicated and Duo. Q4 non-GAAP operating income was $53.4 million with operating margin of 20.5%, up approximately 280 basis points year-over-year. Q4 adjusted free cash flow was $41.8 million at a 16% margin. We ended the quarter with $1.3 billion in cash and investments. On JiHu, Q4 non-GAAP expenses were $3.9 million compared to $3.2 million in the prior year. Our goal remains to deconsolidate JiHu, though we cannot predict the likelihood or timing of when that may occur. Before turning to guidance, let me briefly cover our capital allocation framework. First, investing in growth. Capital goes first to high-return investments that accelerate our product road map and strengthen our go-to-market motion. scaling sales capacity, building our first order team, accelerating Duo Agent Platform and deepening security innovation. We're reallocating resources to the highest return initiatives while balancing growth with profitability and cash generation. Second, balance sheet resilience. We're maintaining a strong liquidity position with sustainable free cash flow and approximately $1.3 billion in cash, cash equivalents and short-term investments. We have the flexibility to invest in ourselves and inorganic growth through cycles without constraint. Third, share repurchases. Our Board has authorized GitLab's first $400 million share repurchase program, reflecting confidence in our fundamentals and a disciplined approach to capital allocation. We look at repurchases as a meaningful way to drive shareholder value and manage dilution, particularly around periods of share price dislocation. Now moving to our FY '27 guidance, guidance represents our clearest view of the business given the current operating environment. Let me frame the key assumptions before getting into the numbers. First, ratable model dynamics. In a ratable model, revenue reflects the cumulative effect of bookings activity over multiple prior periods. As Bill shared previously, we aren't satisfied with sustaining historical growth rates and are executing all 5 growth opportunities he identified. However, a significant portion of our FY '27 guide acknowledges that the bookings growth rate has not scaled with revenue over the past 3 years and that reality flows through mathematically. Second, nonrecurring FY '26 tailwinds. FY '26 benefited from several items we are not embedding in guidance for FY '27. In aggregate, approximately 300 basis points of growth. In order of magnitude, these include the Premium price increase from 3 years ago, positive FX dynamics and specific clauses in certain customer contracts. Third, segment caution. We expect better public sector performance in FY '27 but are not assuming a bounce back. We expect the price-sensitive cohort, approximately 20% of ARR to remain under pressure given the trends we observed in Q4. And finally, prudent assumptions on newer growth drivers. We are assuming minimal revenue contribution from GitLab Duo Agent Platform in FY '27 we launched 7 weeks ago and need time to convert pilots to production deployments. Additionally, approximately 70% of our revenue comes from self-managed customers, which dictates a measured adoption curve. With that context, for Q1 FY '27, we expect total revenue of $253 million to $255 million representing approximately 18% to 19% year over year growth. We expect non-GAAP operating income of $32 million to $34 million. We expect non-GAAP net income per share of $0.20 to $0.21 assuming a 173 million weighted average diluted shares outstanding. Note that Q4 has 3 more days than Q1, creating a sequential headwind. For full year FY '27, we expect total revenue of $1.099 billion to $1.118 billion, representing approximately 15% to 17% year-over-year growth. We expect non-GAAP operating income of $129 million to $137 million. We expect non-GAAP net income per share of $0.76 to $0.80, assuming 175 million weighted average diluted shares outstanding. A few additional modeling points. We assume stable year-on-year growth rates across Q2 through Q4. Full year gross margin of 85% to 87%, down from 89% in FY '26, reflecting increased mix of SaaS, Dedicated and GitLab Duo Agent Platform, which carry different cost structures. For FY '27 modeling purposes, we forecast approximately $15 million of expenses related to JiHu compared with $13 million last year. We are operating from a position of strength. Our TAM continues to grow. Customer retention remains best-in-class. Our largest customers continue to expand, and first orders have returned to growth. We are building new multi-year-growth drivers with GitLab Duo Agent Platform and hybrid pricing. Our FY '27 guidance reflects where we are today, early in a transformation with clear priorities, scaling sales capacity, stabilizing net retention, addressing the price-sensitive cohort and converting DAP pilots to production. As we make progress, we'll update you. Thank you for joining us. I'll now turn the call over to Yao to moderate Q&A.

[Operator Instructions] Our first question comes from Koji Ikeda at Bank of America, followed by Matt Hedberg from RBC.

Jessica, great to meet you on the call. So I have a question on security. And security is a big driver of Ultimate upsells and presumably agentic Duo security usage in the future. And so with Claude Code Security making a lot of noise and with the chance that other foundational model vendors potentially releasing their own code security products, how should we be thinking about the differentiation GitLab brings with its security portfolio and why it should continue to drive Ultimate upsells and agentic usage in the future?

Thanks, Koji. I've been getting that question a lot. And it really comes down to the difference between suggestions and certification. Claude Code Security helps developers write better code at authoring time, and that's really valuable. But the tool that suggests secure code at authoring time can't be the same tool that certifies it's ready for production. And that's where GitLab comes in. GitLab is that independent system that answers a different question. It answers the question, is this project, is this source code ready to ship? A developer can ignore Claude's recommendations during authoring time. In fact, Anthropic's own page says developers always make the call. But with GitLab, they can't bypass the execution policy for the pipeline. They can't ignore the merge request approval rules. Companies ship what is secure and meets their engineering standards, and GitLab is the platform they rely to uphold those standards. So really, these are complementary. Claude improves source code at authoring time and GitLab governs whether the software is allowed to ship.

Next question, Matt Hedberg from RBC, followed by Rob Owens from Piper Sandler.

Bill, you started the call indicating you're not happy with current growth targets for the year. But I certainly do appreciate the 5 initiatives you outlined. It seems like you guys have a lot to -- that could benefit growth. Kind of thinking about some of the considerations that Jessica outlined around fiscal '27 guidance, I guess the question is, how should we think about timing of acceleration and kind of that path back to 20% or better growth, I'm sure you're aspiring to.

Yes. Fair question. As I think about those 5 growth initiatives and I think about what has the biggest immediate impact on FY '27, it really starts with the investment we're making in go-to-market, that increased capacity to both cover our existing customers better and win new logos at an accelerated rate. As I mentioned, we're entering the fiscal year with the highest capacity ever, and we expect a step function increase in ramp to capacity starting around Q3. So that's how I think about GitLab for FY '27 but really stepping back and thinking about long-term growth. Let's remind ourselves, we just delivered the highest new net ARR year and quarter ever. The core business is really healthy. Gross retention is at its best in the last 4 years. Every customer cohort since inception continues to expand. Win rates are stable. Engagement is growing. This is a business that's been decelerating based on bookings patterns and lapping mechanics over the last 3 years. It's not losing relevance. In fact, its relevance is only gaining momentum in the AI era. To address the value capture equation, that's why we're pursuing multiple new strategies. In addition to the increased capacity to go after the TAM, we're also introducing those new SKUs to provide additional adjacent value for customers to opt into. It's why we've also now launched Duo Agent Platform with a new hybrid pricing model that allows customers to get value and automate full life cycle tasks, and we get to charge based on work and value delivered, not just based on the seats. It's also why we're adjusting our coverage models and investing in included DAP credits for customers in that price-sensitive cohort to increase their value equation as well and their stickiness and growth. So long term, I believe this company has everything it needs to be a high-growth generational company, and it's ours to execute starting here in FY '27.

Next question, Rob Owens from Piper Sandler, followed by Sanjit Singh from Morgan Stanley.

Bill, I wanted to build on one of your comments there around gross retention being at its highest levels, but yet your net retention comes down. And I know that you had mentioned some weakness in the mid-market. Maybe on the front of the question, you can unpack that NRR number for us a little bit. And what's driven that overall? Obviously, there's some concern about seats out there and potential seat expansion at customers. So help us understand that dynamic. And I guess, #2, as we look forward and you're guiding to a total revenue less than where your retention rate is now, your expansion rate, I should say. Maybe some guardrails around where NRR could go over the coming year.

Yes, I'll take the first part, and then maybe Jessica can talk a little bit about where -- how to think about in FY '27. So yes, dollar-based net retention is not something that we guide to or focus on. We think of it as an output of the business. And as we look at the mix of [ dipping ] across segments, we see enterprise is really healthy. Our $100,000 cohort, as I shared, grew by 18% year-over-year, and it represents 75% of our ARR. The $1 million cohort grew even faster at 26% year-over-year. So our largest customers continue to expand, and that signal is really strong and consistent. The pressure that we see is concentrated in that price-sensitive cohort. We estimate it around 20% of ARR, which includes the 8% of the business that we've previously discussed, which is in SMB as well as parts of mid-market and Premium. And we're addressing that in FY '27 with now including DAP credits with every Premium seat. We've adjusted coverage models to give them better connection into GitLab, including technical services to accelerate value adoption and value realization. And we're investing in better time-to-value experiences. Jessica, do you want to talk a little bit about the number itself, where we expect it to go from here?

Yes. As you indicated, as Bill indicated, it's not a number that we guide to, but I do want to reinforce this is a year of stabilization for GitLab. And so I would expect DBNR to trend down slightly before stabilizing.

Next question, Sanjit Singh from Morgan Stanley, followed by Karl Keirstead from UBS. Sanjit, go ahead please.

Jessica, congratulations on the role. Bill, I had a question on essentially pricing. How do you sort of came to the pricing equation for DAP for Duo agents? And I guess the context that I'm thinking about is that the coding agents, the popular coding agents, a lot of them are still kind of seat-based pricing, right, whether it's $20 a month or higher, this is more -DAP seems to be priced more on a consumption-based model. So how you sort of arrived at the pricing mechanism for DAP? And then when you play this forward, how do you think about capturing more value in the GitLab platform?

Yes. Let me first start with that observation you made around competitors seems to have more of a seat-based price. That's actually not entirely true. They may have a seat-based entry cost, but then they either throttle usage or charge you for overages, which is actually a less efficient model than what GitLab offers, which is we offer customers the ability to start with included credits. Every Premium seat gets $12 in credits, every Ultimate seat gets $24 in credits. And that's because we want to win their hearts and minds with this phase of the platform. They can use it without having to sign new contracts or get new agreements. And if they're finding value, they can then choose to opt in to on-demand credits. And you can think of on-demand credits as effectively pay-as-you-go. We do a monthly bill based on actual usage at around $1 a credit. What this does then is it creates a demand model for our sales force, where they see the signal of customers using and getting value, and they're able to go have a conversation with the customer and offer additional discounts for committed credits as a monthly minimum. That then drives the flywheel of ratable revenue and ARR because those monthly minimum commitments turn into a subscription that we recognize ratably. This is a really powerful model that we think is better value for customers than having to pay on a per-seat basis for throttled usage or overages. It's more efficient. And I'll just offer this. The existing competitive tools are heavily subsidized by a venture capitalist. I don't think that's going to last forever. In fact, I would predict this year, you'll see many of the enterprise tools beginning to move to API-based charges instead of seat-based charges, which could raise bills for enterprises in the years to come.

Next question, Karl Keirstead from UBS, followed by Shrenik Kothari from Baird.

Jessica, I wouldn't mind probing a little bit on the initial fiscal '27 non-GAAP margin guide of -- it looks like 12% at the high end, which would be a 5-point decel from the year you just put up. Can you unpack that a little bit and talk through some of the investments? I'm guessing sales capacity and perhaps even some DAP free credits could be weighing on that margin guidance, but I'd love to hear your views. And then just if we zoom out, understanding you're not going to give guidance, but how are you and Bill just conceptually thinking about the margin structure at GitLab? And if you think that this year could be the trough? And how important is it for you and Bill to get those non-GAAP EBIT margins up to, say, 20% plus?

No, I appreciate the question, Karl. So our FY '27 margin guide reflects 3 discrete well-understood investments, one of which we committed to at the IPO, and we believe we have clear line of sight to expansion from there. At the midpoint, approximately 300 bps of the step down comes directly from the gross margin mix shift that we've discussed. So the SaaS mix transition, which we predisclosed at IPO and then the remaining compression reflects 2 very deliberate investments. First, we're rebuilding go-to-market capacity, as Bill just talked about, that has been underinvested for several years. And so we're scaling sales capacity, building our first order team and continuing to deepen partner coverage. Second, we are accelerating the Duo Agent Platform and deepening security and innovation. So our investment priority is clear. I highlighted in my remarks about the capital allocation framework, R&D first, then sales and marketing, then G&A. None of these are structural and each has a defined time line and a clear return as the business scales. So as we look to the future, this is really a year of investment, and we believe it's the right thing to do for long-term value creation. And we're going to be watching payoffs very closely and empowering the business with the right guardrails. That discipline has not changed. I think one of the reasons that I joined this business that has really demonstrated an ability to grow profitably and responsibly. The evidence is the 1,700 bps of margin expansion that we've delivered over the past 2 years. And in the long run, we're not managing to margin percentage. We're managing to gross profit dollar growth and the durable returns that come from scaling our platform.

Next question, Shrenik Kothari from Baird, followed by Jason Ader from William Blair.

Welcome aboard Jessica, looking forward to working with you. Bill, you mentioned that, of course, fiscal '27 is largely about converting to [Audio Gap] production and the financial contribution still remaining modest. I know you touched upon the time line a little bit in the previous question from the standpoint of scaling the sales and rebuilding go-to-market. But just per some early customer feedback and there's a customer you mentioned about, can you tell a little bit about just at a very high level, what are the potential gating factors on the customer side that you're seeing so far? Is it the trust in these AI-driven workflows? Is it more governance approvals? And what, in your view, helps successfully scale these into production environments?

Yes. Let me start with the early customer feedback on DAP and then remind investors what it is that will take to convert those early pieces of feedback and trials into revenue. The first is we're getting really clear signal on the feedback that customers appreciate a full life cycle approach to agentic AI. Customers want to use DAP to handle highly repetitive and mundane tasks that engineers do every single day as they manage code, manage builds and deployments and manage the security of their software. So for example, an airline, I think I shared some of this in the prepared remarks, they're using DAP already to automate security vulnerability remediation, dependency updates and cloud migrations. And they now have approximately 90% of component version updates now running autonomously. Think about what that means. Work that used to require a developer to contact switch and understand those component updates are now done completely through agents. Another example is an insurance company that used DAP to run an AI hackathon, and they saw measurable improvements across compliance violations, legacy modernization, developer onboarding time and their security posture. These are just some of the benefits that customers are finding as they evaluate and trial Duo Agent Platform. In order to convert and become a paid customer with committed contracts, our customers have to be running a version of GitLab that supports the Duo Agent Platform. About 70% of our revenue is supporting customers with self-managed deployments. It's not like a cloud-native multi-tenant SaaS service. GitLab is a very diverse portfolio with 70% running their own infrastructure and GitLab on their own premises, including many who have air-gapped environments that can't even connect to the cloud. Those customers typically take about 6 months for up to 50% of them to be running a version like the 18.8 release that we just announced Duo Agent Platform GA with. So that's the first kind of time line to keep in mind. Obviously, the 30% of customers that are running in our multi-tenant cloud can start adopting today, and we're seeing early adoption there, but the bulk of the revenue won't have access to Duo Agent Platform for another couple of quarters. And then secondarily, think about the fact that committed credits is really subscription revenue that we recognize ratably. So even if we are able to start converting the trials to production and committed credits in the back half of the year, that revenue won't be recognized until the following quarters going into FY '28. So that's the reason for -- that's the early feedback that we're hearing from customers, and that's the reason for the conservative projections on Duo Agent Platform revenue for FY '27.

Next one comes from Jason Ader at William Blair, followed by Miller Jump at Truist.

My question for Bill. Has customer decision-making changed at all over the last few quarters in the face of kind of all this massive change? I guess what I'm asking is like have you seen sales cycles shift at all, more focused on the enterprise with this question, but maybe just talk about how customers are navigating all this onslaught of change.

Yes. In my customer conversations, they're navigating it like most of the rest of us, which is every day, every week, there seems to be new innovation, new and exciting opportunities with AI, and they're excited about the potential and they're trying to navigate the many challenges that come with it, starting with the privacy and security concerns with their business and also the increased costs and expense of investing in AI versus other traditional workloads. What's interesting is I think there's a ton of experimentation going. And obviously, early results are really promising within certain workloads, especially around code generation and software development. And we're excited to take that early promise of building software using agents and turn it into actual software innovation with Duo Agent Platform. I don't see customers' behaviors changing. Our win rates are consistent. As I shared earlier, our gross retention rate just hit the highest level it has in 4 years. Our competitive rates remain strong. And so really, this is about focusing our increased capacity, executing a product strategy with increased pricing and packaging granularity to go after that opportunity in FY '27 even stronger than we did in FY '26.

Next question, Miller Jump from Truist, followed by Kingsley Crane from Canaccord Genuity.

Bill, I think you mentioned you overhauled territory design. I guess I'm wondering, has the number of accounts per rep changed? And how do you ensure that those handoffs go smoothly? And then just for Jessica, have you baked in any conservatism to guidance for that?

Yes, it's a fair question. Every year, the territories end up getting re-sliced to some degree, and this year is no exception. But I believe it's going to pay off in the long run. We found we had more accounts than reps could effectively manage and our upmarket shift a few years ago left the lower end of the market underserved. So the overall territory design does reduce the number of customers the rep has to manage, which should result in better customer intimacy, accelerated adoption and value realization by the customer. We're also investing on the technical services side, so with increased overlay support in particular for all segments, but also around 2 areas, especially one around that price-sensitive cohort with additional technical services to support their evaluation adoption and around AI. Many companies are needing help to adapt their workflows to AI with Duo Agent Platform. There's a new set of technology and a new set of techniques to use with your software life cycle. And so our technical teams are getting highly trained on that to help customers unlock the value. And we're also going to begin investing in forward deployed engineers who can go in and support that customer adoption cycle.

And then the short answer to your question is, yes, we've been very holistic in terms of how we're thinking about prudence as we evolve the go-to-market motion.

Next question, Kingsley Crane from Canaccord, followed by Howard Ma from Guggenheim.

Legacy code monetization has been in focus the past couple of weeks. But when you rewrite millions of lines of COBOL, for example, that's not in a vacuum, it's still going to need to be version controlled, run through CI/CD, reviewed and tested. Bill, you've been a developer for a long time. How much weight do you give to the idea that we're going to rewrite a lot of existing code versus creating that new code? And then how could this be expansionary for GitLab?

That's a great question, Kingsley. I think in theory, any software can be rewritten, and I see tons of really exciting experiments where developers are taking cogeneration tools, putting them into a closed loop and giving them instructions to iterate until the code emulates another existing piece of software. And I think there are certain places where that can be done. For example, the Discrete library or a simple application. For the scenario you described, for example, a legacy COBOL application, maybe that's running on a mainframe or a piece of enterprise software that integrates with multiple third-party SaaS back ends, maybe Salesforce or

Great. Next question, Howard Ma from Guggenheim, followed by Ryan MacWilliams from Wells Fargo.

Bill, I wanted to ask you more about Duo Agent Platform. In some of our conversations with engineering leaders, there seems to be hesitance in adopting too many agents from multiple third-party software vendors out of the gate. And meanwhile, larger enterprises may also be debating between a build versus buy approach to agents. And then on the pricing side, you have the new usage-based pricing for DAP, but you also still have the seat-based pricing for Duo Pro and Duo Enterprise, which could cause some confusion for your customers. So how do you address these potential challenges? And are you exploring a further evolution of the model that combines the current seat-based and usage-based for Duo -- for DAP to make the pricing and packaging more seamless?

Yes. So to be clear, the Duo Pro and Duo Enterprise capabilities are already part of Duo Agent Platform. And Duo Agent Platform represents a massive superset on top of that. Think of it as like 100x kind of capability beyond what Duo Pro and Enterprise provided. Those packages are still in market mostly for continuity perspective, any customers who have already been planning or in the process of buying those, we didn't want to disrupt and force them to reevaluate the new platform before making their purchase decisions. And we'll be incentivizing both customers and our field to turn those contracts into Duo Agent Platform credits in the coming year ahead. So think of this as a transition period since Duo Agent Platform is just 7 weeks in market. And over the next couple of quarters, it will be clear customers will see Duo Agent Platform as our AI offering going forward.

Next question, Ryan MacWilliams from Wells Fargo, followed by Nick Altmann from BTIG.

Two-part question. For Jessica, just nice to meet on the earnings call. And I'd just love to hear about how you built up to this guide on the top line side and any changes to the guidance philosophy there? And then for Bill, would love to hear about barriers to entry around CI/CD, why this is a strategic advantage for GitLab and why this will be difficult to replicate for enterprise customers like try to replicate CI/CD with AI.

All right. Well, maybe I'll start with the guidance philosophy, especially with this being my first quarter here as GitLab's CFO. So I think there's a lot happening this year. In addition to me joining, there's a lot of moving parts. This is an investment and an execution year for GitLab. As we've talked about, we're moving from a seat to hybrid model. We are in a new product cycle with the DAP launch, and we're also scaling our go-to-market motion. So a lot of moving parts. The first thing, I want to be clear, our process has not changed internally, and it's as rigorous as ever. And I've spent my first few weeks getting into the details of the business, specifically so that I could stand behind the numbers with conviction. Additionally, when I joined, I ran an intentional listening campaign with investors, and the feedback was very clear. Investors want more insight and transparency into how we arrive at the numbers. And so we heard you, and I'm hoping that you all see that reflected in our prepared remarks, and I expect to carry that forward with my guidance philosophy. And then finally, I would just reiterate that this business is ratable, which gives us strong board visibility, and we apply that visibility into our approach so that when we give you a number, we have high confidence that we will achieve it. So then as it relates to the revenue guide buildup, I think we gave you all the building blocks within my prepared remarks, but I do want to reiterate, FY '26 and Q4 delivered the highest net new ARR year and quarter ever. And so because our model is ratable, a large part of the step down in our guide is mechanical. So it's not a change in the underlying health of the business. The guide reflects an honest view of where we are today, not where we hope to be. So I will just break down again, what's driving that step down from 26%. First, the mechanics. FY '26 benefited from approximately 300 bps of nonrecurring tailwinds, Premium price, favorable FX dynamics and specific contract clauses that won't repeat. Strip those out and then the comparable growth rate gets you closer to 23%. Beyond that, the ratable model means revenue today reflects bookings decisions made 3 years ago, and bookings growth has not kept pace with revenue growth over the past 3 years. So that mathematical reality flows through for FY '27 regardless of what we do operationally this year. Second, what's embedded in the guide. As we've discussed, our first order team is coming online now, but won't be fully ramped until the back half of the year. We've talked about the fact those investments take time to show up in bookings and bookings take time to show up in revenue. So we've embedded prudence there. And then we've also been very deliberately cautious on both PubSec and mid-market, where we saw softness in Q4 and aren't assuming an immediate bounce back. And then as we've also talked about DAP customer reception has been strong, but we're in the very early stages of the adoption cycle. And on a $1 billion business with a ratable revenue model, we're not embedding any meaningful revenue contribution from something that we just launched 7 weeks ago.

Thanks, Jessica. Let me try to answer the first part of your question, which I'll paraphrase as how does the core GitLab platform stack up in a world where agents are quickly iterating, growing, getting stronger and better. And I think this is a common confusion with investors. So let me try to use an analogy, and I hope this makes it more clear. You should think of the core DevOps platform that GitLab has as core infrastructure that both humans need to take action as well as agents need. So for example, there are many coding agents that can generate code, but that code needs to be stored. It needs to be version controlled. It needs to be tested. It needs to be reviewed. It needs to be secured and checked against all of the standards, the compliance frameworks and everything else the business is accountable for. That infrastructure is what GitLab has been building for over a decade. It's what businesses rely on to ensure the integrity of their software, and it's not going anywhere. What agents do is offer an artificial intelligence alternative to the human intelligence that's long gone into both writing the code and managing that software complexity. So you can think of Duo Agent Platform as that alternative for GitLab customers. They can now use Duo Agent Platform to automate tasks to do seamless handoffs between humans and agents and between agents and other agents to do all of the tasks that are required to move that software from planning all the way through deployment. Competitors can obviously offer alternative agents, but they don't offer a replacement for the infrastructure that is GitLab.

Great. We're almost up on time. Nick, you're going to be wrapping up the call here with the last question. Go ahead, please.

Awesome. Jessica, just on the net new ARR strength you alluded to in 4Q, it sounds like the public sector improved sequentially. I know you said there was some deal slippage this quarter, but can you just give us a sense as to how much of the strength this quarter was driven from some of the 3Q public sector weakness we saw and that kind of getting across the finish line in Q4?

No, thanks for the question. Yes, as you alluded to, we delivered the highest net ARR quarter ever, but the reality is results were mixed. First order bookings were healthy with strength in Asia Pacific and enterprise win rates improved quarter-over-quarter and sales cycles held steady. So the softness was really concentrated in 3 areas. First, PubSec, which is about 12% of ARR. And I want to be clear here, the long-term thesis has not changed. We remain the preferred partner to the U.S. Government, and they continue to view us as mission critical. That being said, we only saw a partial recovery following the government reopening. Some business moved into FY '27 and visibility still isn't where we'd like it to be. I think the budget picture has been interesting. We've had increases in certain departments and a lot of uncertainty in others. So again, that's been built into our guide. The second piece is the price-sensitive cohort that Bill talked about. And as we shared, we've sized this at about roughly 20% of ARR. It does include some of the SMB weaknesses that we've been discussing as well as parts of mid-market premium and customers with less budget flexibility. But again, we feel like we sized this right. We're not seeing that in the rest of the business. I think that's been reinforced by our $100,000 customers growing 18% year-over-year and that $1 million cohort growing 26% and enterprise DBNR remains very healthy. And then you get into the U.S. performance and deal slippage that you were referring to, and this is very customer specific. We experienced a few large deals slipping from specific customers facing budget constraints and some industry-specific challenges. For example, there was one retailer that had some Q4 challenges and another large customer that faced some layoffs and restructuring. So these are real issues, and we're continuing to meet our customers where they are, but we found it to be something very specific, and that's all been embedded into our guide going forward.