Gitlab Inc.
For the period ended Jul 31, 2026. Filed Sep 2, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2026 · Filed Sep 2, 2026
GTLB$48.09-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-30; filed 2026-06-02.
0001628280-26-039793
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-09-02.
0001628280-26-059943
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 128 current paragraphs.
81 unchanged; 33 reworded; 13 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In June 2026, we introduced GitLab Flex (“Flex”), a purchasing model that allows customers to make a single annual dollar commitment and adjust their allocation of that commitment month-to-month across platform seats, AI usage, and add-on capabilities without requiring contract amendments. Unprovisioned amounts committed under Flex arrangements are recorded as customer advances and are not classified as deferred revenue until the customer makes an affirmative election to provision specific products or services. See “Remaining Performance Obligations” and “Note 3. Revenues” to our condensed consolidated financial statements for additional information.
Current report
See “Note 3. Revenues” to our condensed consolidated financial statements for additional information.
Current report
Provision for (Benefit from) Income Taxes
Current report
Remaining Performance Obligations
Current report
As of July 31, 2026, the aggregate transaction price allocated to billed and unbilled remaining performance obligations for which revenue has not yet been recognized was approximately $1.2 billion, of which $40.4 million relates to non-cancellable customer advances under Flex contracts where specific products and quantities are determined by the customer at a later date, of which $15.0 million had been billed and was reflected in customer advances as of that date, as described in “Note 3. Revenues” to our condensed consolidated financial statements. As of July 31, 2026, excluding non-cancellable Flex customer advances, 65% is expected to be recognized as revenue over the next 12 months, with the remainder recognized thereafter.
Current report
Sales and marketing expenses increased by $24.8 million, to $134.4 million forthe three months ended July 31, 2026 from $109.6 million forthe three months ended July 31, 2025, primarily due to an increase of $9.3 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount and an increase of $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.
Current report
Sales and marketing expenses increased by $36.6 million, to $253.7 million forthesix months ended July 31, 2026 from $217.2 million forthesix months ended July 31, 2025, primarily due to an increase of $9.7 million in hosting expenses, an increase of $7.3 million in personnel-related expenses, driven by an increase in our average sales and marketing headcount and an increase of $0.7 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 $4.1 million from company events. The remaining change was primarily attributable to an increase of $2.5 million in consulting expenses and an increase of $1.9 million in marketing spend.
Current report
General and administrative expenses increased by $23.5 million to $68.2 million forthe three months ended July 31, 2026 from $44.7 million forthe three months ended July 31, 2025, primarily due to an increase of $16.7 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $11.1 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 $1.3 million in software expenses.
Current report
Stock-based compensation expense increased by $20.7 million, to $75.0 million for thethree months ended July 31, 2026 from $54.3 million for thethree months ended July 31, 2025. The increase was primarily driven by an increase of $12.4 million related to PSU awards granted during the current fiscal year and an increase of $9.3 million in RSU expense.
Current report
Stock-based compensation expense increased by $15.0 million, to $125.1 million for thesix months ended July 31, 2026 from $110.1 million for thesix months ended July 31, 2025. The increase was primarily due to an increase of $12.4 million related to PSU awards granted during the current fiscal year and an increase of $5.6 million in RSU expense, partially offset by a decrease in option expense.
Current report
Other income, net increased forthe three and six months ended July 31, 2026 compared to thethree and six months ended July 31, 2025 primarily due to indirect tax benefit related to the final settlement of amounts associated with the formation of JiHu.
Current report
Provision for (Benefit from) Income Taxes
Current report
Our effective tax rate increased by approximately 40.2 percentage points for the three months ended July 31, 2026 as compared to the three months ended July 31, 2025, and by approximately 14.6 percentage points for the six months ended July 31, 2026 as compared to the six months ended July 31, 2025. Because we are in a pretax loss position, a tax benefit is expressed as a positive rate. We recognized a benefit of 15.0 percent and 13.8 percent for the three and six months ended July 31, 2026 due to the settlement of a JiHu formation withholding tax matter with the China Tax Authority.
Removed paragraphs (4)
Previous report
Provision for Income Taxes
Previous report
Stock-based compensation expense decreased by $5.8 million, to $50.1 million for thethree months ended April 30, 2026 from $55.8 million for thethree months ended April 30, 2025, primarily due to a decrease of $3.7 million of expense from RSUs and $1.1 million related to stock options.
Previous report
Provision for Income Taxes
Previous report
Our effective tax rate decreased by approximately 49.7% forthe three months ended April 30, 2026 as compared tothe three months ended April 30, 2025. A tax expense is expressed as a negative rate because of our pretax loss. The decrease in tax expense was primarily due to a lower year-to-date pre-tax loss in the current period, which resulted in a smaller interim provision under the estimated annual effective tax rate method.
Reworded paragraphs (33)
Previous wording
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 enhanc ements to The GitLab platform every month and, as of April 30, 2026, had done so for the last 175 months. We intend to continue releasing new software on a monthly cadence.
Current wording
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 enhanc ements to The GitLab platform every month and, as of July 31, 2026, had done so for the last 178 months. We intend to continue releasing new software on a monthly cadence.
Previous wording
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 a 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 10,831 as of April 30, 2026 from 10,104 as of April 30, 2025, an increase of 7% and our $100,000 ARR customers increased to 1,519 as of April 30, 2026 from 1,288 as of April 30, 2025, an increase of 18%. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for information about how we define ARR.
Current wording
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 the 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 increasedto 11,114 as of July 31, 2026 from 10,338 as of July 31, 2025, an increase of 8% and our $100,000 ARR customers increased to 1,571 as of July 31, 2026 from 1,344 as of July 31, 2025, an increase of 17%. See the section entitled “—Key Business Metrics—Dollar-Based Net Retention Rate and ARR” below for information about how we define ARR.
Previous wording
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 April 30, 2026 and 2025, our Dollar-Based Net Retention Rate was 117% and 122%, 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.
Current wording
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 July 31, 2026 and 2025, our Dollar-Based Net Retention Rate was 117%and 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.
Previous wording
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 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.
Current wording
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.
Previous wording
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.
Current wording
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. 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.
Previous wording
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 ofthe renewal. However, prorated costs for sales commissions that are incremental to obtain a self-managed license contract are expensed immediately.
Current wording
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.
Previous wording
Other income (expense), net consists primarily of foreign currency transaction gains and losses and indirect tax credit expense related to the JiHu formation.
Current wording
Other income (expense), net consists primarily of foreign currency transaction gains and losses and indirect tax credit adjustments related to the JiHu formation.
Previous wording
Provision for 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.
Current wording
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.
Previous wording
Comparison of the Three Months Ended April 30, 2026 and 2025
Current wording
Comparison of the Three and Six months ended July 31, 2026 and 2025
Previous wording
Revenue increased $49.6 million, or 23%, to $264.2 million for thethree months ended April 30, 2026 from $214.5 million for thethree months ended April 30, 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 April 30, 2026 and 2025, our expansion is reflected by our Dollar-Based Net Retention Rate being 117% and 122%, respectively. We had 1,519 customers with ARR over $100,000 as of April 30, 2026, increasing from 1,288 customers with ARR over $100,000 as of April 30, 2025.
Current wording
Revenue increased $50.3 million, or 21%, to $286.3 million for thethree months ended July 31, 2026 from $236.0 million for thethree months ended July 31, 2025. Revenue increased $99.9 million, or 22%, to $550.4 million for thesix months ended July 31, 2026 from $450.5 million for thesix 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 July 31, 2026 and 2025, our expansion is reflected by our Dollar-Based Net Retention Rate being 117% and 121%, respectively. We had 1,571 customers with ARR over $100,000 as of July 31, 2026, increasing from 1,344 customers with ARR over $100,000 as of July 31, 2025.
Previous wording
Revenue attributed to our variable interest entity, JiHu, was $2.5 million and $1.9 millionforthe three months ended April 30, 2026 and 2025, respectively. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details.
Current wording
Revenue attributed to our variable interest entity, JiHu, was $3.3 million and $2.2 millionforthe three months ended July 31, 2026 and 2025, and $5.8 million and $4.1 millionfor the six months ended July 31, 2026 and 2025, respectively. See “Note 11. Joint Venture” to our condensed consolidated financial statements for additional details.
Previous wording
Cost of revenue increased by $12.5 million, to $37.5 million forthe three months ended April 30, 2026 from $25.0 million forthe three months ended April 30, 2025, primarily due to an increase of $7.5 million in third party hosting costs for SaaS and cloud usage. The remaining change was primarily attributable to an increase of $3.8 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $0.9 million in stock-based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below). Gross margin decreased by 2% to 86% forthe three months ended April 30, 2026 compared to 88% forthe three months ended April 30, 2025.
Current wording
Cost of revenue increased by $17.1 million, to $45.6 million forthe three months ended July 31, 2026 from $28.5 million forthe three months ended July 31, 2025, primarily due to an increase of $11.0 million in third party hosting costs for SaaS and cloud usage. The remaining change was primarily attributable to an increase of $4.3 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $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 4% to 84% forthe three months ended July 31, 2026 compared to 88% forthe three months ended July 31, 2025.
Previous wording
Cost of revenue attributed to our variable interest entity, JiHu, was$0.5 million for each ofthe three months ended April 30, 2026 and 2025. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details.
Current wording
Cost of revenue attributed to our variable interest entity, JiHu, was$0.8 million and$0.4 million forthe three months ended July 31, 2026 and 2025, and$1.3 million and$0.9 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 11. Joint Venture” to our condensed consolidated financial statements for additional details.
Previous wording
Sales and marketing expenses attributed to our variable interest entity, JiHu, were$1.5 million for each ofthe three months ended April 30, 2026 and 2025. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details.
Current wording
Sales and marketing expenses attributed to our variable interest entity, JiHu, were$0.6 million and$1.5 million for the three months ended July 31, 2026 and 2025, and$2.1 million and$3.0 million for the six months ended July 31, 2026 and 2025, respectively. See “Note 11. Joint Venture” to our condensed consolidated financial statements for additional details.
Previous wording
Research and development expenses increased by$6.1 million, to $71.5 million forthe three months ended April 30, 2026 from $65.4 million forthe three months ended April 30, 2025, primarily driven by an increase of $2.6 million in hosting expenses and an increase of $2.2 million in personnel-related expenses, driven by an increase in our average research and development headcount and a decrease of $0.6 million in stock-based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below).
Current wording
Research and development expenses increased by$23.5 million, to $95.0 million forthe three months ended July 31, 2026 from $71.5 million forthe three months ended July 31, 2025, primarily driven by an increase of $8.0 million in restructuring costs, an increase of $6.1 million in personnel-related expenses, driven by an increase of $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.
Previous wording
Sales and marketing expenses increased by $11.8 million, to $119.4 million forthe three months ended April 30, 2026 from $107.6 million forthe three months ended April 30, 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 million in personnel-related expenses, driven by a decrease of $4.6 million in stock-based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below).
Current wording
Research and development expenses increased by$29.6 million, to $166.5 million forthesix months ended July 31, 2026 from $136.9 million forthesix months ended July 31, 2025, primarily driven by an increase of $8.3 million in personnel-related expenses, driven by an increase of $2.0 million in stock- based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below), an increase of $8.0 million in restructuring costs, an increase of $6.3 million in hosting expenses, and an increase of $4.2 million primarily from an in-person company event. The remaining change was primarily attributable to an increase of $2.1 million in software expenses.
Previous wording
Research and development expenses attributed to our variable interest entity, JiHu, were$0.6 million and$0.4 million forthe three months ended April 30, 2026 and 2025, respectively. See “Note 10. Joint Venture” to ourcondensed consolidated financial statements for additional details.
Current wording
Research and development expenses attributed to our variable interest entity, JiHu, were$0.5 million and$0.7 million forthe three months ended July 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 11. Joint Venture” to ourcondensed consolidated financial statements for additional details.
Previous wording
General and administrative expenses increased by $0.5 million to $51.6 million forthe three months ended April 30, 2026 from $51.1 million forthe three months ended April 30, 2025, primarily due to an increase of $2.4 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and a decrease of $1.4 million in stock-based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below). This was partially offset by a decrease of $1.7 million mainly in charitable donations of common stock.
Current wording
General and administrative expenses increased by $24.0 million to $119.8 million forthesix months ended July 31, 2026 from $95.8 million forthesix months ended July 31, 2025, primarily due to an increase of $19.1 million in personnel-related expenses, mainly attributable to an increase in our average general and administrative headcount and an increase of $9.7 million in stock-based compensation expenses (as discussed in the section titled“Stock-Based Compensation Expense” below), and an increase of $5.2 million in restructuring costs. This was partially offset by a decrease of $1.5 million in charitable donation of common stock.
Previous wording
General and administrative expenses attributed to our variable interest entity, JiHu, were$1.3 million for each ofthe three months ended April 30, 2026 and 2025. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details.
Current wording
General and administrative expenses attributed to our variable interest entity, JiHu, were not material for thethree months ended July 31, 2026, compared to$1.6 million forthe 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, respectively. See “Note 11. Joint Venture” to our condensed consolidated financial statements for additional details.
Previous wording
Stock-based compensation attributed to our variable interest entity, JiHu, was an expense of $0.9 million and net gain of $0.2 million for thethree months ended April 30, 2026 and 2025, respectively. See “Note 10. Joint Venture” to our condensed consolidated financial statements for additional details.
Current wording
Stock-based compensation attributed to our variable interest entity, JiHu, during the three and six months ended July 31, 2026 was a net reversal of stock-based compensation expense of $1.2 million and $0.3 million, respectively, and during the three and six months ended July 31, 2025 was $1.0 million and $0.8 million of stock-based compensation expense (net of forfeitures), respectively. See “Note 11. Joint Venture” to our condensed consolidated financial statements for additional details.
Previous wording
Interest income increased forthe three months ended April 30, 2026 compared to thethree months ended April 30, 2025, primarily due to income earned from our cash, cash equivalents, and short-term investments, driven by higher average balances during thethree months ended April 30, 2026 compared to thethree months ended April 30, 2025.
Current wording
Interest income increased forthe three and six months ended July 31, 2026 compared to thethree and six months ended July 31, 2025, primarily due to income earned from our cash, cash equivalents, and short-term investments, driven by higher average balances during thethree and six months ended July 31, 2026 compared to thethree and six months ended July 31, 2025.
Previous wording
Foreign exchange gains (losses) increased for thethree months ended April 30, 2026 compared to thethree months ended April 30, 2025 primarily related to the revaluation of non-functional currency denominated monetary assets and liabilities.
Current wording
Foreign exchange gains (losses), net increased forthe three and six months ended July 31, 2026 compared to thethree and six months ended July 31, 2025 primarily related to the revaluation of non-functional currency denominated monetary assets and liabilities.
Previous wording
Our effective tax rate forthe three months ended April 30, 2026 was different from the U.S. federal statutory tax rate of 21%, primarily due to the Company’s foreign and domestic operations, Base Erosion Anti-abuse Tax (“BEAT”), nondeductible expenses and losses not benefited, offset by tax credits.
Current wording
Our effective tax rate for the three and six months ended July 31, 2026 differed from the U.S. federal statutory tax rate of 21%, primarily due to the mix of income and losses across the jurisdictions in which we operate, the Base Erosion and Anti-abuse Tax (“BEAT”), nondeductible expenses, discrete tax items, and losses for which no benefit was recognized, partially offset by tax credits.
Previous wording
As of April 30, 2026 and January 31, 2026, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating to $1,357.5 million and $1,259.9 million, respectively, which were held for working capital and strategic investment purposes. As of April 30, 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.
Current wording
As of July 31, 2026 and January 31, 2026, our principal source of liquidity was cash, cash equivalents, and short-term investments aggregating to $1,257.0 million and $1,259.9 million, respectively, which were held for working capital and strategic investment purposes. As of July 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.
Previous wording
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 for each of thethree months ended April 30, 2026 and 2025 from operating activities.
Current wording
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. Net 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 thesix months ended July 31, 2026 and 2025 from operating activities.
Previous wording
Cash provided by operating activities during thethree months ended April 30, 2026 was $149.2 million, primarily consisting of our net loss of $5.6 million, adjusted for non-cash items of $66.0 million (mainly attributable to stock-based compensation expense of $50.1 million and amortization of deferred contract acquisition costs, net of $12.9 million), and net cash inflows of $88.8 million provided by changes of our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease in accounts receivable of $103.4 million, the increase in accrued expenses and other current liabilities of $14.5 million, and the decrease in prepaid expenses and other current assets of $6.4 million, partially offset by the decrease in deferred revenue of $14.3 million, the decrease in accrued compensation and benefits of $11.0 million, and the increase in deferred contract acquisition costs of $9.7 million. These changes primarily reflect our strong collections activity following high billings in the fourth quarter of fiscal 2026, driving the reduction in accounts receivable, while the increase in accrued expenses primarily relates to ESPP contributions and research and development expenses.
Current wording
Cash provided by operating activities during the six months ended July 31, 2026 was $146.1 million, primarily consisting of our net loss of $41.7 million, adjusted for non-cash items of $153.9 million (mainly attributable to stock-based compensation expense of $125.1 million and amortization of deferred contract acquisition costs, netof $23.5 million), and net cash inflows of $33.9 million provided by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease in accounts receivable of $46.0 million, the decrease in prepaid expenses and other current assets of $7.7 million, the increase in accrued compensation and benefits of $7.6 million, the increase in deferred revenue of $4.5 million, partially offset by the increase in deferred contract acquisition costs of $24.7 million and the decrease in accrued expenses and other current liabilities of $7.0 million. These changes primarily reflect improved operational performance with successful collections driving lower accounts receivable, ongoing customer subscription growth contributing to increased deferred revenue, and an increase in deferred contract acquisition costs driven by sales commissions capitalized on new and renewed customer contracts executed during the period.
Previous wording
Cash provided by operating activities during thethree months ended April 30, 2025 was $106.3 million, primarily consisting of our net loss of $36.3 million, adjusted for non-cash items of $81.2 million (mainly attributable to stock-based compensation expense of $55.8 million and amortization of deferred contract acquisition costs, net of $13.9 million), and net cash inflows of $61.4 million provided by changes of our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease of accounts receivable of $65.9 million, the increase in accrued expenses and other liabilities of $10.0 million and the increase in accounts payable of $3.6 million, partially offset by the decrease in accrued compensation and related expenses of $13.1 million and the decrease in deferred contract acquisition costs of $8.1 million. These changes primarily reflect our successful collections driving lower accounts receivable and the decrease in accrued compensation is largely due to the payment of prior period commissions and bonuses, while the increase in accrued expenses primarily relates to ESPP contributions and accrued marketing and research and development spending.
Current wording
Cash provided by operating activities during the six months ended July 31, 2025 was $155.7 million, primarily consisting of our net loss of $46.3 million, adjusted for non-cash items of $152.0 million (mainly attributable to stock-based compensation expense of $110.1 million and amortization of deferred contract acquisition costs, net of $27.3 million), and net cash inflows of $49.9 million used in changes of our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were the decrease of accounts receivable of $69.8 million, the increase in accrued expenses and other liabilities of $4.3 million and the increase in deferred revenue of $9.5 million, partially offset by the decrease in accrued compensation and related expenses of $11.1 million and the decrease in deferred contract acquisition costs of $20.4 million. These changes primarily reflect improved operational performance with successful collections driving lower accounts receivable, higher accrued expenses for research and development spending, ongoing customer subscription growth contributing to increased deferred revenue, and the seasonal payment of prior period commissions and bonuses impacting accrued compensation balances.
Previous wording
Cash provided by investing activities during thethree months ended April 30, 2026 was $4.2 million, primarily consisting of $6.6 million in proceeds from maturities and sales of short-term investments, net of purchases, partially offset by $2.4 million in additions to property and equipment.
Current wording
Cash used in investing activities during the six months ended July 31, 2026 was $5.4 million, primarily consisting of $2.8 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $2.6 million in additions to property and equipment.
Previous wording
Cash used in investing activities during the three months ended April 30, 2025 was $81.9 million, primarily consisting of $81.0 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $0.9 million in purchases of property and equipment.
Current wording
Cash used in investing activities during the six months ended July 31, 2025 was $138.5 million, primarily consisting of $134.6 million in purchases of short-term investments, net of proceeds from maturities and sales of short-term investments, and $3.8 million in purchases of property and equipment.
Previous wording
Cash used in financing activities during thethree months ended April 30, 2026 was $47.8 million, primarily attributable to$50.0 million in repurchases of common stock and $0.2 million of payments for taxes related to net share settlement of equity awards, partially offset by $2.4 million in proceeds from the issuance of common stock upon exercise of stock options.
Current wording
Cash used in financing activities during the six months ended July 31, 2026 was $143.3 million, primarily attributable to $154.7 million in repurchases of common stock and $0.9 million of payments for taxes related to net share settlement of equity awards, partially offset by $5.4 million in proceeds from the issuance of common stock upon exercise of stock options and $6.9 million of proceeds from the issuance of common stock under the ESPP.
Previous wording
During the quarter ended April 30, 2026, we repurchased 2,378,892 shares of our Class A common stock for aggregate consideration of$50.0 million under our 2026 Repurchase Program, representing 12.5% of the$400.0 million authorized. We funded these repurchases from the existing cash and short-term investments. As of April 30, 2026,$350.0 million remained available for future repurchases.
Current wording
During the six months ended July 31, 2026, we repurchased 5,840,297 shares of our Class A common stock for aggregate consideration of $154.7 million under our 2026 Repurchase Program. We funded these repurchases from the existing cash and short-term investments. As of July 31, 2026, $245.3 million remained available for future repurchases.
Previous wording
Cash provided by financing activities during the three months ended April 30, 2025 was $3.3 million, attributable to proceeds from the issuance of common stock upon stock options exercises.
Current wording
Cash provided by financing activities during the six months ended July 31, 2025 was $15.7 million, attributable to $7.3 million of proceeds from the issuance of common stock upon stock options exercises and $8.4 million of proceeds from the issuance of common stock under the ESPP.
Previous wording
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. 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.
Current wording
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 (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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cost of revenue increased by $29.6 million, to $83.1 million forthesix months ended July 31, 2026 from $53.5 million forthesix months ended July 31, 2025, primarily due to an increase of $18.6 million in third party hosting costs for SaaS and cloud usage. The remaining change was primarily attributable to an increase of $8.1 million in personnel-related expenses, driven by an increase in our average customer support and professional services headcount and an increase of $2.6 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 3% to 85% forthesix months ended July 31, 2026 compared to 88% forthesix months ended July 31, 2025. The decrease in gross margin was primarily attributable to an increase in third party hosting costs for SaaS and cloud usage.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(1) No non-recurring payments related to the formation of JiHu were recorded during the periods presented.