GitLab: A Scalable DevSecOps Leader with Strong Growth Potential
Deep Dive into $GTLB: Valuation, Segment Growth, Key Metrics, Profitability, Expenses, Product Launches, Customer Acquisition, Financial Stability, SBC/Revenue, and Shareholder Dilution.
GitLab: Company overview
About GitLab
GitLab is a leading DevSecOps platform provider headquartered in San Francisco, California. Founded in 2011, it offers a unified application covering the full software development lifecycle—planning, building, securing, and deploying. GitLab operates fully remotely with 1,350+ employees across 65+ countries. As of 2025, the company has a market capitalization of $8.51 billion, supported by strong financials and global adoption.
Company Mission
GitLab’s mission is to help organizations deliver value faster through digital transformation and DevOps. By offering a single platform for collaboration and innovation, GitLab streamlines workflows, boosts software quality, and ensures security and compliance. Its commitment to transparency and open-source development supports a global community of 30+ million registered users, including major enterprises like Comcast and Nasdaq.
Sector
GitLab operates in the DevSecOps sector, which unifies development, security, and operations into a single software delivery framework. The sector is rapidly expanding due to rising demand for efficient software development amid digital transformation. GitLab competes with GitHub (Microsoft), Atlassian, and Azure DevOps, in a total addressable market (TAM) exceeding $40 billion.
Competitive Advantage
GitLab’s all-in-one platform is its core advantage. While competitors rely on multiple tools, GitLab delivers seamless integration across the DevOps lifecycle. Its cloud-agnostic design, real-time collaboration features, and robust security make it scalable from small teams to global enterprises. A 130% dollar-based net retention rate (DBNRR) reflects strong customer expansion and product stickiness.
Total Addressable Market (TAM)
According to the latest data, GitLab operates in a $40 billion total addressable market (TAM) for DevSecOps platforms. With a current market share of approximately 2.2% as of 2023, the company has significant room to grow.
The DevSecOps market is expanding rapidly. It's projected to increase from $7.07 billion in 2024 to $9.08 billion in 2025, reflecting a 28.5% compound annual growth rate (CAGR). By 2029, the market is expected to reach $24.43 billion, maintaining a strong 28.1% CAGR over the forecast period.
In the broader DevOps tools market, GitLab also plays a key role. Earlier forecasts showed growth from $5.2 billion in 2019 to $10.7 billion by 2024, representing an 18.8% CAGR. The demand is fueled by rising cybersecurity threats—39% of UK companies and over 53 million individuals in the US have been affected by cyberattacks in recent years.
Valuation
$GTLB GitLab is trading at a Forward EV/Sales multiple of 7.27, below the median of 10.8. The company's Forward EV/Sales multiple is at historically low levels relative to its past valuations.
$GTLB GitLab trades at a Forward P/E of 65.5. In 2024, the company became profitable on a non-GAAP EPS basis and is in an earlier stage of growth.
The EPS growth forecast for 2026 is 32.2%, with P/E of 65, 2026 PEG ratio of 2.0.
The PEG (Price/Earnings to Growth) ratio is a key tool for evaluating growth stocks, introduced by Peter Lynch.
PEG < 1: Undervalued – A ratio below 1 suggests the stock is undervalued. For example, if the P/E is 15 and earnings are expected to grow by 20%, the PEG would be 0.75, indicating a good buying opportunity.
PEG = 1: Fair Value – A PEG of 1 means the stock price matches its growth expectations, representing fair value.
PEG > 1: Overvalued – A PEG above 1 indicates the stock may be overvalued, as its price is higher than its projected growth rate, making it riskier.
Valuation comparison
$GTLB GitLab reported 29.1% YoY revenue growth in the last quarter. Analysts' revenue growth forecast for 2025 is 26,5%. Considering this forecast, the valuation based on the P/S multiple appears fair compared to other companies in the DevOps sector.
Analysts expect strong revenue growth, so let's examine the key metrics to determine whether these expectations are justified.
We'll evaluate the company's economic moat, which supports long-term revenue growth, analyze revenue trends and the forecast for next quarter, and identify key factors that could help the company exceed expectations and sustain future growth.
We'll assess the performance of key segments, the launch of new products and updates, customer acquisition growth, key financial metrics, financial stability, and margin trends.
Additionally, we'll review the SBC/Revenue ratio, shareholder dilution, and finally, draw conclusions on the company's outlook.
Economic Moat
GitLab's economic moat is primarily built on switching costs and network effects, though it lacks the comprehensive competitive advantages that characterize companies with wide economic moats.
Economies of Scale
GitLab demonstrates moderate economies of scale through its unified DevSecOps platform that serves over 30 million registered users across various deployment models. The company's ability to offer both self-hosted and SaaS solutions (with SaaS growing from 26% to 39% of ARR year-over-year) creates operational leverage as it scales. However, GitLab faces significant competition in the $40 billion DevSecOps market, limiting its ability to fully capitalize on scale advantages despite its efficient all-in-one platform approach.
Network Effect
GitLab exhibits a moderate to strong network effect through its open-source foundation and collaborative development environment. As more developers join the platform, the value increases for all participants through shared code, knowledge, and integrations. The platform's bi-partite user-project networks show high assortativity values, indicating that developers of similar experience levels tend to collaborate, creating community clusters. However, GitLab's largest connected component encompasses only 10% of users, significantly smaller than typical social networks where giant components often include over 90% of nodes.
Brand
GitLab possesses a weak to moderate brand moat. While the company has a dedicated Brand Strategy team focused on building awareness, trust, and affinity, independent analysis indicates that "GitLab Inc lacks an economic moat, leaving it vulnerable to competitive pressures." The company's brand recognition trails behind competitors like GitHub (Microsoft), limiting its pricing power. GitLab actively protects its brand through trademark guidelines and governance but has yet to establish the strong brand equity needed for a significant competitive advantage.
Intellectual Property
GitLab maintains a moderate intellectual property moat through its comprehensive DevSecOps platform and proprietary features. The company carefully protects its trademarks and code assets while balancing open-source collaboration. GitLab's platform integrates security throughout the software development lifecycle, providing unique capabilities that competitors struggle to match. However, the open-source nature of its core product means that some intellectual property advantages are shared with the broader community, limiting exclusivity.
Switching Costs
GitLab has developed a strong switching cost moat with migration expenses estimated at $50,000-$250,000 for enterprises depending on implementation scale. The platform's comprehensive integration across the entire software development lifecycle creates significant lock-in effects. Organizations that adopt GitLab typically replace four point solutions annually over a three-year period, driving a 152% dollar-based net retention rate in Q4. The Forrester study demonstrates that GitLab delivers a 483% ROI over three years and 400% improvement in developer productivity, making customer departures economically unattractive.
Revenue growth
$GTLB GitLab's revenue growth has slightly slowed to 29.1% YoY. Based on the forecast for the next quarter, if the company exceeds its guidance by 2.6%, as it did in Q4, growth would reach 29.2%, indicating stabilization in revenue growth.
RPO is growing faster than revenue at +40.2% YoY, and billings are also outpacing revenue growth, increasing +31.5% YoY.
Segments and Main Products
GitLab's core product is its DevOps platform, which generated $544.4 million in annual recurring revenue (ARR) as of Q4 2023, representing +32% year-over-year growth. The platform serves over 50,000 customers, including 7,229 enterprise clients. GitLab competes in both DevOps point solutions and DevOps platform markets, with Microsoft (via GitHub) as its primary competitor.
The DevSecOps platform integrates source code management, CI/CD, security scanning, and project management in a single application. Unlike competitors stitching together point tools, GitLab offers one codebase, one interface, and a unified data model across the entire lifecycle.
AI capabilities are emerging as a major growth driver. In Q4 2023, GitLab launched AI-powered features for code suggestions, automated testing, and security scanning. Its AI suite, branded Duo, includes Duo Workflow in private beta and is gaining early traction.
Revenue is generated via a subscription model with three tiers: Free ($0), Premium ($19/user annually), and Ultimate ($99/user annually). In fiscal year 2024, subscription revenue reached $484.3 million out of $516.4 million total revenue, with professional services contributing $32.1 million.
GitLab's customer base includes Enterprise (5,830 customers, 72% of revenue), Mid-Market (3,215 customers, 21%), and Small Business (2,450 customers, 7%). The company maintains a 98% customer retention rate and operates fully remotely with 1,388 employees.
GitLab Duo, the company’s AI assistant suite, enhances productivity across the DevSecOps workflow. It includes code suggestions, vulnerability resolution, code explanations, test generation, and suggested reviewers. Available in Pro and Enterprise tiers, Duo aims to deliver a 10x efficiency improvement. New features include automatic merge requests for fixing vulnerabilities and integration with Model Registry for AI-powered apps.
GitLab Dedicated is a single-tenant SaaS solution built for highly regulated industries. Launched in 2022 and made generally available in 2023, it provides a fully isolated environment hosted in the customer’s chosen AWS region. It offers high availability, enterprise-grade security, full data isolation, and supports private connectivity. GitLab manages the infrastructure, combining SaaS scalability with the compliance of self-hosting, ideal for sectors like finance, healthcare, and government.
Main Products Performance in the Last Quarter
DevSecOps Platform
GitLab’s DevSecOps platform is central to its strategy and customer expansion. The company is increasingly landing large deals by offering end-to-end software lifecycle management with embedded security, compliance, and automation. Key wins in Q4 included Anthropic, Zscaler, Capgemini, and CACI. Customers are adopting the platform to consolidate fragmented toolchains, reduce risk, and accelerate time-to-market. GitLab emphasized it is the only provider offering a comprehensive, single-tenant SaaS platform for secure environments. Public sector, financial services, and embedded software industries are major drivers. Growth is supported by standardizing workflows for both human and AI-generated code. The biggest risk lies in competitive pressure from point-solution vendors and fast-growing AI-native developer tools.
GitLab Ultimate
GitLab Ultimate reached 50% of total ARR, reflecting continued success in upsells and first-time lands. Customers are increasingly adopting Ultimate for advanced security, compliance, and governance features, especially in regulated industries. Notable expansions include Barclays’ 20,000-seat deal and AWS Professional Services’ transition from free tier to Ultimate. Ultimate was included in the top 7 largest deals of the quarter. GitLab highlighted a six-month payback and ~480% ROI over three years, underlining strong value delivery. The mix improvement is likely to continue as customers consolidate tools and adopt GitLab as their core development environment.
GitLab Duo
GitLab Duo is gaining adoption across both new and existing customers. Duo ARR accounted for ~one-third of ARR in deals where it was included. GitLab exceeded internal expectations again in Q4. Barclays expanded Duo usage alongside Ultimate, while Capgemini and CACI adopted Duo Enterprise to embed AI throughout the SDLC. Duo Enterprise is positioning well against Copilot, differentiating with GitLab’s platform-wide context and security. Duo is not yet moving the needle materially at the topline level, but leadership emphasized it is setting the foundation for multiple expansion paths into FY2027. Duo Enterprise is helping GitLab secure competitive wins by enhancing developer productivity, reducing manual tasks, and supporting AI-driven workflows.
Duo Workflow
Duo Workflow entered private beta in Q4 FY2025, aiming for public beta in summer. The product introduces autonomous agentic development, marking a shift from AI-assisted to AI-driven software creation. GitLab internally is already testing it with encouraging results. Duo Workflow leverages GitLab’s unique data graph—planning, code, pipelines, and security—to drive automated development actions. This product enhances GitLab’s AI moat and is expected to unlock further productivity gains. It will be critical to GitLab’s positioning in the AI DevOps space over the next 12–24 months.
GitLab Dedicated
Dedicated grew ~90% YoY in Q4, with the largest-ever first-order deal closed this quarter. GitLab Dedicated is resonating with large enterprise and highly regulated customers needing a managed single-tenant solution. Companies like Delta and NatWest expanded into Dedicated as part of cloud transformation initiatives. Delta moved from Ultimate to Dedicated for a fully managed experience. GitLab sees continued growth potential from migrating large self-managed customers to Dedicated. It strengthens upsell paths to Ultimate and Duo, supporting multi-product ARR expansion.
Product and Innovation Focus
FY2026 innovation is focused on three areas: core DevOps platform, security and compliance, and AI. Investment is directed at enhancing platform breadth and depth with monetization paths tied to new capabilities. GitLab is strengthening onboarding, enablement, and success planning, with expanded services and training to support faster value realization. The launch of Duo Workflow, deeper integration with AWS AI (Amazon Q), and existing AI tools like Duo Pro and Duo Enterprise form a full-stack AI approach. Partnerships with AWS and Google are expanding, and GitLab is emphasizing scalable deployment flexibility: cloud, on-prem, air-gapped environments.
Revenue by Region
The United States accounts for 82% of total revenue, making it $GTLB GitLab’s largest market, with revenue growing +29% YoY in Q4.
The Europe region contributes 16% of total revenue and is growing at +28% YoY.
The Asia Pacific region contributes 2%, with a growth rate of +32% YoY.
Revenue growth in Europe has slowed from +37% YoY in Q3 and is now slightly below overall revenue growth.
Market Leader
GitLab was named a Leader in the 2024 Gartner Magic Quadrant for DevOps Platforms, ranked highest in Ability to Execute and Completeness of Vision. The recognition highlights its unified DevSecOps platform, which replaces complex toolchains with a single solution for collaboration, automation, and scalability.
The platform is expanding to support Agile planning, data science, and observability teams. GitLab Dedicated meets strict compliance demands by offering SaaS simplicity with secure, isolated infrastructure.
Security is integrated early, with scanning at code commit, not just release. GitLab will roll out improved SAST scanners, more policy controls, and a native secrets manager in the next 12 months.
GitLab also leads in AI with GitLab Duo, a suite of privacy-first, AI-powered features across the DevSecOps lifecycle. It was recently named a Leader in Gartner’s first Magic Quadrant for AI Code Assistants, reinforcing its long-term product vision.
$GTLB GitLab was recognized as a Leader in the 2024 Gartner Magic Quadrant for AI Code Assistants, which is an important achievement for the company. Currently, GitHub is excelling in this area, but GitLab is taking the right steps.
Customers
$GTLB GitLab added 374 customers with ARR over $5K, growing +15% YoY, which is lower than the growth rate a year ago.
The company also added 85 customers with ARR over $100K, representing +29% YoY growth—a record number of large customer additions.
As the platform expands, GitLab is increasingly focused on attracting large enterprise customers.
Customer Success Stories
GitLab continues to drive strong business outcomes for enterprise customers, showcasing platform value through increased developer efficiency, toolchain consolidation, and improved security posture.
Booking.com and USAA emphasized GitLab’s ability to accelerate secure software delivery across large engineering teams. Customers reported up to 15x faster time-to-market, 4x faster feature delivery, and 60% reduction in manual tasks, reinforcing the ROI of GitLab’s platform strategy.
The investment arm of the French state (CDC) expanded its GitLab adoption after initial success with infrastructure teams, now standardizing development operations on GitLab Ultimate. This eliminated legacy tools across source control, CI/CD, agile planning, and security scanning, reducing technical debt and streamlining security.
Delta Airlines, a long-term GitLab customer, migrated to GitLab Dedicated as part of its cloud transformation. GitLab now fully manages Delta’s DevSecOps infrastructure, enabling internal teams to focus on product innovation instead of infrastructure maintenance.
CACI, a major U.S. tech and government contractor, consolidated seven point tools into GitLab, resulting in 13x faster security scans and 90% lower toolchain admin overhead. In Q4, they expanded into Duo Enterprise, extending AI-driven productivity across their SDLC.
AWS Professional Services upgraded from GitLab’s free tier to GitLab Ultimate in Q4. The shift enables customer-facing engineering teams to scale solution development while meeting Amazon’s strict security requirements. GitLab’s value-add directly strengthens strategic cloud partnerships.
NatWest continued expanding GitLab usage, investing further into GitLab Dedicated and Duo Enterprise to support ongoing digital transformation efforts. The decision reflects confidence in GitLab’s security and AI-powered development capabilities at scale.
Large Customer Wins
Q4 delivered the largest net ARR deal in GitLab’s history, contributing to a record quarter for new customers with $100K+ in ARR. GitLab added the highest-ever count of first orders exceeding $100K, signaling deeper penetration in mid-market and enterprise segments.
Anthropic, creator of Claude, selected GitLab Ultimate self-managed for secure code collaboration and customizable workflows. As a leading AI company, Anthropic requires scalability and on-prem control—factors that favored GitLab over competitors.
Zscaler, a global cybersecurity leader, migrated from a discontinued on-prem SCM competitor. GitLab’s on-prem capabilities, usability, and ongoing investment in enterprise-grade features won the deal. The shift enables Zscaler to streamline development while maintaining full infrastructure control.
Barclays, a major global financial institution, significantly expanded its GitLab investment. Initially an Ultimate customer, Barclays added 20,000 Duo Enterprise seats in Q4, reflecting rising confidence in GitLab’s AI-driven development capabilities.
Capgemini, a global engineering and R&D leader, selected GitLab Ultimate and Duo to modernize its software delivery platform. GitLab will now power AI-enabled software development across thousands of engineers.
GitLab Dedicated also recorded its largest-ever first-order deal during the quarter, validating growing demand from security-conscious enterprises seeking a managed, compliant SaaS solution. The Dedicated SKU is helping unlock multi-product ARR expansion in regulated industries.
Retention
$GTLB GitLab's Retention Rate (DBNR) for the last quarter slightly decreased to 123%, but it remains strong, ranking among the leaders in SaaS companies and significantly above the median DBNR of 117% for the SaaS companies I monitor.
Net new ARR
$GTLB GitLab added $61.6 million in net new ARR for Q4 2024, which is 9% higher year-over-year.
This marks the highest net new ARR addition in the company's history.
CAC Payback Period and RDI Score
$GTLB GitLab's return on Sales & Marketing (S&M) spending stands at 16.7, with the CAC Payback Period at a healthy level—better than the SaaS average (the median for the SaaS companies I track is 20.8 months).
The R&D Index (RDI Score) for Q4 is 1.14, which is in line with the 1.2 median of the SaaS companies I monitor and remains high, well above the industry median of 0.7.
An RDI Score above 1.4 is considered indicative of best-in-class performance. The lower industry median highlights the importance of efficient R&D investment.
Profitability
Over the past year, $GTLB GitLab has experienced changes in its margins:
Gross Margin slightly decreased from 91.5% to 91.2% but remains at a high level.
Operating Margin significantly increased from 8.1% to 17.7%.
Free Cash Flow (FCF) Margin improved from 14.9% to 29.4%.
Operating expenses
$GTLB GitLab's non-GAAP operating expenses have gradually decreased, driven by reduced Sales & Marketing (S&M) spending. S&M expenses have significantly declined from 56% two years ago to 38%.
The R&D share remains high at 22%, reflecting the company’s continued investment in future growth through platform enhancements and updates.
General & Administrative (G&A) expenses have also dropped, from 28% two years ago to 13%.
Balance Sheet
$GTLB Balance Sheet: Total debt stands at $0.4 million, while GitLab holds $992 million in cash and cash equivalents, far exceeding its liabilities and reflecting a healthy balance sheet with virtually no debt.
Dilution
$GTLB Shareholder Dilution: GitLab’s stock-based compensation (SBC) expenses have declined to a more acceptable level of 22% of revenue, in line with the median for SaaS companies.
However, shareholder dilution remains elevated, with the weighted-average number of basic common shares outstanding increasing by 4.1% YoY.
Conclusion
$GTLB GitLab has demonstrated strong innovation over the past few quarters. The company is expanding into AI Code Assistants, a potential growth driver that could accelerate revenue expansion.
Leading Indicators
• RPO growth of +40.2% significantly exceeded revenue growth
• Billings growth of +31.5%, also ahead of revenue growth
• Net new ARR additions reached a record level, up +9% YoY
• Record number of new large customer additions
Key Indicators
• Net Dollar Retention (NDR) declined by 1 percentage point QoQ to 123%, but GitLab remains among the SaaS leaders in retention
• CAC Payback Period improved to 16.1 months, better than the SaaS average
• RDI Score slightly declined to 1.14, in line with the median of the SaaS companies I track
The outlook suggests revenue growth is stabilizing, supported by strong RPO growth, record large customer additions, and continued strength in net new ARR.
While GitLab appears undervalued relative to its projected revenue growth, it operates in a highly competitive space, with GitHub as a major rival. Given the market dynamics, its valuation based on multiples appears reasonable. It’s also worth noting the company recently achieved profitability on a non-GAAP EPS basis, with continued improvement in operating metrics.
In January 2025, I increased my position in GitLab, which now accounts for 5.0% of my portfolio.