Prepared Remarks
Equity Investor, Macro Commentary
GitLab's post-earnings gain should hold because the quarter was better than its in-line revenue suggests. Consumption numbers were good, guidance was conservative again, and incremental margins were good, even if cRPO growth was unremarkable. Software earnings reports are mostly getting bought, with strong follow-through afterward. x.comÂ
GitLab is not going to become the new GitHub. As @endingwithali notes, GitLab's CEO previously ran New Relic, which was sold to private equity rather than becoming the alternative customers sought when they were annoyed at Datadog's prices. x.comÂ
GitLab faces an existential crisis as the AI "SaaSapocalypse" arrives, yet it still trades at 4.7x sales despite decelerating growth and 10+ analyst downgrades in 2026. x.comÂ
Enterprises' need for source control, CI, security and governance at agent scale probably makes Anthropic's Scion more of an opportunity than a threat for GitLab. Scion shows what starts to break when agents generate code at this scale, a problem GitLab is already working to solve; enterprises need not build their own Scion or replace existing workflows. Scion itself is not inherently bullish for GitLab, and OpenAI, Meta or Anthropic selling that full stack broadly would pose a competitive risk. … Show more
GitLab is not worth investing in because of competition from Microsoft's GitHub, even after a 75% drawdown. AI won't replace the tool, and it has strong switching-cost and brand moats. x.comÂ
GitLab is poorly placed to exploit GitHub's moment of weakness because its product is too similar to GitHub and in many ways worse. Hands-on testing found poor design: it took minutes to find where to create a repo, and pushing failed because force push to main was disabled. That explains why few are talking about migrating despite the stock's 50%+ fall over the past year. Unless it reinvents the product, it is not worth buying; whatever comes next in source control will look different. x.com … Show more
OpenAI's open-source Codex Security CLI looks complementary to GitLab rather than a threat, and the market has moved past punishing GitLab on such news. Six months ago, a release that lets users scan repositories, verify fixes and add security checks to CI/CD would have sent the stock down 10%. x.comÂ
GitLab's results don't justify the stock's after-hours rise. Expense dollars grew far faster than revenue dollars, 117% net retention is unimpressive at this valuation, and stock-based compensation rose 50% year over year. x.comÂ
GitLab's restructuring plan earned it an analyst downgrade. x.comÂ
GitLab looks mispriced against the data value implied by xAI's deal for an option to buy Cursor at $60 billion. At about $2.5 billion of enterprise value, GitLab's code data would be worth only around 5% of Cursor's, which is hard to believe; even a weak plan to monetize that data should spark a monster move, and if management won't, another company could acquire GitLab to exploit it. One caveat: a large share of GitLab is self-managed, so that portion cannot be trained on. x.comÂ
GitLab's revenue strength is not worth celebrating because it jammed sales and marketing spending to grab subscribers. x.comÂ