Q1 2023 GitLab Inc Earnings Call
In the supplemental schedules to our earnings release, a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release submitted to the SEC. These.
These reconciliations together with additional supplemental information are available at the Investor Relations section of our website and a replay of today's call will also be posted on the website.
I will now turn the call over to get Labs, co founder and Chief Executive Officer said see Randy.
Thank you for joining us for our fiscal year 2021st quarter earnings presentation.
But before discussing before these results as I stated last quarter.
We remain deeply saddened and concerned body unprovoked, an unjustified Russian military invasion of Ukraine.
Holistic acts of violence against the sovereign nation, and its people and the terrible impact to all of those in the region.
We continue to work directly with a small number of impacted get lab team members in the region.
And we're committed to providing ongoing assistance and support to them until the conflict if it's over.
Now turning to our results.
We believe that every company needs to become a software company, regardless of the macroeconomic environment.
Our <unk> platform drives compelling business outcomes, providing our customers.
With what we believe to be distinct competitive advantage being able to build deploy and secure software better.
Our pipeline of opportunities remains strong across the globe as we are addressing a large and early stage market opportunity.
In the first quarter of fiscal 2020 feet, we exceeded our guidance with revenue of 87 $4 million and this represents revenue growth of 75% year over year.
Our dollar based net retention rate remains strong and exceeded our reporting threshold level of 130%.
The primary driver of this metric continues to be an increasing number of users at existing customers.
Which we believe to demonstrate a significant return on investment we provide.
Okay.
We are committed to growing in a responsible manner.
I believe our first quarter results demonstrate the attractive unit economics underlying our business.
While continuing to accelerate revenue growth.
We also were able to show significant operating leverage.
Our non-GAAP operating margin improved by seven 700 basis points year over year, and by 700 basis points quarter over quarter.
Underpinning this acceleration in revenue growth is both a higher velocity of new customer wins.
As well as larger strategic commitments.
We achieved momentum in growth in both $1 million deals and $500000 views.
In addition, we continue to experience strong success in upgrading existing customers and signing new customers to our ultimate tier.
Ultimate adoption represented the highest proportional mix of new logos landed during our first quarter of 2023.
And ultimate remains our fastest growing tier by addressing use cases for security compliance and portfolio management.
Two days macroeconomic environment is extremely volatile.
There are a number of challenges did very few would have predicted just a few short months ago.
Our customers and the economy at large are grappling with the war in Ukraine ongoing disruptions related to the pandemic labor shortages rising inflation, increasing interest rates and dislocated supply changed among other issues.
Wanted to dive more deeply into the broader factors driving our financial results.
There are four main reasons why we believe <unk> is well positioned to achieve durable growth with improving unit economics over time.
First we believe the business imperative for digital transformations remained strong regardless of macro conditions. We are in the midst of a generational disruption whereby we believe all companies are becoming software driven businesses and this requires an <unk>.
Creasing number of companies to embrace modern software development practices to deliver captivating mobile and digital experiences to their customers as.
As well as engage in cloud migrations designed to provide agility and future proof their development operational and infrastructure requirements.
In essence in a world where software defined speed of innovation. We believe every company has to become great at developing securing and operating software to remain competitive.
Second we believe the market. We're targeting is very large and early stage in nature. We believe our <unk> platform is addressing an estimated 40 billion dollar opportunity.
We're focused on selling a business outcome.
And the time to value.
Thus our competition is largely the do it yourself known as DIY develop solutions that companies have in place today.
Okay.
We're addressing this estimated large market opportunity with a compelling platform.
<unk> one <unk> platform provides one interface one data store one set of reports one spot to secure your KOB one location to deploy to any cloud in one place for everyone to contribute.
This empowers all of an enterprise's teams, including development security operations Ikea business to collaboratively plan build secure and deploy software across an end to end unified platform.
We believe our platform is the only true cloud independent end to end platform that brings together all of Dev ops capabilities in one place.
Combining all Dev ops capabilities in one platform is so central to get lab that we have incorporated the Dev ops infinity loop into our new logo as part of our brand refresh we undertook late in the first quarter.
Fourth one of our credit values iteration is deeply ingrained and we believe create competitive differentiation.
We strive to do the smallest thing possible as quickly as possible.
And this value leads to more improvements that address customer problems in a shorter timeframe.
To provide some examples of this innovation in the first quarter, we delivered enhancements in our ultimate product in the area of security compliance and planning.
Security needs are the main driver of depth SEC ops.
Our customers are looking to solve the pinpoint over fragmented security experience, which slows down innovation and creates more risk.
Our recent launched integrated security training functionality aims to help developers improve their efficiency and ability to address security issues as part of their normal development workflow.
Get lab provides a comprehensive set of security scanning tools that can identify all types of security issues.
Security findings presented emerged crests pipelines.
A dedicated vulnerability report and when available a recommended solution is given.
Equally important to security as compliance and this is an area where a single Dev ops platform meets an important enterprise need.
We released individual compliance violation reporting which improves our compliance capabilities to capture a single view of projects.
The compliance report now reports every individual merger Chris violation for project within a group. This is a huge improvement over the previous version, which only showed the latest mercury pest that have one or more violations.
The new version allows you to see history and patterns of violation overtime.
Truly automated end to end software development and delivery begins with planning.
And this is an area, where all teams need to contribute.
We introduced functionality that enables teams to collaborate better and track their dependencies across get lab groups.
Active dependency management is a key component of reducing variability and increasing predictability and value delivery.
We're excited about the improvements in the product.
And we believe the four factors mentioned earlier will allow us to capitalize on a long term durable growth opportunity.
This growth opportunity consists of helping companies transition from DIY Dev ops to Dev ops platform.
Most companies are still practicing DIY Dev ops as they are juggling many different tools was homegrown integrations related to co development deployment and operations.
These integrations take more and more effort and overtime. It starts looking like digital duct tape.
This results in a disjointed organization, which constrained our ability to deliver software innovation.
We believe the digital duct tape problem is increasingly recognized among both customers and prospects.
This is resulting in a broadening of the market awareness for the <unk> platform.
We are seeing a more frequent number of engagements where the prospective buyers have gone from not realizing that our DIY Dev ops approach was holding them back to now identifying that they're complex and this joined the tool chain is D issue.
And from a business perspective that means we can deliver both cost savings and productivity gains to our customers.
We aim to accomplish this by eliminating the direct and indirect costs associated with manually integrating the complex tool change inherent with the DIY Dev ops approach.
We believe our single application helps companies to deliver software faster and.
An improved organizational efficiency security and compliance.
Based on a study conducted by Forrester consulting and commissioned by Us.
Customers saw 407% return on investment within three years of deployment of our <unk> platform.
These benefits can be broken down in four categories.
<unk>.
There is a direct software tool license cost reduction as customers are able to eliminate point vendors and consolidate software spend.
Second customers can remove tool chain integration costs.
Customers realize greater productivity and a better overall developer experience.
And finally revenue acceleration can be achieved due to faster innovation as customer facing applications can be designed and deployed fast.
The one <unk> platform delivers positive business outcomes for a very wide range of customers from single users to tens of thousands of users from small organizations to fortune 100 companies.
From a TCE from aerospace to zoology.
We remain encouraged with the increasing numbers.
Our strategic conversations happening at the <unk> level.
We continue to see increasing traction with our channel partners and over the last year, we have increased our number and depth of our alliance partners.
We have also continued to invest in our partner program.
And please let me give you some customer examples representing both new logo wins and expansions.
First.
UK based retail chain with over 400 outlets and over 16000 employees that sells household and homeward goods became a get lap ultimate SaaS customer in the first quarter of FY 2023.
They chose get lap to replace their do it yourself Dev ops approach.
Their existing tool chain contained a broad mix of tools, which was holding back their culture shift to Dev ops and agile practice.
This shift is key to their future digital transformation strategy.
Okay.
Ah.
Our North American based technology company users get lab to drive efficiency and productivity throughout their development teams, primarily utilizing STM and <unk> capabilities.
In late 2021, they began experiencing outages with another vendor that became worse over time.
E Valuate, it get labs package management capabilities.
And they migrated their usage to improve performance and continue enabling developer productivity.
In addition.
They implemented more advanced infrastructure to allow them to scale partnering with get labs professional services team.
Through dedicated training workshops and strategic planning. This company was able to quickly extend and drive outcomes across developed or self service high availability and automation.
Leading to growth in fiscal Q1, 2020 that brought them to over 18000 premium seats.
Third <unk> is the largest e-commerce company in Turkey.
Serve more than 30 million shoppers and deliver more than 1 million packages everyday.
As <unk> has expanded its stable of surfaces and platforms. Its developer teams had a mass the diverse and complex assortment of Dev ops tools.
Adopting get lapped premium has allowed its dev ops teams to simplify operations and organize using a single platform.
As a result, <unk> has experienced a 30% improvement in developer productivity and a 60% reduction in build times and.
And the ability to launch a new application.
50% faster.
Okay.
In summary, I'm extraordinarily pleased with the quarter and I am grateful to all our team members partners the wider get lab community and customers who contributed to our results as we look forward. We are seeing continued strong momentum for customers adopting our <unk> platform.
Now I'll turn the call over to Brian Robbins get Labs, Chief Financial Officer. Thank you said and thank you again to everyone. Joining us today I will quickly recap our first quarter results for FY 2023, and key operating metrics introduced guidance and conclude with some additional context regarding our business and how strong does.
<unk> for our Dev ops platform translates into a strong financial profile first let me turn to the quarter. We are pleased with our results as our business continues to perform at a very high level, demonstrating improving unit economics, despite macroeconomic volatility we continually hear from our customers.
<unk> is a highly strategic platform for them. Our platform is offered with a free version and to paid subscription tiers, which we call premium and ultimate are paid tiers or price per user with different features for tier every user within the organization is on the same plan, which helps us keep our business model transparent and easy to us.
<unk>.
Our customer base is very well diversified across industry verticals customer sizes and geographic regions.
We do not see any slowdown in any key business metrics during the quarter in fact, our pipeline in EMEA is actually stronger than it's ever been.
We are happy with how we executed on team member hiring as we added more new people to the organization this quarter than in each of the previous eight quarters, we remain steadfast in our commitment to growing in a responsible manner. We also view the uncertainty in the macro economy as a benefit for hiring new team members.
Now turning to the numbers.
Revenue of $87 4 million this quarter.
Represents an increase of 75% organically from the prior year as of quarter end, we had over 5100 customers with <unk> of at least $5000 compared 4500 customers in the prior quarter and over 3100 customers in the prior year. This represents a year over year growth rate of.
Approximately 64%.
Currently customers with greater than $5000 in IRR represents approximately 95% of our total IRR.
Just a reminder, with ASC 606, we have some upfront revenue recognition that we analyzed on an annual basis. This may cause some fluctuations of the amount of license revenue.
Wired recognize upfront if we normalize for this change this quarter, we still grew 70% year over year.
We also measure the performance and growth of our larger customers, who we define as those spending more than $100000 in <unk> with us at the end of the first quarter of FY 2023, we had 545 customers with IRR of at least $100000 compared to 492 customers in the prior.
Quarter, and 324 customers in the first quarter of FY 2022. This represents a year over year growth rate of approximately 68%.
As many of you know, we do not believe calculated billings to be a good indicator for our business given that prior period comparisons can be impacted by a number of factors most notably our history of large prepaid multi year deals. This quarter total RPM grew 92% year over year to 336.
Million, we ended our first quarter with dollar based net retention rate exceeding our reported threshold of 130%.
Our ultimate tier is our fastest growing tier now representing 39% of annual recurring revenue for the first quarter of FY 2023, compared with 26% of annual recurring revenue for the first quarter of FY 2022, and continuing to grow in excess of a 100%.
non-GAAP gross margins were 90% for the quarter, which compares to 89% in the immediately preceding quarter and 87% for the first quarter of FY 2022, as we move forward. We are estimating a moderate reduction in this metric due to the rapid year over year growth rate of our size.
<unk> offerings.
We saw improved operating leverage across the business this quarter largely driven by revenue outperformance non-GAAP operating loss was $24 8 million or 28% of revenue compared to a loss of $22 5 million or 45% of revenue in Q1 of the losses full year Q1.
<unk> FY 2023 includes $3 7 million of expenses related to our JV and majority owned subsidiary.
Operating cash use was $28 2 million in the first quarter of FY 'twenty three compared to $21 5 million used in the same quarter last year.
In summary, we performed extraordinary well during the first quarter of FY 2023 on both the top and bottom line and we believe our business is set up for continued strength.
Now, let's turn to guidance for the second quarter of FY 'twenty. Two 'twenty three we expect total revenue of $93 5 million to $94 $5 million, representing a growth rate of 61% to 63% year over year, we expect non-GAAP operating loss of $34 million to $33 million.
And we expect a non-GAAP net loss per share of 24.
20 <unk>.
Assuming a 147 million weighted average shares outstanding.
For the full year FY 2023, we now expect total revenue of $398 million to $402 million, representing a growth rate of 58% to 59% year over year, we expect the non-GAAP operating loss of 135 to $127 5 million and we expect the <unk>.
non-GAAP net loss per share of <unk> 93.
<unk> <unk>, assuming 148 million weighted average shares outstanding.
As Sid mentioned earlier, we believe we are addressing a very substantial market is currently underpenetrated and that we're well positioned to capture an outsized portion of it despite the volatility in the macroeconomic environment in the first quarter, we have not seen any impact to our business. There has been no philosophical teams, how we run.
The business to maximize shareholder value over the long term, we continue to be focus on growth, while driving incremental improvements and the unit economics of our business.
A few more details on guidance in our model as I mentioned last quarter, we will incur approximately $20 million of incremental expenses related to the resumption of travel and in person customer marketing events as well as new public company costs that were not incurred in the first three quarters of FY 2022.
In addition, we now forecast approximately $22 million of expenses related to <unk>, our China joint venture. This compares to $12 million of combined <unk> cost.
FY 2022, I'd like to note, we have deconsolidation Altana, our majority owned subsidiary.
On a percentage basis, our new annual FY 2023 guidance implies a non-GAAP operating margin improvement of approximately 700 basis points year over year at the midpoint of our guidance ranges over the longer term. We believe that our continued targeted focus on growth initiatives and scale in the business will yield further improvement.
<unk> and unit economics with that we'll now move to Q&A.
To ask a question. Please use the chat feature and pose your question directly to IR questions. We're ready for the first question.
Thank you Bryan said, we will begin my guidance of cash at Goldman Sachs Cashway. Please verbalize our question.
Sure happy to congratulations on the quarter.
I'm curious to get your take on the product roadmap is impressive and as wide as it is.
I Wonder how you prioritize which features you'll be investing in so as to maximize the revenue productivity and.
And also to further the company's ambition of getting to as many users as possible on the ultimate edition.
As a follow up to Brian just a logical sequence that.
What would be the company's targets.
With respect to ultimate edition.
Therefore, if that works out well, what or would that ambition as well.
What could be the impact to the financial model of the company. Thank you so much congrats again.
Yes. Thanks, so much for your question.
We're focusing our investment to enable people to go from DIY Dev ops to the platform. We know if they can do that if they can replace the point solutions. They see a great return on investment.
On average they are able to replace four point solutions in year, one year two year three the.
The majority of our investment is going into create very finance securities.
But we're also making long term investments for example in compliance and in model loss because with model ops, we see that software development co development and ml and AI will converge into future <unk> to be ready for that this month, we released <unk> 15 or <unk>.
<unk> major release, and we're excited about having our launch event in the third week of June .
Brian .
Thanks, Scott I appreciate the question in terms of adoption for ultimate.
<unk> EC tremendous business outcomes from our customers, who adopt ultimate and so we as a company get I believe that every customer should the ultimate over time, given the tremendous value at the price point of over $200 per developer per year. So ultimately it gives our customers enhanced security features compliance vulnerability management.
And so far just to name a few and so ultimate now just to remind you is 39% of our <unk> up from 26% first quarter of last year.
Got it.
Thank you so much thanks.
Thanks, guys.
Great. Our next question will be from Michael at Keybanc.
Hey, guys. How are you just trying to gratefully on mute didn't happen.
Doing well thanks.
Scott.
So fantastic quarter results were great and fantastic and you are not seeing any negative impact but maybe.
Brian if you can drill down on how you see <unk>.
Customers enterprises mid size, we're reacting to.
Fears of a recession.
Inflation in.
In terms of development projects today.
Simply saying, Okay, no problem development until the shifting those developed project from one priority to the next and then Brian I just.
Quick question for you on the space.
Yes. Thanks for that Great question, we believe that every company needs to become a software company.
Regardless of what the macroeconomic environment is and the way to do that is Dev ops.
And maybe I can share story, what happened during the pandemic Global Airlines saw their revenue crash, 90% plus reduction in revenue and at that time, we partnered with three global airlines to help them expand their <unk> footprint and to help them make that transformation. So our message message resonates well.
The platform approach helps customers to consolidate tools and with that they save money both on licensing and on integration costs Brian .
Yes, Michael what was your question in regards to the JV.
So all of this.
So just to be just that again sir.
Paul before the JV questions do you see any change in the priority projects. Obviously, you are saving them money, but are you seeing them shift the type of projects they want to do through you.
I believe we have not seen changes in any key indicators in fact, our pipeline in Europe is stronger than it's ever been.
Alright, and then Brian on.
The jv's so.
<unk> expenses go from 12 to 22 Miltonic deconsolidation.
Is there any benefit to the.
And can sustain an above the line by moving at below those expense below the line.
No.
<unk> is the only thing that we're deconsolidation, we did say that this would be last quarter that approximately would be about $30 million and now it's going to be $22 million because we're deconsolidation that we still are consolidating <unk>, our Chinese joint venture.
And so.
All of our guidance basically incorporates us and Youll see the details on <unk> when we file our 10-Q later this evening, okay, so $8 million benefit from the deconsolidation.
Correct.
Okay.
Thank you and now we're moving on to Joel for Cynosure.
<unk>.
That's on the strong execution.
I guess two questions often I just love you to just in boats first on <unk>.
Competition and profitability can you discuss the competitive win rates and then maybe give us some color on the balance of it or how youre thinking about the balance of growth and profitability going forward. Thanks.
Absolutely. Thanks, Joe Yeah, I guess first it's important to say, we're really really early in a $40 billion market and our main competition as we've talked about continues to be DIY Dev ops.
Companies need a way to plan build and secure and deploy software you inner deals and about half the deals we don't see anyone else on the deal.
We're competing against DIY or what they currently have when we do see companies, we typically most run into Microsoft Atlassian and Jenkins.
They are the three that make up over 70% of what we run into on the deals. It is important to note that our win rate against Microsoft whether they're in a deal or not in the deal is almost identical.
And if you look at the total amount of deals that were in Microsoft accounts for less than 20% of the deals that we see them in and so that's a little bit on the competition side on profitability I just want to go back and remind everyone. We land small and expand over time and the quarterly cohorts from over <unk>.
Six years ago are still expanding today.
Which's remarkable which helps us with our net dollar retention rate.
And these cohorts not only they are still expanding their extremely predictable.
So we're continuing to show improvement in unit economics in the business.
As a private company the newly public company, we're growing any expense or a public company in uncertain times, we have not deviated from our strategy one bit.
So if you look at this quarter versus last this quarter last year I think we actually demonstrated that if.
If you exclude <unk>, who we almost had identical non-GAAP operating income for this quarter versus this quarter last year. When we grew revenue, 75%, which basically added $38 million of revenue for the same absolute profitability.
And this is really consistent with our full year guidance, we gave as well and so Sid and I as we said before and we remain we remain to this is we are committed and responsible growth.
That's fantastic. Thank you.
Thanks, Joe.
Matt at RMB has the next question.
Oh, Thanks for thanks for the question Congrats from me as well.
So I had a question.
Hear about all the success in the platform I'm wondering.
With all the advancements you're making in security are you increasingly seeing customers come to get lab from a security first perspective.
Yes, I think it's an important driver we know that for ultimate the main driver is security and ultimate is our fastest growing tier. So it's a very important driver we said in our prepared remarks.
C level execs are increasingly coming to us and they already know that they are DIY Dev ops and scaling and they need to consolidate so thats very encouraging and our security solution is helping customers shift security left.
Earlier, so that it can be more comprehensive and it's easier to incorporate.
I believe we have a very strong offering with static and dynamic analysis first testing.
Container scanning and also increasingly our compliance is a selling point.
With get lab, it's much easier to prove to the auditors that you've done everything that's needed. They can just point out something that you have all the relevant documentation where to date a lot of customers are doing that with DIY defaults would have to make all of that themselves. So, it's increasing and we more and more fewer celsis.
The Dev ops company, but a deficit ops company.
That's fantastic I Couldnt agree more that's certainly what our checks indicate and then I guess just as a question. One question I think we all get on the phone here is the priority of spend if the economy were to slow and it's great to hear a record pipeline in EMEA. How do you think your customers prioritize your spending and I think we all believe we're in an apps driven economy.
And then what you guys are delivering a super important I mean is it that level of criticality and I suppose, especially if there's a security angle here as well you have to be pretty high up on the priority list is that kind of what you're hearing as well.
I think.
Just on that with the global Airlines, Brian you have anything to add to that.
Yes, Matt absolutely I guess I learned.
For this earnings call I listen to several of the earnings announcements and one common theme that I heard is.
You the economic downturn and some of the uncertainty has been a catalyst for digital transformation and we sit right at that critical spot, where we run one platform. We have great business outcomes, you and every company needs a plan manage secure and deploy software and so were positioned really well done.
We added more base customers this quarter than in the history of the company.
And metrics across the board were extremely positive and I think that really is attributed to the value proposition that we're offering our customers.
Scott It makes a lot of sense well done guys.
Thanks, Matt.
Carl at UBS Li Yu. Please ask your question.
Okay great.
Jim maybe this one for <unk>.
I think everybody on the line is hurt a lot of anecdotes about smaller VC backed tech internet companies.
Are being forced to cut their opex and head count I'm, just wondering whether and I'm assuming by the way at a lot of those young engineering focused companies use get lab.
So maybe the question is twofold are you seeing any pressure from that customer cohort that may have been offset by enterprise strength and secondly, a related question, Brian how large is the enterprise exposure of get lab I think at the time of the IPO you gave us.
A 60% number if I remember correctly are you able to update that so really just trying to get at your exposure to these younger customers that might be under a little bit of duress. Thank you.
Yes.
Thanks for the question Great question I'll, let Brian add to my answer good levers the best when you have like a ton of point solutions that you replace so the more complex the organization the bigger the complaints requirements. The more value. We can add so we've always been very strong in large organizations.
And what you see now is that maybe there's a hiring slowdown.
But most people aren't on get lump yet so we have a lot of room to expand within the organizations and which we already lend it.
To get it get laminate hub, we believe to be less than 5% of that $40 billion market.
As customers are forced to slow down hiring do you want to get more out of their existing people and that's what get lamp can bring they can do more with it people they already have instead of.
Hiring would have in it.
Brian .
Yeah, absolutely just to Echo what <unk> said and what sits I was spot on we love to answer the VC backed startup community and to see how much of our current era was comprised of that and how much we think obi and we cut it several different ways and it was less than 5% every way that we looked at it and so really really small.
By sort of <unk>.
There are an absolute volume.
Then when you.
The enterprise amount.
As a percent of the total continues to be about the same theres really been no change that so it's approximately 60% to throw pub sakhalin that year over 70%.
So the two of those combined is pretty strong and so very little exposure to startup VC backed companies.
And.
Approximately 70% when you add enterprise in pub, SEC and enterprise as a percentage of the total has been very consistent since we went public and for a long period of time got it those are really helpful metrics. Thank you both and congrats on a great quarter.
Thanks, Karl I appreciate it.
Our next question is from Koji of Bank of America.
Hey, guys. Thanks for taking the questions just one for me here.
Maybe this question is for Brian I, just wanted to kind of ask you. The magnitude of the B question. We got this question a lot over the past few months thinking about your performance here and where it could go and clearly here at 12% of the.
The revenue top line beat above the high end of the guide versus 10% last quarter clearly better this quarter. So.
Any thought process or just from a high level change to the guidance methodology or the way youre thinking about the annual guide versus the beats the beat and raise cadence.
What we experienced in the first quarter, especially considering the commentary that you had with the demand environment sure sounds it's really strong out there even if with EMEA.
Stronger than today, so any sort of help there and the way we should be thinking about your guidance methodology. Thank you.
I appreciate it Koji. Thanks for the question Super Happy with the quarterly results. It was a great quarter overall and happy that we committed to the guidance at the midpoint of delivering $400 million in revenue, which is approximately 59% year over year growth. There is no change in the guidance philosophy.
Early in the year, there's lots of variables and so.
We guided to the number we had an excellent quarter and so we did obviously have beaten raise one of the most favorite things about our model is the visibility that we have into our business and so almost all of our revenue is ratable, which.
When you come up with guidance makes it a little bit easier.
And so as we reported the quarter, we're extremely happy with our results and guidance and.
I said, we raised our guidance for the remainder of the year.
Got it.
One quick follow up kind of the.
The license line with has has a self managed and professional services and other kind of $10 million during the quarter.
Really strong growth just could you talk a little bit about the components. There is there a bit more professional services than anticipated or.
Could you break that down just a little bit.
Yeah, absolutely as I said in my prepared remarks.
We reevaluate our stand alone selling price every year.
This analysis is.
Required and we're taking a little bit more upfront revenue and so this quarter, we had roughly about $2 $5 million of the revenue that we took.
Our growth rate would have still been 70%. Additionally.
Additionally, as a reminder, we changed our business practice around our licensing earlier in the year and so true ups have gone down from last year. This year.
Through ups and the SSP difference pretty much cancel out one one another.
And so all of this is baked into our guidance for the full year.
Got it thanks, guys I appreciate the color. Thank you so much thanks guys.
Thank you and it looks like our final question is from Derek Wood.
At current can you. Please verbalize your question.
Yeah, great. Thanks, Congrats guys.
Fine.
Ed mentioned the strength in the new customer generation and I would think of but maybe kind of three core variables on on what drives that and we have been seeing that number very strong for quite some time, but when you think about putting more feet on the street from direct sales versus.
More of a C level agenda around around Dev ops platform initiatives versus.
Companies.
Moving out to the open source and wanted to get to a commercial vendor.
How would you guys comment on kind of the rank order of those drivers.
Thanks have a great question. So I think what's really important is the increase in channel. So channel is getting more and more important for us.
And the other thing we're seeing is that increasingly C level execs are already convinced that they want to consolidate tools, where a few years ago. Maybe they said look I'm doing this DIY develop saying I just need some version control and can you tell me that and we had to start from Hey, there's something better there is a demo.
This platform to data come in as St. Luke I want to consolidate I'm just looking for the best platform out there so.
That helps us and it's great to see that recognition I think it was first us than maybe our competitors who realized it than the analysts and now we see traction with our customers right.
Yes, absolutely great Great question, when we were going public I talked about all the new go to market motions that were adding.
We're starting to see the benefit from all of those I think that plus the fact that the overall economy.
Sure. The uncertainty there has been a catalyst for this whole digital transformation really happy as well with the AWS DCP.
Since we're sort of Switzerland, and aren't aligned with one specific cloud provider, it's great to see the deals and the momentum that we're getting with them as well.
Great and then I guess, just a follow up on that same topic you guys hired.
Actually <unk> as chief marketing and strategy officer.
Anything to highlight that we should be looking at.
What she is going to be trying to do as cheap as you on board.
Yes, we're super happy to be able to have her into organization season season really talented.
I think what's important for us is that we appeal both to buyers and to users.
So.
We have to do both.
Right.
And it's still a question of like.
Like telling this story, telling the story of Hey, you've got to move from DIY Dev ops to Dev ops platform. We're still very early in this market and Thats where were focusing our marketing efforts on.
That's great. Congrats again, thanks guys.
I appreciate it.
Okay.
Alright, Thank you for the questions and with that I'll turn things back over to Sandy for closing remarks.
Thank you for your time today I would like to thank our customers for trusting get lab to help them achieve their business objectives.
I'd also like to thank our partners the wire to get lab community and get lab team members all of their contributions.
<unk> had a big part in our continued success. Thank you.