Okay, afternoon session, day four of Morgan Stanley TMT Conference. I'm Sanjit Singh. I run infrastructure software at Morgan Stanley Software Research. I'm super happy to have the management team of GitLab. We have CEO and founder Sid Sijbrandij. Thank you, Sid, for joining us at the conference. I think for the first time. And we have Chief Financial Officer Brian Robins. Brian, thank you for joining us at the conference as well. Let me get through some disclosures, and we'll get right to it. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Sid, just to start the conversation, I've been following GitLab for a long time. And I think what's always impressed me is about the boldness of the vision, right?
It's always been, you know, thinking about the software release cycle holistically. Was taking a platform approach to developer tools and now increasingly DevSecOps the vision? Or, like, when you started, were you just looking to solve a singular pain point? And how did that go from that to this, you know, you know, very bold and ambitious vision to tackle these big markets?
Yeah, we were looking to solve a single pain point: version control. And then, Dmitriy, my co-founder, never wanted to upgrade another Jenkins installation again. And he made another product called CI, without asking for permission. And then at some point, 2015, a Kamil, an engineer in Poland, said, "Hey, I think we should combine the two." And Dmitriy said, "Obviously, that's a bad idea. We need sharp tools that our people can combine." I said, "That's a really bad idea. Our customers want to combine tools. They don't want everything integrated." And, Kamil persisted. And he said, "Well, at least it will be way more efficient for us to just maintain one code base." And we said, "Okay, well, we'll do it." But the results really surprised us. Not only was it better for us, but it was a lot better for our customers.
Today, when customers switch to GitLab, they get an average speed up of 7x, 7x faster cycle time because they don't have to hop between 10 different applications. And that's been the power. And since then, we have unlocked kind of that knowledge. And it was obvious, not we shouldn't combine two things. We should replace, like, the 10, 15 point solutions that companies use. Sometimes a big bank, it's like 170 different point solutions that we can consolidate on a single platform.
That makes a ton of sense. And it seems like software today is going to more platform approaches, particularly coming out of the last cycle into this higher rate environment. It's this new normal because, you know, enterprises are focused on efficiency. You know, thinking about the last year, I mean, growth has been impacted, like many software companies, by the tighter budget environment. But when I look at your Q4, your most recent results, there's a lot of things to like, right? Like, revenue growth of 32%, net retention rate actually improved to 130% from 128%, 52% growth in million-dollar customers, 37% growth in 100K customers. And I think Brian even commented that there was some sort of normalization in the buying cycle.
And so the question is, like, in the context of all of those, you know, call it green shoots, if you will, you on the call on Monday, you noted that guidance would be, quote, unquote, "less conservative going forward." Can you share your thinking on what we can expect as upside as far as to guide and sort of, why did you have to frame it in, like, the, the context of more conservative versus the past couple of years?
Yeah, thanks for the question. This has been a question that has come up a lot since earnings, so I appreciate you asking it. You know, one of the things at GitLab is we're a transparent company. And we've always been transparent. When we actually, for the first two years as a public company, our average beat has been about 7%. And so as we're going into our third year, we really wanted to be more prudent in our guidance. And we wanted to let people that will get closer to the pin, and we'll be less conservative than we've been historically on our beats. We do have a number of growth vectors that we talked about in the company that are long-term in nature that we're super excited about. We have the Premium price increase. We have the Agile Planning SKU. We have GitLab Duo Pro.
There's a lot of growth features in the company that we're excited about.
Great. That's an important framing of the guidance. Some of the other themes, right? And we're gonna have a pretty in-depth conversation about how AI is impacting the software release life cycle. But let's talk about Duo. That's something that you highlighted on the call. Can you explain to the audience what Duo is and how it's being used to accelerate and automate each workflow that makes up the broader software development cycle?
Yeah, so Duo is our suite of AI features. We address more work streams than anybody else. A recent Omdia report showed that we're by far in the lead in addressing use cases. Typically, when people say AI and DevOps platforms, they think of code generation.
Yep.
But there's a lot more. We got 15 other things that we address with GitLab. You can imagine a developer writing code, it's typically 25% of their time. We help them with the other 75% of their time too, summarizing issues, doing all kinds of other things. But we also for every developer, there's typically an operations or a security person. And we make their lives better as well. So we explain vulnerabilities with AI. We suggest fixes. We help with planning. We help with deployment. So AI is not, like, a single feature. It's all these features together to make people more productive. And because we're the broadest platform, we have planning and creating and securing and operating software in one platform, we can offer more AI features than anybody else.
Awesome. And so, Brian, to you, like, with Duo out, I think you have Code Suggestions on the way. You have pricing out for these solutions. Where are we in terms of the customer spending intentions? You mean you sort of addressed a little bit in the previous question around guidance. But with respect to sales cycles, customers downsizing, you know, churn, to what extent is that getting better, going into 2024?
Yeah, you know, we talked a lot about customer buying behavior patterns have changed. And so sort of pre-pandemic, about a year and a half ago, two years ago, when a procurement department would come in and buy, they would buy as much as they could for projects that were gonna be funded, headcount that was gonna be funded. And they would try to negotiate as big of a package as they could and get the best discount with a ramp deal. Through the pandemic, when there was a number of different layoffs, the buying behavior changed where they would come back to you, on a much more frequent basis. And they would buy just for what's needed. And they would try to come to you, multiple times a year. And so we commented in this last call about how the buying behavior has more normalized.
We saw churn and contraction levels improve to what they were, like, six quarters ago. And so we're super happy, especially with the large enterprises, on the performance that we had this quarter. You know, our RPO grew 55% year-over-year, which is really a testament to the large enterprises and some of the multi-year deals that we signed in the quarter.
As we think about, on the, you know, we're talking about AI and hopefully going into a new innovation cycle, you guys have a SaaS-based model. Like, you sort of connect the data points. The hyperscalers are feeling a little bit better. They're seeing cloud optimization stabilize. Is it just sort of a matter of time? Because if we wanna release AI applications, we have to release more software. Is it just a function of sequence that ultimately, as the hyperscalers start to see new workloads coming on, that drives more software development projects and you ultimately sort of, you know, see that improved demand in results?
I personally think that as AI makes creating software more affordable, that we're gonna see a lot of demand. Like, if you make it easier to make software, there's gonna be more people who make software, not fewer of them, in my opinion. We're super happy with our partnerships with the hyperscalers. We mentioned in earnings that revenue through the hyperscalers increased 100% year-over-year.
Mm-hmm. Awesome. Going back to the first question around taking a platform approach, when I look at this market, it seems like the software delivery pro pipeline there's a couple of things going on. It seems like software delivery pipeline is in process of moving to the cloud, number one. Two, we got, you know, AI being infused across the various workflows. And three, customers are more focused on productivity and efficiency than they ever have. And so the question is, is the time for a platform now? And are we expecting to see, you know, an inflection in customers take a platform approach? Because to me, this market's kinda felt like security. It's been you overlay. You have the software release cycle. And there's, you know, 20, 30, 50 vendors solving for each one.
And so is now the time where we should expect customers to rethink how they're delivering and securing software?
Yeah, if you look at your three factors, I, I think it adds up to moving to a platform. The hyperscalers partner with us because they know if they first standardize on GitLab at a customer, they can move to the cloud faster. If you look at AI, the broader the platform, the more, more AI features you can bring to bear to help people. And productivity efficiency-wise, customers get a four kind of a four-layered return on GitLab. They save some software licenses. They don't have the integration costs of bringing all the different point solutions together. Their people get more effective. But most importantly is that increased cycle time. Like, faster cycle time means more progress in your most important projects. Our most expensive offering, GitLab Ultimate, pays for itself within six months.
Makes tons of sense. I'm thinking again about other things going on the market and potential catalysts. You have one big player in Atlassian who's, you know, has this end-of-life of their server deployments. When you talk to your customers and if you could take us through, you know, behind the curtains and in the eyes of a decision maker who owns the software release cycle, when they have to think about, "Okay, I have to do something with my Jira piece," they either have to take it to the cloud, like Atlassian says, or maybe seek alternative solutions. Is that creating a funnel, if you will, or a decision point where people have to think about a broader architecture decision?
Yeah, being forced to make a decision. People took stock. Like, what do we want? Like, how is our spend gonna evolve on that? Do we get the same functionality? But also, how should our process look like? And with GitLab, a lot of the checks and that were manual before are now automatic. So it's less manual work. And that attracts people. We had a leading 3D design firm not only buy a ton of GitLab Ultimate licenses but also buy Enterprise Agile Planning licenses for all their salespeople, the people not directly involved with DevSecOps, but part of the software planning process. So the biggest benefit when they move to GitLab is that the planning happens on the same platform as the creation. So it's more up to date. There's less manual work. And you can move faster.
Yeah. As a follow-up to that, you know, just thinking from a, as a hearing you answer the question, from the sales motion process, are you targeting some of those Atlassian customers who, you know, are looking, you know, at that deadline that was in February and sort of prospecting them? Like, what, what's been sort of the, is there a specific sales playbook to address that opportunity?
There is too hard to address that immediate opportunity at the kind of deprecation of their server product. But I think more importantly, I think it's gonna be something that keeps on giving because the opportunity to consolidate point tools into a platform to bring your planning together with your software creation, I think that's a good idea today. But that will be a good idea five years from now. So that's why we're really excited about Enterprise Agile Planning for the long term.
Awesome. Brian, it's you know been a focus for investors around the pricing piece that the company launched on its Premium offering last year after, you know, I think it was four or five years. You guys had released 400 new features and capabilities. It was probably the right time. That pricing went from $20-$30 per user, right? So in terms of, you know, on its face, it looks like a big, you know, 50% price increase. What's been like the effective yield on that? I mean, in terms of what's been the reaction, the buying behavior, right? Because there's less price increase. And then customers can decide, "Hey, maybe we have fewer users on the Premium.
Maybe we upgrade to Ultimate." What's been the, like, behavioral response to the pricing change?
Yeah, absolutely. We, when we announced the price increase, there was a lot of different calculations for how much the price increase was gonna be. So we've done a lot of time educating investors and analysts on what the impact would be. When we modeled it internally, for FY 2024, we actually did better than our expectations and our internal models. And so we're happy with the results. We talked about the impact for the price increase in FY 2025 is gonna be $10 million-$20 million of incremental revenue. I think, you know, if you look at the price increase, it's been 5 years, over 400 features. We've invested hundreds of millions of dollars in the platform. And so the price increase was just justify the value that we're delivering to our customers. We have cohorts back to 2016 that are still expanding with us today.
There's not many other businesses with the same product, same price point for over 8, 9 years that are still expanding at the same rate that they're expanding from 2 years ago.
You've seen a lot of adoption of the Ultimate tier. To what extent has the price increase on Premium sort of created a nudge and incentive to upgrade to Ultimate?
You know, the Ultimate tier, we're super happy with. It's, it's our highest price tier. It's the fastest growing tier in the company. And it's priced higher than our competitor's highest price tier by multiples. And as Sid alluded to, the payback period for Ultimate is about 6 months. And in 3 years, the ROI is over 400%. And so, you know, in the deal review meetings that's in and weekly, we do hear that some people say, you know, Ultimate used to be 5 times more expensive. Now it's about 3 times more expensive. And so we'll just go to Ultimate versus Premium. But I think really what drives people to Ultimate is the advanced security features, the compliance, the governance. And that's why we're seeing Ultimate grow greater than 50% of our bookings, this quarter and last quarter. And today represents about 44% of our total ARR.
You know, on Ultimate, Sid, you've described Ultimate as including the capabilities that really differentiates you from your competitors. Maybe you can sort of walk through why the Ultimate tier, you know, separates you from, from the pack, if you will.
Yeah. So Ultimate includes all of the security you would need in a DevSecOps pipeline. And that's not just static scanning. But we're the only platform with dynamic scanning, with fuzz testing, with API security. And that allows customers to consolidate on a platform. It also makes it easier to shift security left, do it earlier. To enforce it with GitLab, you can say, "Hey, this project needs to comply with that." And GitLab will prove that the project complies for you. We're the only platform that can do that. Apart from that, we're the only platform that has integrated enterprise agile portfolio planning. We talked about the advantages of combining planning with the rest of the software delivery process. So that's the features. The number one reasoning it's selling is security and compliance. The number two reason is that integration of planning.
Yeah. So it kinda opens up the conversation to the security opportunity. To kick off that part of the conversation, there are a number of companies, not even, like, traditional security companies. There are a number of, you know, companies coming from dev tool world, from infra world to move into security, if you will. So I guess the question is, what gives the license for GitLab to be a credible provider of security solutions versus, you know, Datadog is trying to do this. You have private companies trying to do it. There's a whole set of incumbent point solutions that want to provide security scanning capabilities, for example, and then develop them. So what gives GitLab the license to win in security?
Yeah. I think the breadth of it, the depth of it, we've invested heavily in the security features over a very long time. The only ones who can kind of do compliance automated, the alternative is building something like that yourself. We regularly replace point solutions like Checkmarx, Snyk, Veracode, Black Duck, Synopsys. And these customers are able to move to just GitLab. Super important also to know, it's integrated into the platform. And so you get the entire platform. You buy the product. And so the payback is really quick, the ability that you don't have to do all the integrations. And so there's a lot of benefits too of having it within GitLab.
Talk a little bit about the well, first, who owns the purchasing decision? That's like a debate kinda in the market, right? You may be selling to DevOps users or SRU users or developers. But is it, you know, the CISO or the SOC team that owns the budget? And to extend it, it's more on the security side. What has GitLab been doing to build relationships both with these security buyers but maybe with the, you know, integrating with the security channel and the broader ecosystem overall?
Yeah. So typically, software is so essential to companies, they are becoming software companies. So yeah, there's multiple C-level execs. And we talk with both, like, the CTO who's responsible for engineering, the CIO who wants a scalable, secure platform that complies with all their internal processes, and the CISO, the person who has to do security. And if we talk to the CISO, they say, "Look, I bought all the best point solutions in the market. I just can't get people to use them." With GitLab, people are able to move and then get all those scans done. At T-Mobile, they moved 25,000 software projects to GitLab in two months. And after that, they were running hundreds of thousands of security scans because it made it so much easier.
In terms of, you know, one of the themes in the earnings calls has been sort of GitLab Enterprise. It kind of dovetails with security but also, you know, the compliance, and the sort of the rigorous requirements that, you guys are able to meet. So, GitLab Dedicated, talk about why you released this offering to market and what has been the adoption to date.
So the majority of our revenue is still coming from customers who have a self-managed installation. Typically, they run that in the cloud. But what's typically important to them is that they're the only customer in that installation. That way, they're more secured. With GitLab Dedicated, we can offer them the best of both worlds. Still single-tenant. But it's software -as -a -service. So no maintenance for them. We make sure it's reliable. We make sure it's fast. We make sure it's always up to date. They can get the best of the both worlds. And in Q4, Southwest Airlines became a Dedicated customer.
Brian, could you frame out the uplift potential? So when a customer like Southwest Airlines, as Sid mentioned, if they have a self-managed deployment and they go to GitLab Dedicated, what does that, you know, ARR uplift look like?
Yeah. So basically, the way we price Dedicated is, it's you have to be on Ultimate. You have to be a certain number of licenses. Then there's the infrastructure charges on top of it. I think it's less about the individual customer and more about the addressable market for more customers with a more complex environment that would like this to get up and running faster on GitLab.
So when we think about that as just a way to dovetail off your response, I should think about the self-managed base and potential penetration of GitLab Enterprise within that base maybe as kind of the first step before they go full hog cloud. Is that a decent way to think about it?
I think it's a way to. We're the only DevOps platform who offers a single-tenant SaaS. I think the customers will get more value. If they get more value because they're always up to date and it's always reliable, it tends to grow. They tend to get more people involved. They tend to add planning to it and everything else. So it's not so much that dedicated itself makes money. It's so much of a better experience for the customer and the users that we tend to grow seat count within those customers.
Yeah. Makes total sense. Let's talk a little bit about the underlying tech. I mean, so you guys are delivering a lot of different product capabilities. Underpinning all of these products, is a singular data store. Can you talk about the architectural decision to have one massive backend for the platform? What types of data gets housed in the GitLab data store? And what kind of intelligence and future capabilities will this approach unlock?
Yeah. There's other providers who call it a platform. But it's kind of multiple applications. And then you're still kinda switching between apps. I think us and GitHub are the only true platforms today where it's a single application, single code base, single data store. And the big advantage of that is you get a faster cycle time. You don't have to switch applications. You can do very intelligent things with AI, for example. We wouldn't have been able to add so many AI functions, the most in the market, if it was across different applications. So we're very proud we have the broadest platform because the more point solutions our customers can replace, the more they save on licensing, the more they save on integration costs, the better they can up their compliance, the more efficient they get.
Yeah. It's a really interesting point again. Because essentially, what you're saying, it translates to product velocity, right, in terms of, the breadth and depth of capabilities and your ability to go from more than one product to the other.
Exactly. Like, companies are becoming software companies. Typically, the speed at which they can move is the speed at which they can improve their software. If you can go 7x faster, that's a massive advantage.
Makes, makes total sense. So let's talk a little bit about go-to market. And to kick off that part of the conversation, we obviously saw a bit of a boom coming out of the pandemic, you know, late parts of calendar 2020, 2021, early 2022. What parts of that environment, that sales playbook that worked back then, what part of that is still valid today? And what parts are that we have to sort of chunk out because that was just a really special time in the market, a really frothy time in the market where budgets were plentiful?
I think with us, there's, there's no revolution. It's evolution. We, we have a new CRO, Chris. He hit the ground running. One thing that he's doing is he's focusing even more on the largest customers. Because the bigger companies are, the more complex it is to keep all these point solutions up in the air, the bigger the benefit of moving to a platform. And we wanna make sure each and everyone is successful, not just in the purchase but in implementing it and getting realizing all the value.
Makes total sense. Talk a little bit about, Chris Weber, your new CRO. What impact has he had on the sales organization maybe, from an operational perspective, building muscles? You talked about, focusing on larger customers. But as sort of, you know, the quarter to quarter execution, what role is he gonna play, in GitLab executing against its targets?
Yeah. He inherited a great organization. He's doing an amazing job. I think that the numbers he put up in Q4 are an example of that. The biggest focus has been, in order to be a great kind of technical thought partner to our customers and to make sure that when they vouch for GitLab and put their job on the line to say, "Look, we're gonna get rid of these 10 point solutions," we wanna make sure they're successful each and every time. We're a pure-play company. This is what we do. We do one thing. And we wanna do it very well each and every time.
Makes sense. I wanna go back to the security topic and the go-to-market behind that. You know, sometimes when we're trying to build relationships with these, you know, security purchase decision makers, there's an overlay specialist security sales force who may have had experience with those customers and those CISOs and those SOC teams, if you will. Is that an approach that you guys have considered? Is there gonna be an overlay specialist security sales force at GitLab? Or is it gonna be all salespeople selling the entire platform?
Yeah. All of our salespeople have to be able to talk both with the engineering leader, with the IT leaders, and with the CISOs. It doesn't mean we don't have specialists in GitLab. And truly, the best person to talk to customers is Josh, our Chief Information Security Officer. He's part of our e-group. He's on an equal level. And he has a lot of customer empathy and is talking to lots of CISOs at our customers.
Probably from an investment perspective, is there a way to think about how much, like, a security sales motion does that require more investment versus what we've seen over the past couple of years when you think about allocating investments?
I think it's really hard to say. I think if you look at the money companies are prepared to spend, typically, it's higher in security. And you can infer from our Ultimate, more than half of bookings, 44% of revenue, right, growing. And the main reason to buy it is security and compliance. So we're becoming more and more a security company even though we also help with Agile Planning and deployment and everything else. But security is such a compelling reason that that's a bigger and bigger part.
Have one more question on, like, the product and the platform. And then we'll go to the audience, to see if they have any questions for the GitLab management team. The simple question is this. Like, how does the team decide, just given that you have so much product velocity, how do you decide what features, you know, reside in a Premium subscription versus Ultimate? Like, how do you, how do you guys think through that decision?
Yeah. We have a model for that. We call Buyer-Based Open Core. And basically, it's if an executive really wants it, it's an Ultimate. And for example, an executive wants to prove compliance to the auditors. If a director wants it, we put it in Premium. If an individual contributor wants it because it makes their day-to-day faster, we put it in the free open source version to drive adoption.
Yeah. That's a really interesting way to think about that. Let's go to the audience. If you just raise your hand and wait for the microphone, we'll kick off the Q&A up here in the front.
Hey. I wanted to ask about, you know, we talked about that developers only 25% of their time are writing code. And the other are working on other stuff. You know, we're seeing new models coming with huge context windows of 1 million tokens. We're seeing people uploading an entire code base. And the LLM can analyze it. I was wondering where do you see the new initiatives in automated testing? And what is GitLab's plan to automate the other area of the of the stack?
Yeah. These models are getting better. They will be able to get more context. I think we're in a great position as a platform that hosts people's code to add that context and to give it to the model when relevant. And GitLab already has a feature to help you write tests. And that's gonna those things will continue to grow, get better, get more automated, require less human hand-holding.
I think we had a question up front.
Go ahead.
Just, the microphone's right there. Just one second.
I'm sorry.
Thank you so much for taking my question. I got two questions. One is on the potential, growth potential of the company. So you talk about that we are consolidating many points. And then can you walk us through the potential of the Duo? Because a lot of the holders are not paying yet but paying, like, I don't know, 20, 30, or even $50 a month. It's not a big expense, right? But so how should we think about that in terms of user adoption and my second question will be on competition with GitHub, right? So let's say you go to the CISO. Then how do you convince them to, like, between you, GitLab, and GitHub? Yeah. Thank you.
Yeah. Thank you. The total market for kind of DevOps tools is estimated to be a $40 billion market, a $40 billion revenue a year market. And it's growing. So it's a big market. We and GitHub together are less than 5% of the market. The whole name of the game is to replace the point solutions faster. And GitLab today can replace more point solutions than anybody else. Another way to size kind of the market is to look at, for example, a go-to-market. You have a go-to-market organization. They're paying for Salesforce. They're paying for this. They're paying for that. They're spending a lot more per person than is currently being spent in the software development market even though those people are being paid typically as much money. And I think we can have as big an impact with software there.
So we feel really good about the size of the market. We're talking to a CISO. They compare us to GitHub. They see we can do a lot of things that they need and that GitHub can't do. GitHub doesn't have dynamic scanning. GitHub doesn't have API security. GitHub doesn't have fuzz testing. Even better, we can prove that they're compliant. With GitLab, they can tag every project, note the security framework, say what that security framework consists of, and prove that. The auditors can walk in, point to any environment. They have the reports ready. We're unique in that capability. Oh, you asked how we would talk to a CISO. If I would talk to a CIO, I'd bring different points up, how GitLab's installation is more secure, it scales better, it gives them more ways to customize. I talk to an engineering leader.
I talk about how it's a better user experience because we replace more point solutions. And he can finally tell the developers they can deprecate Jira. And they all cheer for him or her. So it's a different talk track depending on who's listening. Thank you.
Go back to the audience for Q&A. But I wanted to pick up on his point. You know, when the generative AI, like, you know, kind of, you know, hype cycle hit in full force at, you know, spring of last year, you know, there was a initial, you know, view that with things like GitHub Copilot, that that would be disruptive, to companies like GitLab. And, you know, since then, you know, we've seen a number of companies release their code advisor, code pilots you guys have as well. And so going forward, how does a customer think about, one, first part of the question, what AI is gonna do to other parts of the life cycle, so beyond code advisors? And what's gonna be the basis of why I choose one platform like GitLab versus GitHub?
There's even other players that are trying to do some other things. Like, "What's AI? How has AI changed the basis of competition?" is the spirit of the question.
Yeah. Great question. Three points I'll make. First one is you need a good Code Suggestions functionality. We went generally available with Code Suggestions in December. It is a competitive offer. The second thing is the context windows are increasing. Like, the AI can get smarter if you give it the relevant information. The code hosting platforms, GitHub, GitLab, have a natural advantage in making the AIs give smarter suggestions because it's easier for us to give that context. Third thing is people are rising up. AI is not just writing more code. It's, it's helping the developers with everything else. It's helping their security, the operations, the planning people. And they're starting to look at, okay, who can add the most value over the whole software development life cycle. Recent Omdia report, we met 37 of the 42 use cases, more than any other DevOps platform.
That's starting to become a bigger and bigger thing. So they're the shine of the headlining feature.
Mm-hmm.
It's kind of, yeah, everyone's got that. And now it's about who can add the most value throughout the life cycle.
Makes perfect sense. Let's go back to the audience and see if there's any questions for the management team. Just raise your hands. We'll get the mic to you. No questions. All right. So let's talk about Enterprise Agile Planning, right? It's been a theme in a couple of your last earnings calls. The decision to move into planning, it's obviously been a huge area of strength for Atlassian and this Jira offering. I'd love to get a sense of, like, the scale or the momentum behind customers sort of rethinking the planning piece and bringing it into a platform like GitLab.
The great thing about planning is that there's a lot of new people involved. So we had a customer. We talked about it during earnings. They moved to GitLab, thousands of people. But they bought additionally thousands of extra licenses for their salespeople. So for us, these are kind of net new people getting involved. We needed a new SKU for that. So we have Enterprise Agile Planning. It's $15 per user per month, paid annually. And that's because these people are not using any of the other features of GitLab. If they Agile Planning is included in Ultimate. If you're doing DevSecOps and you need planning, it's part of that.
Mm-hmm.
But these new users coming in is very exciting. We're very, very, very early in this movement. Most customers today are in Jira. We're starting to see the first customers. UBS was kind of the first mover in that. Now we're starting to see all the other all the other ones coming in. But it's, it's, it's early. It's not gonna have a giant effect on our revenue for this year. But we see the potential over time to it's the best thing for all the all our customers to bring planning into the platform. So we see a great long-term potential there.
Great. Maybe let's wrap up on just the investments required to scale the AI capabilities in the AI portfolio. Brian, maybe this is a question for you. If not, Sid, feel free to take it. But as you look at your overall investment philosophy as it relates to AI, to what extent will your AI investments require significant investments in GPU capacity? And to what extent will that impact your COGS?
Yeah. So when we look at our investments in R&D in general, one thing that's unique about GitLab versus a lot of other companies: we have single engineering groups. We do monthly software releases. And so we iterate a lot. And so it's not like we're trying to make a monolithic system, put a whole bunch of people on it, launch it 6-9 months later. And so we get a lot more done a lot quicker than other companies. And so the investments that it takes, we've prioritized, 'cause we're working on the full breadth of the platform, our security, compliance around AI. And that's built into the numbers that we've given out.
Awesome. With that, we'll leave it there. Thank you so much, Sid and Brian, for coming to the TMT conference and giving us an update on the GitLab story. We really appreciate it.
Thanks for having us.
Thank you.