Derrick Wood: Great. Thanks. And Sid, sending best wishes to you. Brian — I mean, for Sid or Brian, just wanted to touch on the restructuring or the realignment on some of the headcount cuts. Can you give us a sense of have you made any changes on the go-to-market side? And I know you guys have been evolving from a bottoms up to more of a top-down model as you are kind of selling more on a platform basis. Is that platform sale going to be a lot tougher in this environment? And have you made any changes from a go-to-market perspective given that?
Brian Robins: Yeah. Derrick, thanks for your question. Our land-and-expand sales model continues to be relatively the same. We’re getting — as we got ready to go public, we talked about the various things that we’re doing to change our go-to-market motions. And so, primarily, we were a direct sales motion. We then added channel program, alliance program, the hyper-scaler program and so forth. And so, as I mentioned earlier, within our hyper-scalers, we had the most logos in a given quarter with our hyper-scalers, and they continue to be a good distribution channel for us. We’re continuing to do that. One of the things that we started recently is doing value stream assessments to where we’ll go into a client — a potential client and tell them about — look at their stack and look at how much they’re spending and look to see what GitLab can do to help them create faster software — software faster and save money, and we typically go in at the exact level and sell that.
So I think we’re doing a good job there. If you look at the business outcomes and the ROI that we’re driving for our customers, we continue to get positive feedback. One Ultimate customer, it was a financial — global leader in financial services. We were able to save them $300,000 a year in just tool chain reduction and elimination of developer downtime. And so, we’re — within that client, we replaced four security tools with GitLab and we increased their velocity by about 55% without sacrificing quality. And so, that is a common use case that we’re seeing across all verticals and customers of really any size.
Derrick Wood: And Brian, just in terms of following the headcount restructuring, how should we think about investments for the year? Are you going to be pausing hiring, you’re still going to be investing — still be investing in sales capacity? Any color there?
Brian Robins: Yeah, absolutely. So when we looked at doing the reduction, obviously, a very difficult decision to make. We looked at open headcount first and then looked at existing headcount. It was done across the company to basically align our cost model with our revenue projections to continue to drive operating leverage in the business. For the most part, based on the guidance, we have the capacity on-board today to deliver what we committed to. And so, we will continue to hire, but they will be in very strategic areas where we need to add headcount at. And so, there will be some in sales and marketing, some in R&D, but at a much more measured pace.
Derrick Wood: Okay. Thank you.
Brian Robins: Thanks, Derrick.
Operator: We’ll now hear from Ryan at Barclays.
Ryan MacWilliams: Hey, guys. Thanks for taking questions. So, one for Brian. Do you have a sense of how many customers have more than five free users on your free version? And have you seen increased instances of customers down-tiering from premium to free
Brian Robins: Yeah. I don’t — at my fingertips, I don’t have the exact number of customers with five licenses or more. Typically outside of when we did the starter deprecation, we did see from the $4 product down to the free product. We saw people go that way but have not seen a lot of people go from premium to free, and that’s due to the all the different functionality that you get with premium over free.
Ryan MacWilliams: And just to follow-up on the price increase. I know it’s early and see how it flows through, but do you think a more expensive premium tier could lead more users to reconsider Ultimate and upgrading from it? Thanks.
Brian Robins: Yeah. I hope not. Based on the market research that we’ve done and the feedback that we’ve gotten from the customers, it’s not viewed as a — we’ve put over 400 capabilities into the platform in the last five years and the payback period and the results that we drive and the business outcomes that we drive are so positive that based on market research that we’ve done, we felt like that was a fair price to what we’re delivering.
Ryan MacWilliams: I appreciate the color. Thanks guys.
Brian Robins: Appreciate.
Operator: Next we have Jason from William Blair.
Jason Ader: Yeah. Thank you. I guess Brian, first one for you with the 25% growth expectation for FY 2024, is it right to think that NRR will run 120% for the year? And is that about where it was in months, two and three of Q4?
Brian Robins: Yeah. Of Q4 — yes, so we basically took everything that happened in fourth quarter and what we saw at the beginning of first quarter and factored that into our guidance. In my prepared remarks, I said that if it was over 130, we would continue to report as a threshold but if it dropped below 130, we’d actually report the actual number in quarter and so we don’t — we didn’t give specific guidance on dollar-based net retention rate.
Jason Ader: Okay. And then one quick one for Sid. Sid, how are you positioning the price increase versus GitHub?
Sid Sijbrandij: Yeah. I think what we have is a more comprehensive platform, so we do the entire DevSecOps cycle, it can replace more tools. In the end, what our customers need is to spend less time integrating tools to have fewer people, to have a faster cycle time. So it’s really about having a compelling value and having the most comprehensive platform. That’s what we’re selling. That’s what the results are showing. And of course, there is the price of the software, but if you earn it back in under six months, it’s an amazing deal.
Jason Ader: Okay, thanks. Be well.
Sid Sijbrandij: Thanks.
