GitLab admits IT ineptitude in finance reporting is ongoing GitLab has again warned of material weaknesses in its financial controls because of failures to design and maintain the correct internal IT systems. Following the code shack's Q3 financial results – which reported above expectation revenue growth of 32 percent to $149.7 million – GitLab released a 10-Q legal filing to the …
Honestly, I’m just trying to wrap my head around the published numbers. Losses in Q3 of $285M, on revenue of $148M… just what are they doing?
Code hosting, right? And they make a big play of being all-in on remote working, so one presumes they have little to no real estate overhead.
Where does $435M of spending go, then? Payroll? Maybe, even if I highly doubt that all 1600 employees (yes, I cheated and checked their Wikipedia page) are being paid at Silicon Valley rates.
Genuinely mystified.
Providing a fairly large, free, cloud storage service is expensive. Server costs, support and moderation costs, development costs.
GitHub is a great marketing tool for Microsoft, so they don't care if it makes a bit of a loss. They can also use the Microsoft cloud infrastructure. GitLab doesn't have either of those backing it.
Adverts? Anyone using GitLab will have an ad blocker. (Except for you, you annoying commentator who is going to reply to this post saying "I use GitLab and don't have an ad blocker". But I suspect you're in a minority).
That leaves selling their professional products. Unfortunately not a great business model, and it's a competitive market. They are squeezed between big companies such as Microsoft at the high end, and free software at the low end.
Well, maybe that leaves an IPO and taking the money as the best business model for the people involved. Which they seem to have done.
When there are only two main players in a major marketplace, and the vastly bigger of the two, owned by a company with almost infinitely-deep pockets, deliberately operates at a loss, isn't that called anticompetitive?
GitHub isn't so much a marketing tool for Microsoft as a data-mine.. I was flabbergasted that they were allowed to buy it.
"When there are only two main players in a major marketplace, and the vastly bigger of the two, owned by a company with almost infinitely-deep pockets, deliberately operates at a loss, isn't that called anticompetitive?"
Maybe, but the attempt to prove it in court will have to jump through some smaller hoops and GitHub might not fit those limited requirements. The part of GitHub that operates at a loss is all the open source projects that are hosted there. It's expensive to provide that free hosting and bandwidth, but Microsoft covers it. GitLab might not really want all that coming to them given how expensive the open source hosting they do is for them.
In order to prove that their competition is harming GitLab's business, GitLab would have to prove that their revenue collection is at risk by comparing their paid business products to GitHub's. As it happens, GitHub's business plans are probably not operating at a loss. They're really quite expensive, especially as you add the features that software businesses care about. As such, the easiest argument, that GitHub's cheap business plans are taking customers from GitLab, probably won't prove true. They'll have to use a more convoluted argument about GitHub's free services to open source serving as a lot of marketing of GitHub's services that causes people to pay for its business services over GitLab's, but Microsoft can respond that they're giving that free service away as a service to the community and thus it should count as a donation, and their accountants are happy to calculate exactly how much of a donation it is if the court agrees, then declare it on next year's tax. So in reality, GitLab will likely be unable to prove the allegation of anticompetitive behavior to the extent they need to to make anything happen.
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