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Gitlab Reveals Previously Undisclosed Control Deficiency Related to Revenue

Unfixed control deficiency did not previously specify reported revenue as a concern.

April 15, 2024

Gitlab (GTLB) a DevOps platform, inserted new language in its latest annual report that suggests the revenue its reports is suspect. Previously, the company identified multiple control deficiencies related to information technology (IT) general controls necessary to prepare its financial statements.

In describing the IT controls that remain unfixed in its latest annual report, Gitlab omitted the aforementioned reference to the affected controls being necessary in the preparation of its financial statements and inserted the following:

“We did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems used in the financial reporting processes related to revenue.”

Later, while detailing its revenue recognition practices, Gitlab inserted new language reminding investors that certain reported sales are based on fallible estimates:

“If the consideration to which we expect to be entitled includes variable consideration, the amount of variable consideration included in the transaction price is estimated. In the event that some portion of the estimated variable consideration is uncertain, such estimates are constrained.”

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