5. Fair Value Measurements

The Company determines fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Inputs are unobservable based on the Company’s own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The fair value of the Company’s Level 1 financial instruments, such as money market funds which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of the Company’s Level 2 financial instruments such as commercial paper, corporate debt and U.S. government securities are obtained from an independent pricing service, which may use inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security that may not be actively traded. The Company’s marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models.

Financial assets measured at fair value on a recurring basis are summarized below (in thousands):


	Level 1		Level 2		Level 3		Fair Value
January 31, 2024 (1)
Cash equivalents:
Money market funds	$	187,175	$	—	$	—	$	187,175
U.S. Treasury securities	—		15,907		—		15,907
Commercial paper	—		3,961		—		3,961


Short-term investments:

Commercial paper	—		23,242		—		23,242
Corporate debt securities	—		231,709		—		231,709


U.S. Agency securities	—		56,217		—		56,217
U.S. Treasury securities	—		437,121		—		437,121
Total	$	187,175	$	768,157	$	—	$	955,332

(1) Excludes $81.0 million in cash on the consolidated balance sheet as of January 31, 2024.


	Level 1		Level 2		Level 3		Fair Value
January 31, 2023 (1)
Cash equivalents:


Money market funds	$	60,073	$	—	$	—	$	60,073
U.S. Agency securities	—		2,997		—		2,997

Short-term investments:

Commercial paper	—		88,609		—		88,609
Corporate debt securities	—		95,266		—		95,266
Municipal bonds	—		1,970		—		1,970
Foreign government bonds	—		2,170		—		2,170
U.S. Agency securities	—		73,725		—		73,725
U.S. Treasury securities	—		379,509		—		379,509
Total	$	60,073	$	644,246	$	—	$	704,319

(1) Excludes $232.3 million in cash on the consolidated balance sheet as of January 31, 2023.

The Company had $3.6 million and $3.4 million of Level 3 contingent consideration as of January 31, 2024 and January 31, 2023, respectively. Refer to “Note 6. Supplemental Financial Statement Information” for further details.

Historical Timeline

Fiscal Year	Filed
2024	Mar 26, 2024	Showing above
2023	Mar 30, 2023

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Gitlab Inc. Fair Value Disclosure

Historical Timeline

About Fair Value Disclosures

Other Available Disclosures