Will GitLab's dollar-based net retention rate fall below 115% in any two consecutive quarters by Q2 FY2027?

DBNRR is declining at ~1pp/quarter from 119% as of Q3 FY2026. To reach below 115% in two consecutive quarters by Q2 FY2027, the decline rate would need to roughly double to ~2pp/quarter. While structural headwinds exist (price increase anniversary removing ~10% yield component, smaller new cohorts, AI-driven seat pressure), the 2-4 year AI timeline assessed by the committee suggests acute acceleration is unlikely within 3 quarters. Enterprise strength ($100K+ customers growing 23% YoY) provides a partial buffer.

The math is challenging for YES resolution: from 119%, declining at the observed ~1pp/quarter pace, Q4 FY2026 would be ~118%, Q1 FY2027 ~117%, Q2 FY2027 ~116% -- none reach below 115%, let alone two consecutive quarters. Acceleration factors include the price increase anniversary removing the yield tailwind and GTM restructuring creating a gap. However, GitLab Dedicated growing 92% YoY at $50M+ ARR and the DEFENSIBLE competitive position classification suggest the floor is likely above 115% within this timeframe.

While the base rate of 1pp/quarter decline is insufficient, compounding risks could accelerate the decline: the price increase yield component (~10% of DBNRR) anniversarying out, newer cohorts getting progressively smaller (acknowledged by management), and the GTM restructuring gap. If Q4 FY2026 shows an acceleration to 116-117% (a 2-3pp drop), the two-consecutive-quarter scenario becomes plausible for Q1-Q2 FY2027. The 32:1 insider sell:buy ratio adds marginal concern. LOW confidence because Q4 data is not yet available.

This market asks for an aggressive decline -- two consecutive quarters below 115% from a starting point of 119%, all within 3 remaining data points. At the current 1pp/quarter pace, DBNRR would be approximately 116% by Q2 FY2027. The two-consecutive requirement makes this dramatically harder than a single breach. Enterprise segment ($100K+ at +23% YoY) provides meaningful ballast. The AI disruption timeline of 2-4 years is too long to materially impact this short window.

The decline rate would need to accelerate to ~2pp/quarter to achieve two consecutive sub-115% readings. Three catalysts could drive this: (1) the yield/pricing component (~10% of DBNRR) anniversarying in FY2027, (2) federal government headwinds in public sector (~12% of ARR) worsening, and (3) SMB softness (~8% of ARR) deepening. However, Myth Meter flagged the market as overly pessimistic, and the committee classified the moat as DEFENSIBLE with stable trajectory.

The question requires a specific and severe outcome: below 115% for TWO consecutive quarters within just 3 reporting periods. From 119%, this requires either a sudden step-function drop or sustained acceleration well beyond the observed trend. Even the bearish lenses (Gravy Gauge, Atomic Auditor) frame structural weakening as a medium-term concern, not an imminent collapse. The decelerating but positive customer net adds suggest the expansion engine is weakening, not breaking.

DBNRR has fallen 3pp in 3 quarters with compounding headwinds ahead: price increase anniversary, smaller new cohorts, GTM restructuring gap. The decline could accelerate to 2pp/quarter if all headwinds converge, putting Q1-Q2 FY2027 at risk. The 32:1 insider sell:buy ratio suggests insiders may see acceleration ahead.

The two-consecutive-quarter requirement is the key constraint. Even with acceleration, the math requires DBNRR to drop from 119% to below 115% in two consecutive quarters within 3 data points. Most likely path is a gradual decline to 116-117% by Q2 FY2027, which would NOT trigger resolution. The question is too stringent for the observed pace of decline.

All 5 lenses flagged DBNRR decline as material, and the composition being ~80% seat-based makes it structurally vulnerable. The price increase yield component anniversarying out could cause a discrete 1-2pp additional drop. If Q4 comes in at 116-117% (a 2-3pp drop), it opens the door for two consecutive sub-115% quarters. Low confidence because this requires acceleration beyond current trend.