JFrog Ltd. (FROG) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.29%. A quarter ago, it was expected that this company would post earnings of $0.13 per share when it actually produced earnings of $0.19, delivering a surprise of 46.15%.Over the last four quarters, the company has s ...

Trusted delivery with content control Regional Clouds Model & Dependency Version Control DEPLOYMENT ENVIRONMENT MONETIZATION 8/10 Uber Manual processes were causing inefficient delivery and release of software to global teams, costing Nokia time and money | --- | --- | --- | |---------------------------------|--------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------| | EXISTING OFFERINGS | WHY ...

Exhibit 99.1 JFrog Announces First Quarter 2024 Results • Revenue for the first quarter of 2024 equaled $100.3 million, up 26% year-over-year. • GAAP Gross Profit was $79.7 million; GAAP Gross Margin was 79.5%. • Non-GAAP Gross Profit was $85.3 million; Non-GAAP Gross Margin was 85.1%. • GAAP Operating Loss was ($16.6) million; GAAP Operating Margin was (16.6%). • Non-GAAP Operating Income was $14.1 million; Non-GAAP Operating Margin was 14.0%. • GAAP Net Loss Per Share was ($0.08); Non-GAAP Diluted Earning ...

Wall Street analysts forecast that JFrog Ltd. (FROG) will report quarterly earnings of $0.14 per share in its upcoming release, pointing to a year-over-year increase of 133.3%. It is anticipated that revenues will amount to $98.63 million, exhibiting an increase of 23.6% compared to the year-ago quarter.The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial p ...

SUNNYVALE, Calif. & PARIS--(BUSINESS WIRE)--(KubeCon + CloudNativeCon Europe) — JFrog Ltd. (“JFrog”) (NASDAQ: FROG), the Liquid Software company and creators of the JFrog Software Supply Chain Platform, today released the findings of its annual Software Supply Chain State of the Union report 2024, which identifies emerging development trends, risks and best practices for securing enterprise software supply chains. “DevSecOps teams worldwide are navigating a volatile field of software security, where inno ...

SUNNYVALE, Calif.--(BUSINESS WIRE)--JFrog Ltd. (“JFrog”) (Nasdaq: FROG), the Liquid Software company and creators of the JFrog Software Supply Chain Platform, today announced a new technology integration with Qwak, a fully managed ML Platform, that brings machine learning models alongside traditional software development processes to streamline, accelerate, and scale the secure delivery of ML applications. “Currently, data scientists and ML engineers are using a myriad of disparate tools, which are mostl ...

Financial Data and Key Metrics Changes - In fiscal year 2023, total revenue reached $349.9 million, reflecting a 25% year-over-year increase [11] - Fourth quarter revenue was $97.3 million, showing a 27% year-over-year growth, with a gross margin of 84.6% and $32 million in free cash flow [11][22] - Operating profit in Q4 was $16.2 million, representing a 16.6% operating margin, compared to $1.6 million or 2.1% in the prior year [43] - Free cash flow for the full fiscal year 2023 was $72.2 million, or a 21% margin, marking a record for the company [22] Business Line Data and Key Metrics Changes - Cloud revenues for fiscal year 2023 totaled $119.3 million, up 50% year-over-year, accounting for 34% of total revenues compared to 28% in the prior year [20] - In Q4, 49% of total revenues came from Enterprise+ subscriptions, up from 43% in Q4 2022, with a 50% year-over-year growth in revenue contribution from E+ subscriptions [21] - Customers with ARR greater than $100,000 grew to 886, a 20% increase year-over-year, while those with ARR greater than $1 million increased to 37, up 95% year-over-year [34] Market Data and Key Metrics Changes - The company observed a reacceleration in cloud customer usage during Q4, with cloud revenues equaling $36 million, up 59% year-over-year [41][140] - Net dollar retention for the trailing four quarters stabilized at 119%, a decline of 9 points year-over-year due to macroeconomic headwinds [42] - The gross retention rate remained at 97%, indicating strong customer adoption of the complete JFrog platform [42] Company Strategy and Development Direction - The company is focused on sustainable growth drivers across DevOps, Security, and MLOps, delivered through its software supply chain platform [25] - JFrog aims to consolidate security tools into a single platform, addressing customer needs for end-to-end visibility across the software supply chain [15] - The company plans to enhance its platform with MLOps and MLSecOps capabilities, responding to the rapid adoption of AI and ML technologies [40][130] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic and geopolitical challenges, the company delivered consistent revenue growth and profitability [33] - The company anticipates continued improvements in cloud consumption and migration projects in 2024, while remaining tactically cautious [75][82] - Management expects net dollar retention to be in the high teens exiting fiscal year 2024, with ongoing investments in strategic sales and channels [44] Other Important Information - The company ended the year with $545 million in cash and short-term investments, up from $443.2 million as of December 31, 2022 [22] - JFrog's remaining performance obligation totaled $259.8 million as of December 31, 2023 [68] - The company is actively pursuing M&A opportunities to enhance its platform, particularly in security and AI initiatives [118] Q&A Session Summary Question: What was the messaging from the recent sales kickoff? - Management indicated that the focus remains on a top-down sales approach, aligning with product and R&D roadmaps to ensure customer value [4] Question: How does the company view the impact of optimization on future growth? - Management clarified that net dollar retention has stabilized, and they expect it to remain in the high teens, indicating cautious optimism about future growth [60] Question: What are the growth drivers for 2024? - Management highlighted that cloud growth and the push towards higher-tier subscriptions will be significant contributors, alongside security solutions [106] Question: Can you elaborate on the Advanced Security and Curation contributions for 2024? - Management stated that security will become a material part of revenue in 2024, as customers seek to consolidate point solutions [78] Question: How is the company planning to enhance its sales capacity? - Management confirmed ongoing investments in hiring experienced sales representatives and expanding partnerships to drive growth [124]

Part I [Business](index=6&type=section&id=Item%201.%20Business) JFrog provides an end-to-end 'Liquid Software' platform, automating and securing the software supply chain with Artifactory at its core - JFrog's vision is to enable "Liquid Software" through its end-to-end, hybrid, universal Software Supply Chain Platform, which bridges software development and deployment[22](index=22&type=chunk)[23](index=23&type=chunk) - The company's platform is built around JFrog Artifactory, the first universal package repository, which acts as the central "database of DevOps" for an organization's software packages[26](index=26&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) | Metric | Value (as of Dec 31, 2023) | | :--- | :--- | | Total Customers | ~7,400 organizations | | Fortune 100 Customers | ~83% | | Customers with ARR > $100,000 | 886 | | Customers with ARR > $1.0 million | 37 | | Revenue from outside the U.S. (FY 2023) | ~38% | - JFrog's business model combines a bottom-up, community-focused approach with a top-down enterprise sales strategy, offering multi-tiered subscriptions (Pro, Pro X, Enterprise X, Enterprise Plus)[46](index=46&type=chunk)[47](index=47&type=chunk) [Our Platform and Products](index=7&type=section&id=Item%201.%20Business%23Our%20Platform) The JFrog Platform, centered on Artifactory, offers integrated products for curation, security, distribution, and CI/CD - The platform offers a cohesive, end-to-end solution with JFrog Artifactory at its core, supplemented by products for curation, security, distribution, and CI/CD[37](index=37&type=chunk)[40](index=40&type=chunk) - Key products include: - **JFrog Artifactory:** Universal package repository and single source of truth - **JFrog Curation:** Controls admission of open source packages - **JFrog Xray & Advanced Security:** Scans for vulnerabilities, license compliance, and provides advanced binary-focused security - **JFrog Distribution & Artifactory Edge:** Enables reliable and efficient software distribution to multiple locations and edge devices - **JFrog Pipelines:** Automates and orchestrates the CI/CD workflow[38](index=38&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - The platform is expanding to include MLOps functionality, managing machine learning models and their dependencies to unite MLOps with DevSecOps practices[39](index=39&type=chunk) [Business Model and Growth Strategies](index=12&type=section&id=Item%201.%20Business%23Business%20Model) JFrog employs a hybrid go-to-market strategy with multi-tiered subscriptions, focusing on technology leadership and customer expansion - The company utilizes a dual bottom-up (community-focused) and top-down (enterprise-focused) sales approach[46](index=46&type=chunk) - Subscription tiers include JFrog Pro, Pro X, Enterprise X, and the full-platform Enterprise Plus. Optional add-ons like JFrog Advanced Security and JFrog Curation are available for higher tiers[47](index=47&type=chunk)[50](index=50&type=chunk) - Key growth strategies include: - Extending technology leadership in DevSecOps, MLOps, and edge solutions - Expanding within the existing customer base, highlighted by a net dollar retention rate of **119% as of Dec 31, 2023** - Acquiring new customers through free trials, open source versions, and targeting new user personas like AI/ML Engineers - Expanding channel and alliance partnerships, especially with cloud providers[50](index=50&type=chunk)[51](index=51&type=chunk) [Competition](index=17&type=section&id=Item%201.%20Business%23Competition) JFrog faces fragmented competition from in-house solutions, DevOps vendors, cloud providers, and security point solutions - Competition is fragmented and comes from various sources: - **Home-grown solutions:** In-house tools built by companies for specific needs - **DevOps vendors:** Companies like Microsoft's GitHub, GitLab, Cloudsmith, and Sonatype - **Cloud providers:** AWS, Microsoft Azure, and Google Cloud, which offer competing functionalities - **Security point solutions:** Aqua Security, Snyk, Sonatype, and Synopsys - **Diversified vendors:** IBM (Red Hat) and Broadcom (VMware)[63](index=63&type=chunk)[71](index=71&type=chunk) - Many competitors possess greater financial resources, brand recognition, and larger sales forces[64](index=64&type=chunk) [Human Capital](index=20&type=section&id=Item%201.%20Business%23Human%20Capital) JFrog has approximately 1,400 global employees, guided by a 'CODEX' culture and committed to Diversity, Inclusion, and Equity - The company had approximately **1,400 employees globally** as of December 31, 2023, with about **750 in Israel** and **350 in the U.S**[74](index=74&type=chunk) - The corporate culture is guided by the "CODEX," a set of values created by employees, emphasizing integrity, community, innovation, and teamwork[75](index=75&type=chunk)[76](index=76&type=chunk) - JFrog highlights its commitment to DEI, noting that three of its nine board members and four of its twelve executive management team members are women[79](index=79&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from rapid growth, net losses, competition, cybersecurity threats, and geopolitical instability in Israel - The business has experienced rapid growth, and failure to manage future growth, improve systems, and maintain corporate culture could adversely affect operations[89](index=89&type=chunk)[91](index=91&type=chunk) - The company has a history of net losses (**$61.3 million in 2023, $90.2 million in 2022**) and may not achieve profitability on a consistent basis as it continues to invest in growth[94](index=94&type=chunk) - A breach of security measures or unauthorized data access could lead to loss of customer trust, litigation, and significant liabilities. The company is subject to complex and changing privacy laws like GDPR and CCPA[192](index=192&type=chunk)[179](index=179&type=chunk) - A material part of R&D is conducted in Israel, and operations could be adversely affected by geopolitical conditions, such as the Israel-Hamas war, which has led to employee reservist call-ups[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - The business is highly dependent on its core product, JFrog Artifactory. Any decline in its demand or performance would significantly impact the company's financial condition[117](index=117&type=chunk) [Cybersecurity](index=69&type=section&id=Item%201C.%20Cybersecurity) JFrog's cybersecurity program, led by the CSO, is certified against ISO and SOC 2 standards, with Board oversight - The cybersecurity program is led by the Chief Security Officer (CSO) in partnership with the Chief Information Officer (CIO), who leads the Governance Risk and Compliance (GRC) function[264](index=264&type=chunk) - The company's information security controls are certified against ISO 27001, ISO 27701, ISO 27017, and SOC 2 Type II standards, and are aligned with NIST cybersecurity practices[267](index=267&type=chunk) - The Board of Directors, through its Audit Committee, provides oversight of the information security program, receiving updates at least twice a year[272](index=272&type=chunk) - As of the report date, JFrog is not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the company[271](index=271&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) JFrog leases all its facilities, with co-headquarters in Sunnyvale, California, and Netanya, Israel - The company is co-headquartered in Sunnyvale, California, and Netanya, Israel[275](index=275&type=chunk) - JFrog leases approximately **49,000 sq. ft. in Sunnyvale, CA** (leases expiring through 2026) and **52,000 sq. ft. in Netanya, Israel** (lease expiring in 2026)[275](index=275&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) JFrog's ordinary shares trade on Nasdaq under 'FROG', with no cash dividends paid or anticipated in the foreseeable future - The company's ordinary shares are listed on the Nasdaq Global Select Market under the ticker symbol "FROG"[280](index=280&type=chunk) - JFrog has never declared or paid cash dividends and does not intend to in the foreseeable future[282](index=282&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) JFrog's 2023 revenue grew 25% to $349.9 million, with improved net loss and strong liquidity, driven by customer expansion | Financial Metric | FY 2023 | FY 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $349.9M | $280.0M | 25% | | Net Loss | ($61.3M) | ($90.2M) | (32%) | | SaaS Revenue % of Total | 34% | 28% | N/A | | Enterprise Plus Revenue % of Total | 46% | 38% | N/A | - The net dollar retention rate was **119%** as of December 31, 2023, down from 128% as of December 31, 2022. The company expects this rate to stabilize around current levels[304](index=304&type=chunk) - The number of customers with ARR of **$100,000 or more grew from 736 in 2022 to 886 in 2023**. Customers with ARR of **$1.0 million or more increased from 19 to 37** in the same period[305](index=305&type=chunk) - The company generated positive free cash flow of **$72.2 million in 2023**, a significant increase from $17.1 million in 2022[310](index=310&type=chunk) [Results of Operations (2023 vs. 2022)](index=82&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) Total revenue increased 25% to $349.9 million, with stable gross margin and reduced operating loss, improving net loss to $61.3 million | Metric | 2023 (in thousands) | 2022 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $349,886 | $280,040 | 25% | | Gross Profit | $272,843 | $217,753 | 25% | | Gross Margin | 78% | 78% | 0% | | Operating Loss | ($75,548) | ($89,840) | (16%) | | Net Loss | ($61,256) | ($90,184) | (32%) | - The increase in total revenue was driven by approximately **$64.5 million in growth** from existing customers[327](index=327&type=chunk) - Total share-based compensation expense increased by **39% to $95.2 million in 2023** from $68.7 million in 2022, primarily due to grants to new and existing employees[333](index=333&type=chunk) [Liquidity and Capital Resources](index=85&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) JFrog maintains strong liquidity with $545.0 million in cash and investments, generating $74.2 million in operating cash flow in 2023 - The company's principal sources of liquidity as of December 31, 2023, were cash, cash equivalents, and short-term investments totaling **$545.0 million**[337](index=337&type=chunk) | Cash Flow Activity (in thousands) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $74,155 | $21,425 | | Net cash used in investing activities | ($53,476) | ($53,338) | | Net cash provided by financing activities | $18,371 | $11,027 | - As of December 31, 2023, the company had non-cancelable contractual obligations totaling **$56.1 million**, primarily for hosting services and operating leases[346](index=346&type=chunk) [Financial Statements and Supplementary Data](index=90&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2021-2023, with an unqualified auditor's opinion - The independent auditor's report, issued by Kost Forer Gabbay & Kasierer, expressed an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[363](index=363&type=chunk)[373](index=373&type=chunk) - The auditor identified the evaluation of Standalone Selling Prices (SSPs) for self-managed subscription and license performance obligations as a critical audit matter due to the subjective judgment required[368](index=368&type=chunk)[369](index=369&type=chunk) | Balance Sheet Item (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $972,556 | $871,221 | | Total Liabilities | $293,433 | $246,448 | | Total Shareholders' Equity | $679,123 | $624,773 | | Statement of Operations (in thousands) | FY 2023 | FY 2022 | FY 2021 | | :--- | :--- | :--- | :--- | | Total Revenue | $349,886 | $280,040 | $206,683 | | Gross Profit | $272,843 | $217,753 | $164,860 | | Operating Loss | ($75,548) | ($89,840) | ($68,369) | | Net Loss | ($61,256) | ($90,184) | ($64,203) | [Controls and Procedures](index=132&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and internal control over financial reporting as of December 31, 2023 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[516](index=516&type=chunk) - Management concluded that the internal control over financial reporting was effective as of December 31, 2023, a conclusion audited and confirmed by the company's independent registered public accounting firm[518](index=518&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, the internal controls[519](index=519&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=134&type=section&id=Item%2010-14) Information on governance, compensation, and related matters is incorporated by reference from the forthcoming 2024 proxy statement - Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and accountant fees is incorporated by reference from the forthcoming Proxy Statement[526](index=526&type=chunk)[528](index=528&type=chunk)[529](index=529&type=chunk)[530](index=530&type=chunk)[531](index=531&type=chunk) - The company has adopted a Code of Business Conduct and Ethics, which is available on its investor relations website[527](index=527&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=135&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index of all exhibits filed with the Form 10-K, including corporate governance documents and executive certifications - This section provides an index of all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and executive certifications[534](index=534&type=chunk)[535](index=535&type=chunk) [Form 10-K Summary](index=137&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided in this report - No summary is provided for Item 16[539](index=539&type=chunk)

Financial Data and Key Metrics Changes - JFrog's Q3 2023 revenue was $88.6 million, reflecting a 23% year-over-year growth [8][56] - Non-GAAP profit for the quarter was $16.6 million, with free cash flow of $25.4 million [22][37] - Operating profit was $11.9 million, representing a 13.4% operating margin compared to 1.7% in the prior year [37] - Net dollar retention for the trailing four quarters was 119%, a decline of one point sequentially [36] Business Line Data and Key Metrics Changes - Cloud revenue reached $30.6 million, increasing 46% year-over-year [8][35] - Self-managed revenues were $58 million, up 14% year-over-year [57] - Customers with ARR over $1 million increased to 30, a 67% increase compared to the previous year [9] Market Data and Key Metrics Changes - Customers with ARR over $100,000 grew to 848, a 22% year-over-year increase [22] - 46% of total revenue came from Enterprise Plus subscriptions, up from 39% in Q3 2022 [36] Company Strategy and Development Direction - JFrog is focusing on large-scale enterprise adoption of its software supply chain platform, driven by strategic sales and cloud partnerships [11][31] - The company is expanding into machine learning operations and AI solutions, integrating security for ML models [33][54] - JFrog aims to consolidate security solutions under one vendor to enhance customer value [27][68] Management's Comments on Operating Environment and Future Outlook - Management remains confident in meeting 2023 business goals despite the ongoing conflict in Israel [7][21] - The company anticipates continued growth in cloud adoption and security solutions as key drivers for future revenue [35][57] - Management noted that macroeconomic headwinds are impacting the pace of migrations but cloud usage continues to grow [110] Other Important Information - JFrog appointed Orit Goren as Chief Sustainability Officer, emphasizing its commitment to responsible business practices [40] - The company has a strong cash position with $502 million in cash and short-term investments as of September 30, 2023 [59] Q&A Session Summary Question: Can you walk us through the cloud optimizations and the acceleration of cloud revenue growth? - Management noted positive momentum in cloud usage, driven by large customers and marketplace growth [64][65] Question: What is the opportunity for advanced security and curation going into Q4? - Advanced security and curation are expected to support revenue growth, with significant adoption already seen [68] Question: How does AI and ML impact the usage of the cloud Artifactory? - AI and ML adoption is expected to accelerate platform usage as enterprises seek to secure and automate their processes [102][104] Question: Can customers buy security solutions without Artifactory? - Currently, security solutions are integrated with the platform and not available as standalone products [100] Question: How are optimization headwinds affecting the company? - Management believes optimization headwinds are behind them, with continued growth in cloud usage [110]

FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Commission File Number: 001-39492 JFrog Ltd. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Israel 98-0680649 (I.R ...