[Q2 2025 Earnings Announcement](index=1&type=section&id=Q2_2025_Earnings_Announcement) JFrog reports strong Q2 2025 financial results, driven by its unified platform and growing presence in the AI ecosystem [Executive Summary](index=1&type=section&id=Executive_Summary) JFrog achieved strong Q2 2025 financial results, fueled by its unified platform and expanding role in the AI ecosystem [CEO Commentary](index=1&type=page&id=CEO_Commentary) CEO highlights JFrog's leadership in the AI ecosystem and disciplined execution for sustainable growth - JFrog is positioned as a system of record for software packages and a leader in the AI ecosystem as a gold-standard model registry, with a unified focus on DevOps, Security, and MLOps[4](index=4&type=chunk) - Q2 results reflect strong execution amidst ongoing uncertainty, with a focus on disciplined operations and driving high-quality, sustainable growth[4](index=4&type=chunk) [Second Quarter 2025 Financial Highlights](index=1&type=page&id=Second_Quarter_2025_Financial_Highlights) Key financial metrics for Q2 2025 show significant revenue and cloud revenue growth, along with increased high-value customers Q2 2025 Key Financial Highlights | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Total Revenues (in millions) | $127.2 | +23% | | Cloud Revenues (in millions) | $57.1 | +45% | | Customers with ARR > $1 million (count) | 61 | +45% | | GAAP Gross Profit (in millions) | $97.0 | - | | GAAP Gross Margin (%) | 76.3 | - | | Non-GAAP Gross Profit (in millions) | $105.7 | - | | Non-GAAP Gross Margin (%) | 83.1 | - | | GAAP Operating Loss (in millions) | ($26.0) | - | | Non-GAAP Operating Income (in millions) | $19.4 | - | | GAAP Net Loss Per Share ($) | ($0.19) | - | | Non-GAAP Diluted EPS ($) | $0.18 | - | | Operating Cash Flow (in millions) | $36.1 | - | | Free Cash Flow (in millions) | $35.5 | - | | Cash, Cash Equivalents and Investments (as of June 30, 2025, in millions) | $611.7 | - | | Remaining Performance Obligations (as of June 30, 2025, in millions) | $476.7 | - | - Cloud revenue constituted **45% of total revenue** in Q2 2025, up from 38% in the prior-year period[8](index=8&type=chunk) - Net Dollar Retention rate for the trailing four quarters was **118%**[8](index=8&type=chunk) [Recent Business & Product Highlights](index=1&type=page&id=Recent_Business_Product_Highlights) Recent product innovations and strategic partnerships underscore JFrog's platform expansion and customer adoption - JFrog released a remote AI MCP server to enable agentic AI interaction with the JFrog Platform[7](index=7&type=chunk)[8](index=8&type=chunk) - The company deepened its relationship with NVIDIA as part of their 'Enterprise AI Factory' validated design[7](index=7&type=chunk)[8](index=8&type=chunk) - Customers adopting the end-to-end JFrog Platform Enterprise+ subscription represented **55% of total revenue** in Q2 2025, an increase from 50% in the year-ago period[8](index=8&type=chunk) Customer Growth Metrics | Metric | Q2 2025 (count) | Q2 2024 (count) | YoY Change | | :-------------------------- | :-------------- | :-------------- | :--------- | | Customers with ARR > $1 million | 61 | 42 | +45% | | Customers with ARR > $100K | 1,076 | 928 | +16% | [Detailed Financial Performance](index=1&type=section&id=Detailed_Financial_Performance) This section details JFrog's Q2 and H1 2025 GAAP financial performance, covering operations, balance sheet, and cash flows [Condensed Consolidated Statements of Operations](index=6&type=page&id=Condensed_Consolidated_Statements_of_Operations) Presents GAAP statements of operations for Q2 and H1 2025, showing revenue growth and increased net losses Condensed Consolidated Statements of Operations (GAAP) - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :--------- | | Total subscription revenue | $127,220 | $103,043 | +23.46% | | Total cost of revenue—subscription | $30,202 | $21,893 | +37.96% | | Gross profit | $97,018 | $81,150 | +19.55% | | Total operating expenses | $122,989 | $100,277 | +22.65% | | Operating loss | ($25,971) | ($19,127) | +35.79% | | Net loss | ($21,675) | ($14,303) | +51.54% | | Net loss per share, basic and diluted | ($0.19) | ($0.13) | +46.15% | Condensed Consolidated Statements of Operations (GAAP) - Six Months Ended June 30, 2025 vs 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Total subscription revenue | $249,627 | $203,354 | +22.76% | | Total cost of revenue—subscription | $60,383 | $42,497 | +42.09% | | Gross profit | $189,244 | $160,857 | +17.65% | | Total operating expenses | $238,185 | $196,620 | +21.14% | | Operating loss | ($48,941) | ($35,763) | +36.84% | | Net loss | ($40,178) | ($23,093) | +74.07% | | Net loss per share, basic and diluted | ($0.35) | ($0.21) | +66.67% | [Condensed Consolidated Balance Sheets](index=7&type=page&id=Condensed_Consolidated_Balance_Sheets) Provides GAAP balance sheet data for June 30, 2025, and December 31, 2024, detailing asset and liability changes Condensed Consolidated Balance Sheets (GAAP) - June 30, 2025 vs December 31, 2024 | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------ | :---------------- | :----- | | Total current assets | $737,203 | $649,227 | +13.55% | | Total assets | $1,208,185 | $1,129,906 | +6.93% | | Total current liabilities | $346,722 | $317,515 | +9.20% | | Total liabilities | $381,731 | $356,380 | +7.11% | | Total shareholders' equity | $826,454 | $773,526 | +6.84% | | Cash and cash equivalents | $51,277 | $49,869 | +2.82% | | Short-term investments | $560,423 | $472,138 | +18.69% | | Deferred revenue (current) | $260,066 | $247,187 | +5.21% | [Condensed Consolidated Statements of Cash Flows](index=8&type=page&id=Condensed_Consolidated_Statements_of_Cash_Flows) Outlines GAAP cash flow statements for Q2 and H1 2025, highlighting operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (GAAP) - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :--------- | | Net cash provided by operating activities | $36,085 | $16,697 | +116.11% | | Net cash provided by (used in) investing activities | ($39,548) | $135,188 | -129.25% | | Net cash provided by (used in) financing activities | $9,592 | ($4,673) | +305.29% | | Net increase in cash, cash equivalents, and restricted cash | $6,927 | $146,918 | -95.29% | Condensed Consolidated Statements of Cash Flows (GAAP) - Six Months Ended June 30, 2025 vs 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Net cash provided by operating activities | $64,877 | $34,166 | +89.89% | | Net cash provided by (used in) investing activities | ($85,330) | $88,267 | -196.68% | | Net cash provided by (used in) financing activities | $21,097 | $11,922 | +76.96% | | Net increase in cash, cash equivalents, and restricted cash | $1,408 | $133,538 | -98.95% | [Outlook](index=2&type=section&id=Outlook) JFrog provided financial guidance for the third quarter and full fiscal year 2025, projecting continued revenue growth and non-GAAP operating income, along with non-GAAP diluted earnings per share [Third Quarter 2025 Outlook](index=2&type=page&id=Third_Quarter_2025_Outlook) Provides specific financial guidance for Q3 2025, including revenue, non-GAAP operating income, and EPS Third Quarter 2025 Outlook | Metric | Range | | :-------------------------------- | :-------------------------- | | Revenue | $127.0 million - $129.0 million | | Non-GAAP operating income | $16.5 million - $18.5 million | | Non-GAAP net income per diluted share | $0.15 - $0.17 (assuming ~122M shares) | [Fiscal Year 2025 Outlook](index=2&type=page&id=Fiscal_Year_2025_Outlook) Presents full fiscal year 2025 financial guidance for revenue, non-GAAP operating income, and EPS Fiscal Year 2025 Outlook | Metric | Range | | :-------------------------------- | :-------------------------- | | Revenue | $507.0 million - $510.0 million | | Non-GAAP operating income | $75.0 million - $78.0 million | | Non-GAAP net income per diluted share | $0.68 - $0.70 (assuming ~121M shares) | [Non-GAAP Financial Information and Operating Metrics](index=2&type=section&id=Non-GAAP_Financial_Information_and_Operating_Metrics) This section details JFrog's use of non-GAAP financial measures, providing definitions, rationale for their use, and reconciliations to the most directly comparable GAAP measures. It also defines key operating metrics such as ARR and Net Dollar Retention rate [About Non-GAAP Financial Measures](index=2&type=page&id=About_Non-GAAP_Financial_Measures) Explains JFrog's rationale for using non-GAAP measures and the types of adjustments made - JFrog uses non-GAAP measures (e.g., operating income, gross profit, net income, free cash flow) internally for budgeting, forecasting, and evaluating financial performance, believing they supplement GAAP measures for investors[17](index=17&type=chunk) - Non-GAAP adjustments include share-based compensation, amortization of acquired intangibles, acquisition-related costs, and income tax effects, as these are considered non-operational or non-recurring[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - Free cash flow is defined as net cash provided by operating activities minus capital expenditures, viewed as a necessary component of ongoing operations[20](index=20&type=chunk)[26](index=26&type=chunk) [Reconciliation of GAAP to Non-GAAP Results](index=9&type=page&id=Reconciliation_of_GAAP_to_Non-GAAP_Results) Reconciles GAAP to non-GAAP gross profit, operating income, and net income for Q2 2025 and Q2 2024 Reconciliation of GAAP to Non-GAAP Gross Profit and Margin - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP gross profit | $97,018 | $81,150 | | Non-GAAP gross profit | $105,724 | $86,932 | | GAAP gross margin | 76.3% | 78.8% | | Non-GAAP gross margin | 83.1% | 84.4% | Reconciliation of GAAP to Non-GAAP Operating Income and Margin - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP operating loss | ($25,971) | ($19,127) | | Non-GAAP operating income | $19,355 | $13,617 | | GAAP operating margin | (20.4)% | (18.6)% | | Non-GAAP operating margin | 15.2% | 13.2% | Reconciliation of GAAP to Non-GAAP Net Income - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP net loss | ($21,675) | ($14,303) | | Non-GAAP net income | $22,034 | $17,461 | | Non-GAAP net income per share - diluted | $0.18 | $0.15 | | Non-GAAP weighted-average shares used to compute net income per share - diluted | 120,578 | 115,194 | [Reconciliation of GAAP Cash Flow to Free Cash Flow](index=10&type=page&id=Reconciliation_of_GAAP_Cash_Flow_to_Free_Cash_Flow) Reconciles GAAP operating cash flow to free cash flow for Q2 and H1 2025 and 2024 Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $36,085 | $16,697 | $64,877 | $34,166 | | Less: purchases of property and equipment | ($627) | ($732) | ($1,274) | ($1,573) | | Free cash flow | $35,458 | $15,965 | $63,603 | $32,593 | [Operating Metrics Definitions](index=4&type=page&id=Operating_Metrics_Definitions) Defines key operating metrics such as Annual Recurring Revenue (ARR) and Net Dollar Retention rate - Annual Recurring Revenue (ARR) is defined as the annualized revenue run-rate of subscription agreements from all customers as of the last month of the quarter, including monthly subscription customers[27](index=27&type=chunk)[28](index=28&type=chunk) - Net Dollar Retention rate is calculated by comparing ARR from the same set of customers (Base Customers) across comparable periods, capturing upsells, contraction, and attrition, and is averaged over the trailing four quarters[29](index=29&type=chunk) [Company Overview and Disclosures](index=2&type=section&id=Company_Overview_and_Disclosures) This section provides background on JFrog, including its mission and platform, along with important legal disclaimers regarding forward-looking statements and details for the upcoming conference call and investor contact [About JFrog](index=2&type=page&id=About_JFrog) Introduces JFrog's mission, unified platform capabilities, and global customer reach - JFrog Ltd. (Nasdaq: FROG) is the creator of a unified DevOps, DevSecOps, and MLOps platform, aiming to deliver software without friction from developer to production[12](index=12&type=chunk) - The JFrog Software Supply Chain Platform acts as a single system of record for building, managing, and distributing software quickly and securely, ensuring availability, traceability, and tamper-proof integrity, with integrated security features[12](index=12&type=chunk) - JFrog's hybrid, universal, multi-cloud platform is available as SaaS and self-hosted, serving millions of users and over **7,000 customers worldwide**, including a majority of the Fortune 100[12](index=12&type=chunk) [Forward-Looking Statements](index=2&type=page&id=Forward-Looking_Statements) Discusses the nature of forward-looking statements and associated risks and uncertainties - The press release contains forward-looking statements regarding JFrog's future financial performance, market potential for its platform and products (Artifactory, Xray, Curation, Advanced Security, ML, Runtime Security), growth potential of its cloud business, and opportunities within DevOps, DevSecOps, Security, AI, and MLOps[13](index=13&type=chunk) - These statements are based on current assumptions and are subject to substantial risks and uncertainties that may cause actual results to differ materially, including risks related to rapid growth, history of losses, customer retention, sales and marketing capabilities, acquisitions, security breaches, and general economic conditions[15](index=15&type=chunk)[16](index=16&type=chunk) [Conference Call Details](index=2&type=page&id=Conference_Call_Details) Provides information regarding the Q2 2025 earnings conference call and webcast access - JFrog's Second Quarter 2025 Financial Results Conference Call was scheduled for Thursday, August 7, 2025, at 2:00 p.m. PT (5:00 p.m. ET)[14](index=14&type=chunk) - A live webcast of the conference call is accessible from the investor relations website at https://investors.jfrog.com/events-and-presentations[11](index=11&type=chunk) [Investor Contact](index=5&type=page&id=Investor_Contact) Specifies the contact information for investor inquiries - Investor inquiries can be directed to Jeff Schreiner at jeffs@jfrog.com[30](index=30&type=chunk)

Core Insights - Frog Creek Partners is collaborating with the city of Cheyenne, Wyoming, to launch a stormwater initiative aimed at protecting Crow Creek from pollution, funded by Microsoft [1][2] - The project will install 127 Gutter Bin® stormwater filtration systems, estimated to prevent over 10 tons of pollution annually from reaching Crow Creek [2][5] - This initiative supports Microsoft's commitment to be water-positive by 2030, which includes reducing water-use intensity and replenishing more water than consumed in priority locations [2][6] Project Details - The new Gutter Bins will enhance the effectiveness of previous installations, which included 67 Gutter Bins set up in 2021, already capturing significant amounts of pollution [3][5] - Crow Creek is listed as an impaired waterway due to sediment and E. Coli pollution, necessitating measures to comply with total maximum daily load (TMDL) limits [4] - The existing Gutter Bins have captured tens of thousands of pounds of pollution and filtered millions of gallons of water, contributing to the city's pollution reduction efforts [4] Community and Corporate Responsibility - The collaboration reflects a growing trend of companies partnering with local governments to actively engage in community resource stewardship [7] - Cheyenne's City Council has adopted a resolution to clean Crow Creek, with Microsoft playing a significant role in this initiative [7] - Frog Creek's expertise in stormwater filtration positions it as a valuable partner for advancing Microsoft's water replenishment goals [7] Broader Impact - Similar Gutter Bin installations in other locations, such as Colorado Springs and Vail, have demonstrated significant pollution reduction and improvements in local ecosystems [8][9] - The goal of the Cheyenne project is to restore Crow Creek to a fishable, swimmable, and ecologically healthy state, benefiting both the community and future generations [10][11]

Core Viewpoint - JFrog Ltd. (FROG) has a strong history of beating earnings estimates and is positioned well for potential future earnings beats, particularly in its upcoming quarterly report [1]. Earnings Performance - In the most recent quarter, JFrog reported earnings of $0.16 per share against an expectation of $0.20, resulting in a surprise of 25.00% [2]. - For the previous quarter, JFrog exceeded the consensus estimate of $0.14 per share by reporting $0.19, achieving a surprise of 35.71% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for JFrog, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time [6]. Current Earnings ESP - JFrog currently has an Earnings ESP of +1.02%, suggesting that analysts are optimistic about its near-term earnings potential [8]. - The next earnings report for JFrog is anticipated to be released on August 7, 2025 [8].

Group 1 - Google has acquired the technology licensing and talent team of AI code generation tool company Windsurf for $2.4 billion, intensifying competition in the DevSecOps sector [1] - Bank of America analysts indicate that this acquisition may pose competitive pressure on companies like GitLab and JFrog [1] - The report highlights that AI code generation tools, represented by Windsurf and Cursor, are becoming focal points for investment in the DevSecOps field, driven by rapid user growth and revenue expansion [1] Group 2 - GitLab has emphasized its strategic positioning in AI-driven DevSecOps, particularly in light of the growing market interest in private code generation tools [2] - JFrog faces new challenges in maintaining its market position as code generation tools become critical in dominating DevSecOps workflows [2] - Bank of America has rated both GitLab and JFrog as "Buy," with target prices set at $72 and $48 respectively [2]

Core Viewpoint - The article discusses the importance of understanding the implications of recent financial performance and market trends for investment decisions [1][2]. Financial Performance - Recent earnings reports indicate a significant increase in revenue for the company, with a year-over-year growth of 15% [1]. - The net profit margin has improved from 10% to 12%, reflecting better cost management and operational efficiency [1]. Market Trends - The industry is experiencing a shift towards digital transformation, with companies investing heavily in technology to enhance customer experience [2]. - There is a growing trend of consolidation within the sector, as companies seek to leverage synergies and expand their market share [2]. Investment Opportunities - Analysts suggest that companies focusing on innovation and sustainability are likely to outperform their peers in the coming years [1]. - Emerging markets present significant growth potential, with an expected increase in demand for products and services [2].

Summary of JFrog Conference Call Company Overview - JFrog is positioned as a leader in the software supply chain management, focusing on binary management and DevSecOps, with a unique platform that integrates these functionalities [2][3][5] - The company aims to enhance developer efficiency by managing the transition from source code to machine language, addressing the rapid pace of software updates [5][7] Key Highlights from Q1 Performance - Q1 results reflect a culmination of efforts over multiple quarters, particularly in enterprise sales and security integration [10][11] - Significant growth in large deals, with one customer achieving an annual contract value (ACV) of over $30 million, indicating a shift from smaller deals to larger enterprise contracts [12][16] - Security revenue has grown from essentially zero to 3% of total revenue, showcasing successful penetration into security budgets [13] - Unexpectedly high cloud usage across diverse customer segments, indicating robust demand despite Q1 typically being a slow quarter [14][15] AI and Large Language Models (LLMs) - JFrog is exploring the integration of AI and LLMs into its offerings, believing that increased binary usage will benefit the company [19][21] - The acquisition of QuocAI aims to position JFrog as a key player in managing LLMs, with plans for both cloud and self-hosted versions of the product [20][48] - Current usage trends suggest experimentation with AI tools among customers, but mass adoption is still pending due to industry uncertainties [49][50] Competitive Landscape - JFrog is the only publicly traded company in the DevOps binary management space, with limited competition from private firms like Sonatype and small startups [34][36] - The company differentiates itself through its comprehensive technology stack and security capabilities, which are critical for managing binaries [36][38] M&A Strategy - JFrog maintains a focus on free cash flow to remain agile for potential acquisitions, particularly in the AI and ML sectors [51][52] - The company is not currently seeking transformational acquisitions but is open to tuck-in acquisitions based on customer feedback and market needs [52] Security as a Growth Vector - JFrog sees significant growth potential in security, with plans to deepen penetration into existing customer bases [54][55] - The integration of security sales into a unified approach involving developers and security teams is a strategic focus [56] Financial Outlook and Guidance - The company has adopted a cautious approach to guidance, excluding large deal migrations and usage upside due to market uncertainties [27][30] - JFrog aims to balance growth with profitability, maintaining a free cash flow margin target of 26% to 29% [59][62] Conclusion - JFrog is strategically positioned to capitalize on the growing demand for software supply chain management and security solutions, with a focus on innovation and profitability while navigating a competitive landscape and evolving market dynamics [60][62]

Core Insights - JFrog (NASDAQ: FROG) is identified as a high growth tech stock that has faced significant volatility in the current year [1] Company Overview - JFrog operates as a DevSecOps software platform, assisting other technology companies in their software development processes [1] Analyst Background - Gary Alexander, with extensive experience in covering technology companies and advising startups, contributes insights on industry trends and has been active on Seeking Alpha since 2017 [1]

Summary of JFrog Conference Call Company Overview - JFrog has over 7,300 customers as of the end of 2024 [3] - The company has penetrated more than 82% of the Fortune 100 across all industries [4] - JFrog employs over 1,600 people and has a Total Addressable Market (TAM) exceeding $40 billion [4] - The company reported $450 million in revenue over the last twelve months, reflecting a 22% year-over-year growth [4] - JFrog generated $119 million in free cash flow and has a net dollar retention rate of 116% [4] Business Model and Financial Metrics - JFrog operates on a subscription-based model, with consistent revenue growth [12][13] - The company has a high gross retention rate of 97%, indicating strong customer loyalty [14] - The revenue growth for Q1 was also 22%, with guidance indicating a 17% growth for the upcoming year [13] Product Offerings - JFrog aims to streamline the DevOps process, integrating DevOps, DevSecOps, and MLOps into a single platform [5][9] - The company manages binaries, which are critical in the software supply chain, and offers advanced security products to protect these binaries [6][7] - JFrogML, a recently launched product, manages large language models and integrates with repositories like Hugging Face [9][10] Market Position and Competitive Landscape - JFrog has a strong position in the market, with significant penetration in various industries and a long runway for growth [12][17] - The company faces competition primarily from Sonatype and Cloudsmith in the Artifactory space, with Sonatype experiencing scalability issues [49][50] - JFrog differentiates itself by focusing on binary management and security, which is increasingly becoming an attack vector in software development [54] Strategic Partnerships - JFrog has established a partnership with GitHub to enhance integration between source code and binaries, improving user experience and security [40][41] - The collaboration aims to consolidate security tools and streamline the management of vulnerabilities [46] Future Outlook - JFrog is confident in its go-to-market strategy, having invested in building a strong enterprise sales team and seeing growth in million-dollar customers [62] - The company anticipates that the migration from self-hosted to cloud solutions will drive additional revenue growth [66] - JFrog expects its net dollar retention rate to remain stable at 116%, with potential for growth as customers increase usage beyond minimum commitments [68] Additional Insights - The shift towards AI and machine-generated code is expected to increase the volume of binaries, benefiting JFrog's business model [71][72] - JFrog's pricing model varies based on deployment type, focusing on data transfer, storage, and the number of contributing developers for advanced security [78]

Financial Data and Key Metrics Changes - JFrog reported a revenue growth rate of 22% in the last quarter, with guidance for the current year set at 18% [12][60] - The company has shifted to a more conservative guidance approach after experiencing unexpected challenges in the past [12][15] Business Line Data and Key Metrics Changes - The company has seen a significant increase in larger deals, with "mega deals" now reaching eight figures in size, driven by cloud migration and security needs [15][20] - Security has become a major driver for deal sizes, with many contracts now incorporating security solutions, leading to larger initial adoptions [20][21] Market Data and Key Metrics Changes - Approximately 80% of JFrog's cloud revenue is derived from annual contracts, providing more visibility into revenue streams compared to pure usage models [17] - The company has a strong presence in the enterprise market, with over 50% of revenue coming from the Enterprise Plus tier, which has grown significantly over the past two years [30][46] Company Strategy and Development Direction - JFrog is focusing on expanding its security offerings and integrating them with its existing products to create a comprehensive platform for customers [26][28] - The partnership with GitHub is seen as a strategic move to enhance integration and drive new customer acquisition, although a joint go-to-market strategy is not yet in place [39][44] Management's Comments on Operating Environment and Future Outlook - Management noted a disconnect between corporate America and Wall Street perceptions, indicating a cautious spending environment among customers [61][62] - The company is optimistic about future growth, particularly in cloud migrations, which are expected to drive higher net retention and better economics [52][55] Other Important Information - JFrog has successfully met or exceeded its long-term targets set in 2023, with a focus on profitable growth and maintaining a "Rule of 40" as a guiding principle [59][60] - The importance of binaries has increased as they have become a central attack vector in cybersecurity, emphasizing the need for robust security measures [66][67] Q&A Session Summary Question: What drove the recent increase in developer activity? - Management attributed the increase to experimentation with AI and MLOps, although they cautioned that it may not be a sustained trend [4][6] Question: How has the guidance philosophy changed? - The company has adopted a more conservative approach to guidance to protect investors after past experiences with unexpected customer behavior [12][15] Question: What is the impact of cloud migrations on revenue? - Cloud migrations have led to significant revenue uplifts, with customers experiencing a 20% to 80% increase in revenue after migrating to the cloud [52][55] Question: How does JFrog's security offering differentiate it from competitors? - JFrog's security solutions are integrated with its core offerings, allowing for the consolidation of multiple point solutions, which is a key competitive advantage [26][28] Question: What is the outlook for new customer acquisition? - Management sees potential for new customer acquisition, particularly in the SMB market, as they consider developing a lighter version of their products [32][39]

JFrog (FROG) FY Conference Summary Company Overview - JFrog is a platform that provides DevOps, DevSecOps, and MLOps capabilities to manage software supply chains, emphasizing a cloud-first approach and hybrid solutions [4][7][8]. Key Industry Insights - **Market Trends**: - There is a significant shift towards cloud adoption, even among companies previously resistant to public cloud solutions [8]. - Multi-cloud strategies are becoming popular to avoid vendor lock-in [9]. - CIOs are focusing on tool consolidation to streamline their software supply chains [10]. - **Customer Base**: - JFrog serves approximately 7,000 customers, with 83% of the Fortune 100 and around 50% of the Fortune 500 using its services [9][10]. Financial Performance - **Consumption Growth**: - Recent quarters have shown explosive growth in data consumption, particularly from Docker, Hugging Face, and Python packages [15]. - However, the company remains cautious about the sustainability of this growth due to macroeconomic headwinds and budget misalignments [16]. - **Revenue Composition**: - Security currently accounts for 3% of revenue, with expectations for growth as the security portfolio expands [30][36]. Product Development and Strategy - **Core Product**: - Artifactory is the flagship product, serving as a system of record for software packages, supporting over 32 different technologies [22][24]. - The platform is evolving to integrate security and MLOps capabilities, enhancing its value proposition [25][36]. - **Security Expansion**: - The acquisition of Vidoo has strengthened JFrog's security offerings, allowing it to compete effectively in the DevSecOps space [34][36]. - JFrog's security tools are designed to integrate seamlessly with Artifactory, providing comprehensive protection across the software supply chain [35][37]. Partnerships and Collaborations - **GitHub Partnership**: - A strategic partnership with GitHub aims to create a seamless experience for developers, integrating source code and binary management [51][56]. - 70% of JFrog's customers use GitHub, enhancing trust and collaboration opportunities [56]. Future Outlook - **Macro Environment**: - While JFrog has not yet felt significant impacts from macroeconomic conditions, the company is monitoring the situation closely [65]. - The focus remains on executing growth strategies and maintaining customer engagement [66]. - **Developer Trends**: - The company anticipates that the evolution of AI and automation will lead to more sophisticated developers who leverage tools to enhance productivity [74][75]. - MLOps is a recent addition to the platform, with expectations for gradual adoption and revenue contribution [77][78]. Conclusion - JFrog is positioned as a leader in the DevOps and security space, with a strong focus on cloud solutions and customer consolidation. The company is optimistic about future growth driven by its expanding product offerings and strategic partnerships, while remaining cautious about macroeconomic challenges.