Financial Performance - The company experienced a total revenue of $150.8 million for the year ended December 31, 2020, representing a growth rate of 44% compared to $104.7 million in 2019[89]. - The company incurred a net loss of $9.4 million for the year ended December 31, 2020, with an accumulated deficit of $74.8 million as of the same date[92]. - The company's total assets reached $689.2 million in 2020, compared to $238.0 million in 2019, indicating robust asset growth[418]. - The company reported a total shareholders' equity of $553.9 million in 2020, a significant improvement from a deficit of $33.4 million in 2019[418]. - Deferred revenue increased to $91.8 million in 2020, up from $72.7 million in 2019, indicating a growing customer base and future revenue potential[418]. Customer Growth and Retention - The total number of customers grew to approximately 6,050 organizations as of December 31, 2020, up from approximately 5,600 organizations as of December 31, 2019[86]. - The company relies on subscription renewals for a significant portion of its revenue, and customer satisfaction is critical for maintaining these renewals[119]. - Seasonality affects customer bookings, with a higher percentage of subscription agreements typically occurring in the fourth quarter[117]. Market and Competition - The markets for the company's products are new and evolving, which may develop more slowly than expected, impacting future success[93]. - The market for JFrog's products is nascent and highly fragmented, with competition from companies with greater financial and technical resources[108]. - The AGPL license allows competitors to use the open source version of JFrog Artifactory for free, potentially increasing competition and pricing pressure on subscriptions[106]. - The company faces intense competition for skilled personnel, particularly in engineering and sales, which may hinder its ability to attract and retain qualified employees[135]. Operational Challenges - The company anticipates substantial increases in operating expenses as it continues to enhance products and expand its customer base[92]. - The company has faced challenges in maintaining consistent revenue growth, with expectations of a decline in growth rate in future periods[89]. - The company's results of operations are likely to fluctuate significantly from quarter to quarter, affecting the trading price of its ordinary shares[94]. - Performance issues or security vulnerabilities in the software could lead to revenue loss and damage to the company's reputation[122]. Regulatory and Compliance Risks - The company faces potential penalties for noncompliance with the GDPR, which could be up to €20 million or 4% of global annual turnover for serious violations[181]. - The company is subject to various governmental export control and trade sanctions that could impair its ability to compete internationally[194]. - The company is currently enhancing its compliance procedures with Trade Controls to avoid civil and criminal penalties, including substantial fines and possible incarceration for willful violations[195]. - The company is subject to various anti-bribery and anti-corruption laws, which, if violated, could result in significant penalties and harm to its reputation and financial condition[198]. Financial Management and Risks - The company has net operating loss carryforwards of $18.0 million in Israel, $8.0 million in U.S. federal, and $22.5 million in U.S. state, which may be limited by jurisdictional regulations[213]. - The company may face increased tax liabilities due to unanticipated changes in effective tax rates or challenges from tax authorities regarding its revenue recognition policies[205]. - The company is exposed to fluctuations in currency exchange rates, which could negatively affect its financial condition and results of operations[204]. - The company utilizes foreign currency contracts to hedge against exchange rate risks, particularly with expenses denominated in NIS, which could impact financial results[203]. Strategic Initiatives - The company has invested in acquiring complementary businesses and technologies to enhance its product offerings[101]. - The company has previously acquired businesses, such as Shippable Inc. in February 2019, to complement its existing operations[156]. - The company launched the FrogCare program to provide free software development and DevOps tools to support research organizations in combating COVID-19[257]. Impact of COVID-19 - The impact of the COVID-19 pandemic has contributed to slowed growth and uncertainty in future performance[90]. - The COVID-19 pandemic has led to temporary office closures and a shift to remote work, which may negatively impact business operations and sales cycles[255]. - The company has experienced delays in new projects and requests for extensions of payment obligations from customers due to COVID-19, adversely affecting financial conditions[257]. Governance and Shareholder Matters - As of December 31, 2020, insiders owned approximately 64% of the company's ordinary shares, potentially limiting the influence of other shareholders on corporate matters[216]. - The company does not intend to pay dividends in the foreseeable future, relying on share price appreciation for investor returns[231]. - The exclusive forum provision in the company's articles of association may limit shareholders' ability to choose the judicial forum for disputes[225].

JFrog Ltd. (NASDAQ:FROG) Q3 2020 Results Earnings Conference Call November 4, 2020 5:00 PM ET Company Participants JoAnn Horne - IR Shlomi Ben Haim - Co-founder and CEO Jacob Shulman - Chief Financial Officer Conference Call Participants Sterling Auty - JPMorgan Sanjit Singh - Morgan Stanley Alex Kurtz - KeyBanc Capital Markets Rob Owens - Piper Sandler Brad Reback - Stifel Jason Ader - William Blair Ittai Kidron - Oppenheimer Nikolay Beliov - Bank of America Jack Andrews - Needham Operator Ladies and gentl ...

Financial Performance - Q3'20 LTM Revenue was $139 million[7] - 2020 YTD YoY Revenue Growth was 46%[7] - Q3'20 LTM Net Dollar Retention Rate was 136%[7] - Non-GAAP Gross Profit Margin for 2020 YTD was 82.4% compared to 82.6% for 2019 YTD[39, 49] - Non-GAAP Operating Income Margin increased to 13.2% in Q3'20 from 8.8% in Q3'19[52, 54] - Free Cash Flow Margin increased to 24.9% in Q3'20 from 16.8% in Q3'19[60] Market and Business Model - The company estimates a $22 billion Total Addressable Market[7, 24] - The company has penetrated less than 1% of its addressable market[24] - Over 75% of Fortune 100 companies are customers[26] - Approximately 27% of Global 2000 companies are customers[26] - 87% of revenue comes from Enterprise, Pro X and Pro Tiers, while 13% comes from Single Product[29]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-39492 JFrog Ltd. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Isra ...