JFrog(FROG) - 2022 Q3 - Quarterly Report

Revenue Growth - JFrog generated revenue of $72.0 million for the three months ended September 30, 2022, representing a 34$53.7 million in the same period of 2021[81]. - For the nine months ended September 30, 2022, JFrog's revenue was $203.5 million, a 38$147.4 million in the corresponding period of 2021[81]. - Revenue from SaaS subscriptions contributed 29% of total revenue for the three months ended September 30, 2022, up from 24% in the same period of 2021[78]. - Total subscription revenue increased by $18.3 million, or 34$71.99 million[109]. - Total subscription revenue for the nine months ended September 30, 2022, increased by $56.0 million, or 38$203.5 million, with approximately $50.1 million of the increase attributed to growth from existing customers[119]. Customer Metrics - The net dollar retention rate for JFrog was 130$100,000 or more, an increase from 537 customers as of December 31, 2021[87]. - Approximately $15.4 million of the revenue increase was attributed to growth from existing customers, with the remainder from new customers[109]. Financial Performance - JFrog incurred a net loss of$23.6 million for the three months ended September 30, 2022, compared to a net loss of $20.5 million in the same period of 2021[81]. - The net loss for the three months ended September 30, 2022, was$23.55 million, compared to a net loss of $20.46 million in the same period of 2021[105]. - Operating loss for the three months ended September 30, 2022, was$23.44 million, compared to an operating loss of $20.92 million in the same period of 2021[105]. - Net cash provided by operating activities for the nine months ended September 30, 2022, was$14.1 million, an increase from $10.2 million in the same period in 2021[134]. - Net cash provided by operating activities for the nine months ended September 30, 2022, was$14.1 million, related to a net loss of $67.0 million adjusted for non-cash charges of$69.6 million[135]. Expenses - Research and development expenses rose by $8.6 million, or 37$31.70 million[112]. - Sales and marketing expenses increased by $8.8 million, or 36$33.15 million[113]. - General and administrative expenses decreased by $1.0 million, or 6$14.68 million[114]. - Research and development expenses rose by $34.1 million, or 64$87.7 million, primarily due to increased headcount and share-based compensation[123]. - General and administrative expenses decreased by $3.1 million, or 7$41.4 million, primarily due to a reduction in share-based compensation[125]. Cash and Investments - JFrog's cash, cash equivalents, and short-term investments totaled $434.0 million as of September 30, 2022[81]. - Cash, cash equivalents, and short-term investments amounted to$434.0 million as of September 30, 2022, providing sufficient liquidity for at least the next 12 months[131]. - Net cash used in investing activities for the nine months ended September 30, 2022, was $35.9 million, primarily from net purchases of short-term investments of$31.9 million and capital expenditures of $3.7 million[137]. - Net cash provided by financing activities for the nine months ended September 30, 2022, was$9.7 million, mainly from employee share purchases under the ESPP of $5.2 million and proceeds from the exercise of share options of$4.7 million[139]. - As of September 30, 2022, cash and cash equivalents totaled $54.0 million, and short-term investments amounted to$380.0 million[151]. Internal Controls and Risks - There were no changes in internal control over financial reporting that materially affected, or are likely to materially affect, the company's internal control over financial reporting during the period covered by the report[156]. - The effectiveness of internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in design and evaluation[157]. - Management acknowledges that internal controls can only provide reasonable assurance, not absolute assurance, of achieving control objectives[157]. - Resource constraints impact the design of disclosure controls and procedures, requiring management to evaluate benefits relative to costs[157]. - Future evaluations of effectiveness are at risk due to potential changes in conditions or compliance deterioration[157]. - The company intends to monitor and upgrade internal controls as necessary but cannot guarantee that improvements will be sufficient[157]. Market Conditions - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations, other than its impact on the general economy[152]. - A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on the company's results of operations for the three and nine months ended September 30, 2022[148]. - The company’s hedging program aims to reduce the impact of foreign exchange risks associated with forecasted future cash flows and certain existing assets and liabilities[148]. Product Development - JFrog launched JFrog Advanced Security in October 2022, enhancing its product offerings in the security domain[83]. - The company plans to increase investment in sales and marketing to support growth and attract new customers[101].