JFrog(US:FROG)2025-05-09 20:11Part I Financial Statements (Unaudited) This section presents JFrog Ltd.'s unaudited condensed consolidated financial statements for Q1 2025, reporting $122.4 million in revenue and an $18.5 million net loss Condensed Consolidated Balance Sheets Total assets increased to $1.16 billion as of March 31, 2025, driven by short-term investments, with stable liabilities and growing equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $44,350 | $49,869 | | Short-term investments | $519,157 | $472,138 | | Total current assets | $682,134 | $649,227 | | Total assets | $1,156,229 | $1,129,906 | | Liabilities & Equity | | | | Deferred revenue (current) | $250,145 | $247,187 | | Total liabilities | $356,193 | $356,380 | | Total shareholders' equity | $800,036 | $773,526 | | Total liabilities and shareholders' equity | $1,156,229 | $1,129,906 | Condensed Consolidated Statements of Operations Q1 2025 total subscription revenue grew 22% to $122.4 million, but operating and net losses widened due to higher expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total subscription revenue | $122,407 | $100,311 | | Gross profit | $92,226 | $79,707 | | Total operating expenses | $115,196 | $96,343 | | Operating loss | $(22,970) | $(16,636) | | Net loss | $(18,503) | $(8,790) | | Net loss per share, basic and diluted | $(0.16) | $(0.08) | Condensed Consolidated Statements of Cash Flows Net cash from operations increased to $28.8 million in Q1 2025, while investing activities used $45.8 million for short-term investments Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,792 | $17,469 | | Net cash used in investing activities | $(45,782) | $(46,921) | | Net cash provided by financing activities | $11,505 | $16,595 | | Net decrease in cash, cash equivalents, and restricted cash | $(5,519) | $(13,380) | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, revenue disaggregation showing a SaaS shift, $424.2 million RPO, and $36.8 million share-based compensation Revenue by Category (Q1 2025 vs Q1 2024) | Category | Q1 2025 Revenue | % of Total | Q1 2024 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | Self-managed subscription | $69,797k | 57% | $63,390k | 63% | | SaaS | $52,610k | 43% | $36,921k | 37% | | Total | $122,407k | 100% | $100,311k | 100% | * As of March 31, 2025, remaining performance obligations (RPO) totaled $424.2 million, with 68% expected to be recognized as revenue over the next 12 months37 * Total share-based compensation expense was $36.8 million for Q1 2025, with $290.6 million unrecognized cost to be recognized over 2.6 years66 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, including 22% revenue growth to $122.4 million, driven by SaaS and Enterprise Plus subscriptions * Revenue from SaaS subscriptions grew to 43% of total revenue in Q1 2025, indicating a continued shift in business mix80 * The net dollar retention rate was 116% as of March 31, 2025, expected to remain relatively stable89 * Customers with $100,000+ ARR increased to 1,051, and those with $1.0 million+ ARR increased to 54 as of March 31, 202590 Results of Operations Total revenue grew 22% to $122.4 million in Q1 2025, while gross margin decreased to 75% and operating expenses rose 21-22% Revenue Change (Q1 2025 vs Q1 2024, in thousands) | Category | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total subscription revenue | $122,407 | $100,311 | $22,096 | 22% | * Cost of revenue increased 46% year-over-year, driven by $3.8 million in third-party hosting costs and $2.1 million in intangible amortization111 * Operating expenses increased across all categories, with R&D up $7.5 million (21%), Sales & Marketing up $9.2 million (21%), and G&A up $2.1 million (12%)113114115 Liquidity and Capital Resources Principal liquidity sources totaled $563.5 million as of March 31, 2025, with $28.8 million net cash from operations and $61.0 million in contractual obligations * As of March 31, 2025, principal liquidity sources were cash, cash equivalents, and short-term investments totaling $563.5 million121 * Net cash provided by operating activities was $28.8 million for Q1 2025, driven by a net loss adjusted for $44.0 million in non-cash charges124125 Contractual Obligations as of March 31, 2025 (in thousands) | Obligation Type | Total | 2025 (Remainder) | 2026 and Thereafter | | :--- | :--- | :--- | :--- | | Operating lease obligations | $12,644 | $6,144 | $6,500 | | Purchase obligations | $48,382 | $13,688 | $34,694 | | Total | $61,026 | $19,832 | $41,194 | Quantitative and Qualitative Disclosures About Market Risk The company faces foreign currency exchange risk, primarily USD/NIS, mitigated by hedging, and interest rate risk on investments, with inflation not a material factor * The primary market risk is foreign currency exchange, as Israeli operating costs are in NIS while revenues are primarily in USD133 * JFrog uses a hedging program to reduce exchange rate volatility, with a hypothetical 10% change not materially impacting results134 * Interest rate risk on $563.5 million in cash and investments is not material, as a hypothetical 1% rate increase would not significantly impact fair value137138121 Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting * The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025141 * No material changes to internal control over financial reporting occurred during the quarter142 Part II Legal Proceedings The company is not aware of any current legal proceedings that would materially adversely affect its business or financial results * The company is not aware of any current legal proceedings that would have a material adverse effect on its business59145 Risk Factors This section outlines significant business risks, including growth management, intense competition, foreign operations in Israel, cybersecurity, and intellectual property * Inability to effectively manage significant growth and scale systems could adversely affect financial results148 * Significant competition comes from DevOps companies, large cloud providers, and security point solution providers162168 * Operations in Israel, where a material part of R&D is located, are susceptible to disruptions from ongoing regional conflict293294296 * Security breaches could lead to customer loss, liability, and reputational damage, heightened by geopolitical tensions and sophisticated cyberattacks241244 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period covered by this report * None318 Default Upon Senior Securities This item is not applicable to the company * Not applicable319 Mine Safety Disclosures This item is not applicable to the company * Not applicable320 Other Information CEO Shlomi Ben Haim adopted a Rule 10b5-1 trading plan on March 3, 2025, for the potential sale of up to 822,565 ordinary shares * On March 3, 2025, CEO Shlomi Ben Haim adopted a Rule 10b5-1 trading arrangement for the sale of up to 822,565 ordinary shares322 Exhibits This section lists exhibits filed with the Form 10-Q, including SOX certifications from the CEO and CFO, and Inline XBRL documents * The report includes required certifications from the CEO and CFO under SOX Sections 302 and 906, along with interactive data files (XBRL)327