© JFrog, 2025. All Rights Reserved. Disclaimer This presentation contains forward-looking statements that reflect our current views with respect to, among other things, the operations and financial performance of JFrog Ltd. and its subsidiaries (collectively, "JFrog," "we," "us," or "our"). All statements other than statements of historical facts contained in this presentation, including statements regarding matters such as our industry, business strategy, goals, and expectations concerning our products and ...

RT Avi Chawla (@_avichawla)First Principles Approach to MLOps!MadeWithML is the best place to learn how to combine AI/ML with software engineering to build production-grade solutions.These fundamentals are directly applicable to LLMOps as well.100% free and open-source. https://t.co/aqIbBTqIhg ...

First Principles Approach to MLOps!MadeWithML is the best place to learn how to combine AI/ML with software engineering to build production-grade solutions.These fundamentals are directly applicable to LLMOps as well.100% free and open-source. https://t.co/aqIbBTqIhg ...

Market Performance - On October 23, 2025, the Shanghai Composite Index rose by 0.22%, and the Shenzhen Component Index also increased by 0.22%, while the ChiNext Index saw a smaller gain of 0.09%[15] - The total market turnover was 16,607.09 billion yuan, a decrease of 295.50 billion yuan from the previous trading day[15] - Out of 5,296 stocks, 2,994 rose while 2,302 fell, indicating a generally positive market sentiment[15] Sector Performance - The top-performing sectors included Oil & Petrochemicals (up 1.84%), Coal (up 1.70%), and Composite (up 1.28%) while the laggards were Communication (down 1.51%), Real Estate (down 1.02%), and Building Materials (down 0.86%)[21] - Most concept sectors saw gains, particularly Shenzhen State-Owned Enterprise Reform, Horse Racing, and MLOps, while sectors like Cultivated Diamonds and Co-Packaged Optics (CPO) experienced declines[21] Capital Flow - On October 23, 2025, the net outflow of main funds was 337.33 billion yuan, with large orders contributing to a significant portion of this outflow[25] - Small orders, however, saw a continuous net inflow of 394.31 billion yuan, indicating retail investor interest[25] ETF Activity - Major ETFs such as the Huaxia SSE 50 ETF and the Huatai-PB CSI 300 ETF saw varied trading volumes, with the former decreasing by 6.75 billion yuan to 18.16 billion yuan[29] - The net inflow for the CSI A50 ETF was 3.53 billion yuan on October 22, indicating a preference for large-cap stocks[29] Global Market Trends - On October 23, 2025, the Hang Seng Index rose by 0.72%, while the Nikkei 225 fell by 1.35%[34] - The U.S. stock market saw declines across major indices, with the Dow Jones Industrial Average down 0.71% and the S&P 500 down 0.53%[34]

Core Insights - The A-share market showed mixed performance with the Shanghai Composite Index down by 0.18% and the Shenzhen Component Index down by 0.29%, while the ChiNext Index rose by 0.21% [1][7] - The total trading volume in the Shanghai and Shenzhen markets reached 24,940.66 billion [1][7] - In the industry sector, banking, coal, and electric equipment led the gains, while social services, retail, and computing sectors faced declines [1][7] - The Hong Kong market also saw declines, with the Hang Seng Index down by 0.7% and the Hang Seng Tech Index down by 1.45% [1][7] - Internationally, all three major U.S. indices fell, with the Dow Jones down by 0.19%, S&P 500 down by 0.55%, and Nasdaq down by 0.95% [1][7] Industry News - A new growth stabilization plan for the steel industry has been released by five government departments, emphasizing precise control of production capacity and promoting the elimination of outdated equipment [2][8] - The plan mandates that by the end of 2025, over 80% of steel production capacity must complete ultra-low emission transformations [2][8] Financial Sector Developments - The "14th Five-Year Plan" for China's financial industry has achieved significant milestones, including reforms in financial systems and enhanced support for the real economy [9][10] - During this period, the banking and insurance sectors provided an additional 170 trillion yuan to the real economy through various financing methods [11] - The balance of inclusive loans for small and micro enterprises reached 36 trillion yuan, which is 2.3 times that of the end of the 13th Five-Year Plan, with interest rates decreasing by 2 percentage points [11] - Financial support for technology sectors has been emphasized, with annual growth rates for loans to technology SMEs, inclusive loans, and green loans exceeding 20% [11][12] - The financial risk management framework has been strengthened, with significant progress in addressing risks in key areas such as local government financing platforms and real estate [12][13]

Group 1: AI Software Evolution - The evolution of AI software has transitioned from standalone tools to a complex ecosystem that supports large-scale applications [3][4] - The global AI market is projected to grow from $371.71 billion in 2025 to $2,407.02 billion by 2032, with a compound annual growth rate (CAGR) of 30.6% [3] - Companies are increasingly seeking AI solutions that integrate seamlessly into existing business processes, emphasizing the need for usability, stability, and manageability [4] Group 2: Rise of AI Agents - AI Agents are defined as intelligent programs capable of perceiving their environment, making decisions, and executing tasks autonomously [6] - The global AI Agent market is expected to grow from $5.1 billion in 2024 to $47.1 billion by 2030, with a CAGR of 44.8% [6] - Early adopters of AI Agents have reported efficiency improvements of up to 50% in customer service and sales functions [6] Group 3: Collaboration of Agents - Companies face a choice between developing a single comprehensive Agent or a collaborative system of specialized Agents [7] - Multi-agent systems are seen as a more effective solution for complex enterprise problems, allowing for specialization and collaboration [7] - New approaches, such as the "no API" model, aim to reduce integration costs and improve the efficiency of multi-agent collaboration [8] Group 4: Technical Support for Agents - MLOps and AI orchestration are essential for the stable operation of both single and multi-agent systems [10] - The global MLOps market is projected to grow from approximately $4.5 billion in 2024 to $20 billion by 2034 [10] - AI orchestration focuses on managing complex workflows involving multiple models, Agents, and data streams, with predictions indicating that 50% of organizations will develop AI orchestration platforms by 2025 [11] Group 5: Future of AI and Human Interaction - The debate continues on whether AI will fully replace human jobs or foster a more efficient human-machine collaboration [13][14] - While complete automation could enhance productivity by freeing humans from repetitive tasks, concerns about AI's "black box" nature and decision-making transparency remain [14] - Insights from major industry players at upcoming conferences may provide further clarity on the strategic direction of AI technology [14]

Core Insights - JFrog Ltd reported better-than-expected Q2 financial results, with earnings of 18 cents per share, surpassing the analyst consensus estimate of 16 cents per share, and quarterly sales of $127.22 million, exceeding the estimate of $122.75 million [1] - The company raised its FY2025 sales guidance from a range of $500 million-$505 million to $507 million-$510 million, indicating positive growth expectations [1] - JFrog's CEO emphasized the company's focus on DevOps, Security, and MLOps, positioning it as a leader in the AI ecosystem [2] Financial Performance - Q2 earnings per share: 18 cents, beating the consensus estimate of 16 cents [1] - Q2 sales: $127.22 million, exceeding the estimate of $122.75 million [1] - FY2025 sales guidance raised to $507 million-$510 million from $500 million-$505 million [1] Analyst Ratings and Price Targets - Needham analyst Mike Cikos maintained a Buy rating and raised the price target from $46 to $55 [8] - Piper Sandler analyst Rob Owens maintained a Neutral rating and raised the price target from $40 to $48 [8] - Barclays analyst Ryan Macwilliams maintained an Overweight rating and raised the price target from $45 to $52 [8] - Keybanc analyst Jason Celino maintained an Overweight rating and raised the price target from $46 to $52 [8] - Stifel analyst Brad Reback maintained a Buy rating and raised the price target from $45 to $53 [8]

Financial Data and Key Metrics Changes - JFrog's total revenue for Q2 2025 was $127.2 million, representing a 23% year-over-year increase [5][18] - Operating margin improved to 15.2%, up from 13.2% in the previous year [6][21] - Cloud revenue reached $57.1 million, a 45% increase year-over-year, accounting for 45% of total revenue compared to 38% in the prior year [6][18] - Net dollar retention rate for the trailing four quarters was 118%, up two points sequentially [20] - Free cash flow for Q2 was $35.5 million, or a 28% margin, compared to $16 million, or a 15% margin, in the year-ago period [22] Business Line Data and Key Metrics Changes - Cloud revenue growth was driven by increased annual commitments and the adoption of security products [18][19] - Self-managed or on-premises revenues were $70.1 million, up 10% year-over-year [19] - Revenue contribution from Enterprise Plus subscriptions grew to 55% of total revenues, up from 50% in the prior year [19] Market Data and Key Metrics Changes - JFrog's RPO (Remaining Performance Obligations) totaled $476.7 million, a 75% increase year-over-year, benefiting from multi-year commitments [22] - The company noted a strategic shift in customer infrastructure towards hybrid solutions due to the unpredictable costs associated with AI [10][11] Company Strategy and Development Direction - JFrog aims to become the system of record for all software packages, focusing on DevOps, security, and MLOps [7][12] - The company is deepening partnerships with AI industry leaders and expanding support for the AI ecosystem [13][14] - JFrog is positioning itself as a model registry for AI, emphasizing the importance of a unified software supply chain [13][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's alignment with modern software demands and the ongoing growth in cloud and security solutions [8][11] - The company is cautious about future guidance due to macroeconomic uncertainties but expects continued growth in cloud commitments and security adoption [23][25] - Management highlighted the resilience of the team amid external challenges, reinforcing the strength of the business [26][27] Other Important Information - JFrog will hold its Annual User Conference on September 9, 2025, to announce new products and strategic partnerships [17] - The company is committed to addressing emerging security threats associated with AI and MCP (Model-Centric Programming) [14][100] Q&A Session Summary Question: Can you discuss the evolution of customer hesitations regarding self-managed data centers? - Management noted that customers are rethinking their cloud strategies due to the unpredictability of AI costs, leading to a more cautious approach to cloud migration [34][35] Question: How has the sunsetting of JFrog Pipeline affected partnerships with CI/CD players? - The decision to sunset JFrog Pipeline has allowed for better integration and partnerships with companies like GitHub, focusing on security and cloud migration [38][39] Question: Can you provide insights into the pipeline of large enterprise deals? - Management highlighted a focus on migrating workloads to the cloud and the addition of security solutions as key factors driving large enterprise deals [43][45] Question: What impact have AI coding tools had on the DevOps toolchain? - The introduction of code assistance tools has changed the developer landscape, increasing the need for a model registry and security solutions [85][88] Question: How is JFrog leveraging hyperscaler partnerships for co-selling? - Collaboration with cloud providers is crucial for accelerating deals and optimizing costs, with strong relationships established with AWS, GCP, and Microsoft Azure [78][79] Question: What is the outlook for security's contribution to JFrog's business? - Management plans to provide metrics around security's contribution and sees strong momentum in this area [92]

Core Insights - JFrog reported Q2 FY2025 earnings with GAAP revenue of $127.2 million, exceeding analyst expectations of $122.8 million, and non-GAAP EPS of $0.18, surpassing the expected $0.16 [1][2] - The company experienced significant growth in its cloud segment, with cloud revenue reaching $57.1 million, a 45% increase year-over-year, now accounting for 45% of total revenue [1][5] - Customer expansion was notable, with the number of customers generating over $1 million in annual recurring revenue (ARR) increasing to 61, a 45% rise from the previous year [1][6] Financial Performance - Non-GAAP operating income improved to $19.4 million, up from $13.6 million year-over-year, with a non-GAAP operating margin of 15.2%, an increase of 2 percentage points [2][9] - Free cash flow (non-GAAP) more than doubled to $35.5 million, reflecting a 122.3% increase from the prior year [2][9] - Remaining performance obligations (RPO) stood at $476.7 million, indicating strong momentum in onboarding large customers [10] Business Overview and Strategic Focus - JFrog's platform aids organizations in managing, automating, and securing software packages throughout the development lifecycle, focusing on binary management, vulnerability scanning, and compliance [3] - The company emphasizes integrating security into software development processes and expanding support for emerging technologies like machine learning [4] - Strategic partnerships with major players in cloud and AI sectors are crucial for sustaining growth and enhancing the company's value proposition [4] Product Innovation - New MLOps modules were launched, allowing organizations to manage and secure AI and machine learning model artifacts [7][12] - Enhanced security functions for both standard software components and machine learning models were introduced, addressing the growing need for security in AI applications [7] - Collaborations with NVIDIA, Hugging Face, and GitHub are driving new enterprise deals and platform adoption [8] Outlook and Guidance - For Q3 FY2025, JFrog expects revenue between $127.0 million and $129.0 million, with non-GAAP EPS projected in the range of $0.15 to $0.17 [13] - The full-year revenue outlook for FY2025 has been raised to between $507.0 million and $510.0 million, with non-GAAP operating income projected between $75.0 million and $78.0 million [13][14] - Management maintains a conservative forecasting approach, not factoring in potential upside from large enterprise deals or continued high cloud usage [14]

Financial Performance - JFrog's 2Q'25 Last Twelve Months (LTM) revenue reached $475 million, demonstrating a YoY growth of 22%[6] - The company's 2Q'25 LTM Free Cash Flow was $139 million[6] - JFrog's 2Q'25 LTM Net Dollar Retention Rate stood at 118%[6] - The company projects FY'25 revenue between $507 million and $510 million[81] Market and Customer Base - JFrog estimates its Total Addressable Market (TAM) to be over $40 billion[6] - The company has a customer base of 7,300 as of FY24[6] - JFrog serves 82% of the Fortune 100 companies[6] Platform and Strategy - JFrog's platform manages binaries from creation to distribution, covering the entire software supply chain[24] - The company emphasizes a land and expand growth strategy, showcasing consistent expansion within existing customer accounts[70, 71, 72, 73, 74, 75] - JFrog is focused on extending its technology leadership, expanding within its existing customer base, acquiring new customers, and developing its technology partnership ecosystem[69]