Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $136.9 million, representing a 26% year-over-year increase [7][23] - Operating margin improved to 18.7%, up from 13.5% in Q3 2024 [26] - Cloud revenue reached $63.4 million, a 50% increase year-over-year, accounting for 46% of total revenue compared to 39% in the prior year [24][26] - Gross profit was $114.9 million, with a gross margin of 83.9%, up from 82.8% in the year-ago period [25][26] - Net dollar retention was 118%, consistent with the prior quarter, indicating sustained growth among existing customers [9][25] Business Line Data and Key Metrics Changes - Enterprise Plus subscriptions contributed 56% of total revenues, up from 50% in the previous year, with a 39% year-over-year growth in revenue from these subscriptions [24][25] - Customers spending over $1 million annually grew to 71, a 54% increase year-over-year [8][26] - Customers spending more than $100,000 annually increased to 1,121, a 16% year-over-year growth [8] Market Data and Key Metrics Changes - The company noted strong cloud growth driven by increased usage of various software packages, including AI-related artifacts [8][10] - The demand for JFrog's security solutions has been a significant driver of cloud revenue growth [36] Company Strategy and Development Direction - JFrog aims to position itself as a foundational platform for software delivery, focusing on cloud and security solutions [7][10] - The company is embracing AI and machine learning, integrating these capabilities into its platform to enhance software supply chain management [16][22] - JFrog introduced the DevGovOps solution to address the growing need for governance and compliance in software delivery [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, emphasizing the importance of security and governance in the current market landscape [15][29] - The company is prepared for ongoing macroeconomic volatility while maintaining a focus on profitable growth [28][30] Other Important Information - JFrog completed payments of $5.7 million related to the acquisition of Qwak, which was finalized in July 2024 [28] - The company ended Q3 2025 with $651.1 million in cash and short-term investments, up from $522 million at the end of 2024 [28] Q&A Session Summary Question: Was there anything one-time in the cloud revenue results? - Management confirmed that the strong cloud revenue was not due to one-time events but a combination of strong usage across multiple package types and security solutions [36] Question: What has changed in the go-to-market execution for cloud? - Management highlighted consistent execution and a strategy of converting customers with overusage to higher commitments, leading to stable cloud growth [38] Question: Can you elaborate on the types of artifacts managed by Artifactory? - Management noted an increase in the usage of AI-related artifacts alongside traditional software artifacts, indicating a growing trend [42] Question: How relevant is the UI/UX change due to AI for JFrog? - Management acknowledged the importance of adapting to AI-driven software creation and emphasized the need for agentic capabilities in their offerings [45] Question: What is the outlook for net dollar retention? - Management indicated that net dollar retention remains stable at 118%, with expectations for continued growth driven by security solutions and increased cloud usage [50] Question: How is the pipeline for security deals tracking? - Management reported a growing pipeline for security solutions, although sales cycles are longer due to the need to displace existing solutions [88]

Financial Data and Key Metrics Changes - JFrog's total revenue for Q3 2025 was $136.9 million, representing a 26% year-over-year increase [7][23] - Operating margin improved to 18.7%, up from 13.5% in Q3 2024 [26] - Cloud revenue reached $63.4 million, marking a 50% year-over-year growth and accounting for 46% of total revenues compared to 39% in the prior year [24][26] - Net dollar retention was 118%, consistent with the previous quarter, indicating sustained growth among the customer base [9][25] Business Line Data and Key Metrics Changes - Enterprise+ subscriptions contributed 56% of total revenues, up from 50% in the prior year, with a 39% year-over-year growth in revenue from these subscriptions [24][26] - Self-managed or on-prem revenues were $73.5 million, reflecting a 10% year-over-year increase [24] Market Data and Key Metrics Changes - The number of customers spending over $1 million annually grew to 71, a 54% increase year-over-year [8] - Customers spending more than $100,000 annually increased to 1,121, representing a 16% year-over-year growth [8] Company Strategy and Development Direction - JFrog is focusing on becoming a foundational platform for software delivery, emphasizing cloud growth and security solutions [7][9] - The company is positioning itself as a universal binary repository and model registry for software supply chains, particularly in the context of AI and machine learning [10][16] - JFrog's strategy includes guiding cloud customers towards higher annual commitments to foster long-term partnerships [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, particularly in cloud adoption and security solutions, while acknowledging macroeconomic uncertainties [29][30] - The company anticipates continued strong demand for its security offerings due to increasing software supply chain attacks [14][15] - JFrog is preparing for the ongoing AI revolution, focusing on securing AI models and software packages [16][17] Other Important Information - JFrog completed payments of $5.7 million related to the acquisition of Qwak, which was finalized in July 2024 [28] - The company ended Q3 2025 with $651.1 million in cash and short-term investments, up from $522 million at the end of 2024 [28] Q&A Session Summary Question: Was there anything one-time in the cloud revenue results? - Management confirmed that the strong cloud revenues were not one-time but a result of strong usage across multiple package types and security solutions [36] Question: What has changed in the go-to-market execution for cloud growth? - Management highlighted consistent execution and a strategy of converting overusage customers to higher commitments as key factors for cloud growth [38] Question: Can you elaborate on the types of artifacts managed by Artifactory? - Management noted an increase in the usage of AI-related artifacts alongside traditional software artifacts, indicating a growing trend [42] Question: How relevant is the UI/UX change due to AI for JFrog? - Management acknowledged that the JFrog Fly release is designed to accommodate both developers and AI agents, reimagining the software supply chain [45] Question: What is the confidence level in closing big deals in the security pipeline? - Management indicated a growing pipeline for security solutions, with longer sales cycles due to the need for displacing existing solutions [88]

Financial Data and Key Metrics Changes - JFrog's total revenue for Q3 2025 was $136.9 million, representing a 26% year-over-year increase [5][20][27] - Operating margin improved to 18.7%, up from 13.5% in Q3 2024 [24] - Cloud revenue reached $63.4 million, marking a 50% year-over-year growth and accounting for 46% of total revenues [22][27] - Gross profit was $114.9 million, with a gross margin of 83.9%, compared to 82.8% in the previous year [23][24] - Net dollar retention was 118%, consistent with the prior quarter, indicating strong customer growth [7][23] Business Line Data and Key Metrics Changes - Cloud revenue growth was driven by increased usage of software packages and artifacts, including PyPI, Docker containers, and NPM [6][10] - Self-managed or on-prem revenues were $73.5 million, up 10% year-over-year [22] - The number of customers spending over $1 million annually grew to 71, a 54% increase from the previous year [6][23] Market Data and Key Metrics Changes - JFrog's enterprise focus led to significant wins across various verticals and geographies, including a $9 million deal with the UK Customs and Revenue Agency [11][12] - The company noted a rise in software supply chain attacks, emphasizing the need for robust security solutions [12][13] Company Strategy and Development Direction - JFrog aims to be the universal binary repository and model registry for software supply chains, focusing on AI and machine learning developments [8][15] - The company is committed to integrating security solutions into its platform, addressing the growing demand for software supply chain security [12][41] - JFrog introduced new products like JFrog Uptrust to enhance governance and compliance in software delivery [17][60] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, particularly in cloud adoption and security solutions [26][30] - The company is monitoring AI-driven usage closely, believing it is still early to predict significant cloud usage growth [10][46] - JFrog's guidance for 2025 suggests sustained contributions from security products and customer commitments, with a projected revenue range of $523 million to $525 million [27][26] Other Important Information - JFrog completed payments of $5.7 million related to the acquisition of Qwak [25] - The company ended Q3 2025 with $651.1 million in cash and short-term investments, up from $522 million at the end of 2024 [25] Q&A Session Summary Question: Was there anything one-time in the cloud revenue results? - Management confirmed that the strong cloud revenues were not one-time but a result of strong usage across multiple package types and security solutions [31][32] Question: What has changed in the go-to-market execution for cloud growth? - Management highlighted consistent execution and a strategy of converting customers with overusage to higher commitments, leading to stable cloud growth [33] Question: Can you elaborate on the types of artifacts managed by Artifactory? - Management noted a growth in AI-related artifacts, including those from Hugging Face and various programming languages, indicating a trend towards using JFrog as a system of record for all packages [34][35] Question: How relevant is the UI/UX change due to AI for JFrog? - Management emphasized that JFrog Fly is designed to accommodate both developers and AI agents, reimagining the software supply chain [36][37] Question: What is the sustainability of new budgets allocated towards security? - Management indicated that there is an increasing focus on security budgets, especially in light of recent software supply chain attacks [50][52] Question: How is the pipeline for security tracking for Q4 and beyond? - Management reported a growing pipeline for security solutions, although sales cycles are longer due to the need for customers to upgrade from existing solutions [57][58]

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]