JFrog(FROG)2022-05-10 00:59Financial Data and Key Metrics - Q1 2022 revenue was 100,000 grew to 599, up from 537 in the previous quarter [14] - Trailing four-quarter net dollar retention expanded to 131% [14] - Gross profit was 543,000, with a 0.9% operating margin [47] - Cash and short-term investments totaled 46.9 million [39] - 35% of total revenue came from Enterprise+ customers, up from 29% in Q1 2021 [42] - Security solutions and end-to-end platform adoption drove higher customer consumption [15][16] Market Performance - Strong demand for hybrid and multi-cloud solutions, validated by customer migration trends [16] - Largest single company cloud contract in JFrog's history signed with a semiconductor manufacturer [19] - Automotive software manufacturer adopted JFrog platform for DevOps standardization, leading to 400,000 deal for software supply chain security [24] Strategy and Industry Competition - Focus on cloud-first security, end-to-end platform approach, and hybrid/multi-cloud offerings [11][16] - Investments in unified enterprise-grade platform and 360 funnel management [17] - Strategic partnerships with AWS and other cloud providers to expand market reach [31][33] - Competitive differentiation through holistic DevOps and security solutions, with no significant changes in the competitive landscape [96][99] Management Commentary on Operating Environment and Future Outlook - Management highlighted strong demand for security solutions post-Log4j and Spring Shell vulnerabilities [21][22] - Continued focus on delivering positive free cash flow and efficient growth [37] - Expectation of mid-50% baseline growth rate for cloud business, with potential upside from increased customer usage [40] - Full-year 2022 revenue guidance raised to 278.5 million [50] Other Important Information - Pricing changes for on-prem offerings contributed 7.5 million in revenue over the past 12 months [44][75] - JFrog Connect (formerly Upswift) is gaining traction in IoT device management, with demand for over-the-air updates and monitoring [27][86] - Dart programming language support added to JFrog Artifactory, expanding developer community engagement [29] Q&A Session Summary Question: What drove the revenue acceleration in Q1? [55] - Answer: Three main drivers: growing adoption of SaaS services in the cloud, end-to-end platform adoption, and strategic sales investments [56][57][58] Question: Why was the full-year profitability outlook not raised despite the Q1 beat? [59] - Answer: FX volatility is hedged for 2022, and investments in security, Connect products, and partnerships are prioritized over short-term profitability [61][62] Question: Can sales and marketing initiatives accelerate customer growth? [65] - Answer: Yes, partnerships with cloud providers, system integrators, and professional services firms are expected to drive new customer acquisition [66] Question: How has cloud platform maturity evolved? [69] - Answer: Customers are adopting multi-cloud and hybrid solutions, with JFrog's platform enabling seamless migration and holistic security [71][72] Question: What is the contribution of pricing changes versus volume to growth? [74] - Answer: Pricing changes contributed 7.5 million, while growth primarily comes from expansion of existing customers [75][76] Question: How is the integration of Upswift (JFrog Connect) progressing? [82] - Answer: Strong demand for IoT device management, with security research team enhancing JFrog Xray's capabilities [83][84][86] Question: How is the macro environment impacting deal closure and sales cycles? [87] - Answer: No significant changes in methodology, with a diversified customer base mitigating industry-specific risks [88] Question: Why did billings growth slow to 9%? [91] - Answer: Tough comps from last year's price change pull-forward and cloud adoption headwinds [92][93] Question: Any changes in the competitive landscape? [96] - Answer: No significant changes, with JFrog's platform differentiation and partnerships strengthening its position [99][100] Question: What is the channel strategy and its impact? [116] - Answer: Channel revenue is currently 10-15% of total, with plans to expand through system integrators and professional services [117][120] Question: Are development projects slowing due to macro conditions? [109] - Answer: No, demand for DevOps and security solutions is growing, especially in enterprises and SMBs [110][113]