JFrog(US:FROG)2021-05-07 03:15Financial Data and Key Metrics Changes - JFrog's revenue for Q1 2021 reached $45.1 million, representing a 37% year-over-year growth [11][46] - Cloud revenues grew by 62% year-over-year, amounting to $10.3 million, which is 23% of total revenues compared to 19% in Q1 of the previous year [11][47] - Gross profit was $37.6 million, with a gross margin of 83.4%, up from 81.6% in the same period last year [50] - Non-GAAP operating income was $1.9 million, reflecting a 4.1% operating margin compared to 2.2% in the prior year [53] - Net dollar retention rate for the trailing four quarters was 130% [47] Business Line Data and Key Metrics Changes - Self-managed revenues (on-prem) were $34.8 million, up 32% year-over-year [46] - The number of customers with over $100,000 in ARR increased to 395, up from 352 at the end of 2020 [12][47] - 29% of total revenue came from Enterprise+ customers, up from 16% in Q1 2020 [48] Market Data and Key Metrics Changes - JFrog added significant customers in the APAC region, including the largest stock exchange in Mainland China and a large state-owned financial company [19] - The company is focusing on expanding its footprint in China with dedicated sales, marketing, and support staff [19] Company Strategy and Development Direction - JFrog aims to enhance its hybrid universal end-to-end DevOps platform, focusing on security and software distribution as key drivers for growth [21][25] - The company is investing in partnerships with major cloud providers like AWS, Microsoft, and Google to drive cloud sales growth [17] - JFrog is committed to innovating its product offerings, with significant enhancements released in Q1 [30][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges from the pandemic but remains optimistic about growth in the second half of 2021 as teams return to in-person work [88] - The company expects Q2 revenue guidance of $47.6 million to $48.6 million, with a full-year revenue outlook of $198 million to $204 million [56][57] Other Important Information - JFrog's subscription model has been updated to include Xray as a mandatory security product in its Enterprise solution [40] - The company is preparing for its annual user conference, swampUP, which will showcase its roadmap and industry use cases [42] Q&A Session Summary Question: Can you focus a little bit more on the new logo additions in the quarter? - Management noted a focus on increasing new logos, with positive results from the free tier offering leading to growth in new users and logos [62][64] Question: Why did the price increases not have a more material impact on revenue? - Price increases primarily affected on-prem subscriptions, which represent about 40% of revenue, thus not significantly impacting overall revenue in Q1 [65][66] Question: Can you talk about Xray's capabilities and market awareness? - Xray is designed to secure software packages throughout the lifecycle, and demand for its capabilities is growing as customers seek integrated security solutions [70][72] Question: How much of your market is considered Greenfield versus displacement opportunities? - The market is increasingly recognizing the importance of binary management and automation in DevOps, creating opportunities for JFrog's solutions [76][78] Question: Can you review the commentary around the billings impact from the price increase? - A record quarter in bookings was noted, with many customers renewing at higher subscription tiers before the price changes [82] Question: Is there any lingering impact from COVID on the business? - Management indicated that while challenges remain, they expect a stronger second half of the year as teams return to normal operations [88] Question: Can you discuss the productivity of your sales organization? - The sales and marketing organization is expanding globally, with significant investments in APAC to support growing demand [100][102] Question: How do you expect the price increase to affect Enterprise+ subscriptions in the long run? - The Enterprise+ pricing did not change, and the adoption of this subscription is expected to continue growing as value is added to the portfolio [117] Question: Have you seen any incremental competitive pressure in the DevOps space? - The competitive landscape is evolving, with more vendors entering the market, but JFrog's focus on security and software packages remains a differentiator [119] Question: How do you view the relationship with Atlassian? - The partnership with Atlassian is strong, with complementary solutions that enhance the overall DevOps lifecycle for customers [124]