FROG - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for joining us and welcome to JFrog's First Quarter 2022 Earnings Conference Call. I'll hand the conference over today to JoAnn Horne of JFrog Investor's Relations team. JoAnn, please go ahead.

JoAnn Horne

Good afternoon and thank you for joining us as we review JFrog's first quarter financial results, which were announced following market close today via a press release. Leading the call today will be JFrog's CEO and Co-Founder, Shlomi Ben Haim; and Jacob Shulman, JFrog's CFO.

let the started, harbor get we me safe review statement. Before

expressions are statements call, under our and Litigation the Reform we statements Private this XXXX, to anticipate, second of are of related will year of harbor federal full pursuant provisions safe our may performance, laws future and Act intend forward-looking looking identify including financial During to future expect, The Securities intended forward make our to the believe, words statements to quarter and are indications estimate, outlook business securities similar for the similar continue, including of XXXX. or expectations. made related that

of statements, date. new not to obligated You mind events. release place forward-looking these reliance actual are are any which these Please that revision not of materially to as results we or forward-looking of to revise variety a on undue to statements of of in that any and These and keep differ risks today not the could light expectations. uncertainties only in subsequent reflect cause future or publicly are cautioned as results to from statements, information our subject views

available with material filed of the For a December issued for SEC the earlier XX-K press could and release refer February Relations factors on important the to Form Investor our XXXX, website today. our that on and XXXX, discussion risks actual other affect our please section ended is earnings which results the XX, of XX, year

reports the XXXX, to the in and XX-Q SEC. file from with XX, time quarter March be that will available may made for information Form we Additional other filings and time ended our

for our to will GAAP on A JFrog's refer for, their those GAAP And the should a as Investor measures non-GAAP in financial substitute measures CEO, I'd conference earnings a turn not this financial the which directly of available time. considered are or Additionally, will Haim. to These to like discussed call of from, measures. in the used be be performance, Please in release non-GAAP for measures. to, measures as JFrog Shlomi? over addition call. be tables Ben financial JFrog's measures, this most Shlomi of to limited website that, with a reconciliation on comparable replay call Relations isolation

Shlomi Haim

Thank swamp. you, and the JoAnn, from greetings

XXXX millions conference call, that today's begin crises the our continue want JFrog's wishes humanitarian to for more due for quarter hope past with we reflection say of earnings days pray the focus our Ukraine. again well execution. approach security in Before with ahead. as the results the sales six several we Welcome start everyone got thoughts and These to of in implemented, I to highest peaceful be are to and call. a victims with We quarters. off platform cloud-first and revenue end-to-end strategies growth first impressive joined clear strong key JFrog,

sustainable market fast-growing numbers flow. investments we across aligned with key generating a leading cash goals, are free share show mindset our all and company QX's today product-led how strategic As will metrics, to demand consistently positive all

was revenue our growth XX% XX% quarter. exceeded the growth previous Our first $XX.X quarter by in midpoint reported million, year-over-year the compared guidance to This X%. reflecting of

growing usage marketplace previous subscription cloud our platform capabilities first to the the in revenue primarily and in cloud driven reported security by adoption quarter, of Our quarter our our of compared year-over-year, increased grew XX% XX% channels. by through

XXX% previous retention significantly $XXX,XXX in result also to customers with this compared four-quarter grew ARR compared in quarter. demand, quarter previous number XXX% our over expanded As a the trailing the the to dollar $X.XX to $X.XX of and to of net

all binary storage by provided trend our adopting in adoption one-stop distribution During integrated capabilities, These consumption solution, our a moving companies to more the saw from of customers. platform. higher first quarter going is forward security, end-to-end we driving then

changes drove strategies allow about following the applied we more that elaborate the me this company's to Now, and quarter. goals in

First, enabling hybrid who validated our moving being on-prem set. JFrog's are is of investment considering or a cloud and daily with DevOps by hybrid and strategy environment cloud multi-cloud in offerings. already their security between tool and customers, our

Second, to security.

solution software security a scanning secure already Modern standard supply is Our and that to chain. a new need market. setting in the solution security enough understand holistic organizations the isn't

build cycle control flow. end-to-end automated our secure a full Third, distribute approach delivers to faster and easily allowing platform life fully binary companies in

management now chain. inside we selling Our also and supply the up, investments top Today and cross-sell modern be not partners funnel only but fulfilling our the our Sales I strategic direct growth continue In not will see. through is at a of in with packages see to XXX the JFrog are areas teams, key you sales down. expanded unified share investments, Fourth, QX, software is these we bottom also and will channels. how and enterprise-grade strategy. platform only we software that binaries our through or are are goal focus but to

binaries units. with quarter, are choice the managing binaries. They secure Increasingly, the contract cloud. of of massive history. digital deploy. as I'm and during grew There automate business to all known, semiconductor time company are now you towards hubs demonstrated, cloud organization is the platform entire the no trending promoting software to their largest what software a announce all JFrog our the customers your were in and way a are cloud undergoing run standardization is JFrog of and run across time third-party brought your pleased to that the build, transformation and transition single Artifactory, A completing customers into our automate adoption way we first from ever manufacturer As end-to-end strategic the JFrog's is industrial cloud. without and started into recorded and manage binaries to

migrate across and cloud. with will solutions While customers them this deal is strategy an to also they that it the hybrid is multi-cloud amazing serve long-held to as environment achievement our provide validates deployment

this global debt. distribution partnership software supply were the reminded its the a QX new $XXX,XXX strategic global a cloud, its enterprise team. standardize subscription with within of security. utilizing a DevOps of a automotive DevOps largest cloud the full normalize in to Artifactory incorporate to platform which processes tools cloud, in one source and example the ARR already to our to across We another software us quarter to for platform all Moving that American-based under constant chain In moved net customers the need JFrog sales JFrog the of customer security. as single is led reach software to of After manufacturers team in out As of subscription so manufacturing

continue expanding most vulnerabilities not to contextual but quickly. security QX, security for customers We to of functionality looking already types JFrog net Spring need security ones. capabilities mentioned that illustrate demonstrating new entire more LogXj our being powered customers Xray offering, and and came after of was replacing by team integrated it's led on coverage turned our both incident As leading to rapid on car groups manufacturers what it protect companies to one JFrog lives deal the teams of in couples the directly Xray dependencies around identification Artifactory automatic wall or the other incidents Vdoo undoubtedly the of discoveries team. to our the to and the by we to solution and could across holistic at detection and research generated platform assists feature. Artifactory This a and Regrettably The closely is software JFrog determine look an disregard the zero-day new $XXX,XXX product third-party industry secure the our Xray precisely analysis The JFrog with forward capabilities and software We them in February, than has and environment just its and leading Day the existing security XXXX. supply in solutions already leading to SecOps vulnerability research approach be dedicated irrelevant binary company. hours. and down from we testing, the security upsell we analysis They continues technologies. there affected power industry tools LogXj is market chain in customers' database of in security and team to combined new overstretched the already fixing, approximately were based few remediation security vulnerability finding, in critical QX. further To self-driving the address critical team automobile announcing to how that entire weeks domain. relevance impact more and making customers days Investor allows of also extend configured. and an weeks combining This vulnerability also protect the integrate Europe's distribution security a a turning, Xray Xray delivers, now JFrog heavy coming see develop also of these to value the JFrog more just an JFrog itself, trained Artifactory manufacturers and on an into industry. DevSecOps apparent with pipelines in-depth The outstanding only it in excited just quickly working have Shell new allowing The our are security and to made more to as gaps of JFrog unique technologies corner.

end-to-end approach. our to Let's move platform next

run JFrog's distributing distributed software pain across running developing distributed locations locations of must XX application. controls where key is on on a releasing Take country. version. require me differentiators building getting have organization has software, the those and it different regulations new one with software. software versions better consumed each is a the all in it locations different of each across to of One the process manage and environments. address this with Allow just which small not compliance intelligently world. focus time application globally single the This elaborate to XX a The company, organizations export to Each is to various that in but customers'

large more continues applications. as to and more platform. Unified choosing and of it with exponentially meet multiply grow thousands therefore that JFrog onboard Now the and enterprise take JFrog hundreds to challenges as part organizations these with a and distribution of customers manages JFrog

China deployment most around development exactly This company the challenges. globe, could meeting example and was with contract needs. and in the Chinese firewall, the meet of consumers with for faces win new is entire net a only these platform. used users This by JFrog driven daily large complications that vary a team quickly distribution XXX collaboration the For million around one environment its tools world's widely recognizing nearly JFrog

software companies. This device Upswift cloud the our data now at further doesn't vision. Software Liquid devices. acquisition Connect Connect aims even the to to are IoT anymore. connected devices is and delivery center developers becoming of companies our together entire across of or is part bring Going world why end JFrog JFrog Increasingly a of DevOps flow create the key of organizations to world the unified a from strategic

a In in having the updates, over-the-air a with was We JFrog Dart and developer technology popular Artifactory its innovate managing monitoring, we This offering using by support and where were of addition support platform technology to already is for devices expanded public we Google. happy core most product DevOps our of heart which are JFrog programming and Connect, our driven to seeing Artifactory, including we from XXXX the is emerging by XX, tons large to language flagship key universal and of our for approach. and of community the deliver. fleets depository At support recently pub request community demand top for the releasing remotely controlling more. additional customers our continue

continuing support We are committed to and JFrog welcome to Artifactory. by packages Dart software community to all developers the developer

focused growing a on funnel showing top-tier XXX strategic sales and our the across year, already regarding team year, motion indirect we investment. Finally, who doubling on on with our business Last down top-down sales accounts. management This are and our partners building are we results sales.

we on Ubisoft, between partnership to AWS rely the most game the choose of gaming and a JFrog way During create alliances the the team words increasing and set business. each them globe, tools, that already attractive see global Artifactory to DevOps market see the so cross-team strategic software just QX, quick games and JFrog some of while partners own will on AWS their types who tap the build access broader and easy relationship like within support on can of development respected of And as and for and resellers, into. the JFrog for ecosystem, as "we a key cloud as we possibilities collaboration, well-known initiatives. partnerships with growth expand. I across their In provide JFrog the security DevOps of the enables can video platforms AWS supports With for emphasis companies partnered their are we including opportunities beginning partner. market." These JFrog to we their quote, best a the

Speaking some of the of about to of recent our our customers during most platform impact trusted honored hear we were relationships, from JFrog's event.

be were of running. business. Fidelity, spoke showcased, but applications also excited how very Broadcom at their JFrog massive keep mission products tools, our a thousands such Fidelity XX,XXX cloud and the standard their to in thousands number and to and developers their customers' and fit. scale the per table part of a and for Technologies JFrog and X,XXX Our are as, of critical, if DevOps but for of approximately not We units JFrog of development having supporting at hybrid CA said, only the looked services multi-cloud other developers, hundreds of M&A to and about just case all use business a strategy, teams pieces to entire how of XX-plus about Vdoo day. standardization, continues the transition deployments you migrating supported integrations like, Xray Symantec have applications also ever hundreds not a extensive and periodic Artifactory, it's covering and supporting They activities see

us, We security the put trust to out are have they who and proud build customers, in journey. DevOps as

With our with and I our free solid Jacob? alongside we and year want cash I As in reiterate commitment XXXX. both will positive quarter call second our to Shulman, like now over year growth CFO, for business provide and in-depth who recap on flow turning have we're would outlook results you, past operate that, the the to turn as to in efficient to of this building continue an XXXX, to our financials, to and an quarterly Jacob full the beyond. update

Jacob Shulman

afternoon everyone. you, and Thank good Shlomi

Let me we quarter, momentum saw the XXXX. we started add of the pleased strong year half a very have to are to the Shlomi's with such comments in that continuing second

all a are release furnished to Form A to unless stated. my earnings be an remarks comparable the reminder, our on in on can GAAP non-GAAP numbers is As basis, website which reconciliation measures, otherwise referenced SEC. X-K a exhibit found and in as available the today's to

were a Self-managed months consecutive up million, and for We were our our $XX.X to in third quarterly million, on-prem March is turn growth $XX.X XX% increase. in had ended results. up year-over-year. let's revenues also often Total financial Now XX%. our cloud This growth, called rate strong strongest revenues million. the to quarter particularly revenue up six three XXXX XX, $XX.X quarters XX%

XXXX, As would of indicated of a reacceleration we second we growth and bottomed we reminder, has believe growth. quarter in a see cloud the

cloud cloud While to cloud variability that due solutions our see of by we to for our Net in you would commentary. is business to quarters increased are range like continued mid-XX% for is was security growth to usage-based in momentum upside from dollar with increased four customer We adoption pleased potential recognition. the rate the believe and with in usage. full the business retention platform, trailing we our business, the line remind revenue prior our baseline driven XXX% subject the

the XX, December ARR from from As up XXXX. of of customers end with customers customers XXX had XXX as the of XXXX we end, over quarter XX% up of of $XXX,XXX, XXX QX and at

million we XX% increasing customers to over by number grew from year-over-year. XX, of addition, one QX adding In the X ARR and

from customers. enterprise in the of full of customers, QX revenue in plus increasing is in discussed the our of platform adoption XXXX, total from of QX In factor the came XX% XXXX. XX% up size As past, key we a

year income wanted Before statement, moving to Enterprise+ regarding to the a of one our update ago, on-prem to pricing the provide subscriptions which all excluded some I reminder we made cloud on-prem as an the and subscription. changes, offerings

When announced with has renewals increasing the changes Since we took First revenues first instituting last customers have the that or advantage of year, historical customers recognized a in reflects would platform now almost the we April minimal, previously expect I'm FY to remained noted roughly million. half contribution customer to increase of churn the pricing delivered. change importance solution equal $XX last balance the and revenues by who XX% of it this of approximately the believe quarters. price on remaining JFrog's that would the at over consistent In year, the structure. X ago, reported off report see of price next we year trends. we four current saw roll adoption pricing our renewing happy We early XXXX quarter,

to provide to further opportunities to continue our we additional explore value monetize We the customers.

growth seen a the plus XX% we foreseeable the pricing even to increase. commitment Our have future intact benefit our on-prem excluding from for revenue remains

the let's quarter Gross $XX.X year-ago was income review representing gross million, margin in the profit Now period. compared to detail. a statement XX.X% XX.X% more of in in the

of margins to a XXXX improve We the we steps SaaS structure. took to see continue gross cost result our expand in our

gross million of XX% expect revenues $XX.X total as term million revenue. quarter for XX% a year the expenses and year or ago to over up greater revenues the the margins to first were XX% of become XX% in the balance or portion remain for long revenues, Operating moderating of low of cloud We the XXs the period. towards $XX.X from between

approximately diluted in on building the outstanding. X.X% diluted of or Non-GAAP margin a income the channels. Non-GAAP XXX.X $XXX,XXX, in $X.XX $XXX,XXX was in product million income year an raised margin strategic quarter ago shares invest million income our average period. weighted net operating operating operating to share, out partner was and $X.X per or QX and offerings continue operating We X.X% our for sales to compared

in flow quarter million flow sheet and $XXX December million We cash consideration ended After taking and XXXX. into short-term flow. investments was Cash operations the balance the million in quarter. $XXX to from Turning was as of $X with up from $X.X cash cash million. XX, free CapEx, the

labor Before quarter you the quarter around want no for the that There as quarter, is change the be increases model detail to second expectation of with to cadence market our year. merit the the profitability the we low last remind second to benchmarks. point to guidance, the the I provided we in implemented turn align financial beginning of will we for

expected is to the profitability Our year. improve the half second of in

between operating loss expect to non-GAAP we million $X.X and $XX non-GAAP a between to $X.X share of $XX QX, per For $X.XX, revenue $X.XX count with loss assuming million million share shares. be approximately XX to million to of

assuming full to year of to between we $X.XX be non-GAAP million. shares. and $X expected the operating share guidance positive negative $X share to our million the million revenue income XXXX, positive count $XXX.X are million $X.XX, between is and million approximately XXX range earnings a of $XXX.X increasing For of Non-GAAP to negative per breakeven

before turn let your some the back for questions. take call Shlomi Shlomi? Now, me closing we remarks

Shlomi Haim

to to has and we as processes Thank continues across on bear testament JFrog, strong and are in for addressing are a thanks forward quarterly execution to you, a your pains products, XXXX you. the the and leap to we market start employees, fruit. My team, These JFrog committed seen listening to and building success strong community this dedication the the always real Jacob. year. results throughout

our communities swampUP and and with the annual our We to finally conference. to visiting attend. Looking meet swampUP community the multiple kickoff happy developer user all global on of and invite are year, the customers, you road, we interacting security This customers. are to the forward again in-person cities, we partners for taking QX,

and your we'll you we be JFrog positioned your drive aim like thank growth XXXX customers Finally, to we deliver questions. with I'd take well to for now, further in shareholders. today, Operator? you. JFrog believe all attendance revenue users, JFrog may to for as is And

Operator

with [Operator Needham Instructions] Our first Cikos question comes Mike Company. from and

Mike Cikos

were far revenue to, that what and taking you if first went outperformance Hey, we're have for see a the what good for could come that results back guys? you I right drove guys here as in think Thanks acceleration report. guess, stronger able and you well did us these were as revenue to quarter question that I which anticipated as guys. question to -- help acceleration in the you revenue to seeing the talking hadn't today? Like about that came you the we maybe

Shlomi Haim

actually main we you into very We well joining call And observed for that adoption understand thank mainly holistic and our three that we for is reasons the question. episode thanks people this security. a, they the goal: Yes the solution and for there LogXj detailed, the Mike, security look after as a this the growth quarter. of in when probably need SaaS because cloud, the of services for the growing were

or security adoption just the is thing It's your platform. second end-to-end your anymore The of our demand. not covering repository

the need platform manage testing plus that You our cloud improvements to cycle life strategic is Those strategic partners way to the with end-to-end that our full the And an mainly for but our to all third growth the of more you are also in working customer deployment. adopting the three the the only the are the main in binary point partners. more within consistent DevOps and platform QX. investment customers reasons higher drove saw not team entry lending and portfolio

Mike Cikos

if could This Good beat. be revenue we're know operating year I would being outlook. more to outlining in. And talking as that I Thank for guys you the maintaining about the raise And full before QX what about see think. this the going quarter excess we're squeeze of the low profitability year QX full to is spoken point I where same more had be improves. know one you Jacob that. in the last profit for the I for that cadence

potential if be FX conjunction an that better the that you in you then, I movements sense terrific? the way a why are also up to with of I take not Just And some to full would in guess, that provide profitability? that guys year profit assumptions talk wanted you guys guide? have of, just curious, can that update get could the seeing in you any

Jacob Shulman

Yeah.

FX. potential So first the me address let

about As FX the we sufficient we Please that the negative very is quarter noted a trend hedged in note at previous points. input two in level. XXXX, for

So we overall result now XXXX shekel more the channels versus profitability in previously, better rates Israeli this we're as environment year well end seeing to impact actually alliances. noted, a generate for to of in as efficient us. continue in the our just also and we're this we're free of building us, will There year. regards to because improvements grow cash actually volatility that, very not does are opportunity very offerings market lot security front right And dollar hedged of to products be towards and continue a flow. people and and specifically in additional partnership Connect With

So year we to attractive areas we're that be a understand going the we lot continue please And very to of be of – ROI. with why levels. at that's the for investments have breakeven

Mike Cikos

now. I’ll Understood. in the for queue I of Understood. appreciate. Thank you you. really both very jump much

Operator

Brad next comes Stifel. from with Our Reback question

Brad Reback

Shlomi XX% sales much. could bunch efforts to marketing was this year on talked of these a top-down see customer customer cloud. there initiatives opportunity AWS growth up an the here to Is sales very or the Thanks count side last we lead Great. accelerate various that for and on year? especially you acceleration an about partners

Shlomi Haim

emphasizing Yes, this absolutely, and you for subject. thank

last the XX a it's to the months February prospects also team we market expose strategic completely And in in also bottom-up strong we New sales, strategic the new to totally – very from growth from our on the new as alliances and down now past to to are top-down. machine but ecosystem time JFrog a force as to time It's accelerate the sales solutions inside to our Investor the know, York. and prospects now other the and come we built working building guided customers. partnerships we shared not you that Day in As with just double

answer happen the directions. suspects is already my with will and in these are players cloud us. very closely working Obviously immediate yes. So It are major the guys different three

domain developing and the thing with companies in second the we all and system security. are professional relationship, The integrators DevOps that the service all that, are last on of

So see from should in customers yes new also ARR in growth not in coming just we China. but partners

Brad Reback

very Thanks much. Excellent.

Operator

Ittai comes Kidron question from Oppenheimer. next with Our

Ittai Kidron

guys growth using Do that you growth want great cloud you and or Thanks the first your for numbers. use the Would or you and cloud look the see the then their acceleration. customers with more talk when to specifically now, be maturity They're it or pervasively about how cloud at different? the you on how how to platform that. it platform? organizations? a Shlomi, start year own And using they I of of how they're here they're broadly is think it in it types and cases ago? used applications Can

Shlomi Haim

we that Things the is Yes. question. Hi, consistent well. but we ready and got Ittai actually two. and the the that the it. previous into thank quarter and that invested amazing, answer before cloud see did market grew was happened the what as in for you thing is growth the growth for we The quarter we split this And quarter see in second our and solution in the that to we drove the

have one. first repository a in is that in is single growing the no you to different will now not which that we end-to-end we also that market. just There now order everything what we on In a the cloud cloud business understand scale repository to our sustainable and start the dynamics distribution different the capabilities I'll the no a is to single vulnerable know the call actually in cloud. the gives with be So at market enterprise you the distribution in move customer solution that the portfolio for. just multi-cloud only platform to Alongside source cloud that -- can And not just your destinations the needs that repository. but run a but -- in of is subscription The allows we universal both also parallel. way, environment security organizational to that it's the you versus to a FastAF And the not enterprise cloud to are this solution according also cloud JFrog. the a that fact runs that migrate you in that solution, make and fact in then the holistic them providing obviously have you see your sure as of to class the a clouds, distribution hybrid

you prepared for than are now security The reminder. to a binaries. how strong a binaries. that world other sales the assets any JFrog second LogXj scanning solution thing Spring binary. lot hacker that is one what Shell of explodes. After months natively in the attack will organizations more is and vulnerable because well your of no have is We being now keep There is repository and is saying when XX LogXj in of your others its

I the that these CECL and the grows only when and of more the the that grow Shell other JFrog kind this not attention cloud the also and attention Spring of security headline the things take -- shouted think over. LogXj developers solution to but

Ittai Kidron

can Got and in and up as it. expansion. million in Clearly, question your And kind your customers Excellent. doing your on XXX,XXX maybe you extremely you're we Jacob I'm dollar $X see customers well for and before. to that then of upselling following Brad's customers

value getting the enough just isn't to in price is will pure a versus investors great? growing to a made to trying plus again growth base and you're the customers how contribution lot more customer pie you down that that there's and versus of are road? up of customers. concern -- the to the your So just way of new be a much was about like there's this the resonating I shift way field for you you're here that I kind end-to-end question if here price? call leverage think think kind you've is getting volume been orange, with calls But mean, your they're your growth that it your the for squeezing us from count. upgrading. think thought growth clearly the existing it you can from a selling I've of the investors is there a I adjustments If Is motion much just how to driven right you of about by

Jacob Shulman

to If contribution pricing aspects talking that. -- few Ittai increases. again of think pricing we're I are for there increases a and

$XX my million. in remarks prepared noted about I of up As

So past recognized from increases. which with came $X.X revenue the million price means XX was months the associated in

regards versus remained $XX,XXX. with existing that to lens customers to Now, we ones, continue of approximately new average contribution see

was to customers -- of our rather growth existing revenue contribution than So, the from land our new. expansion historically,

customers year. continue -- as of expanded expanded about land XX% in We new this noted, to and customer Shlomi more year. count we we we last added And new

So, from and expansion the expand customers forward, primarily come existing about. is will because growth going land of is model our what this

Shlomi Haim

Ittai to this the changes And enterprise may I and the public the add solution remind done only price mainly if ForEx. that on we've self-hosted to and

price So, the platform super you subscriptions and not fast-growing cloud the the see to changes. subject were growing

pure is and gold within customers this our So, customers. new

Ittai Kidron

year than Jacob your maybe Yes, about When standpoint. think different guys. it the the Is a standpoint from lending ago? just plans. today you a wrap any lands landing changed you they was different to start talked that dollar about a But hasn't product do from

Jacob Shulman

even customers We see sometime landing enterprise Enterprise+. all, Thailand in first of and the even or of on some

On more smaller the on many which is land. land other customers a cloud hand

ASPs about on are customers prior remain relatively average new -- periods. unchanged therefore So, there from

Ittai Kidron

Thank it, Got stuff. Good excellent. you.

Operator

Our next question Sanjit Singh with Stanley. Morgan comes from

Sanjit Singh

can has wondering with taking out on if security on the Upswift. you Thank questions. with customers. I the your progress for know JFrog the Shlomi you been integration update Connect there

terms end-to-end of you've feedback the your deals -- the sure customers? some with in new if we seen deals where driving highlight broader early we're but of early I'm are integration of expansion What's or the Upswift security that from just progress you phase? been that positioning. that like terms customers, in new with In in could

Shlomi Haim

start Sanjit. inorganic of of we investment the JFrog. additions a that harvest part the hi to to fruits the Yes, Obviously,

we security, are serve now are especially a side. better regarding is two Specifically, start that but elements more us to very the x-ray side, well-trained security what customers. existing Artifactory to And building and strong and also that see the Stage x-ray that a is great from from world happening X our addition more not we here have see important there mention. SecOps, in to of at team A coming a with demand customers to we that's to

the The team. security investment is second research the side security of

that now reveal And a other is technology find the more zero is also covered, and as more is to strong script the before trained processes, better well vulnerability the x-ray than it. team the features a they in find remediation during anyone and actually vulnerabilities and to JFrog a research company this not are team and more in very JFrog knows Now, that days the security a faster that only gives them about domain. the platform world x-ray customers in mentioned covers any scanning but else database into for everything protected the zero-day and because injected

now way the the became and saying question. mainstream. software be binary with of will an will also that the Few good start said, acquisition out mark market your to demand Upswift, my to And developers integrate at fast JFrog just all supply all now customers DevOps secured it see production why Regarding their have the we our way ago heart is just relies deployment of pain JFrog and of years the partners we in us now. repository by What responsibility also Upswift on our the get that composition the JFrog see made Artifactory future device. interest the Connect. binaries result a solution even and security that the binary very this we standard. as we are is security order of This impact and having happening to some after to A will our biggest need to be announcing words, a Connect in to long market demand in the from at chain. I'm on Connect, and the devices. analysis the take that and the already And we represents the future and start the binary the reaching said to not taking

the fruit will for security our low-hanging goal. that So be reason Connect next I is guess and a JFrog

Sanjit Singh

with not the then we've see color that in all for that customers revisit of And may Europe, question so have. sort the the the of you your what season. out vertical there, you been much you earnings any Thank customers, with market Shlomi. From Understood. popular lens or Jacob, I asking your in of there far, international seen may wanted changed changed macro guidance of cycles guidance very relative terms sort of concentration to only the rates, on closure you to you've quarter, describe assumptions how coming then is are -- your sort but the to out Could -- your last cetera? what environment or of for deal the et what not not thus sales deal that the the And respect quarter in assumption quarter? sizes,

Jacob Shulman

Yeah.

very depend So Sanjit. any various We're first customer. or of industry A represented on all your in to the very diversified we'll not first particular of question, well portfolio part any industries.

So the key. the is diversification

the are we've and there they to we macro changes methodology, side, in and yes On prudent obviously continue be second market. it's cautious. presented what today the change we guide not us our did obviously But today,

the So today with potential upsides future. in

methodology we're So have changed don't we consistent in anything. and -- our not we

Sanjit Singh

it. Got Jacob. Understood. Thank you,

Operator

of Ikeda Koji Bank Our with next from America. comes question

Koji Ikeda

my taking for question. Thanks guys. Hey,

for Just me. one

is the of business, metrics the like good. at looking So pretty seems everything sure it

a affected I adoption cloud Just bit mean off looks in understand model a I tough a there. based maybe about But pricing on definitely the little too. by X%, comp. on our billings. there's here question the

aware metric thinking is should just we than about or the So the to there something here? the looking we guess maybe Thanks this I there in adoption we other at How be be billings from cloud else billings pricing is that out really looking guys. we or anything at forward, anymore? be of? should going that call a should should that be even Is

Jacob Shulman

Thanks, you the front a last the been context, year that on We've for huge had advance very billings we time change metric question. that. that of the representative provide Koji not of in the is price more I'll the became address saying April a long pull-forward quite in all-in for was that effective billing here. To X.

we So significant it of $XX we renewals to that's about the be saw into pull-ins quantified why million. and QX

who during year. renew customers to continue will So those unless renewed the back they then term

So will QX. continue in renew to they

billings some contracts the on headwinds also cloud two of So typically last just that's in significant monthly tough you contracts. and billings year pay-as-you-go the represents growth probably and why because have kind cloud Annual saw X% the the of to in arrangements. of comparables. Adoption contracts into pull-ins we types agile because

a billing of customer to a will because if the business. So on-prem the Other than again stays to shorter-term be metric transitions annual that, of representative contracts. headwind billings very in not duration or that cloud really multiyear our nature

Koji Ikeda

it. Really, question appreciate guys. Thanks, Jacob. my taking for really Thanks

Operator

Our Ader next Jason Blair. William question from with comes

Jason Ader

guys. thank Yeah, you. Hey,

of GitHub, Any on are you any Can how time we and First into particular, about changes to question give the last platforms update in GitLab on Shlomi. of I maybe commentary landscape? end-to-end thinking an competitive in your you guess us particular, move for kind the since territory talked, Artifactory? trying customers

Shlomi Haim

So, nothing in the landscape.

we seeing, put you replacing kind from of As Still the changes homegrown model. of we solutions. in is the it big coming remember, a have four-tier majority

it of the cloud. Some to migrated is

mature now it we of DevOps adopting self-hosted. companies SecOps call are But what Some still being is and solution.

is full binary use solution management. organization and management not and is Regarding that start development code there that the source will GitHub or scale There the source our mentioned, source two coexists managing you code without GitLab, will cycle. that no the with specifically, or organization no life code

Regarding none that Artifactory rock are to keep migrating that these what map, the solid do people doing. they is we hearing the are of solutions. are in pre-sales, hearing But I to road planning scalable. we still are

market set think I managing of the standard the binaries. in

two years years when game together a hybrid including especially, platform changer, the security at more look the -- holistic you at today. the provide think is and you solution, solution, ahead everything protecting three including the four including remediation. play. take far platform binaries including your a at cannot line and bottom if that is you mature Our years This advanced and level based both in distribution, the And deployment,

nice it's not a just repository. scanner your putting over So,

that You have last is And together platform. is the actually our your DevOps obviously we some -- to the side-by-side. cloud of think what overlaps. see partnership cloud stronger walk competition. There And are than our about with we XXX is the the

solution enterprise, the features a them we And at customers and killer amount what killer. the trust multi-cloud they makes that smaller maturity to choose is the the and sense business the is the of of aware of product are and to the holistic We that. provide a our we

more competing. more So, and will security competition rather is I think DevOps big a this we very than coexisting that in that see market like what and

Jason Ader

did Jacob, And might RPO? have disclose Great. missed it. then I you

Shlomi Haim

we No. million $XXX on disclosed in RPOs. of end Q disclosed the in got in of approximately -- filings Deposit as costs, we our obviously but QX quarterly basis

Jason Ader

us be kind from reason The proxy of metric. JFrog? with a don't Is companies of I'm at we Yeah. away that for case the to growth but use a because steer looking billings indicator leading as bookings a Should RPO kind as we trying software -- kind and leading you're RPO asking is some of indicator?

Jacob Shulman

the view of a as shorter agreement, Our about but is be adoption duration won't more will with better so than again indicator cloud, we of there headwinds see well. still billings,

Jason Ader

thought you and Got any you that? the is guys depressed. you. And have stock then, amount just given any that thought on buybacks Have cash decent of a to given somewhat

Jacob Shulman

to a better market opportunity see of share shareholders. lot in obviously and we'll We what of invest is in our in front the us

Jason Ader

you. Thank right. All Good guys. luck,

Jacob Shulman

you. Thank

Operator

comes Our KeyBanc. with Turits Michael from question next

Michael Turits

hold as slowing Are alternatives package? everyone just well Jacob they come there and seeing you question. or macro tougher environment to to in of their seem more the in to situation dedicated selective? on a have Are And you development since those? hesitancy, let's backlog you're off any DIY? of, self-built be also the in-house seeing, as Is a Sanjit's increased And have both to in I inflationary SMBs in to their do to and any they -- moving some reaction ask just terms wanted terms enterprises what it will back projects. Hi. I -- call of

Shlomi Haim

It's very And not the question of to Kubernetes. anymore. when market. The Yes. I some I good it not enterprise, enterprise, a adopt heard happen. to all will happen, adopting way and DevOps, SMB assets I versus distinguish a the cloud add, hope question just question. that having it may in will understand deal even if the is

is JFrog the we enterprise that and native, goes to full that in they is enterprise. What products demand. like see, end-to-end we rely confidence the mainly, why cloud together can the enterprise mature they the from security So DevOps This hear get answer and have to that the manage, have number scale I deploy host, is because containers secure by two Broadcom, they just extend, scale mentioned. Investor the broker to enterprise images registries and that the our Day, a these mentioned In JFrog, that of million and with of them on and and day. Fidelity platform

need that's world that. not engineering start to for to On the a LogXj they what that when LogXj, more episode happened there, remediate and with And they combine them small security. single-point help SMB, we only also security over looking to medium business, more to And see parts. start therefore, DevOps, take and to needed from is like not the developer just and tools solution remediate responsibility an also of the but the secure hostile but

can. enterprise we the integrated so just there end-to-end more more single growth the than demand although, more in with is as So SMB, that also together. product see In that for is they as fast is the a solution, the

Did SMB regarding versus I is that's question? the part the there other So of -- enterprise.

Michael Turits

slowdown seeing you Just not were macro, any projects. development the or in whether in current

Shlomi Haim

full responsibilities is The supply What for to is see, No, developers throughout This more opposite. developers. over of the the we number It's no. Actually developers by just XX% that year-over-year. there software demand of not is growing number chain. nice. take is this more

the solution, standup. also not see in mechanism. complete supply solutions to the what by other also just and now observability chain the software So And a way that but as the growing movement, a JFrog demand full for And solution market. be is we started honest

So no. is, answer my

we think stop the your contrary, a next the see the edge. be On that to demand. I will growing software taking And

Michael Turits

Shlomi. Thank you,

Operator

Our comes Owens Piper Sandler. with Rob question next from

Rob Owens

my for Good question. taking Thanks afternoon.

this the seeing or types channel call, velocity-related comes Hartman, the now? a Kelly we you of the this but expect You much of opportunities, should Thanks. relative more as Head I And longer your elaborate revenue you drive touched channel? to what role, on the Channels it could of earlier you're new Is term? is little of more how to currently look your to appointment of in the at larger bit to hoping opportunities drive strategic on from strategy, was

Jacob Shulman

address part the and I'll give So first Shlomi, Difficulty] strategy. can [Technical more some then

our of minimal growing approximately entire fast, our Revenues from smaller of us, business. coming today to revenue. channel actually bulk still very dire the XX% overall channel very, for very overall a to is So, but XX% that's marketplaces, about It's they relatively very business. portion fast-growing

have integrators. who act value-added agents systems We also resellers than procurement or more rather a resellers some as

in a us So really this greenfield to expand it's this program go-to-market. for

organizations partner with with be before all under world will as step partners project. This it's this with for senior IAS the on-prem. our cloud, else and cloud the the and hired big GCP everything moved And get mechanism Regarding into not highly very top the environment, all. regions it the our strong next is a split in five government in activity and is We partners in logical leader with we the strategy, us or the that channels AWS different partnership because and CRO just work built regulated of we be very between organization Azure. to mature, with I to in and more but a that and a manage while savvy mentioned the didn't places work very as

big not full the company, inbound -- out customers domains. and see see to us most also these now still in we paving out feel to that partners thing collaboration we coming we those more change what are because a exploring these order and market also are that them integrator we work different customers to not geographies send are in the reach are want to that in way, of with with And us see from market. reaching the The on with with JFrog. professional and that is for working is expect sorry different now way the big We partners that system the to just also service currently the endless are

Rob Owens

right. All Thank you.

Operator

back closing further Haim to like to time. We're showing turn in I'd no remarks. for Ben Shlomi queue the questions call this at

Shlomi Haim

thank strategy you much. In resources, on today. very not but and successful Thank capital be wise a way. will may us today's all focused with joining the to you its like company paving you. all the also to would I way important market, that the and the only for it's in the very a be allocate very XXXX, of Frog is JFrog Guys,

Operator

conference This for today's concludes call. Thank participating. you

disconnect. You now may

JFrog (FROG) 10 May 222022 Q1 Earnings call transcript