JFrog Q1 2025 Earnings Report

JFrog EPS Results

• Actual EPS: $0.20
• Consensus EPS: $0.16
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: $0.16

JFrog Revenue Results

• Actual Revenue: $122.41 million
• Expected Revenue: $117.44 million
• Beat/Miss: Beat by +$4.97 million
• YoY Revenue Growth: +22.00%

JFrog Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 5:00PM ET

JFrog (NASDAQ:FROG) provides end-to-end hybrid software supply chain platform in the United States, Israel, India, and internationally. The company offers JFrog Artifactory, a package repository that allows teams and organizations to store, update, and manage their software packages; JFrog Curation that functions as a guardian outside the software development pipeline, controlling the admission of packages into an organization, primarily from open source or public repositories; JFrog Xray, which scans JFrog Artifactory to secure all software packages; JFrog Advanced Security, an optional add-on for select JFrog subscriptions; and JFrog Distribution that provides software package distribution. It also provides JFrog Artifactory Edge that utilizes and leverages metadata from JFrog Artifactory to facilitate the transfer of the incremental changes in software packages from their previous versions; JFrog Mission Control, a platform control panel that provides a view of moving pieces of an organization's software supply chain workflow; JFrog Insight, a DevOps intelligence tool; JFrog Connect, a device management solution that allows companies to manage software updates and monitor performance in IoT device fleets; and JFrog Pipelines, a continuous integration and delivery tool for automating and orchestrating the movement of software packages. In addition, the company provides JFrog Pro that provides access to the universal version of JFrog Artifactory and ongoing updates, upgrades, and bug fixes; JFrog Pro X, a self-hosted-only subscription; JFrog Enterprise X, which offers cluster configuration, federated repositories, multi-region replication, larger enterprise-scale deployments, service-level agreement support, and deeper security; and JFrog Enterprise Plus, a full platform subscription option. It serves technology, financial services, retail, healthcare, and telecommunications organizations. JFrog Ltd. was incorporated in 2008 and is headquartered in Sunnyvale, California.

JFrog Q1 2025 Earnings Call Transcript

Key Takeaways

• Q1 results: Total revenue was $122.4 M (up 22% YoY) with a 17.4% operating margin, cloud revenue of $52.6 M (up 42% YoY), and free cash flow of $28.1 M (23% margin).
• Cloud consumption outperformance: Customer usage exceeded contractual minimums across geographies, though JFrog remains cautious about longer sales cycles and does not view this over‐usage as a sustained trend.
• MLOps innovation: Launched JFrog ML to unify DevOps, DevSecOps and MLOps, partnered with Hugging Face to secure 1.5 M open-source ML models, and added malicious model detection capabilities.
• Enterprise traction: Customers spending over $1 M grew 35% YoY to 54, Enterprise Plus subscriptions now represent 55% of revenue (up 37% YoY), and net dollar retention stands at 116%.
• Cautious guidance: Q2 revenue is expected to be $121.5 M–$123.5 M (~19% YoY growth) and full-year revenue is guided to $500 M–$505 M with cloud growth of 31%–33%, reflecting macroeconomic uncertainty.

Presentation

[Operator]

Ladies and gentlemen, thank you for joining us, and welcome to JFrog's First Quarter twenty twenty five Financial Results Conference Call. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Jeffrey Schreiner, VP, Investor Relations. Jeffrey, please go ahead.

[Jeffrey Schreiner, VP-IR at JFrog]

Thank you, Nicole. Good afternoon, and thank you for joining us as we review JFrog's first quarter twenty twenty five financial results, which were announced following market close today via press release. Leading the call today will be JFrog's CEO and Co Founder, Shlomi Benhan and Ed Grabshai, JFrog's CFO. During this call, we may make statements related to our business that are forward looking under federal securities laws and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance and including our outlook for Q2 and the full year of 2025. The words anticipate, believe, continue, estimate, expect, intend, will and similar expressions are intended to identify forward looking statements or similar indications of future expectations.

[Jeffrey Schreiner, VP-IR at JFrog]

You are cautioned not to place undue reliance on these forward looking statements, which reflect our views only as of today and not as of any subsequent date. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our Form 10 ks for the year ended 12/31/2024, which is available on the Investor Relations section of our website and the earnings press release issued earlier today. Additional information will be made available in our Form 10 Q for the quarter ended 03/31/2025, and other filings and reports that we may file from time to time with the SEC.

[Jeffrey Schreiner, VP-IR at JFrog]

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

[Jeffrey Schreiner, VP-IR at JFrog]

Shlomi?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Thank you, Jeff. Good afternoon, and thank you for joining the call. We're kicking off 2025 on a strong note. Our first quarter results underscore JFrog's essential role as a system of record for software delivery from creation to production for customers prioritizing automation, scale, speed and trust. The JFOR platform plays a pivotal role at the intersection of development, security, AI and ML Ops.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

And today, we're excited to share more details about quarterly performance driven by the solid execution of our strategic initiatives. In Q1, J. Fox total revenue was $122,400,000 up 22% year over year. Our operating margin of 17.4% demonstrates our commitment to profitable growth during a period of market uncertainty. Cloud revenue for Q1 equaled $52,600,000 representing 42 year over year growth, driven by increased consumption in addition to steady customer commitment.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Our greater than $1,000,000 customers grew to 54 compared to 40 in the year ago period, equaling 35% growth year over year. Customers spending more than $100,000 annually grew to ten fifty one compared to nine eleven in the year ago period, equaling 15% growth year over year. Our strategic enterprise sales motion fueled by JFrog's software supply chain platform drove both growth and high enterprise customer retention, resulting in stabilizing net dollar retention, which Ed will further discuss later today. Now allow me to address the core drivers behind our Q1 achievements. First, cloud growth.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

In Q1, we saw an overachievement in the cloud driven by increased customer usage beyond contractual commitments, primarily fueled by developer activity. However, purchasing and budget constraints across our portfolio persist, resulting in longer sales cycles and delayed decisions to convert into commitment at higher usage deals. Given continued macroeconomic uncertainty, we remain cautious and do not yet view this overage as a sustained trend. We have strategically invested in our multi cloud and hybrid solutions, establishing them as a market standard and work closely with our self hosted customers to migrate to JFrog SaaS offering. We remain committed to capturing Q1's momentum across all call area, DevOps, security and MLOps.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Next to AI and machine learning. Jayprog is the only platform that unifies DevOps, DevSecOps and MLOps in a single solution. In Q1, we were proud to announce that all cloud enterprise customers now have access to JPOG ML, giving thousands of companies machine learning and model management technologies as part of their software supply chain solution. With the upcoming release of JPOG ML for hybrid customers, the JPOG platform is further solidifying its position as the system of record, not only for software packages, but also for AI models and artifacts. We believe we are leading the market with our natural model as a package approach, giving customers the three sixty degree ability to manage the secure development of traditional software applications as well as testing, training, experimenting, hosting, securing and deploying machine learning models in a single solution.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Driven by our security research and product teams, we also recently expanded our platform capabilities to include detection of malicious ML models with unmatched accuracy as validated by the community. Attacks on the ML supply chain are growing more frequent, requiring a new set of tools to protect all companies from threats that utilize malicious ML models as a Trojan horse into company's AI development processes. This critical capability in security for ML or MMSecOps allows us to provide holistic security tooling across all package types, including AI artifacts in one platform. Recognizing this reality, Hugging Face, the world's largest open source AI and machine learning model hub, approached JFrog to help secure their entire repo of 1,500,000 open source ML models. Millions of global developers look to Hugging Face as their ML model hub, and Hugging Face is looking to JFrog to help fortify the community against malicious models.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

The CTO of Hugging Face, Julian Chowmond, said, We are delighted to deepen our partnership with JFrog to implement high quality scanning capabilities for our AI and ML models and deliver greater peace of mind for developers looking to create the next generation of AI powered applications. As part of our focus on security for the community, we were also proud to recently release our annual software supply chain state of the union report, driven by customers' data, global surveys and our security research team's unique findings. For example, the report shows that there were over 40,000 new CVEs published in 2024. However, our security research team revealed only a very small amount of these vulnerabilities were exploitable, highlighting the value of research backed tools that help DevSecOps teams prioritize tasks. The report also revealed more than 25,000 secondrets, such as login information or API keys were unintentionally revealed publicly, highlighting the need for secret detection as part of a consolidated software supply chain management and security approach.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

A great example in Q1 of security tool consolidation alongside DevSecOps policy enforcement comes from WalkMe, an SAP company which provides a leading digital adoption platform that helps organizations streamline user experiences. WalkMe serves over 1,600 customers, including approximately 30% of the Fortune 500 with more than 35,000,000 users across 42 countries. Using JFrog Artifactory as their binary repository, WalkMe made a decision in 2024 to migrate from various point solutions to JFrog Event Security and JFrog Eurasia. This migration delivered significant efficiency gains, unified our software supply chain security under a single platform and enabled policy enforcements to curate and secure all externally sourced packages. Rene Deaca, CEO of WalkMe shared, moving to JFrog not only improved our security posture across the software supply chain, but also allowed us to optimize our vendor landscape and consolidate around one system of record for DevSecOps.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

JPEG is looking forward to helping many organizations like WalkMe regain control and trust over the software supply chain as we continue to see trends in consolidation of tooling and a move towards a holistic platform based approach for DevSecOps. As an important part of our commitment to developers and development teams, I'm also excited to provide an update on our partnership with GitHub. In Q1, JFrog was on the road, meeting with top customers across North America and Europe, sharing our 2025 roadmap and strategic direction. The powerful partnership between GitHub and JFrog unifies processes across our best of breed platforms. With both solutions already standardized in many customers' development teams, we are jointly dedicated to providing a single platform experience for users.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

We were proud to have Ditub CEO, Thomas Donke, join JFrog for our annual LEAP events in New York and Frankfurt. As part of a fireside chat alongside customers, he noted, GitHub and JFrog are parts of the same systems. GitHub is the single source of tools for source code and JFrog is the binary side of that workflow. We are bringing the best of breed systems together to enable customers' experiences. We are committed to building more strategic partnerships and integrations to deliver the too integrated to fail experience across our customer software supply chain, whether developing software, implementing AI and ML practices or securing the flow end to end.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Before I hand it over to Ed, I'm proud to share that the outcomes highlighted today have positioned JFrog as the backbone not only for the majority of Fortune 100 companies, but also for some of the most cutting edge new innovators. In Q1, we won a sizable enterprise class deal with one of the world's most recognizable AI technology leaders, who are actively shaping the future of general artificial intelligence, Recognizing JFrog's unique hybrid capabilities, enabling fast developer velocity alongside enterprise grade security, they selected JFrog as the system of record for software development and management. While the broad market remains challenging and the adoption of new technology faces growing pains and regulatory hurdles, we are energized by the strong business and technology accomplishments of Q1. We entered Q2 with excitement about the opportunities ahead both across the industry and within our roadmap. With that, I will turn the call over to our CFO, Ed Grebscheid with an in-depth recap of Q1 financial results and our updated outlook for Q2 and the full fiscal year of 2025.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Ed?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Thank you, Shlomi, and good afternoon, everyone. During the first quarter of twenty twenty five, total revenues were $122,400,000 up 22% year over year. Our strong revenue results demonstrate continued execution of our go to market strategy with strength in our cloud revenues, growth in our Enterprise Plus subscription and ongoing demand for our security core products. First quarter cloud revenues grew to $52,600,000 up 42 percent year over year and represented 43% of total revenues versus 37% in the prior year. Our growth in the cloud was primarily driven by data consumption across our customer portfolio, which exceeded contractual minimum commitments.

[Ed Grabscheid, Chief Financial Officer at JFrog]

We believe this highlights the mission critical nature of JFrog to our customers, and we strategically work towards converting this usage into annual commitments while continuing to navigate a rigid purchasing environment. During the first quarter, our self managed or on prem revenues were $69,800,000 up 10% year over year. As a result of our cloud first approach, we continue to observe our on prem customers shift their investments in favor of capturing even greater value coming from our cloud solutions. In Q1, '50 '5 percent of total revenues came from Enterprise Plus subscriptions, up from 49% in the prior year. Driven by the ongoing execution of our enterprise go to market strategy and broader customer adoption of the JFrog platform, revenue contribution from Enterprise Plus subscriptions grew 37% year over year.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Net dollar retention for the four trailing quarters was 116%. We continue to demonstrate that our customers view JFrog solutions as mission critical to their software supply chain with gross retention that equaled 97% as of the first quarter twenty twenty five. Now I'll review the income statement in more detail. Gross profit in the quarter was $101,000,000 representing a gross margin of 82.5%, in line with our guidance compared to 85.1% in the year ago period. The change in gross margin relative to the year ago period was primarily driven by the increased mix of our cloud revenues.

[Ed Grabscheid, Chief Financial Officer at JFrog]

We expect annual gross margins to remain between 82.583.5% in the near future due to continued focus on cost optimization with cloud service providers. Operating expenses in the first quarter were $79,700,000 up 5% sequentially, equaling 65% of revenues. This compares to $71,300,000 or 71% of revenues in the year ago period. The balance between strategic investments and operational efficiency demonstrates our commitment to profitable growth. Our operating profit in Q1 increased to 21,400,000 or an operating margin of 17.4% compared to $14,100,000 or 14% operating margin in the first quarter of twenty twenty four.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Cash flow from operations equaled $28,800,000 in the first quarter. After taking into consideration CapEx requirements, our free cash flow reached $28,100,000 or 23% margin compared to $16,600,000 or 17% in the year ago period. Now turning to the balance sheet. We ended the first quarter of twenty twenty five with $563,500,000 in cash and short term investments compared to $522,000,000 at the end of twenty twenty four. As of 03/31/2025, our RPO totaled $424,200,000 a 62% increase year over year, benefiting from customers' multiyear commitments to the JFrog platform.

[Ed Grabscheid, Chief Financial Officer at JFrog]

And now let's turn to our outlook and guidance for Q2 and the full year 2025. While we see pipeline opportunities continuing to build, the full year guidance does not capture the complete outperformance we achieved in Q1 due to the volatile macroeconomic environment, which has grown more uncertain relative to the beginning of the fiscal year. We believe it is prudent to exercise caution in our forward outlook due to the current economic backdrop. Our updated guidance range suggests growing contributions from the JFrog security core, broader adoption of the full JFrog platform and migration activity consistent with 2024. We continue to derisk our outlook by excluding our largest opportunities given the uncertainty regarding the timing of customer deployments.

[Ed Grabscheid, Chief Financial Officer at JFrog]

We estimate full year 2025 baseline cloud growth to now be in the range of 31% to 33%. Cloud revenue guidance continues to exclude any contribution from usage above our annual customers' minimum commitments. We continue to expect our net dollar retention rate to stabilize in the mid teens. For Q2, we expect revenues to be in the range of $121,500,000 and $123,500,000 equaling 19% year over year growth at the midpoint, with non GAAP operating profit anticipated to be between $17,000,000 and $18,000,000 and non GAAP earnings per diluted share of $0.15 to $0.17 assuming a share count of approximately 120,000,000 shares. For the full year of 2025, we anticipate a revenue range of $500,000,000 to $5.00 $5,000,000 Non GAAP operating income is expected to be between $74,000,000 and $77,000,000 and non GAAP diluted earnings per share of $0.68 to $0.70 assuming a share count of approximately 120,000,000 shares.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Now I'll turn the call back to Shlomi for some closing remarks before we take your questions.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Thank you, Ed. Our strong Q1 results were a reflection of the successful execution of our strategy across all three calls. Before we take your questions, let me quickly recap a few key highlights from Q1. We launched the world's first platform to unify DevOps, DevSecOps and MLOps with the release of JFrogML. We announced the partnership with Hugging Face to help secure millions of open source machine learning models and fortify the AI community.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

We also armed the community with our annual software supply chain state of the union report, eliminating the status of the enterprise software supply chain. We hit the road and welcomed our partners at GitHub as we met with top customers around the world, all while efficiently growing the business and exceeding our guidance. The JFOG team delivered amazing results. To my team, I'm proud of your efforts and grateful to stand beside you as we drive Jayfork forward. These successes belong to you.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Now while we are energized by these accomplishments, we also recently recognized Memorial Day and Independence Day holidays in Israel. We were quickly reminded of the many sacrifices that freedom requires. It is hard to truly celebrate when we know that 59 of our brothers and sisters, including American and European citizens are still held captive in Gaza. We continue to hope and pray for a safe journey home and for peaceful days ahead. With that, thank you for joining our call and may the front be with you.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Operator, we're now open to take questions.

[Operator]

Your first question comes from the line of Pindulim Bora with JPMorgan. Your line is open. Please go ahead.

[Pinjalim Bora, Executive Director, Equity Research at JP Morgan]

Great. Thanks for taking the questions and congrats on a very solid quarter. I just want to go back to some of your comments on the cloud numbers. Just want to make sure I understand this correctly. Was the consumption above commitment?

[Pinjalim Bora, Executive Director, Equity Research at JP Morgan]

And was that broad based across your customer base or was that a narrow set of customers? And what have you seen in terms of consumption so far in April? And lastly, when you're talking about the longer sales cycles and delayed decisions, is that something incremental that you have seen in Q1? Or are you saying kind of that's been the environment so far in the last several quarters?

[Ed Grabscheid, Chief Financial Officer at JFrog]

First of all, thank you for your question. It was a really strong quarter. And as I mentioned, it was driven by data consumption. This was across a broad set of our customers, not only from a customer in terms of industry, but also from the geo perspective. Now regarding your question on in quarter, we don't comment on the in quarter.

[Ed Grabscheid, Chief Financial Officer at JFrog]

So you'll have to wait until the public call in which we do scheduled normal call in Q2. And then regarding the third question, which Life cycle. The life cycle on the third question, this is consistent with what we saw previously. It hasn't been an increase in terms of the sales cycle. This is what we stepped into 2025.

[Pinjalim Bora, Executive Director, Equity Research at JP Morgan]

Understood. And and, Shobhi, I I think you talked about a a q one deal, most recognizable AI technology leader. I want to just understand may maybe help us understand a little bit more on that particular deal. Are we talking about a LLM provider? What kind of a competitive dynamics did you see in the deal?

[Pinjalim Bora, Executive Director, Equity Research at JP Morgan]

Why did they be make that choice? And are there is that basically end to end from audit factory to advanced security to everything?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Hi, Benjamin. Wow, this is an amazing deal that we won, a new logo, a company that we all know. And the first use case that they are now committed to is having JFrog platform as their system of record for all models and to provide services and agent services to their customers. Next, they will consider, according to their roadmap, JFOC security to secure the model before they leave their data centers. And last, they will also look at the ML models solution that we provide with the platform.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

So this is just the first quarter we won it in Q1. We are very excited about it, but the potential is amazing. And this logo demonstrate exactly what we built the platform to.

[Pinjalim Bora, Executive Director, Equity Research at JP Morgan]

Understood. Thank you so much.

[Operator]

Your next question comes from the line of Mike Sikos with Needham. Line is open. Please go ahead.

[Matthew Calitri, Equity Research Associate at Needham & Company]

Hey, team. This is Matt Coetzee on for Mike Sikos over at Needham. Thanks for taking our questions. I was wondering if you can give a little more color on how you thought through guidance construction. Have you seen any macro impact so far?

[Matthew Calitri, Equity Research Associate at Needham & Company]

And how exactly did you further derisk the guidance on top of the more cautious approach you took entering the year? Was it more pipeline scrubbing or a broad cut? Any thoughts there would be great.

[Ed Grabscheid, Chief Financial Officer at JFrog]

I'll go ahead and start, then Shlomi can fill in. So first off, we had a very strong quarter, as I mentioned, during Q1, and we did not carry forward the full benefit of that overperformance into the full year. Why didn't we do that? It's not necessarily based on something we saw at JFrog. It's the fact that we see uncertainty in the market, and we are being more cautious and adding prudence into the outlook based on this uncertainty in the markets.

[Ed Grabscheid, Chief Financial Officer at JFrog]

So there's no change in our philosophy. As you recall, we went into the full year with conservative guidance. We've derisked our pipeline of the largest deals. And in addition to that, we're adding more caution based on the outlook and uncertain macro environments. In terms of the second half, again, we exclude our largest, more complex deals.

[Ed Grabscheid, Chief Financial Officer at JFrog]

And on a year over year comparison, if you remember, three of the largest deals were closed in the second half of twenty twenty four. Therefore, there may be some possible upside, but it's still too soon. We want to get through Q2 and then we can reevaluate where the markets are and provide updated guidance after Q2.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes, Mike, not a lot of dread, but I would just tell you that everything that we wanted to see in Q1 happened from the deliveries, the overachievements and the pipeline building. But it's just the first quarter, as Ed mentioned, and we need to be cautious with how we guide you guys. So we're very happy about it and also happy to update the guidance according to our philosophy.

[Matthew Calitri, Equity Research Associate at Needham & Company]

That makes sense. And then on the lower commitments in the tighter environment, In the past, you've spoken about customers sort of stopping on prem expansion while they await migrating to the cloud. Did you see any hesitancy or delays of any sort connected to the macro exacerbating this during the quarter?

[Ed Grabscheid, Chief Financial Officer at JFrog]

We haven't seen any changes from the behavior through Q1 that we saw during 2024. It's a very similar behavior in terms of migration activity. Customers that are waiting to migrate will remain in their self hosted instance, and they will not typically expand unless it's maybe security. However, we continue to build the pipeline, and we continue to see growth in our pipeline. And if everything plays out, we may see some of those opportunities in the second half.

[Matthew Calitri, Equity Research Associate at Needham & Company]

Awesome. Thanks so much.

[Operator]

Your next question comes from

[Operator]

the line of Sanjit Singh with Morgan Stanley. Your line is open. Please go ahead.

[Sanjit Singh, Executive Director at Morgan Stanley]

Yes. Thank you for taking my question, and congrats on the really strong start to the year. Shomi, I can't remember the last time you spent so much time talking about the ML opportunity in your script. And so I I wanted to dive into why and why now you're emphasizing this so much as part of your messaging. I mean, is there a theory there around, you know, models being the new binaries and JFrog that making that shift from, you know, compiled code binaries to securing models and how important that is to the business?

[Sanjit Singh, Executive Director at Morgan Stanley]

I'd love to if you could just expand on the ML opportunity as you see it today.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. Well, this is one of the most exciting thing that we've released ever. Following the acquisition of Quack AI, we worked very hard to implement their platform into the JFOG platform. And currently, JFOG is the only platform that provides DevOps, DevSecOps and MLOps practices under the same solution. We are excited about it mainly because of the fact that it opens so many doors, including the Hugging Face integration, the integration with NVIDIA that we discussed in the past.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Our customers that are telling us that they start to use JPEG Artifactory as their model registry and JPEG X-ray as their scanner, listen, we stand ready to what this models revolution brings to the universe. And I'm happy that we expanded the platform. We are looking forward to see how it would be translated into the pipeline.

[Sanjit Singh, Executive Director at Morgan Stanley]

Excellent. And then, Ed, sort of a question back on like the cloud business. Those customers that are consuming an excess of contract, what do you think their behavioral response is likely to be as the year goes on? Is it a situation where, ultimately, they'll have to sign a new commitment contract with with higher usage? Do they just get to consume sort of on demand at their sort of original unit pricing?

[Sanjit Singh, Executive Director at Morgan Stanley]

Or do you expect them to sort of curtail or optimize usage to get usage more in line with their with with their commitment? From what you see today, how do you see that element from those customers exceeding commitment playing out?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Well, that's a great question, Sanjit. It's one quarter that we've actually seen usage over our minimum commit. If you recall, in 2024, we didn't have cases where we had so many customers across our portfolio, across geographies that have performed above our minimum commits at these levels. So we have to first evaluate, is this sustainable? Or is this something that is just one quarter?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Now what do we see? We still know that we're in a rigid purchasing environment. We know that it has become uncertain in terms of the macro environment. Developers are using. There is opportunity, and they're being pushed not only by their boards, by their management to continue to innovate and develop, but you have the other side, which is the procurement and the office of the CFO that is pushing back.

[Ed Grabscheid, Chief Financial Officer at JFrog]

We're still in a cost optimized type of environment. You know, it's still too soon to know what's gonna happen. They can continue to use over their minimum commits, and we'll happily take that. It's not part of my guidance looking forward, and we'll have to see what happens.

[Operator]

Your next question comes from the line of Brad Reback with Stifel. Your line is now open. Please go ahead.

[Brad Reback, Managing Director at Stifel Financial]

Thanks very much. Ed, just following up on Sanjit's question. If a customer goes if they use up their full commit, do they then go to the rack rate? Or do they continue to be able to consume at the price they had under the contract?

[Ed Grabscheid, Chief Financial Officer at JFrog]

When they go over their commit, they we actually have a penalty rate that they go and they use. But typically, what we find is that customers will re up if they see that this usage becomes consistent. So we work very closely with the customer, together with our sales organization to increase the data consumption package and get them pricing that's in line with expectations moving forward.

[Brad Reback, Managing Director at Stifel Financial]

Great. And the RPO growth was as strong as it's been since the first quarter of 'twenty one sequentially. Was that concentrated in a few large deals? Or was that broad based?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Well, Brad, you remember, Q3, we closed three of the largest deals, and we continued to close sizable deals. These are multiyear deals. These include security. The timing of our booking will certainly depend on how the performance of the RPO and the CRPO. But in addition to that, we now start to see our customers doing multiyear agreements, and that's what's reflected in our RPO.

[Ed Grabscheid, Chief Financial Officer at JFrog]

So we're seeing it across a broad number of customers. It's not concentrated to a few. It's not all of the customers, but it's certainly a strong indication of the demand coming to JFrog by our customers.

[Brad Reback, Managing Director at Stifel Financial]

Great. Thanks very much.

[Operator]

Your next question comes from the line of Kingsley Crane with Canaccord. Your line is open. Please go ahead.

[Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group]

Hey, thank you. For Shlomi, over a million new models and datasets were added to Hugging Face in 2024 tripled from the year prior. It's approaching Docker and NPM. We also saw a six and a half increase in malicious models. So what inning are we in in terms of maturation of this ecosystem?

[Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group]

And then with malicious models increasing at a faster pace, how aware are builders in the space of the potential risks out there?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Kingsley, thanks for the question. We are in the very early stage of implementing ML Ops. Actually, to be honest with you, what we hear from our customers, specifically the enterprise customers, that there are two big question marks floating around ML adoption. The first one is the security of the models and where models will go and how it would be governed and secured. And the second one, how much it's going to cost me when it will go up to production?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

So together with our customers, we are building the roadmap. We are working with them on QBRs to prepare to the strategy, to answer the board questions. And I think that though we are at the early beginning of ML adoption, it's unstoppable. Developers are already using it. They are not waiting.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

So I think that what you would see next is that the enterprise start to align themselves with the demand coming from the bottom up.

[Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group]

Thanks. That's helpful. And then so for Ed, I wanted to circle back on RPO. So obviously, we've had some really strong commitments starting back from Q3, but even some great sequential growth this quarter. So I just am trying to flip that with some of the challenges that you're seeing securing more commitments in Q1.

[Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group]

I mean, you expecting even higher RPO growth in this Q1?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Kingsley, we did exactly what we expected to do in Q1. In fact, we did better than we expected to do because the cloud usage was much higher than expectation. So we don't guide for it, but we were pleasantly surprised by our cloud usage ending the quarter. Now I would tell you, the RPO, again, is based off of the multiyear and the strength in the multiyear that we see from several customers and where the market is going. They want to secure in this environment multiyear agreements to lock in pricing.

[Ed Grabscheid, Chief Financial Officer at JFrog]

And we also see now security being added on top of this, so all of these factors. And in addition to that, Kingsley, the timing of when these bookings happen, so Q1 of this quarter, as it's comparing to the prior year, is a significant increase because of the timing of the bookings, these large bookings happening towards the second half of twenty twenty four.

[Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group]

Really helpful, impressive results. Thanks, Ed.

[Operator]

Your next question comes from the line of Miller Jump with Truist. Your line is now open. Please go ahead.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Miller, I think you're on mute.

[W. Miller Jump, Vice President, Equity Research at Truist Securities]

Hi. Can you hear me now?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. Sorry about that.

[W. Miller Jump, Vice President, Equity Research at Truist Securities]

So thank you for taking the question. And just just to follow-up on that, the scope of the deals has been obviously a big evolution point over the last year. Can you just talk about maybe any more detail on the pipeline you're seeing right now in terms of volume and number and dollar value of deals versus where you were at the same time last year?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. So what we are seeing, as we saw in the previous year, is that our big companies, big enterprise companies are securing bigger deals, especially around the platform adoption, including security. And our sales team is also triggering discussions around that to encourage the adoption of the full platform and security on top of DevOps. So just like last year and the year before, the second half of the year is where we see more sizable deals coming in. And this is something that, as Ed mentioned, we are also derisking when we provide you some guidance, but we see the pipeline growing, and we are very encouraged about it.

[W. Miller Jump, Vice President, Equity Research at Truist Securities]

Thanks. And then maybe for Ed, you talked about derisking on the revenue side. We have the guide for the bottom line as well. But just any color on are you changing the way that you're thinking about investments going forward, given the macro uncertainty you called out, either in the type of investments or the volume?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Well, Miller, you know we're part of our DNA is to very much focus on profitability and make wise decisions. We balance our investments and our profitability and therefore never really get ahead of ourselves so that we could manage through these uncertain periods of time. And the way that we built the guidance, because of the conservatism on the top line, we believe anything that we overachieve would flow to the bottom line.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. And with that, Miller, as you saw in the past, in 2024, it was Quark AI, before that Vidoo and other companies. When we need to move fast and when we need to invest more, whether it's on the go to market side or the R and D, the IP, the expansion of the platform, we use this efficiency also to become fast and to become aggressive toward the opportunities that we see in the market. Therefore, you see now that JFrog is the only solution in the world that provide all three practices under one platform.

[W. Miller Jump, Vice President, Equity Research at Truist Securities]

Understood. Thank you.

[Operator]

Your next question comes from the line of Raimo Lenschow with Barclays. Your line is now open. Please go ahead.

[Eamon Coughlin, Vice President, Software Equity Research at Barclays]

Hey guys, this is Sam Colligan on for Raimo Lenschow. Thanks for taking the question. Great to hear your traction with the GetUp partnership. Are you seeing any impact to landing net new deals or expanding usage with your existing base from this partnership, or is it too early to tell?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Raimo, we are completely astonished about the reaction of our customers to this partnership. It was so clear to everyone that these two best of breed platforms should play together as one. And as I mentioned in the call, we traveled together with GitHub CEO, with Thomas in Europe and in The U. S. We met our top customers, hundreds of them already adopting the solution.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Now regarding new logos and new opportunities, obviously, it makes it much more stronger as a message to the state who's doing source code and who's doing binary and how the security plays together and how Copilot and our AI capabilities are playing together. But it's across the board. It's coming from developers usage. It's coming from security adoption. I'm not sure that we can put the finger on what's specifically growing, but we see the growth and we also see the growth in the pipeline.

[Eamon Coughlin, Vice President, Software Equity Research at Barclays]

Got it. Thanks, Shlomi. And then for the JFrog's core security platform, just curious if the performance in 1Q was better than expected, how we should think about the pipeline for core security throughout 2025? And then how that go to market motion is evolving for this product?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

We are very pleased with what we saw in Q1. As you know, we will disclose all numbers at the end of this fiscal year. We are pleased with what we saw coming in, in Q1, and we are very much happy about what we see in the pipeline. Still on us to make sure that it keeps growing at the same pace as we demonstrated in 2024. Got it.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Thanks guys.

[Operator]

Your next question comes from the line of Mark Cash with Raymond James. Your line is now open. Please go ahead.

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

Thank you. Yes. So Shlomi, maybe going back

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

to that last question and realizing it was just last week that JFrog's presence at RSA has really grown over the years. So just really curious as to any takeaways coming out of RSA for JFrog. Any areas that stood out as advantages to capitalize on from a product or channel partner perspective to you?

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

You mean overall or specifically on security?

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

Really on security in like just because the way we've seen the booth and the presence for an RSA.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. So what we have heard in RSA is that two trends are heavily happening. The first one is consolidation of tools. One of them was included in today's call when I spoke about WalkMe and the consolidation of tools moving from other tools to from multiple tools to JFrog as a platform solution. The second thing, and this is another big opportunity for us to grow, is the security around models.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

It's not anymore just software packages. It's not anymore just few type of binaries. It's also the new era of AI with the primary asset of models and how you secure that. So you will see more partnership coming in with Jprog and you will see more use cases that developers are not just securing their software packages, but also models. As I said, we are happy about the Q1 results.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

We are more than happy, and thank you for reminding me RSA and RSA results. And we are building the pipeline to make sure that we deliver what we committed to at the end of the year.

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

Great. And for Ed, I think last year, you guys had a focus on making sure you had quality accounts that would expand. Now we're a quarter into '25. I guess, how is your confidence in growing the base? Obviously, like the bigger customers are doing well.

[Mark Cash, Associate Analyst - Equity Research at Raymond James]

Just kind of growing the funnel and the base. And then what would be the key drivers of gaining momentum there? Yes.

[Ed Grabscheid, Chief Financial Officer at JFrog]

We see still great momentum in our customers moving from lower subscriptions into the enterprise. And in particular, if you look at ePlus, the growth that we generate from our ePlus customers, today, now more than 55% of our revenue is coming from ePlus, and we have significant growth over 30 plus percent in year over year revenue growth coming from that particular subscription. So we do see nice momentum. Now regarding how do we continue to carry that going forward, as we add more value to that platform and we continue to add more products to enterprise, this quarter, we added ML to platform. We will start to see more of our customers moving from the lower subscription to higher subscription.

[Ed Grabscheid, Chief Financial Officer at JFrog]

And we have a long runway to go, still with less than 10% of our customers in ePlus.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes, Mark, think just to add a bit about what Dan mentioned, the balance between what you want to add as a value only to your enterprise customers and what you add on the lower subscription is something that we work on for the past fifteen years. On one hand, you want to promote the top of funnel, those who doesn't start at the platform level. And on the other hand, you want to differentiate the platform. This quarter, we added ML Ops capabilities. We expect to see even more migration from lower subscription to the Enterprise Plus.

[Operator]

Your next question comes from the line of Koji Ikeda with Bank of America. Your line is now open. Please go ahead.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Yes. Hey, guys. Thanks so much for taking the questions. When I look at the investor deck, I love how you guys are sticking with this 2027 revenue target. Really like the confidence there.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

But it does seem like growth accelerates from here out of 2025. And so just curious on why are you so confident with that 2027 target still?

[Ed Grabscheid, Chief Financial Officer at JFrog]

Thank you for your question regarding the long term model. We are still evaluating that, as we said actually last year. We are on track. We're on track. And in fact, after even Q1, remain on track with the long term model.

[Ed Grabscheid, Chief Financial Officer at JFrog]

But there is uncertainty right now that we have to take into consideration, and we'll revisit the long term model, and we may come back to you in the second half of twenty twenty five with updates.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Got it. Thank you.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

And one thing I'm really liking about JFrog, maybe even more than the growth is the cash flow generation. And so you did 23% free cash flow margin this quarter. I think it's the best ever for Q1. And when you look historically, free cash flow margin generally builds throughout the year. So I'm not trying to I'm trying not to get ahead of my skis here.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

So maybe help me understand the free cash flow dynamics in the first quarter. It does sound like cloud overage maybe helped out a little bit, but just really thinking about it against the 20% margin guide for 2025.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Yes. So free cash flow in Q1 seasonably tends to be where we have many of our payments, first off. So annual payments are in Q1. And the second piece to take into consideration is the conservatism on the top line. So because we remain conservative on the top line, we don't take into consideration the large customer opportunities, and we're not taking that into consideration in our free cash flow.

[Ed Grabscheid, Chief Financial Officer at JFrog]

It's not captured in free cash flow margin. So today, any overachievement that we would have on our top line would flow to the bottom and potentially improve free cash flow margin and what we're showing in the long term model

[Ed Grabscheid, Chief Financial Officer at JFrog]

or in the investor deck, excuse me.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Your

[Operator]

next question comes from the line of Andrew Sherman with TD Cowen. Your line is open. Please go ahead.

[Andrew Sherman, Analyst at Cowen]

Great. Thanks. Shlomi, would love to hear a little bit more about the pipeline of big deals in large enterprise, if you can. And given what you did last year, which was so strong in the second half, do you see that kind of playing out more Q2 or second half? And how is like pipeline coverage versus year ago levels?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes, Andy, you probably all understand that if we have a big deal in the pipe, it's already there. No big deal, no sizable deal of multimillion dollar POs coming in a quarter before. So, we are working on it, promoting it, building the relationship. And still, while we guide you guys, we derisk those meaningful sizable deals. So we have a few of them in the second half of the year currently projected, and we are very excited about it.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

All of them includes not just DevOps, but also security. The majority of them coming from the cloud as we plan it strategically. And some of them might even include other elements that we added this year, but it's too early to tell.

[Andrew Sherman, Analyst at Cowen]

Okay, great. And speaking of security, have you seen any change to the sales cycles there specifically given that it's a different go to market motion? And on customer renewals that are for those that have been on advanced security for a while, how's the how have those renewals gone in the reception to the roll off of intro pricing? And then if you're able to display some point solutions in the process and that helps fund the budget, would be great to hear about that.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. So first of all, security, the pipeline is being built, as I mentioned. Cycles are the same. I'm happy to see that most of our customers and prospects that are now looking at JFrog are taking security as part of the complete solution. So the cycles are the same cycle, but maybe with more capabilities included.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Regarding renewals, as you remember, the second half of twenty twenty four was a bit more busy in terms of our security deals. So we'll see in the second half, I will be able to come up with maybe more information and insight about it. But what we have seen so far, one quarter behind us, what we have seen so far is very much aligned with our projection in terms of renewals and even upselling some of our customers.

[Andrew Sherman, Analyst at Cowen]

Great. Thanks, guys.

[Operator]

Your next question comes from the line of Shrenik Kothari with Baird. Your line is open. Please go ahead.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Yes. Congrats on the great quarter. So just a follow-up on MLOps. I understand it's early days and you and Ed have said that they're not baking any MLOps related monetization into this fiscal guidance. But I think you said you have rolled out a threat based monetization model for AI usage.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Just as you are kind of best pricing levers across your customers, just if you can comment, show me on how the adoption telemetry is looking like. Is the AI usage exceeding the commit minimums or any internal thresholds that you had in mind on these early accounts? And just curious, like, how to think about potential contribution here? And then I had a quick follow-up ahead.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. Thank you, Svenik. ML is out as part of the JFOG platform for around two months. So while we are excited and some of our customers are already starting to use it, it's too early for me to judge whether it's going to be part of the pipeline building or it's too early. As I mentioned, there are some governance and budget questions, not necessarily technology questions around it.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

And this is why we decided that the MLOps capabilities will be part of your Enterprise Plus subscription. And in order to grow with us, in order to scale with us, then you will be able to buy more AML credits. So even if someone started to use it two months ago, it's still part of the package, we don't yet see a significant impact on the pipeline, but we are looking forward to providing you with more information once we will have evidence from the market.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Got it. I appreciate that, Shneur. And Ed, I know you said on the call that won't comment on in quarter, but just if we can elaborate on anything, if at all, any changes in linearity across the first quarter, particularly in enterprise accounts? Are you seeing kind of more deals late in the quarter versus more the usual of eOne staggered patterns that you typically see? Just any sense there.

[Ed Grabscheid, Chief Financial Officer at JFrog]

Is Shrenik. Outside of the usage that we saw in Q1 that on a year over year basis is totally different than what we saw in Q1 of twenty twenty four. The linearity and our expectations were perfectly in line.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Perfect. Thanks a lot. Appreciate it.

[Operator]

Your next question comes from the line of Jason Celino with KeyBanc. Your line is now open. Please go ahead.

[Jason Celino, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Yes. Thanks for taking my question. When we look at the sequential growth on the cloud side, it's the biggest Q1 we've seen and frankly, of your biggest quarters outside of Q4 on the cloud side. It sounds like most of this was driven from consumption. Did any of the upside or the that you saw come from that enterprise deal that you signed?

[Jason Celino, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Or was it just signed too late in the quarter that it wouldn't have contributed anyway?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. Hey, Jason. Consumption was above the average, especially up till 'twenty three and 'twenty four. We were excited to see developers coming back and using and consume from our cloud services. But let me be clear, it was across the board.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

The deals that we submitted in Q1, the contracts that we secured in Q1, the long term contract, the adoption of our security solution. I think that on all fronts, and if you add to it also the free cash flow, RPO, all funds, which called high. And may I also remind you and everyone else, this is the third quarter in a row that we are exceeding our guidance. And we see a momentum here that we want to keep. It's not only because of technology adoption, it's also because of the strategic way we build and execute on the pipeline.

[Jason Celino, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

Okay. Excellent. And then maybe just a clarification for Ed. Given it was an acceleration in Q1 and then the guide you're taking up for cloud for the full year, it goes up by about one point. So your visibility to the rest of the year, I understand you're trying to be prudent and thoughtful with how you're thinking about the rest of the year.

[Jason Celino, Managing Director & Equity Research Analyst at KeyBanc Capital Markets]

But how should we think about the pace of decel? Because you're looking at 10 points of deceleration just to end the year on an average basis. Would you think that the pace of decel would be more second half weighted? Or any help you can help with the linearity there?

[Ed Grabscheid, Chief Financial Officer at JFrog]

I'm happy to help, and I'll give you three very easy bullets to understand. Number one, the derisk of our pipeline from the largest deals. And as you know, those typically happen in the second half. And those are typically cloud migration deals that are not factored into our guide. The second is the conservatism that we've already built in our guidance, which we've explained as we stepped into 2025.

[Ed Grabscheid, Chief Financial Officer at JFrog]

So we're being more conservative. And the fact that I'm not carrying over the full outperformance of Q1 into the full year, we have to evaluate to see where we're at after Q2, and you may see some opportunity. But again, it's too soon to know.

[Operator]

Your next question comes from the line of Jonathan Recaver with Cantor. Your line is now open. Please go ahead.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

Yes. Hey, guys. So I just have one question. And I realize that code suggestion is not a focus of JFrog. But just, you know, looking at the impact of OpenAI's proposed acquisition of Windsurf, it just, know, makes one think, you know, there are lot of dynamics at play, you know, open seemingly is going to be competing more directly with GitHub Copilot, in addition to Amazon CodeWhisperer.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

But I think that, you know, from my perspective, it seems to point to heightened competition, obviously, between the AI platforms. And, we're seeing those platforms move towards tighter integration of the various solutions across the development tool chain. So I'm just curious, Shlomi, on your perspective on how this potentially impacts the repository opportunity? Does it drive more strategic partnerships?

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Yes. That's a great question. As we know, this market evolves very fast. Currently, from what we see and specifically from the player you mentioned that we work very closely with them, the more the merrier. It's not overlapping the model registry we provide.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

For sure, not overlapping the other software packages that you need to use in order to drive AI. It's not covering the security and the model scanning that we provide. So what the future will bring, I don't know, but currently we are collaborating and the synergy is actually what our customers are asking for. So currently, my answer is that I see more collaboration than competition.

[Jonathan Ruykhaver, Analyst at Cantor Fitzgerald]

Yes. Okay, great. Thank you.

[Operator]

There are no further questions at this time. I will now turn the call back to Shlomi for closing remarks.

[Shlomi Ben Haim, Co-Founder and CEO at JFrog]

Thank you, everyone. We are very, very excited about this quarter. We are excited about what's ahead. And we wish you from here, from the swamp at Sunnyvale, a great afternoon. Thank you.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Jeffrey Schreiner, VP-IR
• Shlomi Ben Haim, Co-Founder and CEO
• Ed Grabscheid, Chief Financial Officer

Analysts

• Pinjalim Bora, Executive Director, Equity Research at JP Morgan
• Matthew Calitri, Equity Research Associate at Needham & Company
• Sanjit Singh, Executive Director at Morgan Stanley
• Brad Reback, Managing Director at Stifel Financial
• Kingsley Crane, Director, Senior Analyst at Canaccord Genuity Group
• W. Miller Jump, Vice President, Equity Research at Truist Securities
• Eamon Coughlin, Vice President, Software Equity Research at Barclays
• Mark Cash, Associate Analyst - Equity Research at Raymond James
• Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America
• Andrew Sherman, Analyst at Cowen
• Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co
• Jason Celino, Managing Director & Equity Research Analyst at KeyBanc Capital Markets
• Jonathan Ruykhaver, Analyst at Cantor Fitzgerald