Jfrog Ltd at JPMorgan Global Technology, Media and Communications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pinjalim Bora - J.P. Morgan - Analyst : Last quarter, the consumption numbers are amazing. You're breaking into security in a pretty big way. You're signing some interesting technology partnerships. Talk about at a high level, what are kind of the common threads of topics that is coming up when you're talking to your most strategic customers? How are they thinking about it?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. Understood. I'll go into the fundamentals of the story. But before I do that, Ed, I do want to ask you about the consumption story, right? The consumption numbers have been amazing last quarter. It seems like customers are committing above-committed rates. We have not seen that too many times in the past, right? You talked about developer activity kind of picking up. I think -- I got a lot of questions from investors, what does that mean? Are you seeing net new workloads start to accelerate? Is AI playing a role because that was -- that is a little bit of a bull thesis on JFrog as some of these code assist starts writing good, right? So maybe help us understand what is driving that?

Question: Pinjalim Bora - J.P. Morgan - Analyst : ERR definitely is an amazing metric to probably start looking at and...

Question: Pinjalim Bora - J.P. Morgan - Analyst : But just to follow up on that, if companies are consuming more than the committed rate and if these are experimentation, do you wait another quarter before you engage with them for a larger contract? Or how does that work?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Understood. Okay. With that out of the way, let's talk about the fundamentals a bit. The core of JFrog, Artifactory. You are in a very critical position in kind of the DevOps, DevSecOps processes. One of the Fortune 100 financial companies we talked to, she said, when JFrog is down, nothing gets pushed to production. It's that kind of critical. And it has been driving most of your growth. Security last year was what, 3% of revenue, I think, but 97% is basically core plus X-ray, which is also partially Security, I guess. But that's kind of your core. How should we think of that core growth, right? The opportunity around core growth, talk about that? Is that driven by this hybrid migration from on-premise to cloud? SKU upgrades? Or I'm thinking is there a correlation to kind of natural workload growth within an organization? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 12:50PM, FROG.OQ - Jfrog Ltd at JPMorgan Global Technology, Media and Communications Conference

Question: Pinjalim Bora - J.P. Morgan - Analyst : So it should have a little bit of a stability in growth for multiple years? Is that?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. So on Security, that's kind of the big news on JFrog, right? Because Security -- or I should say, the bear thesis on JFrog that I've heard for the longest time is it's a one-trick pony, and it cannot break into security, right? And you have kind of diluted that thesis, in my opinion, with the RPO numbers that you have shown us in Q3, Q4, also in Q1 as well on top of those strong quarters. So -- and Security is 3% of revenue. I think 12% of RPO ending 2024. Talk about what is driving that success, right? It took -- you acquired Vdoo probably 2.5 years ago?

Question: Pinjalim Bora - J.P. Morgan - Analyst : So it took some time for that machine to kind of start. So maybe talk about what is driving that success now.

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. So you're basically saying that your core Artifactory as the system of record is actually a definite advantage for you versus a lot of those point products that have to read into your kind of system of record?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. So just to go back to your point that you made on consolidation, right? Are you seeing consolidation of these tools by JFrog?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. But are you able to name like which ones you're taking share from or not? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 12:50PM, FROG.OQ - Jfrog Ltd at JPMorgan Global Technology, Media and Communications Conference

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yeah

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. No, no. I meant, who are you taking share from?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Got it. So coming back to the eight-figure deals that you guys signed in Q3, Q4. Is it possible to understand -- I mean your Security portfolio has grown, right? There is Advanced Security. You have added curation. now we also added Runtime. Which ones are included in those eight-figure

Question: Pinjalim Bora - J.P. Morgan - Analyst : The point that you made about handful in eight-figure out of the 250, right? Are those handful companies -- was there something anomalous for them to go that big? Or do you feel like a lot of the 250s could eventually scale up?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. Understood. Let's move on to the GitHub partnership, right? That is another interesting partnership you had kind of talked about. And I had interactions with Github myself, and they were talking about how it's very complementary. And I was asking them about their package solution that they have and the guy in the booth basically was saying that it's not good enough for customers and what -- versus what Artifactory provides, right? So maybe talk about what that partnership brings to the forefront for JFrog versus without the partnership? Is that resulting in new deals, new conversations, what are you seeing?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. And when -- as investors, we obviously like numbers, right? So when should we expect kind of numbers to flow in materially?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Yes. Understood. Talking about a partnership, Shlomi, in Q1, you announced a sizable deal with -- this is how you explained it. One of the world's most recognizable AI technology leaders who are actively shaping the future of general artificial intelligence. I will not ask who it is. But my understanding is that there is an opportunity for JFrog to power certain services that they might sell to their own end customers. It sounds like an OEM deal in a way to me. But I do not understand like the intricacies of it. How could -- what kind of services could that be? So maybe just explain potentially what could flourish from there?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Understood. Let's talk about macro a little bit, right? You reported last week, it seems like at this point, you're not really seeing any impact. But have those -- how have those conversations fared so far in Q2? I mean there seems like a lot of uncertainty overall, April, May. Do you feel like people are tightening their purse strings or are kind of migration conversion slowing or any kind of a signal that you see out in the future periods?

Question: Pinjalim Bora - J.P. Morgan - Analyst : Okay. I want to ask you one more on that -- on visibility, specifically, right? Because of those large deals that you signed in Q3, Q4 your CRPO coverage numbers are a little bit better than previous years. I think your -- you have also kind of changed the monthly commits, right? The construct of kind of the contracts and your visibility into kind of monthly commitments. Is it fair to say that you're entering 2025 with a little bit more visibility than prior years?

Question: Pinjalim Bora - J.P. Morgan - Analyst : All right. It seems like when we have only 4 minutes. Is there any questions? Can we have a mic here, please? Unidentified_1 As we think about DevOps over the next decade, the amount of dev that's going to be created is going to just grow dramatically. I'm not convinced that the seats are going to grow dramatically as Agentic AI is a key part of that. How do you think about pricing your business model on value-based pricing versus seat-based pricing so that you capture and participate in that growth?

Question: Pinjalim Bora - J.P. Morgan - Analyst : I think you're out of time, unfortunately. We could have probably gone for one hour with this session. Thank you so much.