Jfrog Ltd at KeyBanc Capital Market Technology Leadership Forum Transcript

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

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So, Jacob, I think given all this, we hear about DevOps. Now DevSecOps, we hear -- which is definitely pertinent to you guys, we hear about this shift left. I don't think any of you ever seen the -- it's sort of a M÷bius strip of DevOps. So the idea of DevOps is it's not just, hey, we start here, and we end up here, but it circles back on itself once we get this. We build this stuff. I wrote it down because I always forget: plan, code, build, test, release, deploy, operate, monitor. That's what we do to get stuff going. But the whole idea of the Mobius strip is all of a sudden that feeds back, and also it's like, wait a second, how's this stuff working? How do we start planning?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So within all of that, position JFrog for us. What is it that you guys do? How narrow is it? How broad is it? Where do you fit into that spectrum or that M÷bius strip?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : And different languages, et cetera.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Right. So that's very interesting. On one hand, you're saying that there's this fragmentation of tools, of languages. I mean, there's -- again, I mean I was joking, but who doesn't like to talk to your kids? My kid is in computer science and his specialty is programming language. And I mean, you hear about a new programming language coming out every day.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : And again, I'll give you -- come from him, when he has to -- if he's gone for a job interview, he said, yeah, I never saw this language before. It takes him a couple of days to learn it.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So this is the world that we live in now, as opposed to -- so now you have this proliferation of languages, proliferation tools, and you're creating automation on top of that within the center around binaries. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2022 / 4:00PM, FROG.OQ - Jfrog Ltd at KeyBanc Capital Market Technology Leadership Forum

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Right. There is an interesting aspect to which when you package those binaries, you're actually helping deploy them out to devices. Can you talk about that for a minute?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Okay. So you're getting that. Now is that useful for IoT, autonomous vehicles, a lot of these edge digital devices that we think about?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Anything you can give in terms of customer examples to the extent to which you have customers that are using that full set of your platform? We can come back and drill down on it a little bit more later. But while we're on the subject, doing everything from managing the binaries -- and we'll talk about security in a minute also -- managing that CI/CD stage, which is earlier, all the way out to where you're helping them, actually push them out to a physical device in some way. So yeah, any examples of that?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Obviously, ROI. But as you pointed out, interestingly, security advantages as well.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : I had it to talk about later, just kind of walk through your different products, but we're on that topic now. So maybe it'd be great to talk about security at this point.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : You've had a product called Xray. We're doing a panel later on application security. When we think about application security, we can think about how we think about everything, from how you write more secure source code to how you manage the security in the stages you're talking about, to how you manage security as a piece of infrastructures that's deployed in containers. We can move further to the right into how it's actually run as applications. Where do -- as to what you're doing with Xray, and you also made an acquisition of a company called Vdoo, what exactly are you doing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2022 / 4:00PM, FROG.OQ - Jfrog Ltd at KeyBanc Capital Market Technology Leadership Forum

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Not bad for a CFO. (laughter)

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Right. Is that the same SKU, or is it a different SKU?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : It's a premium SKU.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So I think just as the developer tools world was not as focused on from investors, a little while the security in the development cycle was not as focused on. Where the -- I mean -- I think of certain events like the so called SolarWind supply chain event.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Launch for J.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So what really -- is that the way you saw demand emerge? Did you see people reacting to this? Are they continuing to? And is there been this uplift in interest in securing earlier into the left?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So who are you selling to? Historically, I would think that you are selling to somebody who's Head of Development and Engineering. If you're selling security, are you selling to the CISO organization? Is it a matrix? Are they both involved? Do the same people who were buying you for development purposes also feel comfortable with you from a security perspective and vice versa? How has this changed go-to market for you?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : The developers themselves, right?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So I want to switch back to where I was actually going to start. We usually tend to start on the macro question.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : It's a slowing growth economy. You put up a nice second quarter. Among other things, you continue to see acceleration in your cloud business. So -- but you did talk about some areas where you were perceiving weakness in certain geographies, certain areas where DevOps adoption seemed to be a little bit slower. Tell us what you were -- what you're actually seeing and what you feel, just as a CFO, you need to be cautionary about?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So that's the deal.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : But I think you mentioned just large deals (multiple speakers)

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So one thing we've been trying to figure out again, we put things into these somewhat thematic buckets naturally as in the investor community. So when we think about what the dynamic will be with tighter budgets, what does that mean for the number of different -- new software projects that are being initiated for the number of developers that are being hired? What are you seeing in terms of that impact right now?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Not by sales, right. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2022 / 4:00PM, FROG.OQ - Jfrog Ltd at KeyBanc Capital Market Technology Leadership Forum

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So there is a consumption component to what you do.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : I know you sell different tiers of your product. And what have you seen in that consumption (multiple speakers)

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Continue to grow (multiple speakers)?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Before I want to move on to some other questions, but any questions from the audience? Yeah. Andrew. Unidentified Participant Let me ask on the cost side of the SaaS side (inaudible) to the new logos, they're a little different. I guess my question is, for the cafes or for those startups that just want to use (inaudible) they get go or are they different in any way?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : If you've seen some slides, and then it seems everyone has seen slow, even in the security space, which always surveys' highest. What's your sense? And that I would expect you to be optimistic about the business you're in. But what's your sense of where development tools, DevOps are fitting in terms of the priority and the defensiveness of IT budgets in this environment?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : So I wanted to -- well, maybe I'll -- we're out of time. But maybe I'll finish up with this, this one question. You've talked about over 30% growth, which is great. But you also have 10% free cash flow. So what -- how are you -- in this environment where there's even more emphasis on profitability, but you need to maintain your growth, talk to us about your thoughts about balancing growth and profitability.

Question: Michael Turits - KeyBanc Capital Markets - Analyst : Free cash flow or EBIT basis?

Question: Michael Turits - KeyBanc Capital Markets - Analyst : All right. I think we're out of time. Jacob, thank you very much.