JFrog at TD Cowen Conference: AI Surge and Strategic Shifts

On Wednesday, 28 May 2025, JFrog Ltd (NASDAQ:FROG) participated in TD Cowen’s 53rd Annual Technology, Media & Telecom Conference. The company presented a strategic overview, highlighting both opportunities and challenges. JFrog reported a surge in customer usage driven by AI experimentation but adopted a cautious outlook due to market uncertainties.

Key Takeaways

• Unexpected increase in customer usage linked to AI and MLOps experimentation.
• Secured a significant deal with a major AI-native company.
• Shifted to conservative guidance due to past experiences and economic uncertainties.
• Strong revenue growth driven by security solutions and cloud migrations.
• Strategic partnership with GitHub enhances integration and security offerings.

Financial Results

• Revenue growth aligned with Q1 model projections.
• Enterprise Plus tier now accounts for 55% of total revenue.
• 250 security customers, with some transitioning to full-paying contracts.
• Cloud migrations contributed to a 20%-80% average uplift in the first year.

Operational Updates

• JFrog won a significant contract with a top-three AI-native company, displacing smaller solutions.
• The AI customer is exploring JFrog’s Artifactory for hosting and training AI models, potentially creating a "model as a service" offering.
• JFrog’s guidance philosophy has shifted to a more conservative approach, focusing on larger, multi-year deals.
• The GitHub partnership has been strengthened, with integration at the API and security levels to meet customer demands.

Future Outlook

• JFrog has consistently met or exceeded long-term targets set in May 2023, with plans to update investors later this year.
• Despite macroeconomic uncertainties, JFrog has not observed a significant impact on deal closures but remains vigilant.
• Customers are emphasizing budget discipline and return on investment.
• Investment in support and solutions engineering aims to enhance customer retention and future growth.

Q&A Highlights

• Overconsumption attributed to developer experimentation with AI, specifically using Hugging Face, Python, and Docker.
• The AI-native customer displaced a mix of smaller private solutions, exploring Artifactory for AI model hosting.
• The GitHub partnership was driven by customer requests for closer integration.
• Private competitors face challenges due to funding constraints and limited solution focus.

Readers are encouraged to refer to the full transcript for a detailed account of JFrog’s conference call insights.

Full transcript - TD Cowen’s 53rd Annual Technology, Media & Telecom Conference 2025:

Andrew Sherman, Software Analyst, TD Cowen: Okay, thank you. Everybody, I’m Andrew Sherman, software analyst at TD Cowen. Pleased to have Jeff Schreiner, Head of IR at JFrog. Thank you for being here.

Jeff Schreiner, Head of IR, JFrog: Thank you for having us.

Andrew Sherman, Software Analyst, TD Cowen: And a quick mention for Xdl II. We appreciate your vote if you think we’ve earned it. Thank you very much. So it’s been a busy past year for JFrog. Let’s just recap the quarter, which was a good one, and some new interesting stuff going on.

So the over consumption, I think, was probably the most interesting thing to see. What kind of drove that? It sounded like there was some developer activity that picked up, some AI benefit contribution starting to maybe kick in. I know we’re not extrapolating that, but maybe just talk about what drove that over consumption and can that continue?

Jeff Schreiner, Head of IR, JFrog: Sure. So you’re right. We, in the first quarter, saw good usage amongst our customers. It was broad based and linear in the quarter. It was something that certainly Ed and myself had not expected to occur.

It also occurred in one of our, I would say, more seasonally weak quarters, so that was a surprise as well. What we believe or what we’ve been able to attribute to so far is that this was likely experimentation by developers, trying to become more innovative, starting to look at AI and MLOps or large language models. And why do we say that? Well, on a quarter to quarter basis, again, coming from a small base, the largest package increase that we saw as it contributed to the overages were Hugging Face, Python, and Docker. And if you triangulate those three, and you can always come to a lot of assumptions through triangulation, you could assume that that was, in fact, what they were doing, was experimenting with AI and LLMs.

Now, does this continue? We’ll have to see. We don’t think it’s a trend yet. It’s only been one quarter. Certainly, the procurement and finance departments have not equaled that type of enthusiasm seen by the developer, and thus, we’re cautious given the fact that this could easily see a spike in usage and then have, because of the procurement and finance organizations, a move back to the committed level for the rest of the year.

So we’ll have to see how things play out in Q2. But that’s what we saw in Q1.

Andrew Sherman, Software Analyst, TD Cowen: That’s great. And kind of the, last year there was kind of a thesis that, oh, more code generated by machines would mean more binaries by default and more data transfer and when can this start to show up in the model. When do you think we kinda, is this potentially the start of that or are we not quite there yet? Is this more

Jeff Schreiner, Head of IR, JFrog: I don’t think we’re there yet. I think everyone may have their own opinion. My own personal opinion, this is Jeff Schreiner’s opinion, is that that thesis that was kind of created on the street that you generate code, you generate a binaries, more code, more binaries, I think that that’s something that more occurs when the machines move left and start generating more of the source code because you can believe that a machine is gonna be inherently more productive than a human. I do think that the human developer is going to become more effective and maybe more productive, but maybe not to the same level that you would see the volume throughput of source code with a machine doing that.

Andrew Sherman, Software Analyst, TD Cowen: Okay, great. The other interesting dynamic in the quarter was a large AI native customer win to manage all of their AI models and potentially another use case as well. But maybe just talk about what drove that win, what are they using right now, and what could they use eventually?

Jeff Schreiner, Head of IR, JFrog: Yeah, so we were happy to announce that we had won one of the top three native AI companies that you guys are all very familiar with. It was a displacement. They had been using kind of a hodgepodge of three smaller private solutions to try to make the management of their binaries work. They in fact approached us and had come to us and asked us to help start managing their binaries in a more effective, more scalable way. And in that sense, they landed with what was a 6 figure contract, so a land for us of that nature is unique and it’s something we’ve been trying to point you guys to, that the new lands we’re targeting are of higher quality than maybe we would have seen in the past.

What they’re doing today is that they’re utilizing artifactory in a way that we would all expect. They’re typically bringing in just various packages, scanning those packages, storing them. Down the road, this could be very meaningful if we’re able to continue and retain and win at this customer in the fact that they are starting to do things with Artifactory that we had never thought of yet, given AI. And one of those things that they’re considering is creating a data center and hosting models and training models and building models and creating a new business model called a model as a service. So then company A would have an agent at their organization and company A could say, want model X, I want model Y, I want model Z.

And they could download those and they’d be continuously updated, continuously secured. And that would be something that they’re looking to do that would be of great benefit to JFrog if we’re able to accomplish that with them.

Andrew Sherman, Software Analyst, TD Cowen: Wow, very exciting. Since last year, new guidance philosophy after Q2, more conservative approach versus the past. Your guidance this year is 18%. You just did 22%. You seem to have built this kind of track record the past three quarters.

Talk about how you construct guidance now versus the past and why that’s more conservative.

Jeff Schreiner, Head of IR, JFrog: Yeah, so I think it’s more so of the fact that we felt some pain. It was brought on about by something that occurred that we had not expected to occur. When I joined the company back three years plus, you know, a mega deal was a six figure deal. And those could be pushed and pulled and maybe moved around if something happened. And typically, we’d always had that when contracts had been signed and approved, that things went into the process as they were expected.

Last year in Q2, we had an incident where we acquired a company. We reiterated our guidance for the quarter at the end of the quarter with a few days left and because of that, we had a customer at the time who was going to be our largest customer kind of use that against us and come to us and say, hey, we would like price caps if you’d like this to close in June knowing that that was going to be an important contract. And obviously we were not going to bend the knee. We closed that contract a few weeks later at a higher value, but that caused us some distress with investors because of the issuance of guidance and the fact that then we had to lower afterwards. Thus, what we wanted to do was better protect the investors given the change of the business.

We’re now seeing much larger deals. Deals that we call mega deals could be 8 figures in size in some cases. We’re dealing with cloud migration, security, broader adoption of JFrog. What we wanna do with those are continue to build those and let those organically develop and become ready when they’re ready, not necessarily when we think they’re going to be ready. And what that does is it takes it out of the guidance, those types of deals, and they will hit opportunistically as they hit so that we don’t have the same type of experience of having a customer say that they’re gonna do something in Q3, macro changes, they move it to Q4.

No real change for JFrog overall, but obviously that changes the dynamics of Wall Street and how the street looks at the business.

Andrew Sherman, Software Analyst, TD Cowen: Yeah, perfect. And maybe you have more visibility now because of some of these multi year deals and your cloud revenue, I think 80% is on annual deals. So it’s not pure usage, it’s a ratable

Jeff Schreiner, Head of IR, JFrog: Correct, we’re different than other usage companies in that they are pure usage, meaning what I use that month is what I’m going to pay you for. Whereas we offer something different, and we think it’s unique in the sense that we’ll give you the benefit for a pricing aspect if you’re willing to commit to us the amount of usage that you will use on a use it or lose it basis. And those contracts now have been evolved, as you said Andrew, eighty plus percent or more are now annual, but they also have a monthly aspect to them in terms of the user or losing. And so, that’s how we’ve changed and evolved to bring more visibility, not only to JFrog, but also to the customer and what value they’re extracting right away by utilizing JFrog.

Andrew Sherman, Software Analyst, TD Cowen: Yeah, wow. And the big deals last year kind of showed, and you just mentioned some 8 figure deals. So it’s an important point that certainly in the time you’ve been with the company, but even longer than that, you’re knocking down some really big deals now. What has kind of driven those deal sizes up over time? A lot of it is with existing customers.

Maybe they’re adding security. Some of the a lot of it sounds like last year security was a big part of some of those deals. So maybe talk about how you’re kind of penetrating the CIO and CISO office and budget more so.

Jeff Schreiner, Head of IR, JFrog: Yeah, mean, if you think about it, you could see deals in the past, you know, we had 7 figure type deals that were pretty much DevOps only. Meaning, I’m migrating over, I’m expanding, taking on more order factory, migrating to the cloud, thus monetizing immediately when I start to utilize the data transfers. And I think that what’s changed, to your point Andrew, is security. Security in itself can be a 7 figure or a larger type deal, given how much they maybe adopt in year one and then there’s step ups in adoption in those multi year contracts that you talked about. So I think that security has been the big change in terms of the deal size for us And that’s a new opportunity that just came around in ’24.

Andrew Sherman, Software Analyst, TD Cowen: Yeah, wow. In that security theme, you gave us numbers last Q4, ’5 percent of ARR, 12% of RPO, two fifty customers, Great start, great to have those numbers. Talk about how that pipeline can kind of build this year. There’s a lot of customers that are maybe using it, but on intro pricing. Maybe talk about how those renewals can go this year and kind of drive that line higher.

Jeff Schreiner, Head of IR, JFrog: Yeah, certainly. I mean, we have, as you said, two fifty customers. We have some we’ve already moved. Some of those, obviously, you saw last year a handful of those guys moved and some of those large deals. We think other of those customers are gonna start analyzing and looking at their assessment of the introductory pricing, whether jazz or curation or both, if they’re utilizing both of those solutions, something that they wanna expand upon.

I don’t know exactly, off the top of my head, exactly how many of those are due this year, but certainly I think as we move through the year, because a lot of this was rolled out at the end of ’twenty three, early ’twenty ’4, you can think about the fact that as guys came on and started layering this in for introductory prices, that you’re going to see that similar type of layering and build as we move through this year and into next.

Andrew Sherman, Software Analyst, TD Cowen: Great. And you guys have talked about security kind of adds this holy grail of the software supply chain and it was obviously a crucial piece to have. And tying security in with Artifactory as a system of record for the binaries is a big differentiator in allowing you to displace other point tools. Talk about that kind of competitive set, the sales cycle itself, and all that.

Jeff Schreiner, Head of IR, JFrog: Yeah, well I think that one thing that benefited us in security, I mean, we were to step back and go back to ’21 when the company acquired VDU, there was a lot of pushback. A lot of people were saying, you’re a DevOps company. Stick to DevOps, they’re security companies. And Shlomi and the executive team saw something different. They saw that security was going to be needed on top of DevOps to really bring value to the customer.

And so thus we created that security product, brought it on board, and basically that value that it brings in terms of the overall customer is that you’re basically going to be able to displace all of these different point solutions, all of which may be using different databases. You don’t know, a lot of CISOs are frozen in inaction right now because they don’t know what security tool to trust. And so the consolidation of point tools is something that we think we can benefit from. Curation being kind of outside the developer, allowing a centralized policy of what packets you may bring in, that’s kind of protecting the castle. Inside the castle you have JFrog Advanced Security, which covers the whole software supply chain.

So you’re seeing this secular trend of consolidation of security tools happen and you’re seeing it with the Forrester and Gartner’s even, where they are talking about no longer doing an app sec report going forward because they recognize the industry is moving towards platforms. And thus, that’s what we saw when we acquired Vidoo back in ’21 was more of a platform strategy and I think that that’s now starting to unfold.

Andrew Sherman, Software Analyst, TD Cowen: Excellent. And a lot of the other competitor, the point solutions in that market are private equity owned. Who do kind of

Jeff Schreiner, Head of IR, JFrog: see in the They’re pretty much all private. The only one that was public had been Black Duck being owned through Synopsys, but they were sold to private equity. So you’re talking about guys that had great valuations three, four years ago, a lot of cash, we’re talking about robust roadmaps and what they were gonna do and then we hit this funding air pocket. And so now a lot of these companies are focused only on one solution, they haven’t been able to really expand, there’s not a platform there, and they’ve also then just tried to keep cash without burning it, given the inability to raise additional funding. So I think that that’s hampered some of those private companies as it relates to competing against us, and that’s where a lot of them stand today.

Andrew Sherman, Software Analyst, TD Cowen: That makes a lot of sense. The go to market change over the last few years, moving from bottom up developer led sale to top down enterprise, you’ve done very well clearly. You can see that in the numbers. You report the Enterprise Plus percent of revenue, which is now well over 50%, I think. Some of that security, but there’s also like net new logos.

I think you have half of the Fortune 500, 80 three percent of the Fortune 100. Is there a big opportunity left on the net new side as well? Or the mix of expansion versus net new in that kind of large enterprise? And anything else in the enterprise go to market motion that you want to call out?

Jeff Schreiner, Head of IR, JFrog: Yeah, think you’re right. Know, it’s a difficult shift to move from a bottoms up developer led type of sale to moving to the top of the food chain and the c suite and selling to the CSOs and CIOs of the world. I think we’ve made that adjustment over the last few years creating a strategic team in which to go in and work with our customers to help with the expansion. And I think that expansion is still a very large driver. It’s land and expand is more of the growth.

Now, down the road, could there be a difference in that? The new logo opportunity I think is there, but I think it’s more downstream in SMB and smaller companies who have typically in the past found JFrog to be overkill at the initial stages of their company, move to JFrog later in life, but maybe not initially. And we think that if there’s an ability to come down the road sometime with a maybe artifactory light, for lack of a better word, something that could target the SMB market, along with the relationship we now have with GitHub, I think that that opens the door for a lot of net new logos that maybe we just weren’t exposed to before. But that’s still on

Andrew Sherman, Software Analyst, TD Cowen: the common and still nothing that’s gonna drive 25. Yeah, yeah, that makes a lot of sense. Within that half of the Fortune five hundred you don’t have, what are they using

Jeff Schreiner, Head of IR, JFrog: for Yeah, a lot of them are probably using, some may be using Sonotype, a private competitor that people have chosen in lieu of going to JFrog initially. They have problems, unfortunately, though, being primarily self hosted based. So if you want to go to the cloud, you’re not really able to do that with them. There’s some other small cloud players and smaller open source solutions that only support maybe one or two languages, and if that’s all you need, that may be good enough. There’s also kind of a homegrown, as we saw at this large native AI customer, of guys trying to piece work this together and make kind of a solution internally that manages the binaries for them.

Those often work to a certain level and then hit scalability issues. So binaries are still very new. I think that what I’ve seen in the three years I’ve been here, the importance of binaries have grown. And I think the reason for that is that the sophistication of software development across all organizations is starting to become greater. And I think the greater the sophistication you have in your software development, the more important binaries become.

Andrew Sherman, Software Analyst, TD Cowen: Right, right. You’ve given examples in the past, like at your last Analyst Day, which was a few years ago, a couple years ago. But companies that release software potentially thousands of times a day or a week and have tens of thousands of developers, that’s where you really need an enterprise scalable platform like

Jeff Schreiner, Head of IR, JFrog: Certainly, yeah. I mean, at that level, right, you’re talking about when monolithic software was created. I always go back to my days on the sell side. You look at Cisco’s ASR 9,000, their flagship router. They updated that once a year.

So basically I had the whole year, I could sit around, you and I, Andrew could sit at a table, I could say, all right, it’s time to compile the binaries, Andrew. Grab them from Filestore, bring them on. And we did one release. That release ended up probably needing patches even after it was Now, as you said, we have customers that are releasing thousands of updates a day. And to do that speed and scale and still have the security needed to do that and trust that.

That’s what JFrog brings to organizations.

Andrew Sherman, Software Analyst, TD Cowen: Wow. You mentioned the GitHub partnership, was really interesting last year, probably about a year ago this time, roughly. You have 70% customer overlap. There’s now a seamless integration that GitHub customer can kind of just add on JFrog kind of thing. Have you seen that kind of talk about what that meant for you strategically.

And over the past year, kind of that’s, has it driven more new customers? What’s the feedback been? Where does this partnership go over the next couple of years?

Jeff Schreiner, Head of IR, JFrog: Yeah, so this partnership with GitHub was created actually by a push by our customers saying, look, we’ve invested in both JFrog and GitHub for probably the next three plus more years. We’d like to see you guys get closer together and create some additional value through integration. And some of that integration has been at the API level, some of that integration now is at the security level to where you could essentially take a GitHub advanced security for source code, a JFrog advanced security for software supply chain, replace maybe up to eight tools in that whole process, but then you’ll run it on one screen as if it’s only one tool. All vulnerabilities, all remediation will be done as one tool. I think one thing that the team would point to that’s changed is the discussions we have with investors and analysts like yourself, Andrew, in the sense that no longer are people talking about the git guys moving right and taking out JFrog and that that would be very easy.

They’re talking about the importance of best of breed with the best of breed of source code in GitHub and the best of breed of JFrog in combining. I think today it’s hard for us to point exactly at something and say that’s a dollar from GitHub. I think as I talked about earlier, if we’re able to move downstream and bring on a lot more new logos of earlier stage companies, that might be able to better equate dollars to. I think there probably will be some opportunity to call out to you guys that, hey, some security wins here and there. They were tied to the fact that the customer liked the integration of GitHub and JFrog.

But I think overall it’s just been a very strategic partnership with Shlomi and Thomas to show that there’s a core commitment between the two companies to drive their future roadmaps.

Andrew Sherman, Software Analyst, TD Cowen: Right. Could this kind of have a joint go to market sell at some point or is it, are we not quite there yet?

Jeff Schreiner, Head of IR, JFrog: We’re not quite there yet. And why aren’t we there yet? Shlomi’s the head of a company. Thomas is the head of an organization inside a company. And so this close CEO relationship that they have, and they spend a lot of time talking to each other regularly, is more so what Thomas can do with GitHub.

That today is co marketing and co engineering. To the extent this was to take the next step, would be a co sell and open up the thousands of sellers that are within the Microsoft organization, that would be a decision for Satya to make. And so what we’re going to need to do is really demonstrate a value created that would get up to the level of Satya to say, I’m missing something here and my reps really need to take notice of this.

Andrew Sherman, Software Analyst, TD Cowen: Okay, interesting. Enterprise plus tier, now 55% of revenue. That’s grown from 30 five percent two years ago. It’s really gone up a lot over the past five years. How have you managed to get customers to continue to upgrade tiers and kind of what’s the right ballpark level for that at the end state?

Yeah, talk about how those customers have expanded.

Jeff Schreiner, Head of IR, JFrog: Sure. Well, you know, that’s 55% of our revenues from roughly 10% or less of our customer base. Now, I don’t think, I’m not gonna sit here and tell you Andrew, that every JFrog customer could be e plus. They may not need that. They may go to enterprise x.

That may be enough for them in the Enterprise solution. What we’re seeing is that the driver today of why I moved to Enterprise Plus is distribution. Primarily internal distribution amongst campuses, data centers, what have you. I think, however, there’s new pull, right? There’s the pull of security.

There’s the pull of MLOps that may make you move up the overall supply chain. And so I think what we’re trying to do is continually go out and evolve and change the strategy. You’ve seen us change the offerings recently in terms of basically starting now, every basic package has x-ray. So you’re starting to take security in right away when you sign up with JFrog. And I think we’re looking at those aspects of ways to drive maybe kind of the upsell of a higher subscription tier.

Andrew Sherman, Software Analyst, TD Cowen: Yeah, that’s great. Cloud migrations, you have 7,000 customers, about half are in the cloud. How big of a driver is cloud migrations and what have you seen lately on those trends? I know you’re not assuming a lot of big migrations in guidance, but talk about the trends over the past couple of year for the migrations themselves and how enterprises are managing that.

Jeff Schreiner, Head of IR, JFrog: Yeah, so within cloud, I think there’s two kind of key growth drivers for us. It could be either consumption or it could be migration. And ’22 was probably the last year that consumption was the real driver of those two. It’s been much more migration. One being that in the first year that you migrate with us, there’s a 20 to 80% average uplift.

Some of that’s from taking on more JFrog. Some of that’s also from the fact that you’re now moving to the cloud and the monetization there is more immediate than it would be in the self hosted side. So I think that we feel that there’s still a large portion of our, large meaning that 60% of our revenue is still coming from self hosted, and we think that a lot of that revenue could move over to cloud eventually. There will be some people, I think due to regulations and other factors, that will stay self hosted and always remain certain parts of their business in self hosted, But we think a lot of that self hosted business over time can shift and migrate to the cloud.

Andrew Sherman, Software Analyst, TD Cowen: Right. And that brings with it higher net retention?

Jeff Schreiner, Head of IR, JFrog: It brings with

Andrew Sherman, Software Analyst, TD Cowen: it, I think Better economics.

Jeff Schreiner, Head of IR, JFrog: Better economics in terms of, the thing I always like to use for people to help them understand that kind of uplift and why it can be so variable is that if I was a customer of JFrog using self hosted and I utilized a server from 20% to 80%, that’s a lot of value pull that I took. But JFrog, if you didn’t buy the next server, wouldn’t necessarily see that. If I move it over to the cloud, JFrog sees that immediate monetization. Now the customer benefits from having us manage their software. They can focus on what they’re doing.

They’re removing the TCO of having the internal team managing the cloud and all the aspects of the software development. So there’s benefits for us as JFrog as the provider of the technology, but certainly the user benefits as well. The speed and the ability to globally connect all of your development organizations benefits much more on the

Andrew Sherman, Software Analyst, TD Cowen: cloud. Right. The go to market and sales organization itself has felt fairly stable, both the people and just kind of your level of hiring over time. Just hasn’t been that many changes, which is generally a good thing. But how do you feel about where you stand, the sales capacity you have?

Are you growing that or is it just stable? And anything else on the go to market front that you’re kind of tweaking or improving?

Jeff Schreiner, Head of IR, JFrog: I think that where we’re seeing probably on the sales organization, a need and where we’re focusing is probably on the support side. Solutions engineering support. I think as you noted, I think the kind of core sales team within that strategic sales group that we created has been doing a great job of continuing to move upstream, upsizing the deal, and I think a lot of the key aspect of retaining customers and what we do well there is the support aspect, and our support structure is very strong. And I think that’s an area that we’re looking to add. I think maybe to some extent, making investments today for the future, nothing in ’25, maybe not even in ’26, but looking at ways as well to start targeting the SMB as budgets may be returned there over the coming years.

Yeah, that’s great.

Andrew Sherman, Software Analyst, TD Cowen: Your long term 2027 targets were issued years ago, I think, 2023, yeah. Maybe just talk about those and kind of where we stand today and what, I think there might be an update later this year, anything you want to talk about on those?

Jeff Schreiner, Head of IR, JFrog: Yeah, so since we released the model in May of twenty three, we’ve met or exceeded all the metrics on that. We’re now in the third year of the five year kind of CAGR that we talked about. We’ve done well on some of the metrics such as EBIT margin and free cash flow margin. We’ve stayed within line on the revenue side. As you noted, we would like to possibly provide an update to the investment community with two years left in that kind of strategic model as to where we see it, where it may have been updated since its original issuance.

That’s something we may do at SwampUp. However, you know, we’ll have to see how this year plays out as well because I think this year we have a conservative guidance stance, but we still grew in line with the model in Q1 in terms of the revenue growth rate. So it’s something that we feel has really helped focus investors on what we’re driving, which is profitable growth and rule of 40 being a kind of north star for the company. And yeah, as you noted, we will try to provide an update maybe either later this year or at some point.

Andrew Sherman, Software Analyst, TD Cowen: That’s great. Anything in the near term macro that you’ve noticed among your customer base? It’s been a turbulent few months, but maybe there’s a disconnect between what corporate America and Wall Street sees or thinks. But what have you seen just from a macro kind of high level budget perspective and willingness for customers to actually sign deals in the quarter? Certainly, I don’t think you said there was much of an impact, but

Jeff Schreiner, Head of IR, JFrog: I haven’t seen it yet, but we think that it’s certainly out there. There was obviously, in our mind, incremental uncertainty from when we guided you guys originally in February, and we took additional caution in the full year guidance by not flowing through the full beat in Q1. Know, look, in the last eight to nine months, I think there’s been a big disconnect between how corporate America feels and maybe how people on Wall Street and in the markets feel. I think it’s still a very tough environment, very focused on budgets right now. And that’s why, going back to the original commentary and the first question about overages, why we feel that budgets may not be there yet to continue this trend.

It’s still an environment, we’re not back into 2022 where it was, hey, I burned through this half a million, I need another half a million. It’s much more of a, here’s your million dollars, don’t call me again. And so they’ve kind of been forced to find this religion in terms of discipline and spending and what have you. And so I think that that’s changed and that hasn’t really changed.

Andrew Sherman, Software Analyst, TD Cowen: I think that there’s just a continued focus right now on the spending side and how they’re allocating their budgets. Yeah. And maybe just touch on the ROI from JFrog. I don’t think I’ve ever heard from a customer partner that JFrog is viewed as overly expensive for what it is, which is a good place to be. Maybe just talk about any examples of the ROI a customer can get with you?

Jeff Schreiner, Head of IR, JFrog: I think we ran a, I think it was a Forrester study. I believe it might be on our site or you can find it a year or two back that talked about a 300% plus ROI over a certain timeframe in utilizing JFrog. I know others have talked about that as well. I think it depends on your customer. I think a lot of customers feel that they are getting a great value from JFrog, specifically on the self hosted side, certainly, feel that they’re getting a lot of value for what they’re ending up paying JFrog.

I think that what customers see is that the efficiency that the artifactory can bring as a single source of truth in the organization creates opportunity to drive that ROI. Yeah, that’s great.

Andrew Sherman, Software Analyst, TD Cowen: Any questions from the audience? One thing that was interesting that you’ve talked about over the years is just how the importance of binaries has grown and is kind of your core competitive advantage and how difficult that, that, that was to build. Mhmm. And that those were being attacked in, in a lot of these high profile hacks. So just talk about like that dynamic and, and the perception of, of your core competitive advantage over time and how you’ve kind of proven that is the case.

Jeff Schreiner, Head of IR, JFrog: Yeah, think that binaries have become important to your point, Andrew, because they’re now the center of the attack vector. You know, ten years ago Vlad would sit in Eastern Europe and spend a year, eighteen months trying to hack my firewall, get to my source code. Now, all he needs to do is put in a malicious package in an NPM repository, have you download that, put it out in production, and now he’s in. And so because it’s become a new attack vector and a vector that’s much easier to penetrate the organization, that’s why binaries have become a focus and even more so, to your point, the security of binaries. And given that an LLM is just another form of a binary, that security aspect is a key, I think, gatekeeper.

That and monetization that will need to be addressed and secured in order to see the adoption of LLOps really take off across the enterprise.

Andrew Sherman, Software Analyst, TD Cowen: Perfect. With that, we’re out of time. Thank you, Jeff. Thank you, everybody.

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