JFrog Ltd — Call Transcript 2026

A lot of happy faces in there. I'm Jason Ader from William Blair. I'm very pleased to introduce Ed Grabscheid, CFO of JFrog, and Jeff Schreiner, who's VP of Investor Relations. Before we begin, I'm required to inform you that a complete list of research disclosures or potential conflicts of interest is available on our website at williamblair.com. With that out of the way, Ed. Thank you very much. Thank you. Good morning, everybody. My name is Ed Grabscheid. I'm the CFO of JFrog, and with me today, we have Jeff Schreiner, who is our VP of Investor Relations. I'm going to show some slides. I'm going to be relatively quick. I see a lot of familiar faces, maybe new faces in the crowd that don't know JFrog. I'll give a high-level overview. I'll give the time to Jason to ask some questions. I'm guessing you want to hear a little bit about AI. It's not a topic that we've heard much on the investment circuit, but I'm guessing this group will want to ask about AI. We'll jump into that a little bit. I won't read the disclosure slides. I'm sure you've seen that a million times. All right. Let me go ahead and start. I'll give you a quick overview of JFrog and who JFrog is and what we've done over the last year or so. We're a little over 6,000 customers, 6,600 at the end of 2025 and continuing to grow. We have more than 80% of the Fortune 100. Not only do we have a large number of diverse customers, we also target the enterprise with more than 80% of the enterprise customers, 83% to be exact. Today, we're now over 1,900 employees. The last reported was 1,800, and we're continuing to grow. Unlike some other companies that are releasing employees, we continue to hire and invest in our workforce, but also utilization of a lot of AI internally, but we have a good balance of both. We see a very large opportunity in DevSecOps, now more than $40 billion in terms of the TAM that's reported. Very strong revenue growth over the last year, 25% over the last 12 months in terms of revenue growth. In the last reported quarter, we did 26%, more importantly, free cash flow, very strong free cash flow generation, over $150 million in free cash flow, representing a 27% free cash flow margin. Not only are we growing very strong in the top line, we also have a very strong discipline around expansion of operating margins and free cash flow. It's very much focused on our compass of remaining a rule of company. Today, it's a Rule of 50, that is our compass that we continue to guide towards. Lastly, net dollar retention rate of 120% on a trailing four quarter net dollar retention rates are very strong in terms of expansion of the existing customer base as well. Our vision overall, we started as a company that was focused on Artifactory, which is the core product, DevOps, we've expanded that to a platform which not only is DevOps, DevSecOps, and now focused on governance, DevGovOps, which is in the era of AI, very critical as we manage and govern the software supply chain. You see here it's about secure software supply chain automation governed, and most importantly, in this era of AI, trusted. Whatever is coming into the organization, it is trusted in terms of the binaries. We manage the binaries. This is why it is critical infrastructure for enterprises and organizations around the globe to have JFrog as their binary management platform in the software supply chain. I talked about the number of customers that we have, over 6,600 customers, a penetration in the Global 2000, and of course, in the Fortune 100. You can see we penetrate more than eight out of 10 in every single industry. Names that you recognize, I don't need to read them. They're very well-known names, and they're all customers. They rely on JFrog, and we continue to expand on that number of customers and how critical for the enterprise JFrog has become across all industries. It's interesting to see it's not just tech, but it's oil and gas. It's the automotive industry. It's the financials all using JFrog. Everyone is becoming a software company. Everyone is releasing software, and JFrog is the critical infrastructure that allows those trusted and secure releases. This is a busy slide, but it really kind of summarizes the journey of JFrog, and I think it's important. We started originally as a developer-loved tool with Artifactory, a repository, and we've expanded that to a platform. The heart of the system is Artifactory. This is the DevOps solution, and we've built on top of that. We did the acquisition of Vdoo many years ago, and we created the DevSecOps opportunity that sits on top of the DevOps solution, and then we further expanded that with the Qwak acquisition to enable large language models in training, and then from that acquisition, was able to build DevGovOps. You see the stack of how we continue to grow our critical infrastructure to be able to capture this surge of binaries that is coming from this era of AI. The amount of source code that is being created that then becomes a production binary and goes into the organization hosted by JFrog is a platform solution, not only hosted but secured and delivered through distribution. We support over 36 languages. We support all of the native AI labs and the number of models that are supported and come into the organization, all of the open repositories. Our control plane into JFrog, this is a visual of how that has evolved over the past 12 years with JFrog. We just released the State of the Union. If you haven't had an opportunity to read that, it's very compelling about what's taking place right now, in particular around AI and the vulnerabilities that are created as models are now coming into the organizations at a lightning pace of creation and the vulnerabilities that it creates. We see here that AI models, you have 1.4 million new AI packages being created. The defenses are out of date. You see in terms of what's happening, and the number of vulnerabilities, and you hear it, you see it daily. There's all types of vulnerabilities in npm, the Shai-Hulud attack, and the vulnerabilities that are created and the importance of governance and what is needed in order to protect your organization and why JFrog is so critical in that process. Then lastly, the shadow AI. These are packages that are being used within the organization that the CISO may not have awareness. Organizations are adopting AI at a pace that can't necessarily be controlled. We see that JFrog allows for that governance layer and protection. Again, seeing this opportunity around governance will be the next vector of growth for JFrog, and this is what's driving the continuation and expansion of the platform. Real quickly on some customer success stories. Maybe skip through this fast, but what you see here is three Fortune 100 companies that depend on JFrog, one of those being an automotive company. They needed to expand in the cloud. A previous competitor, I should say, that didn't allow them to expand. They moved over their workloads to JFrog into the cloud, giving them the opportunity to move at a very quick pace and adopt the security solution. The second one being a financial services company. They went wall to wall with security, very quickly adopted it, not only with Curation, but Advanced Security, replacing disparate tools, and able to do that in hours to replace disparate solutions. The last one there being a tech company that has multiple developers. They were able, an organization with 20,000 developers, consolidate that, have full control over their system, save significant amount of money, and make sure there was continuity across their software supply chain. Great success stories with very large companies, and continuing to expand their footprint with JFrog, modernizing their tech stack, and also growing significantly within JFrog. Just quickly on what the outlook from a revenue perspective over the last year, 24% on a year-over-year basis. When you look at the quarter, we've guided, and we'll talk a little bit about the guidance philosophy, but if you look at the guide for next quarter, it's at 18%. However, we only guide on commitment, so what is contractually committed to JFrog, and what we've seen over the last year or so has been significant usage over minimum commitments. That's not considered in our guidance, nor is large migration opportunities and very large deals. That's being de-risked out of there, and we'll see where we go for the remainder of the year. We're pretty optimistic and positive with how things are playing out for the year. The right-hand side just shows this progressive growth as a SaaS company in our revenues. In addition to not only having very strong net dollar retention, we also have exceptionally strong gross retention. Once customers are with JFrog, they understand the mission-critical nature of the infrastructure, and they don't churn. We've maintained best-of-class gross retention rates well above 97%, between 97% and 98% over the last 24 months, two years or so. Very strong retention rates and customers stay with JFrog. There's no reason for them to churn once they come to JFrog. It's a very sticky product, and they continue to stay with JFrog and in fact expand it at a rate of 120% gross retention rates or net retention rates. Thank you very much. Okay. Thanks, Ed. I want to just level set the conversation because I know for some investors that I talk to, JFrog's a little bit intimidating because of the technology and software development is not a natural thing that people understand how it works. Maybe if you can start out, explain where JFrog plays in the process of software development. Yeah. I think it is a bit intimidating because I think when you understand code and writing software, you understand English, German, Spanish, and how you write the code, and you understand that you have to observe the code once it goes into production. What happens in the middle is the binaries. Binaries were the red-headed stepchild. Nobody really talked about binaries. They didn't understand binaries because 20 years ago, you wrote the code and you deployed it maybe once every year or every two years. Open source packages came into play, and then you'd start to pull open source. The pace of code creation exponentially grew. Now in the era of AI. Code is basically becoming commoditized. You can write code every single day, hundreds of codes, and maybe not even need humans to do that anymore. What you need is the machine language, the binary, and the management. That becomes the primary asset, and this is what JFrog has always focused on, and it's around secure and trusted infrastructure to be able to deploy those machine languages, the binary, and this is what JFrog does. Got you. Source code is text-based that is not readable by machine. Correct By computers. Correct. You have to do some type of a conversion into the. Compile, convert, and then you release. Right. You guys are in that process of right before production, you're sort of the last step in the process. Yeah before it goes into a production-. We become the system of record for that production code. Got you. All right. Maybe frame the case for investors for why JFrog is an AI winner? Mm-hmm. Yeah. You want me to take that or you want to? No, I'll go ahead and start, and then you can take it. It's clear today, as code is being written by machines or a combination of humans and machines, the amount of code that has been created has exploded. Truly has exploded. You see the statistics. It's something like growth in the amount of code 14 times, 15 times from historical levels. That code, once it becomes production-ready and it's clean code, not slop and experimentation, but once it becomes clean code, ends up becoming this machine language. It's binary. As code is being created, more binaries will be created, and there's a need to host those binaries to make sure that you're scanning those binaries for vulnerabilities because the attack surface is now coming through the open source packages of the binaries. Then those are being released, and you have to update those binaries. As more code is being created, more binaries are being created, and more production binaries are being created, and this benefits JFrog based on how we monetize, and primarily in the cloud, that comes in as data consumption, and then you deploy that. I think that what I would add to what Ed delivered and talked about in terms of binaries and the impact in the world of AI, I think that one thing that needs to be understood is the Lego-type effect of what JFrog has built, is that the underlying infrastructure or the platform is something I take, and that becomes more sticky to me as a user, as I add on DevSecOps, and that becomes a combination of DevOps and DevSecOps. I now add on DevGovOps, which encompasses all three, and governance is going to be critical in the world of AI. Today, right now, we're at a level where management teams and the Board are cracking the whip and saying, "We want you to run fast and start building with these models, training these models." That's the focus today. You see that in the Git pushes and the tokenization usage. What's going to happen is when that agent becomes autonomous, it will shift quickly to the governance of that agent. To give you guys an analogy that we have used that I think has been received well, is the fact that the models will be akin to lawyers. I don't think that any of us would like to find ourselves in a courtroom with just lawyers. They'd be smacking each other's motions down, lots of confusion, things of that nature. You're still going to need a judge, and that is the role that JFrog plays. I want to reiterate that even as the machines no longer need us mere humans, and they start realizing that their end goal is to produce a binary, and they start building binaries, JFrog will still be critical and will still be the judge because the creators will never be the governors in the enterprise. Okay. Very helpful. Maybe talk about the Anthropic day that we were talking about before the presentation started. I think the stock was down 20% or something. More than that. 30%, just on an announcement from- Yeah Anthropic on a product called Claude Code Security. Just talk about how that product would overlap or not overlap with what you guys offer. That product was basically an announcement that they were going to be bringing to market something that's been in the market for the greater part of 20-30 years in a source code scanning tool. That is not where we play. We don't have any security pipeline revenue, outstanding RPO that is related to static code analysis, which that is what that code scanning tool was and is related to. What I think was missed on that day, other than the governance aspect on the security side, what was missed is that if they are doing this, there was a perception that if they are doing the source code scanning, that it's so good that by the time it gets to binaries, you don't have to do anything. Yeah. That's not true because, one, I can tell you that secrets detection was done for 20+ years in source code, and JFrog came along, and now it's being done in binaries because we found out that it's not being done as well as it should have. What I think people missed is that if I create a better code, it's cleaner, it's been scrubbed over several times with now their brilliant source code scanner, and we would tell you that scanning is in fact probably commoditized. That's probably better to reach what Ed was describing, which we want at JFrog, which is a production asset. Yeah. Putting the binary into production, which isn't really happening yet today. Why is that? Today with humans, we have customers who are doing 6,000 updates a day. What is going to happen in the world of AI? We are being asked by our customers to provide remediation guarantees of less than four hours today. We joke that by next year, it may be an hour. Two years from now, it may be minutes. That is the criticality. These models are very intelligent. They're equivalent to 1000 person research security team, but finding the vulnerabilities is not where the value lies. In the world of AI and this new team, TeamPCP, and the sophistication they have at hacking very large, well-known repositories, they are now having kind of a weapon in their own hands, and it's a race between you and them as to who's going to patch that vulnerability first. Got you. Okay. I guess those players in the market, the labs, do you have partnerships with them? How do you interact with them in sort of a daily basis? With the labs, we've had, as of March, what we've disclosed, and obviously, these are the type of customers you can't really name, but there's kind of five, maybe five to seven, I always say four through seven is your own opinion possibly, kind of major frontier labs out there. We feel that we had captured three of those as of the March quarter. Those three had been deployments into our self-hosted side of the business. Knock on wood, Ed and I have learned that nothing is official until the quarter has closed. We hope to have some sort of general conversation about possibly talking about a fourth lab this quarter. I think the thing that we've tried to communicate that we can, to the extent we can, that's unique, is that this would be a lab that would choose to engage with JFrog in a hybrid capacity. There would be some cloud exposure, and we would start to learn, I think, over time. I pause everyone. Don't come to me next quarter asking about cloud usage from this customer. We want to see what a leading frontier lab will maybe decide as what is the right workload for self-hosted, what is the right workload for cloud. I don't think that it precludes the other three who have chosen to go down their own build their data center path from becoming hybrid in the future. It's just this is how each has chosen to engage with JFrog. Yeah. A good segue to the cloud business, maybe for you, Ed. Yeah. Does it surprise you that investors seem to, I don't know, not, I won't say disrespect the self-managed part of the business, but everything's always about cloud-? Yeah it feels like with software companies right now. How do you just help people think about the mix of the business and why both are still super important? Yeah. Both are important, but we're strategically built and aligned on moving our customers to the cloud for a couple of reasons. Number one is the monetization mechanism, because we monetize in the cloud off of data consumption and storage. You have an infinite amount of growth, unlike self-hosted, where it's monetized on the number of servers. Neither model is a seat-based model. We're not concerned about number of seats, which is very important, especially as you see a transition, and I think there's a lot of pressure on companies that have a seat-based model because of what is a seat in the future. If it's an agent, are you going to charge that agent for a seat, and does one agent take 100 seats? We don't know that yet. We're immune to that transition. On the other hand, we really strategically are trying to move customers to our cloud, and this is what we're focused on, and the results have been very good. We did 50% growth in the cloud. Why did we do that growth? There's a couple of reasons that we saw. Number one, we only guide, as I mentioned, on what we have committed. We have a model that is not 100% based on data consumption. There is a commitment. You make a commitment to JFrog. Over the last year or so, we've seen many of our customers, in fact, the vast majority of our customers, going over those minimum commitments. In Q1 of this year, we saw significant growth being driven by those customers using more than their minimum commitments. That usage over the minimum commit comes with an overage rate. It comes with a decision that they'll have to make in the future to do an upsell to a higher commitment. We'll see how that plays out in this token economy. We're very focused on converting those customers. Cloud, and for the right reasons, investors and the market are focused on the cloud because of the growth potential. That's a great segue to the next question, which is, where is the money going to come from for all these customers? Yeah. They're spending so much on tokens. There's a lot of stories of customers burning through their token budgets. Yeah In three or four months, their annual token budgets. How do you see the buying behavior sort of evolving? Yeah. Is this going to actually crimp the budget for tools like JFrog? Yeah. Well, I don't think anybody's immune to it at this point, including ourselves. You want to adopt quick, you want to be relevant in the era of AI. You're adopting tools as quickly as you can. You're building as quickly as you can. You can't do an 80% build with an AI agent, and then you run out of tokens and then take that over as a human to finish the last 20%. You end up buying more tokens. That's just the nature of the business right now. There will be a rationalization. The CFO office today is probably a little bit looser based on this race to adopt. Religion will come into play at some point. We know that. It's always been the case. It will not infinitely grow without any rationalization. Today, what do we see? There's probably two ways to do it. There's a responsible way to do it, how we manage it, and we've always been very responsible. There's other organizations that are just simply cutting headcount, reducing headcount, and I think that's what they're doing right now to manage their spend. In addition to what you see in the news with organizations blowing through their budget, they're also cutting headcount right now at a very high pace. Some very notable companies that have reduced headcount, saying that it's efficiency through AI, and I think it's really a way to offset some of the costs that we're seeing today, which is a good thing because it gives you a bit of a runway to spend. When you're asked, is this durable? It's probably for a while it'll be durable because you're reducing headcount to offset those expenses. Yeah, actually, GitLab reported last night, you may have seen, they talked about seat contraction with some of their customers, and I imagine that's part of the budget management that's going on right now. Yeah. I want to ask you next on security, how material are security products to your business? What's the long-term revenue mix in your mind between the core Artifactory product and security? Maybe before you answer that, just explain what you guys are doing in security. I'll start, Jeff. You can maybe go a little bit more technical than me on the security piece. We offer as an add-on today two security products. We have Curation, which has been a very compelling security product for the enterprise, and I think with the attacks that we've seen really starting in Q3 of last year, not only did it create a bit of a fear buy, I think now it's no longer fear. I think it's now become pretty well known that you must have Curation in your organization, and we see that in our pipeline and we're growing a very strong pipeline with Curation. There's Advanced Security. We call it JAS, JFrog Advanced Security, which is a platform security product that replaces disparate tools, seven-plus disparate tools. That's still very critical to the software development life cycle and sits on top of your repository. Both of those products have done exceptionally well. We report annually those numbers, so we had a very strong year in 2025, and we gave those metrics, 10% of our ARR and 16% of our RPO. You see what it does in terms of contribution in the ARR and the RPO. It is a cross-sell, and customers typically take that on a multi-year basis. When they're renewing an Artifactory, they're taking security on a multi-year basis and driving RPO in a positive way. In addition to that, we see a big opportunity. What the mix will be, time will tell, but we see a big opportunity. Today, we've got a small percentage of our customer base penetrated. We have over 3,000 customers today that use Xray, which is, I would say, ground zero for scanning capabilities, and you must use Xray in order to bring Advanced Security and Curation into your organization. I think there's still a long runway of penetration and opportunity in security. Okay, great. Maybe just talk a little bit about the business model. Pretty solid operating margins right now, but where do you think the operating margins for this business can go over time? Well, the operating margins is not by luck or by chance. It's around a discipline that we employ, and you've followed us since the IPO. Four years ago, we were a break-even company. We said that there was a path to profitability, there was a path to free cash flow. We've always been free cash flow positive, but to generate strong free cash flow, and it's always been a strategy of ours. We went from break-even to today, you see we're over 20% operating margin. We did over 21% in Q1, and much of that has to do around, again, the discipline. We're not going to spend $3 to earn $1, but we also recognize that there's an opportunity, especially in the era of AI, to capture value on the top line, but we'll do it in a smart way. When we outperform in the top line, we expect that a portion of that will flow to the bottom line. We saw that in Q1. We had a $7 million beat on the top line. All $7 million were able to flow to the bottom line, and we generated a very strong operating margin. We'll see what happens as we go through the year. If we continue to outperform at that pace, I'm sure there will be an opportunity to reinvest back in the business and make sure that we're capturing more value for shareholders in the future and developing new products and enhancing the products that we have today. I would expect that operating margins, I don't know that they'll expand at the pace that we saw during Q1, but we would continue to focus on operating margin expansion. Okay, last question, then we're going to go upstairs for a breakout for those that can join. You talked to a lot of investors. What do you think the most underappreciated aspect of the JFrog story is? It's governance. Yeah. It's not in our guidance yet. It's on the come. I think that what I'm telling people is that, as new guys call or want to talk or they want to learn more about JFrog or find maybe a new edge given where things have gone and the equity valuation, I say, "Look to DevGovOps and start really studying governance." You're starting to see other people talk about the importance of governance. In the world of AI, governance will be critical, and we feel that we are well-positioned and have the right to win in DevGovOps. As I always say, if it's not us, it will be somebody else because the creators will not be the governors. I think that that's probably something that's underappreciated because today, I think security and cloud are somewhat understood, and those are the drivers of growth today. That's the Lego. You got Artifactory, then on top of that, you got security, and then on top of that, you got governance. You got governance. That full platform is what differentiates you guys. I would quickly add, Jason, you've got the scalability of two effects. Yeah. We'll talk about this maybe more in the breakout. On the revenue side, you saw us talk about MCP registry, Skills Registry. We created Skills Registry in two weeks because it was a pain point for a customer in Vdoo. Now we've had POC shut down in a few weeks because they've been so good. It's not going to be a driver for 2026. What it tells you is that customers are recognizing the value of maintaining Agent 101 in Artifactory to make sure he doesn't hallucinate, to make sure he's not acting differently, that he's not chosen to do a different function than what he was programmed for. Likewise, with MCP, is my Jira connection correct? Is my JFrog connection correct? Is my Datadog connection correct? These are being useful tools that are going to scale revenue opportunities in Artifactory with little to no investment. Awesome. All right. I think that we'll have to leave it there. Thank you all for joining. Thank you. We'll see you upstairs. Thank you.

Speaker 2: A lot of happy faces in there. I'm Jason Ader from William Blair. I'm very pleased to introduce Ed Grabscheid, CFO of JFrog, and Jeff Schreiner, who's VP of Investor Relations. Before we begin, I'm required to inform you that a complete list of research disclosures or potential conflicts of interest is available on our website at williamblair.com. With that out of the way, Ed. A lot of happy faces in there. a lot of happy faces in there I'm Jason Ader from William Blair. i'm jason ader from william blair I'm very pleased to introduce Ed Grabscheid, CFO of JFrog, and Jeff Schreiner, who's VP of Investor Relations. i'm very pleased to introduce ed grabscheid cfo of jfrog and jeff schreiner who's vp of investor relations Before we begin, I'm required to inform you that a complete list of research disclosures or potential conflicts of interest is available on our website at williamblair.com. before we begin i'm required to inform you that a complete list of research disclosures or potential conflicts of interest is available on our website at williamblair.com With that out of the way, Ed. with that out of the way ed

Speaker 1: Thank you very much. Thank you. Good morning, everybody. My name is Ed Grabscheid. I'm the CFO of JFrog, and with me today, we have Jeff Schreiner, who is our VP of Investor Relations. I'm going to show some slides. I'm going to be relatively quick. I see a lot of familiar faces, maybe new faces in the crowd that don't know JFrog. I'll give a high-level overview. I'll give the time to Jason to ask some questions. I'm guessing you want to hear a little bit about AI. It's not a topic that we've heard much on the investment circuit, but I'm guessing this group will want to ask about AI. We'll jump into that a little bit. I won't read the disclosure slides. I'm sure you've seen that a million times. All right. Let me go ahead and start. Thank you very much. thank you very much Thank you. thank you Good morning, everybody. good morning everybody My name is Ed Grabscheid. my name is ed grabscheid I'm the CFO of JFrog, and with me today, we have Jeff Schreiner, who is our VP of Investor Relations. i'm the cfo of jfrog and with me today we have jeff schreiner who is our vp of investor relations I'm going to show some slides. i'm going to show some slides I'm going to be relatively quick. i'm going to be relatively quick I see a lot of familiar faces, maybe new faces in the crowd that don't know JFrog. i see a lot of familiar faces maybe new faces in the crowd that don't know jfrog I'll give a high-level overview. i'll give a high-level overview I'll give the time to Jason to ask some questions. i'll give the time to jason to ask some questions I'm guessing you want to hear a little bit about AI. i'm guessing you want to hear a little bit about ai It's not a topic that we've heard much on the investment circuit, but I'm guessing this group will want to ask about AI. it's not a topic that we've heard much on the investment circuit but i'm guessing this group will want to ask about ai We'll jump into that a little bit. we'll jump into that a little bit I won't read the disclosure slides. i won't read the disclosure slides I'm sure you've seen that a million times. i'm sure you've seen that a million times All right. all right Let me go ahead and start. let me go ahead and start I'll give you a quick overview of JFrog and who JFrog is and what we've done over the last year or so. We're a little over 6,000 customers, 6,600 at the end of 2025 and continuing to grow. We have more than 80% of the Fortune 100. Not only do we have a large number of diverse customers, we also target the enterprise with more than 80% of the enterprise customers, 83% to be exact. Today, we're now over 1,900 employees. The last reported was 1,800, and we're continuing to grow. Unlike some other companies that are releasing employees, we continue to hire and invest in our workforce, but also utilization of a lot of AI internally, but we have a good balance of both. We see a very large opportunity in DevSecOps, now more than $40 billion in terms of the TAM that's reported. I'll give you a quick overview of JFrog and who JFrog is and what we've done over the last year or so. i'll give you a quick overview of jfrog and who jfrog is and what we've done over the last year or so We're a little over 6,000 customers, 6,600 at the end of 2025 and continuing to grow. we're a little over 6,000 customers 6,600 at the end of 2025 and continuing to grow We have more than 80% of the Fortune 100. we have more than 80% of the fortune 100 Not only do we have a large number of diverse customers, we also target the enterprise with more than 80% of the enterprise customers, 83% to be exact. not only do we have a large number of diverse customers we also target the enterprise with more than 80% of the enterprise customers 83% to be exact Today, we're now over 1,900 employees. today we're now over 1,900 employees The last reported was 1,800, and we're continuing to grow. the last reported was 1,800 and we're continuing to grow Unlike some other companies that are releasing employees, we continue to hire and invest in our workforce, but also utilization of a lot of AI internally, but we have a good balance of both. unlike some other companies that are releasing employees we continue to hire and invest in our workforce but also utilization of a lot of ai internally but we have a good balance of both We see a very large opportunity in DevSecOps, now more than $40 billion in terms of the TAM that's reported. we see a very large opportunity in devsecops now more than $40 billion in terms of the tam that's reported Very strong revenue growth over the last year, 25% over the last 12 months in terms of revenue growth. In the last reported quarter, we did 26%, more importantly, free cash flow, very strong free cash flow generation, over $150 million in free cash flow, representing a 27% free cash flow margin. Not only are we growing very strong in the top line, we also have a very strong discipline around expansion of operating margins and free cash flow. It's very much focused on our compass of remaining a rule of company. Today, it's a Rule of 50, that is our compass that we continue to guide towards. Lastly, net dollar retention rate of 120% on a trailing four quarter net dollar retention rates are very strong in terms of expansion of the existing customer base as well. Very strong revenue growth over the last year, 25% over the last 12 months in terms of revenue growth. very strong revenue growth over the last year 25% over the last 12 months in terms of revenue growth In the last reported quarter, we did 26%, more importantly, free cash flow, very strong free cash flow generation, over $150 million in free cash flow, representing a 27% free cash flow margin. in the last reported quarter we did 26% more importantly free cash flow very strong free cash flow generation over $150 million in free cash flow representing a 27% free cash flow margin Not only are we growing very strong in the top line, we also have a very strong discipline around expansion of operating margins and free cash flow. not only are we growing very strong in the top line we also have a very strong discipline around expansion of operating margins and free cash flow It's very much focused on our compass of remaining a rule of company. it's very much focused on our compass of remaining a rule of company Today, it's a Rule of 50, that is our compass that we continue to guide towards. today it's a rule of 50 that is our compass that we continue to guide towards Lastly, net dollar retention rate of 120% on a trailing four quarter net dollar retention rates are very strong in terms of expansion of the existing customer base as well. lastly net dollar retention rate of 120% on a trailing four quarter net dollar retention rates are very strong in terms of expansion of the existing customer base as well Our vision overall, we started as a company that was focused on Artifactory, which is the core product, DevOps, we've expanded that to a platform which not only is DevOps, DevSecOps, and now focused on governance, DevGovOps, which is in the era of AI, very critical as we manage and govern the software supply chain. You see here it's about secure software supply chain automation governed, and most importantly, in this era of AI, trusted. Whatever is coming into the organization, it is trusted in terms of the binaries. We manage the binaries. This is why it is critical infrastructure for enterprises and organizations around the globe to have JFrog as their binary management platform in the software supply chain. I talked about the number of customers that we have, over 6,600 customers, a penetration in the Global 2000, and of course, in the Fortune 100. Our vision overall, we started as a company that was focused on Artifactory, which is the core product, DevOps, we've expanded that to a platform which not only is DevOps, DevSecOps, and now focused on governance, DevGovOps, which is in the era of AI, very critical as we manage and govern the software supply chain. our vision overall we started as a company that was focused on artifactory which is the core product devops we've expanded that to a platform which not only is devops devsecops and now focused on governance devgovops which is in the era of ai very critical as we manage and govern the software supply chain You see here it's about secure software supply chain automation governed, and most importantly, in this era of AI, trusted. you see here it's about secure software supply chain automation governed and most importantly in this era of ai trusted Whatever is coming into the organization, it is trusted in terms of the binaries. whatever is coming into the organization it is trusted in terms of the binaries We manage the binaries. we manage the binaries This is why it is critical infrastructure for enterprises and organizations around the globe to have JFrog as their binary management platform in the software supply chain. this is why it is critical infrastructure for enterprises and organizations around the globe to have jfrog as their binary management platform in the software supply chain I talked about the number of customers that we have, over 6,600 customers, a penetration in the Global 2000, and of course, in the Fortune 100. i talked about the number of customers that we have over 6,600 customers a penetration in the global 2000 and of course in the fortune 100 You can see we penetrate more than eight out of 10 in every single industry. Names that you recognize, I don't need to read them. They're very well-known names, and they're all customers. They rely on JFrog, and we continue to expand on that number of customers and how critical for the enterprise JFrog has become across all industries. It's interesting to see it's not just tech, but it's oil and gas. It's the automotive industry. It's the financials all using JFrog. Everyone is becoming a software company. Everyone is releasing software, and JFrog is the critical infrastructure that allows those trusted and secure releases. This is a busy slide, but it really kind of summarizes the journey of JFrog, and I think it's important. We started originally as a developer-loved tool with Artifactory, a repository, and we've expanded that to a platform. You can see we penetrate more than eight out of 10 in every single industry. you can see we penetrate more than eight out of 10 in every single industry Names that you recognize, I don't need to read them. names that you recognize i don't need to read them They're very well-known names, and they're all customers. they're very well-known names and they're all customers They rely on JFrog, and we continue to expand on that number of customers and how critical for the enterprise JFrog has become across all industries. they rely on jfrog and we continue to expand on that number of customers and how critical for the enterprise jfrog has become across all industries It's interesting to see it's not just tech, but it's oil and gas. it's interesting to see it's not just tech but it's oil and gas It's the automotive industry. it's the automotive industry It's the financials all using JFrog. it's the financials all using jfrog Everyone is becoming a software company. everyone is becoming a software company Everyone is releasing software, and JFrog is the critical infrastructure that allows those trusted and secure releases. everyone is releasing software and jfrog is the critical infrastructure that allows those trusted and secure releases This is a busy slide, but it really kind of summarizes the journey of JFrog, and I think it's important. this is a busy slide but it really kind of summarizes the journey of jfrog and i think it's important We started originally as a developer-loved tool with Artifactory, a repository, and we've expanded that to a platform. we started originally as a developer-loved tool with artifactory a repository and we've expanded that to a platform The heart of the system is Artifactory. This is the DevOps solution, and we've built on top of that. We did the acquisition of Vdoo many years ago, and we created the DevSecOps opportunity that sits on top of the DevOps solution, and then we further expanded that with the Qwak acquisition to enable large language models in training, and then from that acquisition, was able to build DevGovOps. You see the stack of how we continue to grow our critical infrastructure to be able to capture this surge of binaries that is coming from this era of AI. The amount of source code that is being created that then becomes a production binary and goes into the organization hosted by JFrog is a platform solution, not only hosted but secured and delivered through distribution. We support over 36 languages. The heart of the system is Artifactory. the heart of the system is artifactory This is the DevOps solution, and we've built on top of that. this is the devops solution and we've built on top of that We did the acquisition of Vdoo many years ago, and we created the DevSecOps opportunity that sits on top of the DevOps solution, and then we further expanded that with the Qwak acquisition to enable large language models in training, and then from that acquisition, was able to build DevGovOps. we did the acquisition of vdoo many years ago and we created the devsecops opportunity that sits on top of the devops solution and then we further expanded that with the qwak acquisition to enable large language models in training and then from that acquisition was able to build devgovops You see the stack of how we continue to grow our critical infrastructure to be able to capture this surge of binaries that is coming from this era of AI. you see the stack of how we continue to grow our critical infrastructure to be able to capture this surge of binaries that is coming from this era of ai The amount of source code that is being created that then becomes a production binary and goes into the organization hosted by JFrog is a platform solution, not only hosted but secured and delivered through distribution. the amount of source code that is being created that then becomes a production binary and goes into the organization hosted by jfrog is a platform solution not only hosted but secured and delivered through distribution We support over 36 languages. we support over 36 languages We support all of the native AI labs and the number of models that are supported and come into the organization, all of the open repositories. Our control plane into JFrog, this is a visual of how that has evolved over the past 12 years with JFrog. We just released the State of the Union. If you haven't had an opportunity to read that, it's very compelling about what's taking place right now, in particular around AI and the vulnerabilities that are created as models are now coming into the organizations at a lightning pace of creation and the vulnerabilities that it creates. We see here that AI models, you have 1.4 million new AI packages being created. The defenses are out of date. You see in terms of what's happening, and the number of vulnerabilities, and you hear it, you see it daily. We support all of the native AI labs and the number of models that are supported and come into the organization, all of the open repositories. Our control plane into JFrog, this is a visual of how that has evolved over the past 12 years with JFrog. we support all of the native ai labs and the number of models that are supported and come into the organization all of the open repositories. our control plane into jfrog this is a visual of how that has evolved over the past 12 years with jfrog We just released the State of the Union. we just released the state of the union If you haven't had an opportunity to read that, it's very compelling about what's taking place right now, in particular around AI and the vulnerabilities that are created as models are now coming into the organizations at a lightning pace of creation and the vulnerabilities that it creates. if you haven't had an opportunity to read that it's very compelling about what's taking place right now in particular around ai and the vulnerabilities that are created as models are now coming into the organizations at a lightning pace of creation and the vulnerabilities that it creates We see here that AI models, you have 1.4 million new AI packages being created. we see here that ai models you have 1.4 million new ai packages being created The defenses are out of date. the defenses are out of date You see in terms of what's happening, and the number of vulnerabilities, and you hear it, you see it daily. you see in terms of what's happening and the number of vulnerabilities and you hear it you see it daily There's all types of vulnerabilities in npm, the Shai-Hulud attack, and the vulnerabilities that are created and the importance of governance and what is needed in order to protect your organization and why JFrog is so critical in that process. Then lastly, the shadow AI. These are packages that are being used within the organization that the CISO may not have awareness. Organizations are adopting AI at a pace that can't necessarily be controlled. We see that JFrog allows for that governance layer and protection. Again, seeing this opportunity around governance will be the next vector of growth for JFrog, and this is what's driving the continuation and expansion of the platform. Real quickly on some customer success stories. Maybe skip through this fast, but what you see here is three Fortune 100 companies that depend on JFrog, one of those being an automotive company. There's all types of vulnerabilities in npm, the Shai-Hulud attack, and the vulnerabilities that are created and the importance of governance and what is needed in order to protect your organization and why JFrog is so critical in that process. there's all types of vulnerabilities in npm the shai-hulud attack and the vulnerabilities that are created and the importance of governance and what is needed in order to protect your organization and why jfrog is so critical in that process Then lastly, the shadow AI. then lastly the shadow ai These are packages that are being used within the organization that the CISO may not have awareness. these are packages that are being used within the organization that the ciso may not have awareness Organizations are adopting AI at a pace that can't necessarily be controlled. organizations are adopting ai at a pace that can't necessarily be controlled We see that JFrog allows for that governance layer and protection. we see that jfrog allows for that governance layer and protection Again, seeing this opportunity around governance will be the next vector of growth for JFrog, and this is what's driving the continuation and expansion of the platform. again seeing this opportunity around governance will be the next vector of growth for jfrog and this is what's driving the continuation and expansion of the platform Real quickly on some customer success stories. real quickly on some customer success stories Maybe skip through this fast, but what you see here is three Fortune 100 companies that depend on JFrog, one of those being an automotive company. maybe skip through this fast but what you see here is three fortune 100 companies that depend on jfrog one of those being an automotive company They needed to expand in the cloud. A previous competitor, I should say, that didn't allow them to expand. They moved over their workloads to JFrog into the cloud, giving them the opportunity to move at a very quick pace and adopt the security solution. The second one being a financial services company. They went wall to wall with security, very quickly adopted it, not only with Curation, but Advanced Security, replacing disparate tools, and able to do that in hours to replace disparate solutions. The last one there being a tech company that has multiple developers. They were able, an organization with 20,000 developers, consolidate that, have full control over their system, save significant amount of money, and make sure there was continuity across their software supply chain. They needed to expand in the cloud. they needed to expand in the cloud A previous competitor, I should say, that didn't allow them to expand. a previous competitor i should say that didn't allow them to expand They moved over their workloads to JFrog into the cloud, giving them the opportunity to move at a very quick pace and adopt the security solution. they moved over their workloads to jfrog into the cloud giving them the opportunity to move at a very quick pace and adopt the security solution The second one being a financial services company. the second one being a financial services company They went wall to wall with security, very quickly adopted it, not only with Curation, but Advanced Security, replacing disparate tools, and able to do that in hours to replace disparate solutions. they went wall to wall with security very quickly adopted it not only with curation but advanced security replacing disparate tools and able to do that in hours to replace disparate solutions The last one there being a tech company that has multiple developers. the last one there being a tech company that has multiple developers They were able, an organization with 20,000 developers, consolidate that, have full control over their system, save significant amount of money, and make sure there was continuity across their software supply chain. they were able an organization with 20,000 developers consolidate that have full control over their system save significant amount of money and make sure there was continuity across their software supply chain Great success stories with very large companies, and continuing to expand their footprint with JFrog, modernizing their tech stack, and also growing significantly within JFrog. Just quickly on what the outlook from a revenue perspective over the last year, 24% on a year-over-year basis. When you look at the quarter, we've guided, and we'll talk a little bit about the guidance philosophy, but if you look at the guide for next quarter, it's at 18%. However, we only guide on commitment, so what is contractually committed to JFrog, and what we've seen over the last year or so has been significant usage over minimum commitments. That's not considered in our guidance, nor is large migration opportunities and very large deals. That's being de-risked out of there, and we'll see where we go for the remainder of the year. Great success stories with very large companies, and continuing to expand their footprint with JFrog, modernizing their tech stack, and also growing significantly within JFrog. great success stories with very large companies and continuing to expand their footprint with jfrog modernizing their tech stack and also growing significantly within jfrog Just quickly on what the outlook from a revenue perspective over the last year, 24% on a year-over-year basis. just quickly on what the outlook from a revenue perspective over the last year 24% on a year-over-year basis When you look at the quarter, we've guided, and we'll talk a little bit about the guidance philosophy, but if you look at the guide for next quarter, it's at 18%. when you look at the quarter we've guided and we'll talk a little bit about the guidance philosophy but if you look at the guide for next quarter it's at 18% However, we only guide on commitment, so what is contractually committed to JFrog, and what we've seen over the last year or so has been significant usage over minimum commitments. however we only guide on commitment so what is contractually committed to jfrog and what we've seen over the last year or so has been significant usage over minimum commitments That's not considered in our guidance, nor is large migration opportunities and very large deals. that's not considered in our guidance nor is large migration opportunities and very large deals That's being de-risked out of there, and we'll see where we go for the remainder of the year. that's being de-risked out of there and we'll see where we go for the remainder of the year We're pretty optimistic and positive with how things are playing out for the year. The right-hand side just shows this progressive growth as a SaaS company in our revenues. In addition to not only having very strong net dollar retention, we also have exceptionally strong gross retention. Once customers are with JFrog, they understand the mission-critical nature of the infrastructure, and they don't churn. We've maintained best-of-class gross retention rates well above 97%, between 97% and 98% over the last 24 months, two years or so. Very strong retention rates and customers stay with JFrog. There's no reason for them to churn once they come to JFrog. It's a very sticky product, and they continue to stay with JFrog and in fact expand it at a rate of 120% gross retention rates or net retention rates. Thank you very much. We're pretty optimistic and positive with how things are playing out for the year. we're pretty optimistic and positive with how things are playing out for the year The right-hand side just shows this progressive growth as a SaaS company in our revenues. the right-hand side just shows this progressive growth as a saas company in our revenues In addition to not only having very strong net dollar retention, we also have exceptionally strong gross retention. in addition to not only having very strong net dollar retention we also have exceptionally strong gross retention Once customers are with JFrog, they understand the mission-critical nature of the infrastructure, and they don't churn. once customers are with jfrog they understand the mission-critical nature of the infrastructure and they don't churn We've maintained best-of-class gross retention rates well above 97%, between 97% and 98% over the last 24 months, two years or so. we've maintained best-of-class gross retention rates well above 97% between 97% and 98% over the last 24 months two years or so Very strong retention rates and customers stay with JFrog. very strong retention rates and customers stay with jfrog There's no reason for them to churn once they come to JFrog. there's no reason for them to churn once they come to jfrog It's a very sticky product, and they continue to stay with JFrog and in fact expand it at a rate of 120% gross retention rates or net retention rates. it's a very sticky product and they continue to stay with jfrog and in fact expand it at a rate of 120% gross retention rates or net retention rates Thank you very much. thank you very much

Speaker 2: Okay. Thanks, Ed. I want to just level set the conversation because I know for some investors that I talk to, JFrog's a little bit intimidating because of the technology and software development is not a natural thing that people understand how it works. Maybe if you can start out, explain where JFrog plays in the process of software development. Okay. okay Thanks, Ed. thanks ed I want to just level set the conversation because I know for some investors that I talk to, JFrog's a little bit intimidating because of the technology and software development is not a natural thing that people understand how it works. i want to just level set the conversation because i know for some investors that i talk to jfrog's a little bit intimidating because of the technology and software development is not a natural thing that people understand how it works Maybe if you can start out, explain where JFrog plays in the process of software development. maybe if you can start out explain where jfrog plays in the process of software development

Speaker 1: Yeah. I think it is a bit intimidating because I think when you understand code and writing software, you understand English, German, Spanish, and how you write the code, and you understand that you have to observe the code once it goes into production. What happens in the middle is the binaries. Binaries were the red-headed stepchild. Nobody really talked about binaries. They didn't understand binaries because 20 years ago, you wrote the code and you deployed it maybe once every year or every two years. Open source packages came into play, and then you'd start to pull open source. The pace of code creation exponentially grew. Now in the era of AI. Yeah. yeah I think it is a bit intimidating because I think when you understand code and writing software, you understand English, German, Spanish, and how you write the code, and you understand that you have to observe the code once it goes into production. i think it is a bit intimidating because i think when you understand code and writing software you understand english german spanish and how you write the code and you understand that you have to observe the code once it goes into production What happens in the middle is the binaries. what happens in the middle is the binaries Binaries were the red-headed stepchild. binaries were the red-headed stepchild Nobody really talked about binaries. nobody really talked about binaries They didn't understand binaries because 20 years ago, you wrote the code and you deployed it maybe once every year or every two years. they didn't understand binaries because 20 years ago you wrote the code and you deployed it maybe once every year or every two years Open source packages came into play, and then you'd start to pull open source. open source packages came into play and then you'd start to pull open source The pace of code creation exponentially grew. the pace of code creation exponentially grew Now in the era of AI. now in the era of ai Code is basically becoming commoditized. You can write code every single day, hundreds of codes, and maybe not even need humans to do that anymore. What you need is the machine language, the binary, and the management. That becomes the primary asset, and this is what JFrog has always focused on, and it's around secure and trusted infrastructure to be able to deploy those machine languages, the binary, and this is what JFrog does. Code is basically becoming commoditized. code is basically becoming commoditized You can write code every single day, hundreds of codes, and maybe not even need humans to do that anymore. you can write code every single day hundreds of codes and maybe not even need humans to do that anymore What you need is the machine language, the binary, and the management. what you need is the machine language the binary and the management That becomes the primary asset, and this is what JFrog has always focused on, and it's around secure and trusted infrastructure to be able to deploy those machine languages, the binary, and this is what JFrog does. that becomes the primary asset and this is what jfrog has always focused on and it's around secure and trusted infrastructure to be able to deploy those machine languages the binary and this is what jfrog does

Speaker 2: Got you. Source code is text-based that is not readable by machine. Got you. got you Source code is text-based that is not readable by machine. source code is text-based that is not readable by machine

Speaker 1: Correct Correct correct

Speaker 2: By computers. By computers. by computers

Speaker 1: Correct. Correct. correct

Speaker 2: You have to do some type of a conversion into the. You have to do some type of a conversion into the. you have to do some type of a conversion into the

Speaker 1: Compile, convert, and then you release. Compile, convert, and then you release. compile convert and then you release

Speaker 2: Right. You guys are in that process of right before production, you're sort of the last step in the process. Right. right You guys are in that process of right before production, you're sort of the last step in the process. you guys are in that process of right before production you're sort of the last step in the process

Speaker 1: Yeah Yeah yeah

Speaker 2: before it goes into a production-. before it goes into a production-. before it goes into a production-

Speaker 1: We become the system of record for that production code. We become the system of record for that production code. we become the system of record for that production code

Speaker 2: Got you. All right. Maybe frame the case for investors for why JFrog is an AI winner? Got you. got you All right. all right Maybe frame the case for investors for why JFrog is an AI winner? maybe frame the case for investors for why jfrog is an ai winner

Speaker 1: Mm-hmm. Yeah. You want me to take that or you want to? Mm-hmm. mm-hmm Yeah. yeah You want me to take that or you want to? you want me to take that or you want to No, I'll go ahead and start, and then you can take it. It's clear today, as code is being written by machines or a combination of humans and machines, the amount of code that has been created has exploded. Truly has exploded. You see the statistics. It's something like growth in the amount of code 14 times, 15 times from historical levels. That code, once it becomes production-ready and it's clean code, not slop and experimentation, but once it becomes clean code, ends up becoming this machine language. It's binary. As code is being created, more binaries will be created, and there's a need to host those binaries to make sure that you're scanning those binaries for vulnerabilities because the attack surface is now coming through the open source packages of the binaries. Then those are being released, and you have to update those binaries. No, I'll go ahead and start, and then you can take it. no i'll go ahead and start and then you can take it It's clear today, as code is being written by machines or a combination of humans and machines, the amount of code that has been created has exploded. it's clear today as code is being written by machines or a combination of humans and machines the amount of code that has been created has exploded Truly has exploded. truly has exploded You see the statistics. you see the statistics It's something like growth in the amount of code 14 times, 15 times from historical levels. it's something like growth in the amount of code 14 times 15 times from historical levels That code, once it becomes production-ready and it's clean code, not slop and experimentation, but once it becomes clean code, ends up becoming this machine language. that code once it becomes production-ready and it's clean code not slop and experimentation but once it becomes clean code ends up becoming this machine language It's binary. it's binary As code is being created, more binaries will be created, and there's a need to host those binaries to make sure that you're scanning those binaries for vulnerabilities because the attack surface is now coming through the open source packages of the binaries. as code is being created more binaries will be created and there's a need to host those binaries to make sure that you're scanning those binaries for vulnerabilities because the attack surface is now coming through the open source packages of the binaries Then those are being released, and you have to update those binaries. then those are being released and you have to update those binaries As more code is being created, more binaries are being created, and more production binaries are being created, and this benefits JFrog based on how we monetize, and primarily in the cloud, that comes in as data consumption, and then you deploy that. As more code is being created, more binaries are being created, and more production binaries are being created, and this benefits JFrog based on how we monetize, and primarily in the cloud, that comes in as data consumption, and then you deploy that. as more code is being created more binaries are being created and more production binaries are being created and this benefits jfrog based on how we monetize and primarily in the cloud that comes in as data consumption and then you deploy that

Speaker 3: I think that what I would add to what Ed delivered and talked about in terms of binaries and the impact in the world of AI, I think that one thing that needs to be understood is the Lego-type effect of what JFrog has built, is that the underlying infrastructure or the platform is something I take, and that becomes more sticky to me as a user, as I add on DevSecOps, and that becomes a combination of DevOps and DevSecOps. I now add on DevGovOps, which encompasses all three, and governance is going to be critical in the world of AI. Today, right now, we're at a level where management teams and the Board are cracking the whip and saying, "We want you to run fast and start building with these models, training these models." That's the focus today. I think that what I would add to what Ed delivered and talked about in terms of binaries and the impact in the world of AI, I think that one thing that needs to be understood is the Lego-type effect of what JFrog has built, is that the underlying infrastructure or the platform is something I take, and that becomes more sticky to me as a user, as I add on DevSecOps, and that becomes a combination of DevOps and DevSecOps. i think that what i would add to what ed delivered and talked about in terms of binaries and the impact in the world of ai i think that one thing that needs to be understood is the lego-type effect of what jfrog has built is that the underlying infrastructure or the platform is something i take and that becomes more sticky to me as a user as i add on devsecops and that becomes a combination of devops and devsecops I now add on DevGovOps, which encompasses all three, and governance is going to be critical in the world of AI. i now add on devgovops which encompasses all three and governance is going to be critical in the world of ai Today, right now, we're at a level where management teams and the Board are cracking the whip and saying, "We want you to run fast and start building with these models, training these models." That's the focus today. today right now we're at a level where management teams and the board are cracking the whip and saying "we want you to run fast and start building with these models training these models." that's the focus today You see that in the Git pushes and the tokenization usage. What's going to happen is when that agent becomes autonomous, it will shift quickly to the governance of that agent. To give you guys an analogy that we have used that I think has been received well, is the fact that the models will be akin to lawyers. I don't think that any of us would like to find ourselves in a courtroom with just lawyers. They'd be smacking each other's motions down, lots of confusion, things of that nature. You're still going to need a judge, and that is the role that JFrog plays. You see that in the Git pushes and the tokenization usage. you see that in the git pushes and the tokenization usage What's going to happen is when that agent becomes autonomous, it will shift quickly to the governance of that agent. what's going to happen is when that agent becomes autonomous it will shift quickly to the governance of that agent To give you guys an analogy that we have used that I think has been received well, is the fact that the models will be akin to lawyers. to give you guys an analogy that we have used that i think has been received well is the fact that the models will be akin to lawyers I don't think that any of us would like to find ourselves in a courtroom with just lawyers. i don't think that any of us would like to find ourselves in a courtroom with just lawyers They'd be smacking each other's motions down, lots of confusion, things of that nature. they'd be smacking each other's motions down lots of confusion things of that nature You're still going to need a judge, and that is the role that JFrog plays. you're still going to need a judge and that is the role that jfrog plays I want to reiterate that even as the machines no longer need us mere humans, and they start realizing that their end goal is to produce a binary, and they start building binaries, JFrog will still be critical and will still be the judge because the creators will never be the governors in the enterprise. I want to reiterate that even as the machines no longer need us mere humans, and they start realizing that their end goal is to produce a binary, and they start building binaries, JFrog will still be critical and will still be the judge because the creators will never be the governors in the enterprise. i want to reiterate that even as the machines no longer need us mere humans and they start realizing that their end goal is to produce a binary and they start building binaries jfrog will still be critical and will still be the judge because the creators will never be the governors in the enterprise

Speaker 2: Okay. Very helpful. Maybe talk about the Anthropic day that we were talking about before the presentation started. I think the stock was down 20% or something. Okay. okay Very helpful. very helpful Maybe talk about the Anthropic day that we were talking about before the presentation started. maybe talk about the anthropic day that we were talking about before the presentation started I think the stock was down 20% or something. i think the stock was down 20% or something

Speaker 3: More than that. More than that. more than that

Speaker 2: 30%, just on an announcement from- 30%, just on an announcement from- 30% just on an announcement from-

Speaker 3: Yeah Yeah yeah

Speaker 1: Anthropic on a product called Claude Code Security. Anthropic on a product called Claude Code Security. anthropic on a product called claude code security

Speaker 2: Just talk about how that product would overlap or not overlap with what you guys offer. Just talk about how that product would overlap or not overlap with what you guys offer. just talk about how that product would overlap or not overlap with what you guys offer

Speaker 3: That product was basically an announcement that they were going to be bringing to market something that's been in the market for the greater part of 20-30 years in a source code scanning tool. That is not where we play. We don't have any security pipeline revenue, outstanding RPO that is related to static code analysis, which that is what that code scanning tool was and is related to. What I think was missed on that day, other than the governance aspect on the security side, what was missed is that if they are doing this, there was a perception that if they are doing the source code scanning, that it's so good that by the time it gets to binaries, you don't have to do anything. That product was basically an announcement that they were going to be bringing to market something that's been in the market for the greater part of 20- 30 years in a source code scanning tool. that product was basically an announcement that they were going to be bringing to market something that's been in the market for the greater part of 20- 30 years in a source code scanning tool That is not where we play. that is not where we play We don't have any security pipeline revenue, outstanding RPO that is related to static code analysis, which that is what that code scanning tool was and is related to. we don't have any security pipeline revenue outstanding rpo that is related to static code analysis which that is what that code scanning tool was and is related to What I think was missed on that day, other than the governance aspect on the security side, what was missed is that if they are doing this, there was a perception that if they are doing the source code scanning, that it's so good that by the time it gets to binaries, you don't have to do anything. what i think was missed on that day other than the governance aspect on the security side what was missed is that if they are doing this there was a perception that if they are doing the source code scanning that it's so good that by the time it gets to binaries you don't have to do anything

Speaker 2: Yeah. Yeah. yeah

Speaker 3: That's not true because, one, I can tell you that secrets detection was done for 20+ years in source code, and JFrog came along, and now it's being done in binaries because we found out that it's not being done as well as it should have. What I think people missed is that if I create a better code, it's cleaner, it's been scrubbed over several times with now their brilliant source code scanner, and we would tell you that scanning is in fact probably commoditized. That's probably better to reach what Ed was describing, which we want at JFrog, which is a production asset. That's not true because, one, I can tell you that secrets detection was done for 20+ years in source code, and JFrog came along, and now it's being done in binaries because we found out that it's not being done as well as it should have. that's not true because one i can tell you that secrets detection was done for 20+ years in source code and jfrog came along and now it's being done in binaries because we found out that it's not being done as well as it should have What I think people missed is that if I create a better code, it's cleaner, it's been scrubbed over several times with now their brilliant source code scanner, and we would tell you that scanning is in fact probably commoditized. what i think people missed is that if i create a better code it's cleaner it's been scrubbed over several times with now their brilliant source code scanner and we would tell you that scanning is in fact probably commoditized That's probably better to reach what Ed was describing, which we want at JFrog, which is a production asset. that's probably better to reach what ed was describing which we want at jfrog which is a production asset

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Putting the binary into production, which isn't really happening yet today. Why is that? Today with humans, we have customers who are doing 6,000 updates a day. What is going to happen in the world of AI? We are being asked by our customers to provide remediation guarantees of less than four hours today. We joke that by next year, it may be an hour. Two years from now, it may be minutes. That is the criticality. These models are very intelligent. They're equivalent to 1000 person research security team, but finding the vulnerabilities is not where the value lies. Putting the binary into production, which isn't really happening yet today. putting the binary into production which isn't really happening yet today Why is that? why is that Today with humans, we have customers who are doing 6,000 updates a day. What is going to happen in the world of AI? today with humans we have customers who are doing 6,000 updates a day. what is going to happen in the world of ai We are being asked by our customers to provide remediation guarantees of less than four hours today. we are being asked by our customers to provide remediation guarantees of less than four hours today We joke that by next year, it may be an hour. we joke that by next year it may be an hour Two years from now, it may be minutes. two years from now it may be minutes That is the criticality. that is the criticality These models are very intelligent. these models are very intelligent They're equivalent to 1000 person research security team, but finding the vulnerabilities is not where the value lies. they're equivalent to 1000 person research security team but finding the vulnerabilities is not where the value lies In the world of AI and this new team, TeamPCP, and the sophistication they have at hacking very large, well-known repositories, they are now having kind of a weapon in their own hands, and it's a race between you and them as to who's going to patch that vulnerability first. In the world of AI and this new team, TeamPCP, and the sophistication they have at hacking very large, well-known repositories, they are now having kind of a weapon in their own hands, and it's a race between you and them as to who's going to patch that vulnerability first. in the world of ai and this new team teampcp and the sophistication they have at hacking very large well-known repositories they are now having kind of a weapon in their own hands and it's a race between you and them as to who's going to patch that vulnerability first

Speaker 2: Got you. Okay. I guess those players in the market, the labs, do you have partnerships with them? How do you interact with them in sort of a daily basis? Got you. got you Okay. okay I guess those players in the market, the labs, do you have partnerships with them? i guess those players in the market the labs do you have partnerships with them How do you interact with them in sort of a daily basis? how do you interact with them in sort of a daily basis

Speaker 3: With the labs, we've had, as of March, what we've disclosed, and obviously, these are the type of customers you can't really name, but there's kind of five, maybe five to seven, I always say four through seven is your own opinion possibly, kind of major frontier labs out there. We feel that we had captured three of those as of the March quarter. Those three had been deployments into our self-hosted side of the business. Knock on wood, Ed and I have learned that nothing is official until the quarter has closed. We hope to have some sort of general conversation about possibly talking about a fourth lab this quarter. With the labs, we've had, as of March, what we've disclosed, and obviously, these are the type of customers you can't really name, but there's kind of five, maybe five to seven, I always say four through seven is your own opinion possibly, kind of major frontier labs out there. with the labs we've had as of march what we've disclosed and obviously these are the type of customers you can't really name but there's kind of five maybe five to seven i always say four through seven is your own opinion possibly kind of major frontier labs out there We feel that we had captured three of those as of the March quarter. we feel that we had captured three of those as of the march quarter Those three had been deployments into our self-hosted side of the business. those three had been deployments into our self-hosted side of the business Knock on wood, Ed and I have learned that nothing is official until the quarter has closed. knock on wood ed and i have learned that nothing is official until the quarter has closed We hope to have some sort of general conversation about possibly talking about a fourth lab this quarter. we hope to have some sort of general conversation about possibly talking about a fourth lab this quarter I think the thing that we've tried to communicate that we can, to the extent we can, that's unique, is that this would be a lab that would choose to engage with JFrog in a hybrid capacity. There would be some cloud exposure, and we would start to learn, I think, over time. I pause everyone. Don't come to me next quarter asking about cloud usage from this customer. We want to see what a leading frontier lab will maybe decide as what is the right workload for self-hosted, what is the right workload for cloud. I don't think that it precludes the other three who have chosen to go down their own build their data center path from becoming hybrid in the future. It's just this is how each has chosen to engage with JFrog. I think the thing that we've tried to communicate that we can, to the extent we can, that's unique, is that this would be a lab that would choose to engage with JFrog in a hybrid capacity. i think the thing that we've tried to communicate that we can to the extent we can that's unique is that this would be a lab that would choose to engage with jfrog in a hybrid capacity There would be some cloud exposure, and we would start to learn, I think, over time. there would be some cloud exposure and we would start to learn i think over time I pause everyone. i pause everyone Don't come to me next quarter asking about cloud usage from this customer. don't come to me next quarter asking about cloud usage from this customer We want to see what a leading frontier lab will maybe decide as what is the right workload for self-hosted, what is the right workload for cloud. we want to see what a leading frontier lab will maybe decide as what is the right workload for self-hosted what is the right workload for cloud I don't think that it precludes the other three who have chosen to go down their own build their data center path from becoming hybrid in the future. i don't think that it precludes the other three who have chosen to go down their own build their data center path from becoming hybrid in the future It's just this is how each has chosen to engage with JFrog. it's just this is how each has chosen to engage with jfrog

Speaker 2: Yeah. A good segue to the cloud business, maybe for you, Ed. Yeah. yeah A good segue to the cloud business, maybe for you, Ed. a good segue to the cloud business maybe for you ed

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Does it surprise you that investors seem to, I don't know, not, I won't say disrespect the self-managed part of the business, but everything's always about cloud-? Does it surprise you that investors seem to, I don't know, not, I won't say disrespect the self-managed part of the business, but everything's always about cloud-? does it surprise you that investors seem to i don't know not i won't say disrespect the self-managed part of the business but everything's always about cloud-

Speaker 1: Yeah Yeah yeah

Speaker 2: it feels like with software companies right now. How do you just help people think about the mix of the business and why both are still super important? it feels like with software companies right now. it feels like with software companies right now How do you just help people think about the mix of the business and why both are still super important? how do you just help people think about the mix of the business and why both are still super important

Speaker 1: Yeah. Both are important, but we're strategically built and aligned on moving our customers to the cloud for a couple of reasons. Number one is the monetization mechanism, because we monetize in the cloud off of data consumption and storage. You have an infinite amount of growth, unlike self-hosted, where it's monetized on the number of servers. Neither model is a seat-based model. We're not concerned about number of seats, which is very important, especially as you see a transition, and I think there's a lot of pressure on companies that have a seat-based model because of what is a seat in the future. If it's an agent, are you going to charge that agent for a seat, and does one agent take 100 seats? We don't know that yet. We're immune to that transition. Yeah. yeah Both are important, but we're strategically built and aligned on moving our customers to the cloud for a couple of reasons. both are important but we're strategically built and aligned on moving our customers to the cloud for a couple of reasons Number one is the monetization mechanism, because we monetize in the cloud off of data consumption and storage. number one is the monetization mechanism because we monetize in the cloud off of data consumption and storage You have an infinite amount of growth, unlike self-hosted, where it's monetized on the number of servers. you have an infinite amount of growth unlike self-hosted where it's monetized on the number of servers Neither model is a seat-based model. neither model is a seat-based model We're not concerned about number of seats, which is very important, especially as you see a transition, and I think there's a lot of pressure on companies that have a seat-based model because of what is a seat in the future. we're not concerned about number of seats which is very important especially as you see a transition and i think there's a lot of pressure on companies that have a seat-based model because of what is a seat in the future If it's an agent, are you going to charge that agent for a seat, and does one agent take 100 seats? if it's an agent are you going to charge that agent for a seat and does one agent take 100 seats We don't know that yet. we don't know that yet We're immune to that transition. we're immune to that transition On the other hand, we really strategically are trying to move customers to our cloud, and this is what we're focused on, and the results have been very good. We did 50% growth in the cloud. Why did we do that growth? There's a couple of reasons that we saw. Number one, we only guide, as I mentioned, on what we have committed. We have a model that is not 100% based on data consumption. There is a commitment. You make a commitment to JFrog. Over the last year or so, we've seen many of our customers, in fact, the vast majority of our customers, going over those minimum commitments. In Q1 of this year, we saw significant growth being driven by those customers using more than their minimum commitments. That usage over the minimum commit comes with an overage rate. On the other hand, we really strategically are trying to move customers to our cloud, and this is what we're focused on, and the results have been very good. on the other hand we really strategically are trying to move customers to our cloud and this is what we're focused on and the results have been very good We did 50% growth in the cloud. we did 50% growth in the cloud Why did we do that growth? why did we do that growth There's a couple of reasons that we saw. there's a couple of reasons that we saw Number one, we only guide, as I mentioned, on what we have committed. number one we only guide as i mentioned on what we have committed We have a model that is not 100% based on data consumption. we have a model that is not 100% based on data consumption There is a commitment. there is a commitment You make a commitment to JFrog. you make a commitment to jfrog Over the last year or so, we've seen many of our customers, in fact, the vast majority of our customers, going over those minimum commitments. over the last year or so we've seen many of our customers in fact the vast majority of our customers going over those minimum commitments In Q1 of this year, we saw significant growth being driven by those customers using more than their minimum commitments. in q1 of this year we saw significant growth being driven by those customers using more than their minimum commitments That usage over the minimum commit comes with an overage rate. that usage over the minimum commit comes with an overage rate It comes with a decision that they'll have to make in the future to do an upsell to a higher commitment. We'll see how that plays out in this token economy. We're very focused on converting those customers. Cloud, and for the right reasons, investors and the market are focused on the cloud because of the growth potential. It comes with a decision that they'll have to make in the future to do an upsell to a higher commitment. it comes with a decision that they'll have to make in the future to do an upsell to a higher commitment We'll see how that plays out in this token economy. we'll see how that plays out in this token economy We're very focused on converting those customers. we're very focused on converting those customers Cloud, and for the right reasons, investors and the market are focused on the cloud because of the growth potential. cloud and for the right reasons investors and the market are focused on the cloud because of the growth potential

Speaker 2: That's a great segue to the next question, which is, where is the money going to come from for all these customers? That's a great segue to the next question, which is, where is the money going to come from for all these customers? that's a great segue to the next question which is where is the money going to come from for all these customers

Speaker 1: Yeah. Yeah. yeah

Speaker 2: They're spending so much on tokens. There's a lot of stories of customers burning through their token budgets. They're spending so much on tokens. they're spending so much on tokens There's a lot of stories of customers burning through their token budgets. there's a lot of stories of customers burning through their token budgets

Speaker 1: Yeah Yeah yeah

Speaker 2: In three or four months, their annual token budgets. How do you see the buying behavior sort of evolving? In three or four months, their annual token budgets. in three or four months their annual token budgets How do you see the buying behavior sort of evolving? how do you see the buying behavior sort of evolving

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Is this going to actually crimp the budget for tools like JFrog? Is this going to actually crimp the budget for tools like JFrog? is this going to actually crimp the budget for tools like jfrog

Speaker 1: Yeah. Well, I don't think anybody's immune to it at this point, including ourselves. You want to adopt quick, you want to be relevant in the era of AI. You're adopting tools as quickly as you can. You're building as quickly as you can. You can't do an 80% build with an AI agent, and then you run out of tokens and then take that over as a human to finish the last 20%. You end up buying more tokens. That's just the nature of the business right now. There will be a rationalization. The CFO office today is probably a little bit looser based on this race to adopt. Religion will come into play at some point. We know that. It's always been the case. It will not infinitely grow without any rationalization. Today, what do we see? There's probably two ways to do it. Yeah. yeah Well, I don't think anybody's immune to it at this point, including ourselves. well i don't think anybody's immune to it at this point including ourselves You want to adopt quick, you want to be relevant in the era of AI. you want to adopt quick you want to be relevant in the era of ai You're adopting tools as quickly as you can. you're adopting tools as quickly as you can You're building as quickly as you can. you're building as quickly as you can You can't do an 80% build with an AI agent, and then you run out of tokens and then take that over as a human to finish the last 20%. you can't do an 80% build with an ai agent and then you run out of tokens and then take that over as a human to finish the last 20% You end up buying more tokens. you end up buying more tokens That's just the nature of the business right now. that's just the nature of the business right now There will be a rationalization. there will be a rationalization The CFO office today is probably a little bit looser based on this race to adopt. the cfo office today is probably a little bit looser based on this race to adopt Religion will come into play at some point. religion will come into play at some point We know that. we know that It's always been the case. it's always been the case It will not infinitely grow without any rationalization. it will not infinitely grow without any rationalization Today, what do we see? today what do we see There's probably two ways to do it. there's probably two ways to do it There's a responsible way to do it, how we manage it, and we've always been very responsible. There's other organizations that are just simply cutting headcount, reducing headcount, and I think that's what they're doing right now to manage their spend. In addition to what you see in the news with organizations blowing through their budget, they're also cutting headcount right now at a very high pace. Some very notable companies that have reduced headcount, saying that it's efficiency through AI, and I think it's really a way to offset some of the costs that we're seeing today, which is a good thing because it gives you a bit of a runway to spend. When you're asked, is this durable? It's probably for a while it'll be durable because you're reducing headcount to offset those expenses. There's a responsible way to do it, how we manage it, and we've always been very responsible. there's a responsible way to do it how we manage it and we've always been very responsible There's other organizations that are just simply cutting headcount, reducing headcount, and I think that's what they're doing right now to manage their spend. there's other organizations that are just simply cutting headcount reducing headcount and i think that's what they're doing right now to manage their spend In addition to what you see in the news with organizations blowing through their budget, they're also cutting headcount right now at a very high pace. in addition to what you see in the news with organizations blowing through their budget they're also cutting headcount right now at a very high pace Some very notable companies that have reduced headcount, saying that it's efficiency through AI, and I think it's really a way to offset some of the costs that we're seeing today, which is a good thing because it gives you a bit of a runway to spend. some very notable companies that have reduced headcount saying that it's efficiency through ai and i think it's really a way to offset some of the costs that we're seeing today which is a good thing because it gives you a bit of a runway to spend When you're asked, is this durable? when you're asked is this durable It's probably for a while it'll be durable because you're reducing headcount to offset those expenses. it's probably for a while it'll be durable because you're reducing headcount to offset those expenses

Speaker 2: Yeah, actually, GitLab reported last night, you may have seen, they talked about seat contraction with some of their customers, and I imagine that's part of the budget management that's going on right now. Yeah, actually, GitLab reported last night, you may have seen, they talked about seat contraction w ith some of their customers, and I imagine that's part of the budget management that's going on right now. yeah actually gitlab reported last night you may have seen they talked about seat contraction w ith some of their customers and i imagine that's part of the budget management that's going on right now

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I want to ask you next on security, how material are security products to your business? What's the long-term revenue mix in your mind between the core Artifactory product and security? Maybe before you answer that, just explain what you guys are doing in security. I want to ask you next on security, how material are security products to your business? i want to ask you next on security how material are security products to your business What's the long-term revenue mix in your mind between the core Artifactory product and security? what's the long-term revenue mix in your mind between the core artifactory product and security Maybe before you answer that, just explain what you guys are doing in security. maybe before you answer that just explain what you guys are doing in security

Speaker 1: I'll start, Jeff. You can maybe go a little bit more technical than me on the security piece. We offer as an add-on today two security products. We have Curation, which has been a very compelling security product for the enterprise, and I think with the attacks that we've seen really starting in Q3 of last year, not only did it create a bit of a fear buy, I think now it's no longer fear. I think it's now become pretty well known that you must have Curation in your organization, and we see that in our pipeline and we're growing a very strong pipeline with Curation. There's Advanced Security. We call it JAS, JFrog Advanced Security, which is a platform security product that replaces disparate tools, seven-plus disparate tools. I'll start, Jeff. i'll start jeff You can maybe go a little bit more technical than me on the security piece. you can maybe go a little bit more technical than me on the security piece We offer as an add-on today two security products. we offer as an add-on today two security products We have Curation, which has been a very compelling security product for the enterprise, and I think with the attacks that we've seen really starting in Q3 of last year, not only did it create a bit of a fear buy, I think now it's no longer fear. we have curation which has been a very compelling security product for the enterprise and i think with the attacks that we've seen really starting in q3 of last year not only did it create a bit of a fear buy i think now it's no longer fear I think it's now become pretty well known that you must have Curation in your organization, and we see that in our pipeline and we're growing a very strong pipeline with Curation. i think it's now become pretty well known that you must have curation in your organization and we see that in our pipeline and we're growing a very strong pipeline with curation There's Advanced Security. there's advanced security We call it JAS, JFrog Advanced Security, which is a platform security product that replaces disparate tools, seven-plus disparate tools. we call it jas jfrog advanced security which is a platform security product that replaces disparate tools seven-plus disparate tools That's still very critical to the software development life cycle and sits on top of your repository. Both of those products have done exceptionally well. We report annually those numbers, so we had a very strong year in 2025, and we gave those metrics, 10% of our ARR and 16% of our RPO. You see what it does in terms of contribution in the ARR and the RPO. It is a cross-sell, and customers typically take that on a multi-year basis. When they're renewing an Artifactory, they're taking security on a multi-year basis and driving RPO in a positive way. In addition to that, we see a big opportunity. What the mix will be, time will tell, but we see a big opportunity. Today, we've got a small percentage of our customer base penetrated. That's still very critical to the software development life cycle and sits on top of your repository. that's still very critical to the software development life cycle and sits on top of your repository Both of those products have done exceptionally well. both of those products have done exceptionally well We report annually those numbers, so we had a very strong year in 2025, and we gave those metrics, 10% of our ARR and 16% of our RPO. we report annually those numbers so we had a very strong year in 2025 and we gave those metrics 10% of our arr and 16% of our rpo You see what it does in terms of contribution in the ARR and the RPO. you see what it does in terms of contribution in the arr and the rpo It is a cross-sell, and customers typically take that on a multi-year basis. it is a cross-sell and customers typically take that on a multi-year basis When they're renewing an Artifactory, they're taking security on a multi-year basis and driving RPO in a positive way. when they're renewing an artifactory they're taking security on a multi-year basis and driving rpo in a positive way In addition to that, we see a big opportunity. in addition to that we see a big opportunity What the mix will be, time will tell, but we see a big opportunity. what the mix will be time will tell but we see a big opportunity Today, we've got a small percentage of our customer base penetrated. today we've got a small percentage of our customer base penetrated We have over 3,000 customers today that use Xray, which is, I would say, ground zero for scanning capabilities, and you must use Xray in order to bring Advanced Security and Curation into your organization. I think there's still a long runway of penetration and opportunity in security. We have over 3,000 customers today that use Xray, which is, I would say, ground zero for scanning capabilities, and you must use Xray in order to bring Advanced Security and Curation into your organization. we have over 3,000 customers today that use xray which is i would say ground zero for scanning capabilities and you must use xray in order to bring advanced security and curation into your organization I think there's still a long runway of penetration and opportunity in security. i think there's still a long runway of penetration and opportunity in security

Speaker 2: Okay, great. Maybe just talk a little bit about the business model. Pretty solid operating margins right now, but where do you think the operating margins for this business can go over time? Okay, great. okay great Maybe just talk a little bit about the business model. maybe just talk a little bit about the business model Pretty solid operating margins right now, but where do you think the operating margins for this business can go over time? pretty solid operating margins right now but where do you think the operating margins for this business can go over time

Speaker 1: Well, the operating margins is not by luck or by chance. It's around a discipline that we employ, and you've followed us since the IPO. Four years ago, we were a break-even company. We said that there was a path to profitability, there was a path to free cash flow. We've always been free cash flow positive, but to generate strong free cash flow, and it's always been a strategy of ours. We went from break-even to today, you see we're over 20% operating margin. We did over 21% in Q1, and much of that has to do around, again, the discipline. We're not going to spend $3 to earn $1, but we also recognize that there's an opportunity, especially in the era of AI, to capture value on the top line, but we'll do it in a smart way. Well, the operating margins is not by luck or by chance. well the operating margins is not by luck or by chance It's around a discipline that we employ, and you've followed us since the IPO. it's around a discipline that we employ and you've followed us since the ipo Four years ago, we were a break-even company. four years ago we were a break-even company We said that there was a path to profitability, there was a path to free cash flow. we said that there was a path to profitability there was a path to free cash flow We've always been free cash flow positive, but to generate strong free cash flow, and it's always been a strategy of ours. we've always been free cash flow positive but to generate strong free cash flow and it's always been a strategy of ours We went from break-even to today, you see we're over 20% operating margin. we went from break-even to today you see we're over 20% operating margin We did over 21% in Q1, and much of that has to do around, again, the discipline. we did over 21% in q1 and much of that has to do around again the discipline We're not going to spend $3 to earn $1, but we also recognize that there's an opportunity, especially in the era of AI, to capture value on the top line, but we'll do it in a smart way. we're not going to spend $3 to earn $1 but we also recognize that there's an opportunity especially in the era of ai to capture value on the top line but we'll do it in a smart way When we outperform in the top line, we expect that a portion of that will flow to the bottom line. We saw that in Q1. We had a $7 million beat on the top line. All $7 million were able to flow to the bottom line, and we generated a very strong operating margin. We'll see what happens as we go through the year. If we continue to outperform at that pace, I'm sure there will be an opportunity to reinvest back in the business and make sure that we're capturing more value for shareholders in the future and developing new products and enhancing the products that we have today. I would expect that operating margins, I don't know that they'll expand at the pace that we saw during Q1, but we would continue to focus on operating margin expansion. When we outperform in the top line, we expect that a portion of that will flow to the bottom line. when we outperform in the top line we expect that a portion of that will flow to the bottom line We saw that in Q1. we saw that in q1 We had a $7 million beat on the top line. we had a $7 million beat on the top line All $7 million were able to flow to the bottom line, and we generated a very strong operating margin. all $7 million were able to flow to the bottom line and we generated a very strong operating margin We'll see what happens as we go through the year. we'll see what happens as we go through the year If we continue to outperform at that pace, I'm sure there will be an opportunity to reinvest back in the business and make sure that we're capturing more value for shareholders in the future and developing new products and enhancing the products that we have today. if we continue to outperform at that pace i'm sure there will be an opportunity to reinvest back in the business and make sure that we're capturing more value for shareholders in the future and developing new products and enhancing the products that we have today I would expect that operating margins, I don't know that they'll expand at the pace that we saw during Q1, but we would continue to focus on operating margin expansion. i would expect that operating margins i don't know that they'll expand at the pace that we saw during q1 but we would continue to focus on operating margin expansion

Speaker 2: Okay, last question, then we're going to go upstairs for a breakout for those that can join. You talked to a lot of investors. What do you think the most underappreciated aspect of the JFrog story is? Okay, last question, then we're going to go upstairs for a breakout for those that can join. okay last question then we're going to go upstairs for a breakout for those that can join You talked to a lot of investors. you talked to a lot of investors What do you think the most underappreciated aspect of the JFrog story is? what do you think the most underappreciated aspect of the jfrog story is

Speaker 3: It's governance. It's governance. it's governance

Speaker 1: Yeah. Yeah. yeah

Speaker 3: It's not in our guidance yet. It's on the come. I think that what I'm telling people is that, as new guys call or want to talk or they want to learn more about JFrog or find maybe a new edge given where things have gone and the equity valuation, I say, "Look to DevGovOps and start really studying governance." You're starting to see other people talk about the importance of governance. In the world of AI, governance will be critical, and we feel that we are well-positioned and have the right to win in DevGovOps. As I always say, if it's not us, it will be somebody else because the creators will not be the governors. It's not in our guidance yet. it's not in our guidance yet It's on the come. it's on the come I think that what I'm telling people is that, as new guys call or want to talk or they want to learn more about JFrog or find maybe a new edge given where things have gone and the equity valuation, I say, "Look to DevGovOps and start really studying governance." You're starting to see other people talk about the importance of governance. i think that what i'm telling people is that as new guys call or want to talk or they want to learn more about jfrog or find maybe a new edge given where things have gone and the equity valuation i say "look to devgovops and start really studying governance." you're starting to see other people talk about the importance of governance In the world of AI, governance will be critical, and we feel that we are well-positioned and have the right to win in DevGovOps. in the world of ai governance will be critical and we feel that we are well-positioned and have the right to win in devgovops As I always say, if it's not us, it will be somebody else because the creators will not be the governors. as i always say if it's not us it will be somebody else because the creators will not be the governors I think that that's probably something that's underappreciated because today, I think security and cloud are somewhat understood, and those are the drivers of growth today. I think that that's probably something that's underappreciated because today, I think security and cloud are somewhat understood, and those are the drivers of growth today. i think that that's probably something that's underappreciated because today i think security and cloud are somewhat understood and those are the drivers of growth today

Speaker 2: That's the Lego. You got Artifactory, then on top of that, you got security, and then on top of that, you got governance. That's the Lego. that's the lego You got Artifactory, then on top of that, you got security, and then on top of that, you got governance. you got artifactory then on top of that you got security and then on top of that you got governance

Speaker 3: You got governance. You got governance. you got governance

Speaker 2: That full platform is what differentiates you guys. That full platform is what differentiates you guys. that full platform is what differentiates you guys

Speaker 3: I would quickly add, Jason, you've got the scalability of two effects. I would quickly add, Jason, you've got the scalability of two effects. i would quickly add jason you've got the scalability of two effects

Speaker 1: Yeah. Yeah. yeah

Speaker 3: We'll talk about this maybe more in the breakout. On the revenue side, you saw us talk about MCP registry, Skills Registry. We created Skills Registry in two weeks because it was a pain point for a customer in Vdoo. Now we've had POC shut down in a few weeks because they've been so good. It's not going to be a driver for 2026. What it tells you is that customers are recognizing the value of maintaining Agent 101 in Artifactory to make sure he doesn't hallucinate, to make sure he's not acting differently, that he's not chosen to do a different function than what he was programmed for. Likewise, with MCP, is my Jira connection correct? Is my JFrog connection correct? Is my Datadog connection correct? These are being useful tools that are going to scale revenue opportunities in Artifactory with little to no investment. We'll talk about this maybe more in the breakout. we'll talk about this maybe more in the breakout On the revenue side, you saw us talk about MCP registry, Skills Registry. on the revenue side you saw us talk about mcp registry skills registry We created Skills Registry in two weeks because it was a pain point for a customer in Vdoo. we created skills registry in two weeks because it was a pain point for a customer in vdoo Now we've had POC shut down in a few weeks because they've been so good. now we've had poc shut down in a few weeks because they've been so good It's not going to be a driver for 2026. it's not going to be a driver for 2026 What it tells you is that customers are recognizing the value of maintaining Agent 101 in Artifactory to make sure he doesn't hallucinate, to make sure he's not acting differently, that he's not chosen to do a different function than what he was programmed for. what it tells you is that customers are recognizing the value of maintaining agent 101 in artifactory to make sure he doesn't hallucinate to make sure he's not acting differently that he's not chosen to do a different function than what he was programmed for Likewise, with MCP, is my Jira connection correct? likewise with mcp is my jira connection correct Is my JFrog connection correct? is my jfrog connection correct Is my Datadog connection correct? is my datadog connection correct These are being useful tools that are going to scale revenue opportunities in Artifactory with little to no investment. these are being useful tools that are going to scale revenue opportunities in artifactory with little to no investment

Speaker 2: Awesome. All right. I think that we'll have to leave it there. Thank you all for joining. Awesome. awesome All right. all right I think that we'll have to leave it there. i think that we'll have to leave it there Thank you all for joining. thank you all for joining

Speaker 3: Thank you. Thank you. thank you

Speaker 2: We'll see you upstairs. Thank you. We'll see you upstairs. we'll see you upstairs Thank you. thank you