November 3, 2022

(“JFrog”) (Nasdaq: FROG), the Liquid Software company and creators of the JFrog DevOps Platform, today announced financial results for its third quarter, ended September 30, 2022.

 

“Our third quarter results exceeded the high-end of guidance across all metrics, as cloud revenues grew 60%, driven with our cloud marketplace partners and higher levels of customer usage,” said Shlomi Ben Haim, JFrog Co-founder and CEO. “We are reimagining the way DevOps and Security play together. As part of our strategy, we launched JFrog’s Advanced Security, a ground shaking DevSecOps product that is now part of our platform, and provides our users a binary-focused approach to software supply chain security.”

Third Quarter Financial Highlights

  • Revenue for the third quarter of 2022 equaled $72.0 million, an increase of 34% year-over-year.
  • GAAP Gross Profit was $56.1 million; GAAP Gross Margin was 77.9%.
  • Non-GAAP Gross Profit was $60.6 million; Non-GAAP Gross Margin was 84.2%.
  • GAAP Operating Loss was ($23.4) million; GAAP Operating Margin was negative (32.6%).
  • Non-GAAP Operating Profit was $1.2 million; Non-GAAP Operating Margin was 1.7%.
  • GAAP Net Loss Per Share was ($0.24); Non-GAAP Earnings Per Share was $0.02.
  • Operating Cash Flow was $5.1 million, with Free Cash Flow of $3.8 million.
  • Cash, Cash Equivalents and Investments were $434.0 million as of September 30, 2022.
  • Remaining performance obligations were $189.8 million as of September 30, 2022

Recent Business & Product Highlights

  • Cloud revenue equaled $21.0 million during the third quarter of 2022, an increase of 60% over the year ago period. Cloud revenue represented 29% of total revenue, compared to 24% in the year ago period.
  • Net Dollar Retention rate for the trailing four quarters was 130%.
  • $100K ARR customers increased 49% year-over-year to 696 customers, compared with 466 in the year ago period.
  • $1 million ARR customers increased 29% year-over-year to 18 customers, up from 14 customers as of September 30, 2021.
  • Customers adopting the complete JFrog Platform represented 39% of total revenue versus 34% in the year ago period.
  • Launched the general availability of JFrog Advanced Security, the world’s first binary-focused, DevSecOps solution, providing holistic security coverage from any source to any destination.
  • Completed the first large JFrog Connect deal with an international defense electronics company to manage one of Western Europe’s technologically-advanced armed forces’ DevOps flow to enable over-the-air software updates.
  • Partnered with one of the world’s top 3 largest automotive manufacturers closing a multi-million dollar deal leveraging the full JFrog Platform.

Fourth Quarter and Fiscal Year 2022 Outlook

  • Fourth Quarter 2022 Outlook:
    • Revenue between $76.5 million and $77.5 million
    • Non-GAAP operating income between $1.0 million and $2.0 million
    • Non-GAAP net income per diluted share between $0.01 and $0.02, assuming approximately 106 million weighted average diluted shares outstanding
  • Fiscal Year 2022 Outlook:
    • Revenue between $280.0 million to $281.0 million
    • Non-GAAP operating income between $1.0 million and $2.0 million
    • Non-GAAP net income per diluted share between $0.01 and $0.02 assuming approximately 106 million weighted average diluted shares outstanding

The section titled “Non-GAAP Financial Information” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.