JFrog Ltd Q4 FY2024 earnings call

• Strong cloud growth: Despite 2023 challenges, JFrog secured large multiyear cloud commitments in Q3 and Q4 2024, with 2024 cloud revenues in line with Q2 guidance, and a strategic collaboration with AWS to enable enterprise customers to scale DevSecOps AI-driven solutions in the cloud.
• Security success: JFrog's advanced security and curation were adopted by ~250 customers migrating from point solution tools. Security core solutions comprised over 5% of ARR and ~12% of RPO in 2024.
• Enterprise strategic success: Focus on enterprise market led to growth in customers with ARR over $100,000 and over $1 million, and net dollar retention for the four trailing quarters was 100%.
• MLOps and AI: Acquired Quack AI in 2024, launched JFrog Ltd. ML for cloud customers, and partnered with GitHub, Hugging Face, and NVIDIA to enhance workflows.

In 2024, JFrog Ltd.'s total revenue was $428.5 million, up 22% year over year. Cloud revenue for 2024 was $168 million, representing 41% year-over-year growth, which was 39% of total revenues. Self-managed or on-prem revenues in 2024 were $260.5 million, up 13% year over year. The security core, including JFrog Ltd. curation, advanced security, and runtime, comprised over 5% of ending total ARR and approximately 12% of remaining performance obligation (RPO) as of December 31, 2024, and represented 3% of total revenues in 2024.

• Q1 2025: Revenues expected $116 million to $118 million, 17% y/y growth at midpoint; non-GAAP operating profit $16.5M-$17.5M; non-GAAP EPS $0.15-$0.17.
• Full-year 2025: Revenue range $499M-$503M, 17% y/y growth at midpoint; non-GAAP operating income $73M-$75M; non-GAAP EPS $0.67-$0.69.
• 2025 outlook: Anticipates 30%-32% cloud growth and net dollar retention in mid-teens, with focus on innovation and disciplined spending.

• Macroeconomic uncertainties: Customers remain conservative in commitments, impacting project timelines and spending.
• Regulatory changes: Potential impacts on AI adoption in production due to evolving regulations.
• Execution risks: Scaling security solutions to broader enterprise base and managing customer expectations in a competitive market.

Q: Pinjalim Bora from JPMorgan Chase asked about security traction and large deals in the pipeline.

A: Shlomi Ben Haim said CIOs and CISOs are looking to consolidate point solution tools, and there's encouragement from the pipeline with customers pushing for single holistic security solutions.

Q: Michael Cikos from Needham inquired about cloud growth and the database comment.

A: Shlomi Ben Haim explained the new cloud service for security suites and that migration to the new version is reflected in cloud guidance.

Q: Sanjit Singh from Morgan Stanley asked about sales motion for security and changes.

A: Shlomi Ben Haim said the sales force is armed to scale with the mature security offering, and customers are inquiring about securing AI models with the suite.

Q: Kingsley Crane from Canaccord asked about the AWS strategic collaboration.

A: Shlomi Ben Haim said the agreement provides more cost-effective scale for customers with AWS.