JFrog(FROG)2022-08-04 20:15Financial Data and Key Metrics Changes - JFrog reported Q2 revenue of 100,000 increased to 647, a 56% year-over-year growth [11][33] - Net dollar retention for the trailing four quarters was 132%, slightly up from 131% in the previous quarter [11][33] - Gross profit was 48.6 million, up 31% year-over-year, but growth has slowed as new customers increasingly adopt cloud solutions [30][32] - The adoption of the full platform is a key factor in increasing customer size, with 36% of total revenue coming from Enterprise Plus customers, up from 32% in Q2 2021 [33][88] Market Data and Key Metrics Changes - Asia Pacific, the smallest geographic region for JFrog, has seen slower levels of DevOps adoption than expected [28] - The company noted that elongated sales cycles for large new business deals have emerged, particularly in the current macroeconomic environment [27][70] Company Strategy and Development Direction - JFrog continues to focus on strategic investments in R&D, particularly in security and IoT, while also enhancing cloud efficiency [92][96] - The introduction of the Advanced Security Package aims to provide a holistic solution for software supply chain protection, expected to be available commercially in Q3 [80][81] - The company is committed to maintaining a long-term revenue growth rate of 30% or greater, despite macroeconomic headwinds [29][38] Management's Comments on Operating Environment and Future Outlook - Management observed increased demand for cloud solutions and noted that elongated sales cycles for large deals are a concern [45][46] - The company remains confident in its ability to grow revenue and maintain operational efficiency, even in a challenging economic environment [38][39] Other Important Information - JFrog's cash flow from operations was 3 million, maintaining a positive cash flow since going public [36] - The company expects revenue for Q3 to be between 71.5 million, with non-GAAP operating profit ranging from negative 0.5 million [39][40] Q&A Session Summary Question: Confidence in sustaining 30% growth - Management noted increased demand for cloud solutions and attractive expansion rates among existing customers, despite elongated sales cycles for large deals [45][46][47] Question: Economic uplift from customer migration to cloud - Migration to the cloud typically results in ARR growth, driven by increased data transfer and additional capabilities added by customers [56][59] Question: Efficiencies in spending and hiring - Management indicated a careful review of hiring and spending, focusing on strategic areas while improving cloud efficiency [60][62] Question: Differences in sales cycles across regions - Elongated sales cycles are observed for large deals, with no significant impact on smaller deals, and similar trends noted in EMEA and North America [71][72] Question: Advanced Security Package details - The Advanced Security Package will be available for Enterprise Plus and Enterprise X customers, with expected contributions to revenue assessed in Q4 [81][83] Question: R&D investment focus - R&D investments will focus on security, IoT, and enhancing cloud efficiency, with a rich roadmap for Artifactory improvements [92][93]