Miller Jump: Okay, thanks. And then maybe just one more. Obviously, this is a lumpy metric, but it also looked like 100,000 customers were the slowest on net adds that they’ve been in some time. Is there anything to indicate that that digestion period that you talked about is indicating large customers more than the overall?
Ed Grabscheid: Well, what we saw in Q4, and a lot of this, you’re right, is lumpiness and seasonality. We had significant traction in our large customers really in the second half of 2023. So this quarter that we’re seeing somewhat digestion as customers are looking at their budgets and considering expansion opportunities. We saw in Q1, although there was nice growth, it wasn’t at the same pace that we saw in previous quarters. We would expect that that would start to trend more normalized in future quarters, and it will be similar to what we saw in 2023.
Miller Jump: Understood. Thank you.
Operator: Our next question comes from the line of Jason Celino with KeyBanc Capital Markets. Please go ahead.
Jason Celino: Hey, great. Glad to be on. We actually saw some big news this week that a major player in AppSec would be spun out as a private standalone. Have you seen any changes in the competitive dynamics in security over the last, call it six months? And then more importantly, do you see any incremental share gain opportunities on the horizon, just on the competitive landscape? Thanks.
Shlomi Ben Haim: Yes, that’s a very good question. First of all, wow. The last quarter was full of events that change everything. And on one hand, we see the need for consolidation around best-of-breed platform, and therefore customers are mentioning the platform that they can consolidate around especially around security and DevOps together. On the other hand, there were a lot of changes. HashiCorp got acquired, synopsis of their entire stack and Atlassian has some changes. So obviously there are a lot of changes. Tectonic plates are moving, but one thing is staying the same. Customers are looking to consolidate and to have a comprehensive security solution. And then on that hand, the security landscape and the competitive landscape didn’t change from last quarter.
Jason Celino: Okay. And then maybe just a quick one for Ed, the digestion that we’re all kind of discussing today. Did you start seeing it very beginning in the quarter, or was it toward the end, or just pretty consistent throughout? Thanks.
Ed Grabscheid: It was consistent throughout the quarter.
Jason Celino: Okay, great. Awesome.
Operator: Our next question comes from the line of Kingsley Crane with Canaccord. Please go ahead.
Kingsley Crane: Hi, thanks for taking the question. Shlomi, in the spirit of RSA, want to talk about security? In Mandiant’s report, 31 vendors were impacted by zero-day threats in the past year, that’s up from three in 2018 not mentioning thousands of end customers impacted by those breaches. You cited some of JFrog’s security research in your prepared remarks. Can you talk about the value of having that security research team in addition to your security capabilities including things like JFrog creation?
Shlomi Ben Haim: Yes. Well, thank you for noting that. JFrog security research team is one of the largest in the industry, not only by the size of the team and how they were trained, but also by the amount of report and finding that we are sharing with the customers and with the community. Recently we released the state of the union for software supplies and security finding. And then just after the Docker Hub scanning and malicious packages on Docker Hub together with Docker. This is an amazing differentiator because our customers can know before the rest of the market from threats that might become, and it’s included in the database of our security solutions. So obviously it’s a great service for the community, but it’s also boosting our tools to be able to detect some threats before other tools can catch them.
Kingsley Crane: Thank you. That’s really helpful. And then for Ed, really strong gross margins at 85%. Can you talk about the efficiencies you’re finding there even as cloud generally increases as a percent of your overall revenue?
Ed Grabscheid: Yes, very strong gross margins. As you pointed out, 85.1%, one of the reasons that we had such strong gross margins in Q1 is that we removed, eliminated a third-party outsourced database as we now standardized on the Vdoo database that we acquired two, three years ago. So we saw some efficiency gain there. However, what we see in our model is that we’ll continue to spend and invest in those databases and other costs associated with our gross margins. So our model indicates that we’ll still, and as it’s in our guidance, between 83% to 84% gross margins during 2024.
Kingsley Crane: Thank you. Hopefully.
Operator: Our next question comes from Yi Fu Lee with Cantor Fitzgerald.
Yi Fu Lee: Thank you for taking my question. Question could be for Shlomi or Ed. In terms of, I want to focus on the consolidation opportunity. Maybe if Shlomi or Ed, you could comment on like the up sell to other products. I know in prepared remarks you talked about the security as an example. How about other parts like CI/CD, distribute, IoT device management, any updates on that front as well?
Shlomi Ben Haim: Yes. So obviously the consolidation of tools around one platform comes with all the capabilities of the factory as the center as the single source of record than the registry of all packages on top of it the security solution, but also what you mentioned, distribution, automation, the database that I just mentioned, these are all coming in one platform, one package, and the expansion potential is around all of them. It’s differently packaged in the DevOps is the offerings versus the cloud, and the cloud we are looking to see more consumption based on more usage and more adoption. And in the self-hosted this expansion by seat and by number of servers, by location, by project, by sizes of teams and so on, so that’s the expansion motion that we see now with additional product on the platform.
Yi Fu Lee: Got it, got it. That’s extremely helpful. And then my last follow up is on the MLOps opportunity. It’s great that you’ve given customer obviously the freedom of choice. They don’t have to unlock – they don’t have to lock themselves up in anything like they could use Hugging Face [indiscernible]. I was wondering how material is the MLOps opportunity and when do you think it’s going to be more significant to I guess the contribution to JFrog.
Shlomi Ben Haim: Yes, MLOps is not mature. AI is not mature, but the practices are being built now. And the nice thing about what we see is that the ML engineers, the Python engineers, the data scientists actually using the best practices of DevOps and DevSecOps to practice MLOps and MLSecOps. So it’s not mature. This might be a tailwind, but it’s not going to change our 2024 guidance and we are going to invest more and expand more getting JFrog platforms prepared to this big opportunity that is coming in the next year.
Yi Fu Lee: Thanks, for that Shlomi.
Operator: Our next question comes from the line of Brad Reback with Stifel. Please go ahead.
