JFrog Ltd. (NASDAQ:FROG) Q3 2023 Earnings Call Transcript

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Operator: Okay. Thank you so much. Our next caller is Nick Altman with Deutsche Bank.

John Gomez: This is John Gomez on for Nick. Can you talk about how September and October trended from a macro perspective relative to expectations? And whether you have seen any meaningful change in overall like buying propensity from customers.

Jacob Shulman: No, we did not see any changes in the trends in October continued to be comparable with Q3.

Ethan Weeks: Next caller is from Ethan Weeks with Piper Sandler. This is Ethan on from Rob. It seems like there’s still a large amount of organizations out there using either free or open source binary repository management solutions. And as we think about the amount of innovation and product leases you’ve had on the security side, do you think this could provide a catalyst maybe for a lot of these organizations to start considering a commercial solution?Or if not, maybe what that catalyst may be in the future as we think about new customer growth and converting some of these onto your platform? Thank you.

Jacob Shulman: Yes. I’ll take this one. We built Gotraction from the bottom up on the developer app and obviously, starting with open sales build the concerns around Artifactory as a single source of record for the organization. What we know now years after is that it takes more than just one open source solution. When you want to build a comprehensive software supply chain solution, especially on an enterprise infrastructure level, you have to adopt some security tools you have to adapt universality, high availability, multi-cytopology. And very often, we want to move everything to the cloud, which obviously has nothing to do with open source or not. It’s about having it as a service. So for sure, yes, it’s the top of funnel.

A lot of potential customers are looking at the open source before they are trying our tools in the three trial. But the open source is still there, serving us among developers. — the enterprise with J. Polkchein, it’s a very temporary solution and usually being good place very fast.

Operator: Okay. And our final question comes from Michael Turits with KeyBanc Capital Markets.

William Mandl: This is Billy on for Michael. Just wanted to ask, with curation crossing between kind of both developers and security, have you seen that acting at all as a gateway to broader conversations with the CISO? Should we think about curation as the next logical customer expansion from the core product before adopting advanced security? Thank you.

Jacob Shulman: This is a wonderful question. curation is very, very unique because curation lends on the common ground of the CIO and the CIS. What I mean by that is that companies realize that they can become far more efficient with adopting open source stages by scanning it before it’s even getting into the organization. And therefore, curation is very appealing and growing very fast. The pipeline, we are very pleased with what we see that people immediately understand it. It doesn’t matter if you’re coming from the security side or the DevOp side, you immediately understand the value of preventing malicious packages to get into your organization to your software supply chain. So we absolutely think that this will accelerate the adoption of our security solution.

This is also why on the go-to-market, it’s separated from getogretan security, still based on the same business model. In the future, we will add more capabilities that would provide a full comprehensive better solution. But already now, — we see that nobody is just building from scratch and everybody brings open source packages. And therefore, you want to secure them and to curate them to bless them before they are getting into your software supply chain. Once they are in, then Goersecurity take and actually take position and secure our pipeline. So my answer is absolutely yes, and I’m looking forward to see how this is changing the landscape of how open our software packages are being used.

Operator: Thank you. And there are no further questions at this time. So I will turn the call back to Shlomi for closing remarks.

Shlomi Haim: Well, thank you, everyone. Thank you for taking the time to join us today. We pay for more feasible, quiet days here in Israel and made the fog be with you.

Operator: Thank you very much. And this concludes today’s call. Thank you for attending, and you may now disconnect.

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