JFrog Ltd. (NASDAQ:FROG) Q4 2023 Earnings Call Transcript

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Shlomi Ben Haim: Yes. So, thank you, Rob. As you remember, we discussed it multiple times, we are hiring enterprise-experienced sales representatives together with the right executive on the marketing side, customer success. It’s a full cycle. It’s not just the sales account managers. In addition to that, we invest a lot in increasing our partners and channel’s ecosystem, not just our partnership with AWS, GCP, and Azure, but also standalone companies that are promoting our solutions and access the channels. On top of that, we’re also increasing the number of our overlay reps that can bring the security experience to the market. So, we see those expert sales representatives that are coming from security backgrounds. This is — these are all additions to the strategic sales team that we discussed before and to the entire enterprise sales team that we build together now.

Rob Owens: Thank you.

Operator: Our next question comes from the line of Nick Altmann with Scotiabank. Please go ahead.

Nick Altmann: Awesome. Thanks, guys. Earlier, you guys had made some comments on how customers are landing at higher ASPs and you’re actually seeing sort of greater expansion motions from some of these customers. Can you just maybe talk about sort of what’s driving that and when you look over the next several years, how durable is that trend or do you think it’s kind of more of a near-term trend that you’re just kind of seeing over the last couple of quarters here?

Shlomi Ben Haim: Thank you, Nick. What really drives the higher ASP, especially when you step to a technology, technologies, they are allergic to fluffy values. If they are not solid and concrete, they will not respond to it. So, what really drives that is that you answer their pain. And from the outside in, the pain that we hear about is, help me to consolidate the numerous tools that we currently use in order to run one delivery process. So, having consolidations of tools in one platform is one reason for customers to land higher. The second reason is that when they move from another tool to JFrog, they are already educated with what they want to achieve. They already know how DevOps works, how Security works. And when they move to JFrog, most cases, it will come with the expectation to scale.

So, they are willing to commit to higher numbers. They are willing to commit to a higher volume. They know that JFrog scales to infinity, unlike the other tools. And therefore, they land higher with their ASP. There are other reasons, but these are the main two. And obviously, when it comes with the cloud momentum, the consumption and the commitment for the year is another parameter. But these are the main three.

Nick Altmann: Awesome. And then just another question, kind of building off Rob’s earlier question around the go-to-market. I assume you guys recently had your sales kickoff. And I know you’re focused on sort of the top-down sales motion. But just coming out of the sales kickoff, what was sort of the messaging? What go-to-market tweaks are being made if any? And any meaningful changes to how quota-carrying reps are compensated in 2024? Thanks.

Shlomi Ben Haim: Yes. Well, as we speak, sales kickoffs are happening all over the world. Our sales team, what they hear is that the geography-based execution coming with a full platform that includes Security, having a full platform that can also be hybrid, this is how they should focus their efforts on. To the partners and channels team, we are expanding the solution to land higher with a full holistic solution for DevOps and DevSecOps. But obviously, the focus of JFrog in 2024 will be the joint solution of DevOps and Security together, and this is what my team hears.

Operator: There are no further questions at this time. I’ll now turn the call back to Shlomi for closing remarks.

Shlomi Ben Haim: I’d like to thank you all for joining us today. Happy Valentine’s and may the Frog be with you. Take care, guys.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.

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