JFrog Ltd. (FROG) is a pioneering software company that has established itself as a leader in the rapidly evolving DevOps, DevSecOps, and MLOps landscapes. With its innovative Liquid Software platform, JFrog is empowering enterprises to securely and efficiently manage their software supply chains, accelerating the delivery of trusted applications in the era of artificial intelligence (AI).
Company Background
Founded in 2008 and headquartered in Sunnyvale, California and Netanya, Israel, JFrog has experienced remarkable growth, driven by its mission to create a world where software is continuously updated and accessible everywhere. The company's comprehensive platform seamlessly integrates development, security, and machine learning operations, addressing the increasing demand for end-to-end solutions that unify and secure the software delivery lifecycle.
Product Portfolio
JFrog's flagship product, Artifactory, serves as the cornerstone of its platform, providing a universal package management solution that supports a wide range of software package technologies. In its early years, JFrog made the strategic decision to release a limited-functionality version of Artifactory under an open source license, which helped drive awareness and adoption of the platform. This robust foundation enables customers to compile software from source code repositories, manage dependencies, and securely distribute applications to endpoints, all through a single, user-friendly interface.
Over time, JFrog expanded its platform capabilities, adding solutions for security (JFrog Xray), distribution (JFrog Distribution), and device management (JFrog Connect). These additions allowed JFrog to serve a wider range of customer needs across the software development lifecycle. The company also made several strategic acquisitions to bolster its offerings, including Vdoo in 2021 to enhance its security capabilities.
JFrog's platform consists of multiple products across DevOps, DevSecOps, and MLOps. At the core of the platform is JFrog Artifactory, which serves as a universal package management solution. Artifactory allows teams and organizations to store, update, and manage software packages at any scale, ensuring all software packages being deployed are current, secure, and trusted. Artifactory supports all major software package technologies and can be deployed on public clouds, in multi-cloud environments, on-premises, in a private cloud, and across hybrid environments.
In addition to Artifactory, JFrog offers several other solutions that expand the platform's capabilities. JFrog Curation acts as a "guardian" outside the software development pipeline, controlling the admission of packages into an organization, primarily from open source or public repositories. JFrog Xray provides continuous scanning of Artifactory to identify potential vulnerabilities, policy violations, and open source software license compliance issues. JFrog Advanced Security and JFrog Runtime Security offer more advanced security features integrated into the platform.
Other solutions include JFrog Distribution for reliable, scalable, and secure software package distribution, JFrog Connect for connected device management and software updates, and JFrog ML for machine learning model management as part of the overall software supply chain.
Strategic Acquisitions and Innovation
In 2024, JFrog further solidified its position as an industry trailblazer with the acquisition of Quack AI, a privately-held AI development platform company. This strategic move allowed JFrog to introduce JFrog ML, the industry's first end-to-end DevOps, DevSecOps, and MLOps platform, empowering enterprises to rapidly develop and deploy AI-powered applications with unparalleled security and control.
The integration of JFrog ML with the company's existing offerings has been a game-changer, addressing the growing need for a unified approach to software delivery that encompasses the convergence of DevOps, security, and machine learning. By providing a centralized system of record for all software components, including AI models and datasets, JFrog is enabling customers to achieve unprecedented transparency, traceability, and trust in their software supply chains.
Financials
JFrog's financial performance has been equally impressive, with the company reporting total revenues of $428.5 million for the fiscal year 2024, representing a 22% year-over-year increase. The company's cloud revenue, a key growth driver, grew by 41% in 2024, now accounting for 39% of total revenue. This cloud-centric strategy has allowed JFrog to strengthen its partnerships with leading cloud providers, such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, further expanding its reach and delivering enhanced value to customers.
One of the most notable achievements in 2024 was JFrog's success in the enterprise market, where the company secured several multi-million-dollar, multi-year deals. Customers with annual recurring revenue (ARR) exceeding $100,000 grew to 1,018, up from 886 in the prior year, while the number of customers with ARR greater than $1 million increased to 52, up from 37 in the previous year. This underscores the strong demand for JFrog's comprehensive platform, particularly its security solutions, which now account for more than 5% of the company's total ARR and approximately 12% of its remaining performance obligation (RPO).
For the fiscal year 2024, JFrog reported a net loss of $69.2 million, compared to a net loss of $61.26 million in 2023. Despite the increased net loss, the company demonstrated strong cash flow generation, with operating cash flow of $110.92 million and free cash flow of $107.78 million for the year. The free cash flow margin reached 25% in 2024, showcasing JFrog's ability to generate substantial cash flows to fuel continued innovation and strategic investments.
In the most recent quarter (Q4 2024), JFrog reported revenue of $116.08 million, representing a 19% year-over-year growth. The net loss for the quarter was $23.2 million. The company's revenue from Enterprise Plus subscriptions, its highest-tier offering, accounted for approximately 51% of total revenue in 2024, up from 46% in 2023, demonstrating increased demand for JFrog's end-to-end solutions.
JFrog has continued to invest in its business, with research and development expenses increasing 20% year-over-year in 2024 to $160.86 million, and sales and marketing expenses increasing 26% to $190.40 million. These investments reflect the company's commitment to enhancing its platform and expanding its customer base.
Liquidity
Despite the broader economic challenges faced in 2023, JFrog demonstrated its resilience, navigating the uncertain environment by maintaining a focus on operational efficiency and customer-centric initiatives. The company's financial position remains strong, with $522 million in cash and short-term investments as of the end of 2024. JFrog's debt-to-equity ratio is a conservative 0.018, indicating a low level of leverage. The company's current ratio and quick ratio both stand at 2.04, suggesting a healthy short-term liquidity position.
Future Outlook
Looking ahead, JFrog's growth prospects remain compelling. The company's strategic collaboration agreement with AWS, announced in 2025, is expected to further enhance its cloud capabilities and drive increased adoption among enterprise customers. Additionally, the integration of JFrog ML with leading AI platforms, such as Hugging Face and NVIDIA, positions the company as a trusted partner in the responsible development and deployment of generative AI technologies.
For fiscal year 2025, JFrog has provided guidance projecting total revenue in the range of $499 million to $503 million, representing a 17% year-over-year increase at the midpoint. The company expects non-GAAP operating income between $73 million and $75 million, and non-GAAP diluted earnings per share of $0.67 to $0.69, assuming a share count of approximately 120 million shares. Baseline cloud revenue growth is anticipated to be in the range of 30% to 32%, with net dollar retention expected to stabilize in the mid-teens.
It's worth noting that JFrog's management has adopted a more conservative guidance philosophy, focusing on derisking the business by only including committed customer deals in the guidance and not factoring in potential upside from usage-based metrics. This approach demonstrates the company's commitment to transparency and prudent financial management.
As the software industry continues to evolve, driven by the pervasive influence of AI, JFrog is well-positioned to capitalize on the growing demand for secure, scalable, and integrated software delivery solutions. With its innovative platform, strategic partnerships, and relentless focus on customer success, JFrog is poised to play a pivotal role in shaping the future of software development and deployment in the AI era.
JFrog's comprehensive software supply chain platform, which caters to the evolving needs of DevOps, DevSecOps, and MLOps teams, has enabled the company to establish a strong foothold among large enterprises. As of December 31, 2024, JFrog had a global customer base of approximately 7,300 organizations across all industries and sizes, including approximately 82% of Fortune 100 organizations. This diverse and high-quality customer base provides a solid foundation for future growth and expansion.
The software development tools market, in which JFrog operates, has seen strong growth in recent years, with a compound annual growth rate (CAGR) estimated around 15-20%. This growth is driven by the increasing adoption of DevOps, DevSecOps, and MLOps practices across industries. As organizations continue to prioritize digital transformation and agile software development methodologies, JFrog's platform is well-positioned to address the complex challenges associated with modern software delivery.
In conclusion, JFrog's innovative platform, strong financial performance, and strategic focus on the rapidly evolving AI-driven software landscape position the company for continued success. As the demand for secure, efficient, and integrated software delivery solutions continues to grow, JFrog's Liquid Software vision and comprehensive platform offerings are likely to play an increasingly important role in shaping the future of software development and deployment.