JFrog soars on third-quarter earnings & revenue beat

JFrog CEO & Co-Founder Shlomi Ben Haim joins Yahoo Finance's Karina Mitchell and Jared Blikre to break down the company's third-quarter earnings results.

Video Transcript

- We're going to turn our attention to earnings. Liquid software company JFrog just reported third-quarter earnings. Here to discuss the results and the big names that they've brought along for the ride is Shlomi Ben Haim, JFrog's CEO and co-founder. Sir, thank you so much for being here today.

Just want to go over some of the statistics from your financial quarter results. Revenue for third quarter was up 53-- was 53.7 million, an increase of 38% over the third quarter of 2020, year over year, compared to 34% growth in the prior quarter. Gross profit was also 42.2 million. Some good numbers there. What is the momentum that you saw in the third quarter, and do you see that carrying forward into the fourth quarter and beyond?

SHLOMI BEN HAIM: Well, Happy Friday. Thank you for having me. Yes, in JFrog, we had a wonderful quarter. Obviously, the growth in our business comes not only from new customers that are adopting our platform and digitalizing the world, making developers in the enterprise faster and secure in moving software all the way from the developer environment to the consumers' hands. We saw it growing on all fronts-- cloud and on-prem instances, existing customers and new. We had over 466 new customers that are climbing over the $100,000 [INAUDIBLE]. And we are very excited about-- that the market is growing and JFrog is growing with it.

- I'd like to ask you about your company. I think a lot of people would not necessarily know exactly what you do. The business of DevOps is a part of it, and a lot of people wouldn't even know what that is. It's kind of a recent development itself, where you take products and services to market, or you help companies do that, at a rate, at a pace that's quicker than they would have been otherwi-- they would have been able to do otherwise. So I'm just wondering, what kind of technologies have enabled this? And just kind of give us an overview of your business, if you would.

SHLOMI BEN HAIM: Jared, thank you. DevOps-- you know, that's the story of our life [INAUDIBLE] explain how DevOps changes everybody's life. You mentioned Uber and Airbnb before. I'll add to it Bank of America and Siemens and others that all have the digitalized organization. It's the digital bank that will work tomorrow. It's the digital hospitality company that will work tomorrow. And it's all powered by software.

Now, what the development organizations are required to deliver is faster and more secure software every day. We, as consumers-- you and I-- we expect our software to be updated no matter what device we use and no matter what time and where in the world. JFrog built the platform that helped the developers in the enterprise become faster and more secure as they build software and release it to the end consumers, and therefore help companies fulfill their digital transformation. We call it liquid software. So software can actually flow. Others call it digital transformations.

- Now I want to ask you about some of the big-brand customers that you have brought in along for the ride-- Hitachi, National Australia Bank, Panasonic. And then if, also, you could touch on your partnership with SoftBank. What does all of this do to add value and put you ahead of the competition?

SHLOMI BEN HAIM: What the JFrog did well for the enterprise, Karina, to your question, is help them to scale in a multi-site environment and the hybrid environment. And this is why JFrog is so appealing to these enterprises. We have customers-- we are honored to have customers like Hitachi and Bank of America and Siemens and SoftBank and everyone out of the more than 6,000 customers that you mentioned. But they are using JFrog's platform because they know, number one, that they can scale to infinity with it. And when you build so fast, and you release so fast, you need tools that can scale with you.

The second thing is the movement to the cloud. They need the freedom of choice. Developers own the biggest democracy in the world. They want to have this freedom. And we give them this freedom of using the cloud or on-prem [INAUDIBLE]. And the last thing is the multi-site topology. We spoke about Airbnb. We spoke about Uber. Those are not local companies. They need their software to get anywhere at any time. And JFrog provides that.

- I wanted to ask you, it's been a big year for the crypto trade and also blockchain. I'm wondering, do you have clients in this space? Do you have any products that specifically use smart contracts, the blockchain, anything like that?

SHLOMI BEN HAIM: So yes, we have customers that are developing crypto. JFrog is a company that starts from the community up. So developers from all disciplines are using our tools, especially to build their software, to distribute their software and secure it.

Cryptonizing your software is an innovation that we all see in the world of theft-- of software development. So I can share with you that even inside JFrog, we use crypto technology in order to protect our products and to build solution that is more secured for usage. So cryptonizing technology is an amazing innovation that we also adopted in JFrog in-house, but also serve the community moving forward.

- So many companies have faced supply-chain issues. I'm assuming that your company doesn't have to deal with that as much as maybe some other sectors. But what about labor issues and, you know, the rising cost of labor as well? Have you had to factor that into your business revenue?

SHLOMI BEN HAIM: So the labor issues and the recent report-- obviously, these are good news that the economy is rising up. And then we are all excited about that. I can share with you, JFrog is now almost a 1,000-people company. We have thousands of frogs all over the planet, all over the globe. And this is not just something we see here in the US. We see it everywhere in the world.

And talents are now something that everybody is after. During the pandemic, we hired over 300 people in JFrog globally, organically and inorganically. And I think that every employer now has to think about not just, how can I pay more and get more, but also, what are the cultures and values we want to follow so when these times will be changed or flipped, we will still have a solid, strong company?

- OK, Shlomi Ben Haim, JFrog CEO and co-founder. Thank you for spending part of your Friday afternoon with us. Thank you.