10-Q 1 frog-20240331.htm 10-Q 10-Q
P456DfalseQ1--12-310001800667P369Dhttp://fasb.org/us-gaap/2023#CostOfRevenuehttp://fasb.org/us-gaap/2023#CostOfRevenuehttp://fasb.org/us-gaap/2023#ResearchAndDevelopmentExpensehttp://fasb.org/us-gaap/2023#ResearchAndDevelopmentExpensehttp://fasb.org/us-gaap/2023#SellingAndMarketingExpensehttp://fasb.org/us-gaap/2023#SellingAndMarketingExpensehttp://fasb.org/us-gaap/2023#GeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2023#GeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2023#NonoperatingIncomeExpensehttp://fasb.org/us-gaap/2023#NonoperatingIncomeExpense0001800667us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001800667us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-12-310001800667us-gaap:OtherIntangibleAssetsMember2024-01-012024-03-310001800667us-gaap:RetainedEarningsMember2024-03-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberfrog:RestOfWorldMember2024-01-012024-03-310001800667country:ILus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-3100018006672023-03-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-310001800667us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2023-12-310001800667us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667us-gaap:CommonStockMember2024-03-310001800667us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:LicenseMember2024-01-012024-03-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001800667us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001800667us-gaap:CertificatesOfDepositMember2024-03-310001800667us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001800667us-gaap:RetainedEarningsMember2023-03-310001800667frog:RestOfWorldMember2024-01-012024-03-310001800667us-gaap:FairValueInputsLevel1Member2024-03-3100018006672024-05-030001800667us-gaap:FairValueInputsLevel2Member2024-03-310001800667us-gaap:RestrictedStockUnitsRSUMember2023-12-310001800667us-gaap:CommonStockMember2023-03-310001800667us-gaap:LicenseMember2023-01-012023-03-310001800667frog:MrsTaliNotmanMember2024-01-012024-03-310001800667frog:SubscriptionMember2024-01-012024-03-310001800667frog:TwoThousandTwentyPlanMember2024-03-310001800667us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberfrog:RestOfWorldMember2023-01-012023-03-310001800667us-gaap:CorporateDebtSecuritiesMember2023-12-310001800667us-gaap:NondesignatedMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:CustomerRelationshipsMember2024-03-310001800667us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001800667frog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:DesignatedAsHedgingInstrumentMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667us-gaap:UnbilledRevenuesMember2024-03-310001800667frog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667us-gaap:RetainedEarningsMember2024-01-012024-03-310001800667us-gaap:ProductConcentrationRiskMemberfrog:SaasMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667us-gaap:CostOfSalesMember2023-01-012023-03-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-03-310001800667us-gaap:LeaseholdImprovementsMember2024-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:CommercialPaperMember2024-03-310001800667country:US2023-12-310001800667us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2023-12-310001800667us-gaap:AgencySecuritiesMember2023-12-310001800667us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001800667frog:SelfmanagedSubscriptionMember2023-01-012023-03-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2024-03-310001800667us-gaap:DevelopedTechnologyRightsMember2023-01-012023-12-310001800667us-gaap:ComputerEquipmentMember2023-12-310001800667us-gaap:RetainedEarningsMember2023-01-012023-03-310001800667us-gaap:BilledRevenuesMember2024-03-310001800667us-gaap:AgencySecuritiesMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:CommercialPaperMember2023-12-310001800667us-gaap:CorporateDebtSecuritiesMember2024-03-310001800667us-gaap:ComputerEquipmentMember2024-03-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001800667us-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001800667us-gaap:OtherIntangibleAssetsMember2024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001800667us-gaap:NondesignatedMemberfrog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2024-03-310001800667us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2024-01-012024-03-310001800667us-gaap:ProductConcentrationRiskMemberfrog:SaasMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001800667us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-01-012024-03-310001800667us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2023-01-012023-03-310001800667us-gaap:CommercialPaperMember2024-03-310001800667frog:SharePurchaseRightsUnderTheEsppMember2023-01-012023-03-310001800667us-gaap:CommercialPaperMember2023-12-310001800667us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2023-03-310001800667us-gaap:ProductConcentrationRiskMemberfrog:SelfmanagedSubscriptionMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001800667us-gaap:NondesignatedMemberfrog:AccruedExpensesAndOtherCurrentLiabilitesMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667us-gaap:AgencySecuritiesMember2024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001800667us-gaap:NondesignatedMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberfrog:PortionAtFairValueDisclosureMember2024-03-3100018006672023-01-012023-03-310001800667frog:MrsTaliNotmanMember2024-03-3100018006672022-12-310001800667us-gaap:DevelopedTechnologyRightsMember2023-12-310001800667us-gaap:NondesignatedMember2023-01-012023-03-310001800667us-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001800667us-gaap:AdditionalPaidInCapitalMember2024-03-310001800667us-gaap:FairValueInputsLevel3Member2024-03-310001800667frog:FurnitureAndOfficeEquipmentMember2023-12-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-03-310001800667us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-03-310001800667us-gaap:NondesignatedMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2024-03-3100018006672023-12-310001800667country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667us-gaap:RetainedEarningsMember2023-12-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667frog:SaasMember2023-01-012023-03-310001800667frog:EmployeeStockPurchasePlanMember2024-01-012024-01-010001800667us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001800667us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001800667us-gaap:CostOfSalesMember2024-01-012024-03-310001800667us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:NondesignatedMemberfrog:AccruedExpensesAndOtherCurrentLiabilitesMemberfrog:PortionAtFairValueDisclosureMember2023-12-310001800667frog:RestOfWorldMember2024-03-310001800667country:IN2024-03-310001800667us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-3100018006672024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001800667us-gaap:CommonStockMember2024-01-012024-03-310001800667us-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001800667us-gaap:OtherIntangibleAssetsMember2023-01-012023-12-310001800667us-gaap:OtherIntangibleAssetsMember2023-12-310001800667us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:CertificatesOfDepositMember2023-12-310001800667frog:PortionAtFairValueDisclosureMember2023-12-310001800667us-gaap:SubscriptionAndCirculationMember2024-01-012024-03-310001800667country:ILus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667country:US2024-01-012024-03-310001800667us-gaap:ForeignExchangeContractMemberfrog:SubscriptionSelfManagedAndSoftwareAsAServiceMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001800667us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2024-03-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667frog:RestOfWorldMember2023-12-310001800667frog:MrShlomiBenHaimMember2024-03-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-01-012024-03-310001800667frog:SharePurchaseRightsUnderTheEsppMember2024-01-012024-03-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2022-12-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberfrog:SubscriptionSelfManagedAndSoftwareAsAServiceMember2024-01-012024-03-310001800667us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:LicenseMember2023-01-012023-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:CertificatesOfDepositMember2023-12-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001800667us-gaap:CustomerRelationshipsMember2023-12-310001800667frog:RestOfWorldMember2023-01-012023-03-310001800667us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2024-03-310001800667us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001800667frog:PortionAtFairValueDisclosureMember2024-03-3100018006672023-01-012023-12-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-03-310001800667us-gaap:BankTimeDepositsMember2023-12-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001800667country:IL2024-01-012024-03-310001800667frog:SubscriptionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001800667us-gaap:LeaseholdImprovementsMember2023-12-310001800667us-gaap:CommonStockMember2023-01-012023-03-310001800667country:IN2023-12-310001800667us-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001800667us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-03-310001800667us-gaap:NondesignatedMemberfrog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667us-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001800667us-gaap:FairValueInputsLevel1Member2023-12-310001800667country:IL2023-12-310001800667frog:SelfmanagedSubscriptionMember2024-01-012024-03-310001800667us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001800667country:US2024-03-310001800667us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001800667us-gaap:AdditionalPaidInCapitalMember2023-03-310001800667us-gaap:CustomerRelationshipsMember2024-01-012024-03-310001800667us-gaap:FairValueInputsLevel2Member2023-12-310001800667us-gaap:ProductConcentrationRiskMemberfrog:SelfmanagedSubscriptionMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667frog:FurnitureAndOfficeEquipmentMember2024-03-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310001800667us-gaap:RetainedEarningsMember2022-12-310001800667country:IL2024-03-310001800667us-gaap:RestrictedStockUnitsRSUMember2024-03-3100018006672024-04-012024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2024-03-310001800667us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberfrog:PortionAtFairValueDisclosureMember2023-12-310001800667frog:MrShlomiBenHaimMember2024-01-012024-03-310001800667us-gaap:CommonStockMember2022-12-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2023-01-012023-03-310001800667us-gaap:AgencySecuritiesMemberfrog:PortionAtFairValueDisclosureMember2023-12-310001800667us-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-310001800667country:IL2023-01-012023-03-310001800667frog:IssuableOrdinarySharesRelatedToBusinessCombinationMember2023-01-012023-03-310001800667frog:IsraeliInnovationAuthorityMemberfrog:GrantsMember2024-01-012024-03-310001800667us-gaap:FairValueInputsLevel3Member2023-12-310001800667us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001800667us-gaap:BankTimeDepositsMember2024-03-310001800667us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-12-310001800667us-gaap:CorporateDebtSecuritiesMemberfrog:PortionAtFairValueDisclosureMember2024-03-310001800667us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001800667us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001800667us-gaap:AdditionalPaidInCapitalMember2023-12-310001800667us-gaap:LicenseMember2024-01-012024-03-310001800667us-gaap:NondesignatedMember2024-01-012024-03-310001800667us-gaap:AdditionalPaidInCapitalMember2022-12-310001800667us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:CertificatesOfDepositMember2024-03-310001800667frog:TwoThousandTwentyPlanMember2024-01-012024-01-010001800667us-gaap:DevelopedTechnologyRightsMember2024-03-310001800667us-gaap:NondesignatedMemberfrog:PortionAtFairValueDisclosureMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-12-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2023-12-310001800667us-gaap:CommonStockMember2023-12-3100018006672024-01-012024-03-310001800667us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-310001800667us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667frog:EmployeeStockPurchasePlanMember2024-03-310001800667us-gaap:SubscriptionAndCirculationMember2023-01-012023-03-310001800667frog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:FairValueInputsLevel2Member2023-12-310001800667frog:IssuableOrdinarySharesRelatedToBusinessCombinationMember2024-01-012024-03-310001800667frog:SaasMember2024-01-012024-03-310001800667frog:SubscriptionMemberus-gaap:ProductConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001800667us-gaap:ForeignExchangeContractMemberus-gaap:ResearchAndDevelopmentExpenseMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-01-012023-03-310001800667us-gaap:AccumulatedDistributionsInExcessOfNetIncomeMember2024-01-012024-03-310001800667us-gaap:CustomerRelationshipsMember2023-01-012023-12-310001800667country:USus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-310001800667us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001800667us-gaap:CorporateDebtSecuritiesMemberfrog:PortionAtFairValueDisclosureMember2023-12-310001800667us-gaap:DevelopedTechnologyRightsMember2024-01-012024-03-310001800667frog:AccruedExpensesAndOtherCurrentLiabilitesMemberus-gaap:DesignatedAsHedgingInstrumentMemberfrog:PortionAtFairValueDisclosureMember2023-12-310001800667us-gaap:EmployeeStockOptionMember2024-03-310001800667frog:SubscriptionMember2023-01-012023-03-310001800667country:US2023-01-012023-03-310001800667frog:PortionAtFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2023-12-31xbrli:purexbrli:sharesiso4217:USDxbrli:sharesiso4217:USDiso4217:ILSxbrli:shares

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39492

JFrog Ltd.

(Exact name of Registrant as specified in its charter)

Israel

 

98-0680649

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

270 E. Caribbean Drive

Sunnyvale, California 94089

(408) 329-1540

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

        Trading Symbol(s)

Name of each exchange on which registered

Ordinary Shares, NIS 0.01 par value

FROG

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of May 3, 2024, the registrant had 108,420,032 ordinary shares, NIS 0.01 par value per share, outstanding.

 

 

 


TABLE OF CONTENTS

 

 

PAGE

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

3

 

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023

4

 

Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2024 and 2023

5

 

Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2024 and 2023

6

 

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

7

 

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

30

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

66

Item 3.

Default Upon Senior Securities

66

Item 4.

Mine Safety Disclosures

66

Item 5.

Other Information

66

Item 6.

Exhibits

67

 

Signatures

68

 

 


NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses, operating cash flow and free cash flow, and our ability to achieve, and maintain, future profitability;
market acceptance of our products;
our expectations about the impact of global economic disruptions resulting from natural disasters, public health epidemics, protests or riots, and geopolitical tensions or war, such as the war between Hamas and Israel and the war in Ukraine, on our business, results of operations and financial condition;
our expectations about the impact of unfavorable economic conditions, and adverse macroeconomic conditions, such as recent inflation and slower growth or recession, on our business and financial condition;
the effects of increased competition in our markets and our ability to compete effectively;
anticipated trends, growth rates and challenges in our business and in the markets in which we operate;
our ability to maintain and expand our customer base, including by attracting new customers;
our ability to successfully expand in our existing markets and into new markets;
our ability to maintain the security and availability of our software;
our ability to maintain or increase our net dollar retention rate;
our ability to develop new products, or enhancements to our existing products, and bring them to market in a timely manner;
our business model and our ability to effectively manage our growth and associated investments;
our ability to integrate and realize anticipated synergies from acquisitions of complementary businesses;
beliefs and objectives for future operations, including regarding our market opportunity;
our relationships with third parties, including our technology partners and cloud providers;
our ability to maintain, protect, and enhance our intellectual property rights;
our ability to successfully defend litigation brought against us;
our ability to attract and retain qualified employees and key personnel;
the sufficiency of our cash and cash equivalents to meet our liquidity needs;
our ability to comply with laws and regulations that currently apply or become applicable to our business in Israel, the United States, and internationally; and
the future trading prices of our ordinary shares.

1


You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

2


PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

JFROG LTD.

CONDENSED Consolidated Balance SheetS

(in thousands, except share and per share data)

(unaudited)

 

 

 

As of

 

 

 

March 31, 2024

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

71,385

 

 

$

84,765

 

Short-term investments

 

 

508,229

 

 

 

460,245

 

Accounts receivable, net

 

 

66,570

 

 

 

76,437

 

Deferred contract acquisition costs

 

 

11,869

 

 

 

11,378

 

Prepaid expenses and other current assets

 

 

17,569

 

 

 

12,976

 

Total current assets

 

 

675,622

 

 

 

645,801

 

Property and equipment, net

 

 

6,473

 

 

 

6,663

 

Deferred contract acquisition costs, noncurrent

 

 

17,727

 

 

 

18,032

 

Operating lease right-of-use assets

 

 

20,323

 

 

 

22,427

 

Intangible assets, net

 

 

22,879

 

 

 

25,768

 

Goodwill

 

 

247,955

 

 

 

247,955

 

Other assets, noncurrent

 

 

6,101

 

 

 

5,910

 

Total assets

 

$

997,080

 

 

$

972,556

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

14,247

 

 

$

16,970

 

Accrued expenses and other current liabilities

 

 

39,597

 

 

 

35,815

 

Operating lease liabilities

 

 

8,135

 

 

 

8,272

 

Deferred revenue

 

 

198,240

 

 

 

201,118

 

Total current liabilities

 

 

260,219

 

 

 

262,175

 

Deferred revenue, noncurrent

 

 

12,972

 

 

 

12,987

 

Operating lease liabilities, noncurrent

 

 

11,705

 

 

 

13,954

 

Other liabilities, noncurrent

 

 

4,382

 

 

 

4,317

 

Total liabilities

 

 

289,278

 

 

 

293,433

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Preferred shares, NIS 0.01 par value per share; 50,000,000 shares authorized; 0 issued and outstanding as of March 31, 2024 and December 31, 2023

 

 

 

 

 

 

Ordinary shares, NIS 0.01 par value per share, 500,000,000 shares authorized; 108,338,295 and 106,114,892 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

303

 

 

 

297

 

Additional paid-in capital

 

 

1,006,865

 

 

 

968,245

 

Accumulated other comprehensive income (loss)

 

 

(144

)

 

 

1,013

 

Accumulated deficit

 

 

(299,222

)

 

 

(290,432

)

Total shareholders’ equity

 

 

707,802

 

 

 

679,123

 

Total liabilities and shareholders’ equity

 

$

997,080

 

 

$

972,556

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


JFROG LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Subscription—self-managed and SaaS

 

$

95,406

 

 

$

74,543

 

License—self-managed

 

 

4,905

 

 

 

5,277

 

Total subscription revenue

 

 

100,311

 

 

 

79,820

 

Cost of revenue:

 

 

 

 

 

 

Subscription—self-managed and SaaS

 

 

20,459

 

 

 

18,203

 

License—self-managed

 

 

145

 

 

 

218

 

Total cost of revenue—subscription

 

 

20,604

 

 

 

18,421

 

Gross profit

 

 

79,707

 

 

 

61,399

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

35,832

 

 

 

34,886

 

Sales and marketing

 

 

43,571

 

 

 

35,486

 

General and administrative

 

 

16,940

 

 

 

14,240

 

Total operating expenses

 

 

96,343

 

 

 

84,612

 

Operating loss

 

 

(16,636

)

 

 

(23,213

)

Interest and other income, net

 

 

7,087

 

 

 

3,992

 

Loss before income taxes

 

 

(9,549

)

 

 

(19,221

)

Income tax expense (benefit)

 

 

(759

)

 

 

1,588

 

Net loss

 

$

(8,790

)

 

$

(20,809

)

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.08

)

 

$

(0.21

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

 

107,025,351

 

 

 

101,260,549

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


JFROG LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Net loss

 

$

(8,790

)

 

$

(20,809

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Net change in unrealized gains (losses) on available-for-sale marketable securities, net of tax

 

 

(431

)

 

 

572

 

Net change in unrealized losses on derivative instruments, net of tax

 

 

(726

)

 

 

(173

)

Other comprehensive income (loss), net of tax

 

 

(1,157

)

 

 

399

 

Comprehensive loss

 

$

(9,947

)

 

$

(20,410

)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


JFROG LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

 

 

 

Three Months Ended March 31, 2024

 

 

 

Ordinary Shares

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2023

 

 

106,114,892

 

 

$

297

 

 

$

968,245

 

 

$

1,013

 

 

$

(290,432

)

 

$

679,123

 

Issuance of ordinary shares upon exercise of share options

 

 

1,280,624

 

 

 

4

 

 

 

6,842

 

 

 

 

 

 

 

 

 

6,846

 

Issuance of ordinary shares upon release of restricted share units

 

 

764,873

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

Issuance of ordinary shares under the employee share purchase plan

 

 

177,906

 

 

 

 

 

 

4,494

 

 

 

 

 

 

 

 

 

4,494

 

Share-based compensation expense

 

 

 

 

 

 

 

 

27,286

 

 

 

 

 

 

 

 

 

27,286

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

(1,157

)

 

 

 

 

 

(1,157

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,790

)

 

 

(8,790

)

Balance as of March 31, 2024

 

 

108,338,295

 

 

$

303

 

 

$

1,006,865

 

 

$

(144

)

 

$

(299,222

)

 

$

707,802

 

 

 

 

Three Months Ended March 31, 2023

 

 

 

Ordinary Shares

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2022

 

 

100,907,857

 

 

$

283

 

 

$

856,438

 

 

$

(2,772

)

 

$

(229,176

)

 

$

624,773

 

Issuance of ordinary shares upon exercise of share options

 

 

351,794

 

 

 

1

 

 

 

1,155

 

 

 

 

 

 

 

 

 

1,156

 

Issuance of ordinary shares upon release of restricted share units

 

 

371,504

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Issuance of ordinary shares under the employee share purchase plan

 

 

207,388

 

 

 

1

 

 

 

3,498

 

 

 

 

 

 

 

 

 

3,499

 

Share-based compensation expense

 

 

 

 

 

 

 

 

19,912

 

 

 

 

 

 

 

 

 

19,912

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

399

 

 

 

 

 

 

399

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,809

)

 

 

(20,809

)

Balance as of March 31, 2023

 

 

101,838,543

 

 

$

286

 

 

$

881,002

 

 

$

(2,373

)

 

$

(249,985

)

 

$

628,930

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6


JFROG LTD.

CONDENSED Consolidated StatementS of Cash Flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(8,790

)

 

$

(20,809

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

3,799

 

 

 

3,847

 

Share-based compensation expense

 

 

27,286

 

 

 

19,912

 

Non-cash operating lease expense

 

 

2,104

 

 

 

2,022

 

Net amortization of premium or discount on investments

 

 

(2,008

)

 

 

(1,288

)

Losses (gains) on foreign exchange

 

 

253

 

 

 

(367

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

9,781

 

 

 

(838

)

Prepaid expenses and other assets

 

 

(4,032

)

 

 

(3,114

)

Deferred contract acquisition costs

 

 

(186

)

 

 

(793

)

Accounts payable

 

 

(2,516

)

 

 

(1,086

)

Accrued expenses and other liabilities

 

 

(3,213

)

 

 

410

 

Operating lease liabilities

 

 

(2,116

)

 

 

(1,737

)

Deferred revenue

 

 

(2,893

)

 

 

2,712

 

Net cash provided by (used in) operating activities

 

 

17,469

 

 

 

(1,129

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of short-term investments

 

 

(164,703

)

 

 

(123,216

)

Maturities and sales of short-term investments

 

 

118,623

 

 

 

114,326

 

Purchases of property and equipment

 

 

(841

)

 

 

(266

)

Net cash used in investing activities

 

 

(46,921

)

 

 

(9,156

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of share options

 

 

6,846

 

 

 

1,156

 

Proceeds from employee share purchase plan

 

 

4,494

 

 

 

3,499

 

Proceeds from employee equity transactions, net of payments to tax authorities

 

 

5,255

 

 

 

297

 

Net cash provided by financing activities

 

 

16,595

 

 

 

4,952

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(523

)

 

 

84

 

Net decrease in cash, cash equivalents, and restricted cash

 

 

(13,380

)

 

 

(5,249

)

Cash, cash equivalents, and restricted cash—beginning of period

 

 

84,777

 

 

 

45,607

 

Cash, cash equivalents, and restricted cash—end of period

 

$

71,397

 

 

$

40,358

 

Reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows above:

 

 

 

 

 

 

Cash and cash equivalents

 

$

71,385

 

 

$

40,346

 

Restricted cash included in prepaid expenses and other current assets

 

 

12

 

 

 

12

 

Total cash, cash equivalents, and restricted cash

 

$

71,397

 

 

$

40,358

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7


JFROG LTD.

NOTES TO CONDENSED Consolidated StatementS

(unaudited)

1. Organization and Description of Business

JFrog Ltd. (together with its subsidiaries, “JFrog”, or the “Company”) was incorporated under the laws of the State of Israel in 2008. JFrog provides an end-to-end, hybrid, universal Software Supply Chain Platform that enables organizations to continuously and securely create and deliver software updates across any system. This platform is the critical bridge between software development and deployment of that software, paving the way for modern software supply chain management and software release processes. The Company enables organizations to build and release software faster and more securely while empowering developers, security teams and machine learning operations teams to be more efficient. The Company’s solutions are designed to run on-premise, in public or private clouds, or in hybrid environments.

 

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of JFrog Ltd. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 15, 2024.

In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2024 and the Company’s consolidated results of operations, shareholders’ equity, and cash flows for the three months ended March 31, 2024 and 2023. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024 or any other future interim or annual period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods and accompanying notes. Significant items subject to such estimates and assumptions include, but are not limited to, the allocation of transaction price among various performance obligations, the estimated benefit period of deferred contract acquisition costs, the allowance for credit losses, the fair value of acquired intangible assets and goodwill, the useful lives of acquired intangible assets and property and equipment, the incremental borrowing rate for operating leases, and the valuation of deferred tax assets and uncertain tax positions. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes to these policies during the three months ended March 31, 2024.

8


Interest and Other Income, Net

Interest and other income, net primarily consists of income earned on cash equivalents and short-term investments and foreign exchange gains and losses. Interest income was $7.1 million and $4.4 million for the three months ended March 31, 2024 and 2023, respectively. Foreign exchange gains (losses) were not material for the periods presented.

Geographical Information

Revenue by geographical region can be found in Note 3, Revenue Recognition. The following table presents the Company’s long-lived assets by geographic region, which consist of property and equipment, net and operating lease right-of-use assets:

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

(in thousands)

 

United States

 

$

7,856

 

 

$

8,566

 

Israel

 

 

14,768

 

 

 

15,888

 

India

 

 

3,701

 

 

 

4,054

 

Rest of world

 

 

471

 

 

 

582

 

Total long-lived assets

 

$

26,796

 

 

$

29,090

 

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. In addition, it provides new segment disclosure requirements for entities with a single reportable segment. The guidance will be effective for the Company for annual periods beginning January 1, 2024 and for interim periods beginning January 1, 2025. Early adoption is permitted. The Company is currently evaluating the impact on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance will be effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact on its financial statement disclosures.

3. Revenue Recognition

Disaggregation of Revenue

The following table presents revenue by category:

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

Amount

 

 

Percentage of Revenue

 

 

Amount

 

 

Percentage of Revenue

 

 

 

(in thousands, except percentages)

 

Self-managed subscription

 

$

63,390

 

 

 

63

%

 

$

54,780

 

 

 

69

%

Subscription

 

 

58,485

 

 

 

58

 

 

 

49,503

 

 

 

62

 

License

 

 

4,905

 

 

 

5

 

 

 

5,277

 

 

 

7

 

SaaS

 

 

36,921

 

 

 

37

 

 

 

25,040

 

 

 

31

 

Total subscription revenue

 

$

100,311

 

 

 

100

%

 

$

79,820

 

 

 

100

%

 

9


The following table summarizes revenue by region based on the shipping address of customers:

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

Amount

 

 

Percentage of Revenue

 

 

Amount

 

 

Percentage of Revenue

 

 

 

(in thousands, except percentages)

 

United States

 

$

60,658

 

 

 

60

%

 

$

49,539

 

 

 

62

%

Israel

 

 

2,933

 

 

 

3

 

 

 

2,043

 

 

 

3

 

Rest of world

 

 

36,720

 

 

 

37

 

 

 

28,238

 

 

 

35

 

Total subscription revenue

 

$

100,311

 

 

 

100

%

 

$

79,820

 

 

 

100

%

Contract Balances

Of the $214.1 million and $175.7 million of deferred revenue recorded as of December 31, 2023 and 2022, respectively, the Company recognized $83.7 million and $63.5 million as revenue during the three months ended March 31, 2024 and 2023, respectively.

Remaining Performance Obligation

The Company’s remaining performance obligations are comprised of product and service revenue not yet delivered. As of March 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $261.7 million, which consists of billed considerations of $211.2 million and unbilled considerations of $50.5 million, that the Company expects to recognize as revenue. As of March 31, 2024, the Company expects to recognize 82% of its remaining performance obligations as revenue over the next 12 months, and the remainder thereafter.

Cost to Obtain a Contract

Amortization of deferred contract acquisition costs was $3.1 million and $2.2 million for the three months ended March 31, 2024 and 2023, respectively.

4. Short-Term Investments

Short-term investments consist of bank deposits and marketable securities. As of March 31, 2024 and December 31, 2023, bank deposits were $106.7 million and $81.1 million, respectively.

Marketable securities consist of the following:

 

 

March 31, 2024

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

 

 

(in thousands)

 

Certificates of deposit

 

$

2,467

 

 

$

 

 

$

(11

)

 

$

2,456

 

Commercial paper

 

 

4,147

 

 

 

 

 

 

(3

)

 

 

4,144

 

Corporate debt securities

 

 

161,396

 

 

 

95

 

 

 

(261

)

 

 

161,230

 

Municipal securities

 

 

17,722

 

 

 

1

 

 

 

(49

)

 

 

17,674

 

Government and agency debt

 

 

216,403

 

 

 

57

 

 

 

(429

)

 

 

216,031

 

Total marketable securities

 

 

402,135

 

 

 

153

 

 

 

(753

)

 

 

401,535

 

 

10


 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

 

 

(in thousands)

 

Certificates of deposit

 

$

2,455

 

 

$

 

 

$

(21

)

 

$

2,434

 

Commercial paper

 

 

8,927

 

 

 

 

 

 

(6

)

 

 

8,921

 

Corporate debt securities

 

 

162,515

 

 

 

234

 

 

 

(302

)

 

 

162,447

 

Municipal securities

 

 

22,263

 

 

 

9

 

 

 

(36

)

 

 

22,236

 

Government and agency debt

 

 

183,093

 

 

 

252

 

 

 

(250

)

 

 

183,095

 

Total marketable securities

 

$

379,253

 

 

$

495

 

 

$

(615

)

 

$

379,133

 

The following table summarizes the Company’s marketable securities by contractual maturities:

 

 

March 31, 2024

 

 

 

(in thousands)

 

Due in 1 year or less

 

$

254,895

 

Due in 1 year through 2 years

 

 

146,640

 

Total

 

$

401,535

 

The following tables present fair value and gross unrealized losses of the Company’s marketable securities that have been in a continuous loss position, aggregated by length of time:

 

 

March 31, 2024

 

 

 

Less Than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

 

(in thousands)

 

Certificates of deposit

 

$

250

 

 

$

(1

)

 

$

2,206

 

 

$

(10

)

 

$

2,456

 

 

$

(11

)

Commercial paper

 

 

4,144

 

 

 

(3

)

 

 

 

 

 

 

 

 

4,144

 

 

 

(3

)

Corporate debt securities

 

 

102,475

 

 

 

(218

)

 

 

14,347

 

 

 

(43

)

 

 

116,822

 

 

 

(261

)

Municipal securities

 

 

11,814

 

 

 

(30

)

 

 

4,576

 

 

 

(19

)

 

 

16,390

 

 

 

(49

)

Government and agency debt

 

 

147,125

 

 

 

(366

)

 

 

18,669

 

 

 

(63

)

 

 

165,794

 

 

 

(429

)

Total

 

$

265,808

 

 

$

(618

)

 

$

39,798

 

 

$

(135

)

 

$

305,606

 

 

$

(753

)

 

 

 

December 31, 2023

 

 

 

Less Than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

Fair Value

 

 

Gross Unrealized Loss

 

 

 

(in thousands)

 

Certificates of deposit

 

$

250

 

 

$

 

 

$

2,175

 

 

$

(21

)

 

$

2,425

 

 

$

(21

)

Commercial paper

 

 

8,921

 

 

 

(6

)

 

 

 

 

 

 

 

 

8,921

 

 

 

(6

)

Corporate debt securities

 

 

77,023

 

 

 

(177

)

 

 

25,156

 

 

 

(125

)

 

 

102,179

 

 

 

(302

)

Municipal securities

 

 

7,071

 

 

 

(6

)

 

 

4,215

 

 

 

(30

)

 

 

11,286

 

 

 

(36

)

Government and agency debt

 

 

99,236

 

 

 

(181

)

 

 

8,972

 

 

 

(69

)

 

 

108,208

 

 

 

(250

)

Total

 

$

192,501

 

 

$

(370

)

 

$

40,518

 

 

$

(245

)

 

$

233,019

 

 

$

(615

)

As of March 31, 2024 and December 31, 2023, the unrealized losses related to marketable securities were determined to be not due to credit related losses. Therefore, the Company did not recognize an allowance for credit losses. See Note 12, Accumulated Other Comprehensive Income (Loss), for the realized gains or losses from available-for-sale marketable securities that were reclassified out of accumulated other comprehensive income (loss) (“AOCI”) during the periods presented.

11


5. Fair Value Measurements

The following tables present information about the Company’s financial instruments that are measured at fair value on a recurring basis:

 

 

March 31, 2024

 

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

 

(in thousands)

 

Financial Assets:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

32,037

 

 

$

32,037

 

 

$

 

Cash equivalents

 

 

32,037

 

 

 

32,037

 

 

 

 

Certificates of deposit

 

 

2,456

 

 

 

 

 

 

2,456

 

Commercial paper

 

 

4,144

 

 

 

 

 

 

4,144

 

Corporate debt securities

 

 

161,230

 

 

 

 

 

 

161,230

 

Municipal securities

 

 

17,674

 

 

 

 

 

 

17,674

 

Government and agency debt

 

 

216,031

 

 

 

 

 

 

216,031

 

Marketable securities

 

 

401,535

 

 

 

 

 

 

401,535

 

Foreign currency contracts designated as hedging instruments included in prepaid expenses and other current assets

 

 

666

 

 

 

 

 

 

666

 

Foreign currency contracts not designated as hedging instruments included in prepaid expenses and other current assets

 

 

35

 

 

 

 

 

 

35

 

Restricted bank deposits included in prepaid expenses and other current assets

 

 

12

 

 

 

 

 

 

12

 

Total financial assets

 

$

434,285

 

 

$

32,037

 

 

$