Good day, and thank you for standing by. Welcome to the JFrog call to discuss the acquisition of Vdoo announced this morning. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Joann Horne of JFrog Investor Relations team. Please go ahead. Thank you, operator, and good morning, everyone. As you seen this morning, we announced the entry into a definitive agreement to acquire Vdoo Connected Trust Ltd. Joining us today to discuss the proposed acquisition will be JFrog's CEO and co-founder, Shlomi Ben Haim, and Jacob Shulman, JFrog's CFO. After the management's brief remarks, they'll be happy to answer your questions. During this call, we may make statements related to our business that are forward-looking under federal securities laws and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance, including our previously disclosed outlook for the second quarter and full year of 2021, and our expectations regarding the proposed acquisition of Vdoo. The words anticipate, believe, continue, estimate, expect, intend, will, and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our views only as of today, and not as of any subsequent date. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events, except as may be required by law. These statements are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our Form 10-K filed with the SEC on February 12, 2021, which is available in the investor relations section of our website, our quarterly report on Form 10-Q for the quarter ending March 31, 2021, filed with the SEC on May 7, 2021, and the press release issued earlier today. Additional information will be made available in other filings and reports that we may file from time to time with the SEC. Non-GAAP financial measures will be discussed on the conference call. These non-GAAP financial measures, which are used as measures of JFrog's performance, should be considered in addition to, not as a substitute for or in isolation from, GAAP measures. Please refer to the tables of our earnings release for the first quarter of 2021 for a reconciliation of those measures to their most directly comparable GAAP financial measures. A replay of this call will be available on the JFrog Investor Relations website for a limited time. With that, I'd like to turn the call over to JFrog CEO, Shlomi Ben Haim. Shlomi? Thank you, Joann. Greetings from Jerusalem everyone, and thank you for joining the call. I'm excited to share more information about our announcement earlier today regarding the proposed acquisition of Vdoo, the creators of a hybrid product security platform that automates security tasks throughout the entire software release lifecycle. This acquisition is yet another step towards our vision of becoming the company behind all software updates and creating a world of liquid software. Previously, we shared how security is a strategic focus for JFrog and is driving enterprise DevOps across the globe. By joining forces with Vdoo, we are taking another leap forward in securing software builds to release and orchestration tasks all the way from the dev environment to IoT or other edge points and expanding JFrog's security offering within our platform to provide holistic security for software creators. Why is this important? In today's world, the main goal of any DevOps process is to release software faster and more efficiently. If companies aren't focused on the security of their releases as part of their DevOps process, if they are not trying to streamline, consolidate, and cross-reference data to ensure security, they will see a slowdown in both development and security operations. Many of today's security tools focus only on some of the application components, such as custom code, third-party code, open source, configurations, et cetera, and are not fully integrated into the complete delivery lifecycle, only offering isolated control points that don't share data. This creates disparate security systems, each with its own data set, that slows the release of software updates, specifically when continuously delivering to the edge. These tools are not fueling the promise of fast, automated, and secure releases. Furthermore, there aren't many tools that serve both DevOps and security engineering well, providing them a common ground to bridge the two worlds with a common understanding that they are doomed to heavy friction at best, failure at worst. Four years ago, we introduced JFrog Xray to the world of developers, offering them a solution that will secure their binary repository and integrate with the CI/CD flow. Xray today serves thousands of customers as part of the JFrog Platform. With Xray, our customers use our software composition analysis technology to secure their software packages and DevOps pipeline for containers and cloud-native application at scale. We see the market, we hear the demands from our customers, and they are looking for more. They are looking for value and not having security solutions out of field. They would like to have an end-to-end holistic process that secures the binaries all the way to the edge, consolidates security data for efficient decision-making, saves time and resources, and blesses an end-to-end delivery system with the highest integrity, something that goes beyond their development organization. This is where Vdoo comes in. Vdoo's vast team of security experts and their advanced security technology is a perfect match to deliver on the liquid software vision while solving today's challenges. For example, Vdoo's contextual threat analysis capability allows them to prioritize critical security gaps, enabling fast mitigation and recommendations of the issues that are exploitable across multiple vectors like binaries, application images, firmware, and more. Alternative solutions currently available provide long lists of vulnerability with many false positives that often development teams need to sift through at length. Again, serving one side instead of building trust between Dev and Sec. Often, these alternative solutions are manually judging the applicability of vulnerability in their particular use case, only to find that while it's relevant in some other instances, it may be irrelevant in other environments. The days of long vulnerability lists provided by the security team that overload developers with no good reason are over. We need to be faster and seek after security and development organizational handshake. Vdoo also discovers and provides visibility into zero-day new vulnerabilities, malware, exploits, backdoor, supply chain risks, and other threats before they become public for both first-party and third-party binaries. Vdoo's hybrid product security platform and team of experts can find security issues before the issues are even public knowledge. They have already demonstrated hundreds of times and saved many hours for software makers. Imagine how great it would be if SolarWinds-like issue was detected before the world even heard about it. Vdoo provides security that extends even to embedded software on devices. Their automated technology observes and analyzes the applications that run on devices and provides data on the environment, behavior, usage, security architecture, configuration, and more. To illustrate Vdoo's capabilities, let's take the example of services provided to a tier 1 telecommunication provider that supports millions of customers and also delivers millions of edge devices, most of which are shipped containing software from third-party vendors. Securing the software applications running on these many devices for many sources is critical for the service provider's customers. However, analyzing these devices' software stack in their release form is almost impossible without slow manual analysis and large engineering efforts, making it hard to consistently enforce security standards at scale across hundreds of externally sourced products. With Vdoo's platform, the telecom provider's team started running analysis scans of their devices' software stack automatically out of their build pipeline in their final binary form with no modification. They can now obtain comprehensive results within minutes, including a detailed software bill of materials, common vulnerabilities and exposure, zero-day vulnerability, configuration issues, security malpractices, malicious files, and more. The company was able to get fast detection and response to new threats, as well as produce higher accuracy and coverage of security issues. They received meaningful prioritization, resolution, and standard compliance guidance, enabling efficient handling of any issues that have actual security and risk impact. About how JFrog and Vdoo will work together following the completion of the acquisition. JFrog is the only vendor in the market that manages the end-to-end flow of software packages, also known as binaries. Vdoo leads a holistic product security approach that provides security for any software package or artifact. The integration of Vdoo's automated security technology into JFrog's DevOps platform, combined with their extensive research expertise, will provide a complete picture of how customers' software components are woven together, giving developers, security engineers, and product teams the flexibility to analyze and mitigate security issues in the multiple dimensions of the environment in which their software is created and shipping. By bringing Vdoo's team, we expect to triple the size of the JFrog security expert team, including engineering, marketing, and sales, with employees that will be located in Israel, Germany, Japan, and North America. The world-class security experts and vulnerability researchers have many years of experience in software architecture, vulnerability research, reverse engineering, and binary code analysis, enabling them to continually enhance the Vdoo knowledge base. In addition, Vdoo's top-down sales approach will complement our strategic sales team to expand our security footprint. Netanel Davidi, CEO and co-founder, and Asaf Karas, CTO and co-founder of Vdoo, have built a global team of security experts that, together with JFrog, will expand our joint vision. This research and engineering team will be an integral part of our plans moving forward. Both company teams stand ready to start merging the products following the completion of the acquisition. We expect the rollout of the first set of solutions into JFrog Xray to happen rapidly to deliver a hybrid, universal, integrated solution as part of the JFrog Platform through 2022. In closing, a personal note to the Vdoo team. We are beyond excited to have you join the JFrog family upon completion of the proposed acquisition. It is clear to us that the joint vision of changing the way software is being created, released, and updated to the edge will be our compass as we offer the market a binary-focused solution to secure the organization's software assets. This move will amplify JFrog's current success with Xray and create the expectation that fearless software releases will be the experience both security and development teams enjoy. Welcome to the Swamp, Vdooers, and may the Frog be with us all. With that, I'll turn it over to Jacob Shulman, our CFO. Thank you, Shlomi. Under the terms of the definitive agreement, JFrog agreed to acquire Vdoo for a total purchase price of $300 million, subject to adjustments as set forth in the purchase agreement for cash-free, debt-free basis, to be paid in a combination of cash and share consideration. Of the purchase price, approximately $90 million will be paid with JFrog ordinary shares based on the average close price of the shares during the last 15 trading days, or approximately two million ordinary shares. The required corporate approvals of both Vdoo and JFrog have been obtained for the proposed transaction. The transaction is subject to certain customary closing conditions and is expected to close in the third quarter of 2021. Vdoo brings extensive technology know-how to JFrog. Today, Vdoo revenues have been immaterial as the company just began to ramp up its go-to-market strategy. The acquisition will not have an immediate impact on JFrog revenue. We expect to see the revenue benefits next year when we begin selling the product integrating Vdoo and Xray, as Shlomi discussed. I'll also add that while we expect some minor cost synergies, we plan to reinvest any potential savings to support growth of the combined entity. Please note that in today's press release, we reiterated our guidance for the second quarter and full year. Subject to the closing of the proposed acquisition, JFrog anticipates its consolidated operating expenses to increase by approximately $9 million-$10 million for the remainder of 2021. We are confident in our ability to bring the JFrog and Vdoo teams together. This confidence stems from our shared goals and values and our success with previously completed acquisitions. Shannon, please open the call for questions. Thank you. As a reminder, to ask you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Sterling Auty with JP Morgan. Your line is open. Yeah, thanks. Hi, guys. A couple of questions from my side. I think you did an excellent job describing what they do. I want to drill into how Vdoo does what it does, and specifically within the CI/CD pipeline and software development process. There's some presentations out there talking about micro agents that they use on-device, but where is the solution installed? Is there an agent? What does it capture? Just help us understand how it actually accomplishes all the things that you talked about. Yes, I can address that. Good morning. Thank you for the question. Vdoo started a bit more than three years ago by developing a security solution for embedded software and for the IoT environment. In the last year, they were focusing on shifting left and started to build tools that secure the DevOps, the DevSecOps pipeline, including containers and the CI/CD tool. This is where they started to integrate with tools like Artifactory and JFrog Xray in order to serve developers' environment. What we build with JFrog Xray is actually coming from the other way. We build tools for developers to scan their binaries, to secure the repository, integrate with their CI/CD, and to be able to distribute the binary securely to the deployment environment. The combination of both is actually what we are looking at. We want to take Vdoo's capability. Putting aside the extensive security research data and the infrastructure that they build. To take these scanners, to take these capabilities and add it to Xray. The result will be a security tool that not only serves developers on the CI/CD side, integrated seamlessly with your pipeline, comes as a platform, all-in-one repository, CI/CD, security, and distribution solution for software packages, and also secure your embedded software or IoT environment. Now, if you activate the specific security capabilities that Vdoo brings, like the research, the zero-day, the contextual security threat that they know how to do, you get a full end-to-end security solution that is driven by binary analysis. This is exactly what we had in mind when we thought about the vision of JFrog moving forward. That makes a lot of sense. Jacob, is it fair to think since the revenue is immaterial, it sounds like this is really just getting integrated into Xray. It's not like there's any type of different contract structure. It's still that you're going to be selling Xray going forward, and that's how you're going to generate revenue with the Vdoo solution? Yes, Sterling. This is our intent. We will combine our capabilities of Xray with Vdoo, we expect to start seeing revenues from the combined product throughout 2022. All right, great. Last question. How many employees in total do you expect to come over with the transaction? Vdoo's total team is approximately 90 employees in four different countries. We expect the majority of them to join JFrog. Great. Thank you guys. Thank you. Our next question comes from Koji Ikeda with Bank of America. Your line is open. Oh, hey, good morning, guys, and thanks for taking my questions. Just looking at the Vdoo website here. I was wondering if you could tell us maybe what are the key one, two, or three features of the Vdoo platform that excites you most today? I'll try to Koji, find one or two or three items that we really like because the list is long and obviously starts with a team of experts that bring a vast experience in this domain. A few things that we heard from the market and we knew that we have to reinforce actually with are the saving resources with improved efficiency and high accuracy when you provide a contextual threat analysis. What it basically means is that Vdoo's scanners, Vdoo's technology can help you understand what you are actually threatened by and not just the list of what the security engineers [Inaudible] on the developers. This saves tons of times and hours of development and also builds the trust between the two communities. The other thing is the zero-day detection. This is huge. The main reason for that is that if you have a team of experts, they have PhD expert people that know how to find zero-day vulnerability. They know how the hacker thinks. They develop the product with a hacker mindset. This can be an amazing add-on to Xray if we can find and detect and protect our customers from zero-day, from vulnerabilities that are not yet reported. The other thing, obviously, that we are super excited about is the IoT and the embedded software security. This comes not just with the expertise of analyzing your binaries in the security world, but also understanding the configuration around it, understanding the environment, understanding the instance of the device in order to provide you not only with software analysis security results, but also software analysis security results of the specific environment. Saving tons of hours for both developers, security, product manager, and more. Alongside what I just mentioned, Koji, we are joining a team of 90 experts that this is what they do from day one in the industry. This team has already had a company before. This is the second company. They build a vast experience around the community of security. They are well-known with the results that they are bringing. The combination of that with a great technology that will lay down on Xray would be a great benefit for all of our customers and community. Got it. Thanks, Shlomi. Just 1 follow-up here. You mentioned in your prepared remarks, a fully integrated product here from JFrog and Vdoo in 2022. I guess any sort of color on the timeframe in 2022? Is that an early or late 2022 target there? Yeah. Our team already spent time thinking about what would be the first milestones and how can we plan the next eight quarters in terms of technology and joint roadmap. It was kind of a joy if I may say so, because when you have a joint vision, when both of us understand that the primary asset that needs to be protected is binary, it's now a discussion around merging the infrastructure, the databases, merging the teams, merging the add-ons, the UI, the assets that you want to get into the JFrog Platform. We think about the low-hanging fruit, and it obviously will start with the infrastructure and database that will enrich Xray. Then how can we provide this service as an integral part of the DevOps end-to-end solution that is provided by JFrog? Obviously, we will have it in several milestones. Later this year, you will start to see the early results of this integration. Towards swampUP, the middle of 2022, we would love to have the first version of the merged product coming from JFrog. Got it. Thank you. Super helpful. Congrats again on the acquisition announcement. Thanks for taking my question, guys. Thank you. Our next question comes from Brad Reback with Stifel. Your line is open. Great. Thanks very much. As we think about monetization of the Vdoo product going forward, do you envision it a separate SKU or this just accelerating enterprise adoption? Yes, Brad, thank you for the question. Obviously, it's too early. We are observing all the possibilities. This opportunity opens a new door to a new avenue of growth. As you can see in the security market, there are so many dimensions of what you can and need to protect. We are looking at that. We understand that there are other opportunities for security for IoT and edge devices. We don't yet have the full information around that. The first milestone for us is to merge Vdoo into the JFrog Platform and obviously to provide more value to our customers, and we will take it from there. Great. Thanks very much. Thank you. Our next question comes from Kingsley Crane with Berenberg. Your line is open. Hi, thanks for taking my questions. One is a similar theme. You're talking about providing more value to your customers through Xray. Do you think that potentially lines up the product for some type of price increase over the next 12- 24 months? Again, price increases and new subscriptions, new values added to the current subscription, obviously in the cloud, it's less relevant because our JFrog as a service is based on consumption. When we think about the on-prem self-hosted solution, we will have to consider the prices, the packages, the subscriptions. Currently, we would like to be focused on the technology merge to add it to the JFrog Platform and not yet ready to share the prices or the updates that might come in the future. Okay, that's helpful. For the 90-person engineering team, I'm curious how many of those are entirely focused on zero-day threat hunting research, and then how many of those are sort of software developers building out a software product? That's a great question because this was my first question when we met the team. 90 people are not just engineers and researchers. 90 people include the sales and marketing that are also security experts in the go-to market of the security landscape. They will join our teams. They will join our sales and marketing team. The strategic team will be boosted by these teams. Around 60 in total out of the Vdoo team are engineers, and around 15 of them are researchers. Probably this is what we will start with. It will be merged with our security team and our team of researchers and data collectors. It's become quite a significant team. As I said, we are more than tripling the team that is focusing on security in JFrog. Okay, that's perfect. Thanks so much. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. Our next question comes from Sanjit Singh with Morgan Stanley. Your line is open. Hi, thank you for taking the question, and congrats on the deal, Shlomi. I wanted to get your view on who the ultimate buying center is going to be because it sounds like Vdoo was more of a SOC team solution, and JFrog obviously with Xray focusing on developers and the DevOps team. As you sort of look to 2022 to monetize that product, who do you have in mind as the ultimate sort of end users for the integrated solution? Yeah, thank you for the question, Sanjit, and good morning. Well, you were with us just a few weeks ago at swampUP when we announced and introduced JFrog Distribution to the world. The reason that I'm starting with that is that, again, JFrog expanded the solution to a new persona. JFrog Distribution actually addresses the product managers of the organization. When we look at security, as we always said, and when we said that we would extend our solution in the DevSecOps market, when we look at security, we are looking at a holistic solution. It's not just the security piece of the platform. It has to be embedded into the platform to well improve and empower Xray to integrate with your CI/CD and with your distribution. Binary flow will be seamless as we describe in the liquid software vision. Basically to your question, Sanjit, it will be the DevOps engineers in small companies, probably security and product security engineers in small and medium companies, the security organization in the enterprise, and product security and product managers in the big enterprise. When we look at the 6,000 customers currently, almost 6,000 customers of JFrog, we probably going to hear first from security engineers, SecOps engineers, DevOps engineers, and product managers. That makes a lot of sense, Shlomi. From their traction perspective, I know they're early in their go-to-market, but I think JFrog has a strong reputation for being an enterprise-grade solution. As you did your due diligence on Vdoo, what were some of their early customer profiles? I imagine they get a lot in sort of the early tech startup community, but any sort of traction in enterprise-grade environments that you guys were able to encounter in due diligence? From what we learned during the due diligence, we saw two types of interest in Vdoo's technology. First was the same persona that also looked at Xray. They had a security solution that need to be powered by a container solution, and this is where Vdoo solution for the DevOps market addressed the DevSecOps team. The other side of the Vdoo offering is the product security people. These are the guys that had to secure the product, not just the flow, not the DevOps flow. They were not only the DevOps platform, they own the product, and they had to secure the product all the way to the edge. These security engineers often cover the full software release flow all the way to the device, including configuration and environment setup. Those are the two personas. The nice thing about what Vdoo brings from go-to-market expertise is the top-down methodology. As you know, JFrog is mainly bottom-up build. It also exposed us to CISOs and to the security community, and Vdoo researchers and engineers are well-known in this industry. Understood. Thank you so much, Shlomi. Thank you. Our next question comes from Jack Andrews with Needham. Your line is open. Good morning. Thanks for taking my question, and congratulations. I was just wondering if you could provide any more background information in terms of just the process of the acquisition. Was this something that is sort of opportunistic in nature, or had you specifically been casting a net for this type of technology to add to your platform? Yeah, Jack, good morning. Well, you know that from the early beginning, when we thought about expanding JFrog inorganically, we were looking at the security market. Obviously, in Israel, where there are a lot of security experts and security companies. We saw several targets, and we were happy about some and less happy about the others. Sometimes the technology was better than the team, sometimes the team was better than the technology. None of those targets were focusing on binaries on software packages. When we met Vdoo few months early this year, we met them to discuss an integration between Vdoo's product and JFrog Artifactory and Xray. When we realized what they did and when we saw the team, and we saw how they speak about securing binaries, it was for us, again, a binary conclusion. Either we buy them or compete them. We decided that we go with joining them to the family, and we were very happy and honored to see that they were also interested in building something that is bigger together. Thanks for the color around that. Just as a quick follow-up for Jacob. In terms of your expense guidance provided in the press release, should we assume that that mainly impacts 4Q, or should some of that impact 3Q expenses as well? Yes, Jack. We expect the acquisition to close during Q3. Some of that will impact Q3 as well. Thanks a lot. Thank you. I'm currently showing no further questions at this time. I'll turn the call back over to Shlomi Ben Haim for closing remarks. Thank you, thank you guys for taking the time and join us. Obviously, this is a very special day at JFrog. We are extremely excited. We know that the fruits of our labor are now being expanded with the new group of frogs into the company. We welcome you all to stay tuned, and may the frog be with us. Thank you very much. This concludes today's conference call. Thank you for participating. You may now disconnect.