XML 32 R20.htm IDEA: XBRL DOCUMENT v3.25.4
Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combination [Abstract]  
Business Combinations

8. Business Combinations

On July 9, 2024, the Company acquired all outstanding shares of Qwak AI Ltd. (“Qwak”), a privately-held company based in Israel, which offers an end-to-end platform for deploying, monitoring, and managing machine learning models at scale. The acquisition is expected to enhance the Company’s machine learning model management capabilities, enabling users to streamline the machine learning model lifecycle from development to deployment.

The purchase consideration consisted of the following:

 

 

Fair Value

 

 

 

(in thousands, except share)

 

Cash

 

$

163,686

 

JFrog’s ordinary shares (377,181 shares)

 

 

13,420

 

Replacement restricted share units (1)

 

 

375

 

Total

 

$

177,481

 

_________________________________________

(1) The replacement restricted share units (“RSU”) had a total fair value of $8.9 million, of which $0.4 million attributable to pre-acquisition service was part of the purchase consideration. The remaining $8.5 million is recognized as share-based compensation expense over the vesting period of approximately 4 years.

The acquisition also included a holdback arrangement with certain employees of Qwak, totaling $17.0 million in cash and 754,360 of the Company’s ordinary shares with a fair value of $26.8 million. The consideration will vest in three equal annual installments on the anniversary of the acquisition date. In addition, the Company agreed to pay retention bonuses of approximately $2.2 million to Qwak continuing employees over 2 years from the acquisition date. Because the vesting of holdback shares and payout of the holdback cash consideration and the retention bonuses are subject to continued employment, they are recognized as share-based compensation expense and acquisition-related expense, respectively, over the requisite service periods.

The following table summarizes the fair value of assets acquired and liabilities assumed:

 

 

July 9, 2024

 

 

 

(in thousands)

 

Cash, cash equivalents and restricted cash

 

$

6,972

 

Other current assets

 

 

826

 

Intangible assets

 

 

52,636

 

Goodwill

 

 

123,557

 

Other noncurrent assets

 

 

118

 

Current liabilities

 

 

(2,252

)

Deferred tax liabilities, net

 

 

(4,376

)

Total purchase consideration

 

$

177,481

 

 

Goodwill is primarily attributable to expected synergies arising from expanded product and service offerings. Goodwill is not deductible for income tax purposes. The following table presents components of the identified intangible assets acquired and their estimated useful lives as of the date of acquisition:

 

 

Fair Value

 

 

Useful Life

 

 

 

(in thousands)

 

 

(in years)

 

Developed technology

 

$

48,662

 

 

 

5.0

 

Customer relationships

 

 

3,974

 

 

 

1.0

 

Total intangible assets acquired

 

$

52,636

 

 

 

 

 

The results of operations of Qwak have been included in the Company’s consolidated financial statements since the date of the acquisition. Pro forma results of operations are not presented because the impact of the acquisition is not material to the Company’s consolidated financial statements.