Financial Data and Key Metrics Changes - JFrog's total revenue for Q3 2024 was $109.1 million, representing a 23% year-over-year increase [11][20] - Cloud revenue reached $42.4 million, up 38% year-over-year, accounting for 39% of total revenues compared to 35% in the prior year [20][11] - Self-managed revenue was $66.7 million, reflecting a 15% year-over-year increase [20] - Net dollar retention for the trailing four quarters was 117%, with a gross retention rate of 97% [21] - Gross profit was $90.3 million, resulting in a gross margin of 82.8%, down from 83.7% in the previous year [23] - Operating profit was $14.7 million, with an operating margin of 13.5%, slightly up from 13.4% in the year-ago period [25] Business Line Data and Key Metrics Changes - The number of customers with an ARR over $100,000 increased to 966, up from 848 in the previous year [11] - Customers with an ARR exceeding $1 million grew to 46, representing a 53% year-over-year increase [12] - 50% of total revenue came from Enterprise Plus subscriptions, up from 46% in the prior year, with revenue contribution from these subscriptions growing 35% year-over-year [22] Market Data and Key Metrics Changes - The cloud business experienced sequential growth driven by increased migration activity, although overall usage trends remained moderate compared to the previous year [13] - The market continues to demand higher standards for software integrity, with enterprises prioritizing modernization of their software supply chain security [15] Company Strategy and Development Direction - JFrog is focused on a unified platform experience, integrating DevOps, DevSecOps, and MLOps into one solution [8] - The company aims to expand its security offerings, with JFrog Runtime Security being recognized as a critical solution for organizations [8][15] - The strategic partnership with GitHub aims to enhance security capabilities and integrate AI functionalities [18] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook regarding large migration deals in the 2024 pipeline, indicating that customer migration activity has not yet fully turned the corner [14] - The company anticipates cloud revenue growth of around 40% year-over-year for 2024, with year-to-date cloud growth currently at 42% [29] - Management remains focused on expense discipline while investing in future growth opportunities [24] Other Important Information - JFrog's acquisition of Qwak closed in early July, contributing less than 0.5% to Q3 revenue [31] - The company ended Q3 2024 with $467.8 million in cash and short-term investments, down from $591.3 million as of June 30, 2024 [26] Q&A Session Summary Question: How did Q3 results come in compared to expectations? - Management indicated that Q3 performance was largely due to significant projects that were closed, including deals pushed from Q2 [37] Question: What gives confidence for 2025 being a year of material contribution from security? - Management noted that security was a critical component of large deals secured in Q3, and they see more opportunities combining cloud growth and security [39] Question: What is the customer behavior regarding renewals with a security component? - Management observed that customers are adopting and expanding their security solutions, with a focus on large projects [44] Question: How should 2025 be viewed in terms of growth? - Management is being conservative in building the outlook and guidance for 2025, considering the macro environment [47] Question: How is macro impacting cloud usage? - Management noted that while customers are planning to migrate to the cloud, execution is taking longer than expected [56] Question: What are the contributing factors to cloud growth? - Management mentioned that large-scale wins, annual customer commitments, and smaller migrations are contributing to cloud growth [60] Question: How is JFrog addressing deployment integration bottlenecks? - Management emphasized the importance of consolidating solutions and providing support for customers to overcome integration challenges [65] Question: What is the status of the partnership with GitHub? - Management highlighted ongoing co-engineering efforts and the potential for innovation and customer retention through the partnership [68] Question: What is the outlook for AI integration in revenues? - Management indicated that while AI is a significant opportunity, it will take time for it to translate into revenue as customers are still in the experimental phase [85]

If a Bloomberg article proves to be accurate, the company might change hands before long. On the last trading day of the week, investors traded on rumor rather than hard news about software tools specialist JFrog (FROG 4.47%). After a media report stated that several potential acquirers are circling around the company, market players bid the shares up by just under 5% on the day. That performance trounced the 0.8% increase of the benchmark S&P 500 index. A report says potential suitors are sniffing around I ...

NEW YORK, Oct. 10, 2024 (GLOBE NEWSWIRE) -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC is investigating potential claims on behalf of purchasers of JFrog Ltd. ("JFrog" or "the Company") (NASDAQ: FROG). Investors who purchased JFrog securities are encouraged to obtain additional information and assist the investigation by visiting the firm's site: bgandg.com/FROG. Investigation Details On August 7, 2024, JFrog released its second quarter 2024 financial results and lowered its fiscal year 2024 ...

Editor's note: Seeking Alpha is proud to welcome The Matadors as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access. Click here to find out more » Editor's note: Seeking Alpha is proud to welcome The Matadors as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get publi ...

JFrog Ltd. (FROG) reported $103.04 million in revenue for the quarter ended June 2024, representing a yearover-year increase of 22.4%. EPS of $0.15 for the same period compares to $0.11 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $103.53 million, representing a surprise of -0.47%. The company delivered an EPS surprise of +7.14%, with the consensus EPS estimate being $0.14. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ...

JFrog Ltd. (FROG) came out with quarterly earnings of $0.15 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 7.14%. A quarter ago, it was expected that this company would post earnings of $0.14 per share when it actually produced earnings of $0.16, delivering a surprise of 14.29%. Over the last four quarters, the company has s ...

Revenue and Growth - Revenue for the three months ended March 31, 2024, was $100.3 million, representing a 26% increase from $79.8 million in the same period of 2023[85]. - SaaS subscriptions contributed 37% of total revenue for Q1 2024, up from 31% in Q1 2023[82]. - Enterprise Plus subscriptions accounted for approximately 49% of total revenue in Q1 2024, compared to 44% in Q1 2023[83]. - Total subscription revenue for Q1 2024 was $100.3 million, a 26% increase from $79.8 million in Q1 2023, driven by $16.9 million growth from existing customers[112]. Customer Metrics - The net dollar retention rate was 118% for Q1 2024, down from 124% in Q1 2023, with expectations to stabilize around current levels[91]. - As of March 31, 2024, the number of customers with an ARR of $100,000 or more increased to 911, up from 886 at the end of 2023[92]. Financial Performance - Free cash flow for Q1 2024 was $16.6 million, a significant improvement from a negative $1.4 million in Q1 2023[96]. - Gross profit for Q1 2024 was $79.7 million, representing a gross margin of 79%, up from 77% in Q1 2023[113]. - Operating loss decreased to $16.6 million in Q1 2024 from $23.2 million in Q1 2023, indicating improved operational efficiency[112]. - Net loss for Q1 2024 was $8.8 million, a significant improvement compared to a net loss of $20.8 million in Q1 2023[112]. Cash Flow and Liquidity - As of March 31, 2024, the company had cash, cash equivalents, and short-term investments totaling $579.6 million, ensuring liquidity for upcoming operational needs[125]. - Net cash provided by operating activities was $17.5 million in Q1 2024, a turnaround from a cash outflow of $1.1 million in Q1 2023[127]. - Net cash used in investing activities for Q1 2024 was $46.9 million, primarily from net purchases of short-term investments of $46.1 million[131]. - Net cash provided by financing activities for Q1 2024 was $16.6 million, including proceeds from share options of $6.8 million and employee share purchases of $4.5 million[132]. - As of March 31, 2024, cash and cash equivalents were $71.4 million, and short-term investments totaled $508.2 million[142]. Expenses and Investments - Operating expenses are expected to increase as the company invests in sales and marketing, research and development, and general administrative functions[104][105]. - Research and development expenses increased by 3% to $35.8 million in Q1 2024, primarily due to a $2.5 million rise in share-based compensation[117]. - Sales and marketing expenses rose by 23% to $43.6 million in Q1 2024, attributed to increased headcount and higher share-based compensation[118]. - General and administrative expenses increased by 19% to $16.9 million in Q1 2024, driven by higher personnel-related costs and legal expenses[119]. Risk Management and Accounting - The company has activated a comprehensive business continuity plan to ensure operations remain consistent amid regional conflicts[87]. - A hypothetical 10% change in foreign currency exchange rates would not have materially impacted the results of operations for Q1 2024[139]. - The company has established a hedging program to mitigate foreign exchange risks, primarily using short-term foreign currency contracts[139]. - There were no significant changes to critical accounting policies and estimates during Q1 2024[136]. - The company does not believe inflation has materially affected its financial condition or results of operations[143]. - A hypothetical 1% increase in interest rates would not have had a material impact on the fair value of cash and cash equivalents as of March 31, 2024[142]. Future Plans - The company plans to continue investing in research and development to enhance its software supply chain platform and maintain technology leadership[88]. - The company aims to expand its customer base through self-service and inbound sales models, leveraging free trials and open-source software[93].

Investors appear to be overreacting today.Shares of software delivery company JFrog (FROG -17.21%) plunged on Friday after the company reported financial results for the first quarter of 2024. As of 11:30 a.m. ET, JFrog stock was down 18%.Does this warrant such a big drop?Explaining a stock move isn't always straightforward. As best as I can figure, investors are punishing JFrog stock today because management didn't raise its guidance by as much as they had hoped. To be clear, the company's financial result ...

Key PointsJFrog plummeted 12% after solid results and is setting up for the next leap higher. Growth is solid but slowing and aligns with forecasts, providing no catalyst for rallying today. Analysts trim targets but maintain a Moderate Buy rating and see a 20% upside at consensus. 5 stocks we like better than JFrogJFrog NASDAQ: FROG is a small DevOps platform shaking up an industry projected to grow at a 20% CAGR for the next five years. Its Enterprise+ package provides an end-to-end software supply chain ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were $100.3 million, representing a 26% year-over-year increase [20] - Cloud revenue reached $36.9 million, growing 47% year-over-year, exceeding guidance [20][9] - Gross profit was $85.3 million, with a gross margin of 85.1%, up from 82.9% in the previous year [21] - Operating profit for Q1 was $14.1 million, reflecting a 14% operating margin, an improvement from 3.4% in the prior year [7] - Net dollar retention rate was 118%, consistent with guidance for high-teens retention in 2024 [6][23] - Earnings per share were $0.16, compared to $0.06 in the prior year [129] Business Line Data and Key Metrics Changes - Self-managed revenues on-premises were $63.4 million, up 16% year-over-year [6] - Revenue contribution from Enterprise Plus subscriptions grew 39% year-over-year, accounting for 49% of total revenue [128] Market Data and Key Metrics Changes - Customers with Annual Recurring Revenue (ARR) greater than $1 million increased to 40, up from 21 a year ago, reflecting a 90% growth [1] - The number of customers with ARR greater than $100,000 grew to 911, a 16% increase year-over-year [145] Company Strategy and Development Direction - The company is focused on integrating DevOps, DevSecOps, MLOps, and MLSecOps into a unified platform to meet market demands [122][150] - There is an emphasis on expanding the partner network and channel strategy to enhance market reach [148] - The company anticipates continued growth in cloud migration projects and customer usage throughout 2024 [3][17] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are currently in a digestion phase after significant consumption in Q4 2023, with expectations for project spending to increase in the latter half of 2024 [29][40] - The company remains optimistic about the growth potential in the MLOps and GenAI markets, although it does not expect immediate impacts on 2024 guidance [86][150] Other Important Information - The company ended Q1 2024 with $579.6 million in cash and short-term investments, up from $545 million at the end of 2023 [22] - The JFrog Security Research team is noted for its significant contributions to the industry, providing early insights into vulnerabilities [94] Q&A Session Summary Question: What is the current spending environment and customer willingness to invest? - Management indicated that customers are cautious and focused on budget stabilization, with larger project discussions expected to ramp up in the second half of 2024 [13][38] Question: How is the cloud business performing in terms of efficiency and optimization? - The cloud business is growing faster than on-premises, with customers increasingly focusing on optimization efforts [27][32] Question: What are the trends in MLOps and customer conversations regarding JFrog's offerings? - Customers are looking for comprehensive solutions for MLOps, with JFrog Artifactory being considered as a model registry [30][138] Question: Can you elaborate on the digestion phase observed in Q1? - The digestion phase was anticipated, with customers reassessing budgets and project priorities, leading to a more cautious spending environment [40][60] Question: How is the competitive landscape evolving in the security sector? - The competitive landscape is changing, with a trend towards consolidation around best-of-breed platforms, but the need for comprehensive security solutions remains consistent [79]