JFrog (NASDAQ:FROG) Beats Expectations in Strong Q3, Stock Jumps 22.7%

Core Insights - JFrog reported Q3 CY2025 revenue of $136.9 million, exceeding Wall Street expectations by 6.6% and reflecting a year-on-year growth of 25.5% [6][8] - The company provided a positive revenue guidance for Q4 CY2025 at $137.5 million, which is 4.8% above analyst estimates [6] - Non-GAAP profit per share was $0.22, surpassing analysts' consensus by 34.4% [6] Company Overview - JFrog is a software supply chain platform that enables organizations to securely create, store, manage, and distribute software packages [4] - The company is recognized as a foundational element in modern software supply chains, particularly in the context of AI [3] Revenue Growth - Over the last five years, JFrog has achieved a compounded annual growth rate of 29.3%, outperforming the average software company [5] - The company reported an annualized revenue growth of 23.6% over the last two years, indicating healthy demand despite being below the five-year trend [7] Financial Performance - Adjusted operating income was $25.61 million, with an 18.7% margin, significantly beating analyst estimates [6] - The operating margin improved to -15.8%, up from -27.4% in the same quarter last year [6] - Free cash flow margin was reported at 21%, a decrease from 27.9% in the previous quarter [6] Customer Metrics - JFrog has 1,121 customers paying more than $100,000 annually, demonstrating a strong customer base [6] - The net revenue retention rate stood at 118%, consistent with the previous quarter [6] Market Position - JFrog's market capitalization is currently valued at $5.38 billion [6] - Billings reached $163.8 million at the end of the quarter, reflecting a year-on-year increase of 24.1% [6]