Why JFrog Rallied Over 25%, Even on a Bad Day for the Nasdaq

Core Insights - JFrog's shares increased by 26.6% despite a 0.5% decline in the Nasdaq Composite, following strong earnings and raised full-year guidance [1] Financial Performance - In Q3, JFrog's revenue grew by 25.5% to $136.9 million, with adjusted non-GAAP EPS rising by 46.7% to $0.22, both exceeding expectations [2] - Cloud revenues surged by 50% to $63.4 million, constituting nearly half of total revenue, while the net dollar retention rate increased to 118%, indicating strong customer spending [3] Guidance and Management Commentary - Management raised full-year revenue guidance to a range of $523 million to $525 million, up from $507 million to $510 million, and adjusted EPS guidance to $0.78 to $0.80, up from $0.68 to $0.70 [4] - CEO Shlomi Ben Haim emphasized strong execution across various operational areas, including DevOps and MLOps, and highlighted the company's innovation in Governance and Compliance [4] Market Position and Valuation - JFrog's shares trade at over 13 times sales, which is considered not cheap but reasonable for a software company, especially if cloud business growth continues [6][7] - The company holds approximately $650 million in cash with no debt, representing nearly 10% of its market cap [7]