What Happened?
Shares of software supply chain platform JFrog (NASDAQ: FROG) jumped 7.9% in the afternoon session after the stock's positive momentum continued as the company reported third-quarter financial results that beat analysts' expectations on key metrics.
JFrog's revenue increased by about 26% year-over-year to $136.9 million, surpassing Wall Street's estimates. Its adjusted earnings per share came in at $0.22, which was significantly above the consensus forecast of $0.16. The company's management credited the strong performance to broad-based cloud adoption and higher demand for its security products. In particular, cloud revenue grew 50% compared to the previous year, driven by increased usage related to artificial intelligence. This performance also led to a 29.6% jump in gross profit to $106 million.
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What Is The Market Telling Us
JFrog’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 23.5% on the news that the company reported a "beat and raise" third quarter financial results that beat analysts' expectations on all key metrics.
The company's revenue increased 25.5% year-over-year to $136.9 million, surpassing Wall Street's estimates, and its adjusted earnings per share came in at $0.22, significantly above the consensus forecast of $0.16. Management credited broad-based cloud adoption and increased security product usage as central to the quarter's growth. CEO Shlomi Ben Haim added, "Our cloud revenue grew 50% year-over-year, driven by increased usage of AI-related artifacts and a clear go-to-market strategy that converts usage overages into higher annual commitments." The company also pointed to notable customer expansion in large enterprise accounts and cited continued success in growing its security-focused offerings. Looking ahead, the company provided fourth-quarter revenue guidance that was well above expectations and raised its full-year adjusted earnings per share forecast, signaling confidence in its continued growth.
JFrog is up 113% since the beginning of the year, and at $65.28 per share, has set a new 52-week high. Investors who bought $1,000 worth of JFrog’s shares 5 years ago would now be looking at an investment worth $1,095.
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