JFrog’s first quarter results for 2025 were met with a positive market reaction, as underlying drivers included robust cloud revenue growth and expanding enterprise adoption of its software supply chain platform. Management credited the quarter’s performance to increased customer consumption across its cloud offerings, particularly among large enterprise clients, and highlighted the success of its strategic partnerships and platform enhancements. CEO Shlomi Ben Haim emphasized, “Our first quarter results underscore JFrog's essential role as a system of record for software delivery from creation to production for customers prioritizing automation, scale, speed, and trust.”
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JFrog (FROG) Q1 CY2025 Highlights:
- Revenue: $122.4 million vs analyst estimates of $117.3 million (22% year-on-year growth, 4.4% beat)
- Adjusted EPS: $0.20 vs analyst estimates of $0.16 (21.5% beat)
- Adjusted Operating Income: $21.35 million vs analyst estimates of $17.08 million (17.4% margin, 25% beat)
- The company slightly lifted its revenue guidance for the full year to $502.5 million at the midpoint from $501 million
- Adjusted EPS guidance for the full year is $0.69 at the midpoint, beating analyst estimates by 2.1%
- Operating Margin: -18.8%, down from -16.6% in the same quarter last year
- Customers: 1,051 customers paying more than $100,000 annually
- Net Revenue Retention Rate: 116%, in line with the previous quarter
- Annual Recurring Revenue: $482.6 million at quarter end, up 22.5% year on year
- Billings: $123.7 million at quarter end, up 27% year on year
- Market Capitalization: $5.03 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions JFrog’s Q1 Earnings Call
- Pinjalim Bora (JPMorgan): Asked if increased cloud consumption was broad-based or concentrated. CFO Ed Grabscheid replied it was across a wide set of customers and regions, not isolated to a few accounts.
- Sanjit Singh (Morgan Stanley): Inquired about the emphasis on machine learning and whether models are becoming as important as traditional binaries. CEO Shlomi Ben Haim explained the integration of MLOps positions JFrog to manage both software and AI models in one platform.
- Brad Reback (Stifel): Questioned whether strong remaining performance obligations (RPO) were driven by a few large deals. Grabscheid clarified that multi-year agreements are increasing across the customer base, not just among a select few.
- Eamon Coughlin (Barclays): Asked about the impact of the GitHub partnership on customer acquisition and expansion. Ben Haim said customer reaction has been positive, with adoption growing but it is too early to quantify specific impacts.
- Shrenik Kothari (Baird): Requested details on the adoption and revenue impact of the new MLOps features. Ben Haim responded that it is early days for monetization, with usage just beginning and broader contributions expected over time.
Catalysts in Upcoming Quarters
As we look to upcoming quarters, our team will be monitoring (1) whether above-contract cloud consumption persists or normalizes, (2) customer migration rates from on-premises to cloud and adoption of the full JFrog platform, and (3) the early impact of the ML and security enhancements on new enterprise deals. The pace at which large deals in the pipeline convert and overall customer retention will also be key markers for sustained momentum.
JFrog currently trades at $44, up from $35.20 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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