Jfrog Ltd. ((FROG)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
JFrog Ltd. reported a strong performance in its recent earnings call, showcasing impressive revenue growth, especially in the cloud and security segments. The company highlighted its focus on the enterprise market, despite expressing caution for 2025 due to macroeconomic and regulatory uncertainties. Overall, the positive sentiment from their achievements overshadowed the challenges they foresee.
Strong Revenue Growth
JFrog Ltd. announced a total revenue of $428.5 million for 2024, marking a 22% increase compared to the previous year. Notably, cloud revenue experienced a 41% growth, reaching $168 million, underscoring the company’s robust financial performance.
Cloud Segment Success
The fourth quarter was particularly successful for JFrog’s cloud segment, with revenues reaching $49.4 million, a 37% year-over-year increase. This growth was largely driven by winning large customers and migrating to a new enhanced cloud database product.
Significant Security Adoption
JFrog’s advanced security and curation products were adopted by approximately 250 customers. These security core products contributed to 5% of the company’s annual recurring revenue (ARR) and 12% of its remaining performance obligations (RPO).
Enterprise Market Focus
The company’s focus on the enterprise market paid off, with customers generating over $100,000 in ARR growing to 1,018, up from 886 in the previous year. Additionally, those with ARR exceeding $1 million increased to 52, from 37 last year.
MLOps Expansion
JFrog expanded its capabilities by acquiring Quack AI, making it the first company to unify DevOps, DevSecOps, and MLOps within a single platform.
Record Free Cash Flow
The company achieved a record quarter for free cash flow, generating $48.5 million, which represents a 42% margin for the fourth quarter.
Conservative Guidance for 2025
Looking ahead, JFrog Ltd. provided a conservative guidance for 2025, anticipating a 17% revenue growth and mid-teens net dollar retention. The company remains cautious due to macroeconomic conditions and potential regulatory changes.
Slowdown in On-Prem Revenue
The self-managed or on-premises revenue saw a growth of only 13% year over year, totaling $66.7 million in the fourth quarter, indicating a slowdown compared to other segments.
Macro and Regulatory Uncertainties
Despite the achievements, JFrog acknowledged that customers are hesitant due to macroeconomic uncertainties and possible regulatory changes impacting AI adoption, which could affect future growth.
Forward-Looking Guidance
For the fiscal year 2024, JFrog Ltd. provided detailed guidance with an expected total revenue of $428.5 million, reflecting a 22% year-over-year growth. The company projected a conservative estimate for 2025, expecting full-year revenues between $499 million and $503 million, with cloud growth anticipated to be between 30% and 32%.
In summary, JFrog Ltd.’s earnings call highlighted a strong performance with significant growth in cloud and security sectors, and a strategic focus on the enterprise market. While the company remains optimistic about its current achievements, it exercises caution regarding future growth due to external uncertainties.
