JFrog Ltd. (NASDAQ: FROG) reported better-than-expected results for the second quarter ended June 30, 2022. Both revenue and earnings surpassed the expectations of the Street. The company also provided upbeat guidance for the third quarter and 2022.
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Following the results, shares of the company gained 2.3% to close at $24.82 in yesterday’s extended trade.
JFrog is a software company that empowers organizations with its proprietary DevOps platform – the JFrog Platform. The platform provides organizations with tools to address critical pieces of the DevOps cycle.
Revenues Soar, Losses Kick In
JFrog reported revenues of $67.8 million for the second quarter, up 39.4% from the previous year’s quarter. Moreover, the figure topped the consensus estimate of $65.52 million. Year-over-year growth of 40.5% in subscription revenue to $63.7 million drove the overall growth in revenues for the company.
However, the company reported a loss of $0.02 per share compared to earnings of $0.01 per share reported in the previous year. Yet, the figure came in lower than the consensus estimate of a loss of $0.03 per share.
Meanwhile, some of the key operating metrics reported by the company also marked an improvement from the previous year. JFrog’s customers with $100,000 annual recurring revenue (ARR) increased by 56% from the prior year to 647. Further, customers with $1 million ARR rose by 42% from the year-ago quarter to 17.
FROG Offers Upbeat Guidance
JFrog also provided guidance for the third quarter and Fiscal Year 2022. The guidance seems upbeat as both revenue and earnings are above the Street estimates.
For the third quarter, the company expects to see earnings per share (EPS) of ($0.01)-$0.01 while for 2022 it is expected to be in the same range. The consensus estimate stands at an EPS of $0.01 for the third quarter and break-even for 2022.
Similarly, for revenues, the company expects the same to hover between $70.5 and $71.5 million in the third quarter (against the consensus of $70.91 million) and $278.5-$280.5 million (against the consensus of $277.13 million) in 2022.
Rising Website Traffic Hinted at Upbeat Results
JFrog’s rising website traffic already indicated Q2 solid results.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into JFrog’s performance this quarter.
According to the tool, the JFrog website recorded a 0.69% monthly rise in global visits in June, compared to the same period last year. Moreover, year-to-date, JFrog website traffic increased by 29.65%, compared to the previous year.
Learn how Website Traffic can help you research your favorite stocks.
Overall, the Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on four Buys and three Holds. The FROG average price target of $28.14 implies the stock has an upside potential of 16% from current levels. Shares have declined 43.8% over the past year.
Key Takeaways
JFrog’s robust results were marked by strong growth in revenues and improvement in some of the operating metrics that are critical to the company. Further, the upbeat guidance is a sign that the company’s prospects are solid.
Yet, profitability concerns continue to plague the company.
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