JFrog Ltd. NASDAQ: FROG provides DevOps platform solutions that enable enterprise IT teams and developers to manage and automate their software delivery process. JFrog deems itself a Liquid Software company through its JFrog Software Supply Chain Platform.
DevOps platforms enhance and streamline the development and distribution of software. JFrog fosters improved collaboration between all parties connected to the software lifecycle by breaking down silos. This leads to increased efficiency and speed augmented by automation, scalability, enhanced observability, resource utilization and feedback loops. This results in improved ROI, better business outcomes, customer satisfaction and reliability.
This computer and technology sector company claims the majority of the Fortune 100 companies as clients, including Nvidia Co. NASDAQ: NVDA, Boeing Co. NYSE: BA, and Splunk Inc. NASDAQ: SPLK. It competes with Gitlab Inc. NASDAQ: GTLB and Microsoft Co. NASDAQ: MSFT, which owns GitHub. Its platform helps companies leverage artificial intelligence (AI) and manage machine learning (ML) models with its tools, enabling smoother delivery and workflows.
Binaries, artifacts and repositories
What initially sounds like physical industrial components are keys to the software development ecosystem. Software binaries are compiled executable files derived from source code in machine-readable format. These are instructions to the computer to execute specific applications and programs on a target platform or operation system.
Binaries, in addition to various files and components, including documentation, configuration files, libraries, and other resources, are artifacts. These represent the output from the different stages of the software development cycle, ranging from compilation to testing to packaging and deployment.
Repositories are centralized storage systems that house software artifacts. They serve as a central hub for distribution across the environments and development teams.
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Crushing it in the fourth quarter
On February 14, 2024, JFrog reported EPS of 19 cents in Q4 2023, beating consensus estimates by 7 cents. Non-GAAP gross profit was $82.3 million with 84.6% non-GAAP gross margin. Non-GAAP operating income was $16.2 million. Non-GAAP operating margin was 16.6%.
Revenues leaped 27.1% YoY to $97.26 million, beating consensus analyst estimates of $93.07 million. Cloud revenues climbed 59% YoY. JFrog grew its clients with $1 million or more by 96% YoY to 37. The remaining performance obligations (RPOs) were $259.5 million.
Closing out a banner year
For the full year 2023, JFrog has 50% YoY revenue growth powered by 50% cloud revenue and 50% YoY Enterprise+ subscription revenue growth. The company grew its unique customers to 7,400 in 2023, up from 7,200 in the year ago period. It closed out the year with $545 million in cash and cash equivalents. Cloud revenues account for 37% of total revenues. The net dollar retention rate for the trailing four quarters was 119%. Get AI-powered insights on MarketBeat.
Raising the bar
JFrog raised its forecasts for both Q1 2024 and the full year 2024. The company expects Q1 2024 EPS of 13 cents to 15 cents versus 11 cents consensus estimates. Revenues for Q1 2024 are expected to be between $98 million and $99 million versus analyst estimates of $97.33 million.
JFrog expected full-year 2024 EPS of 58 cents to 60 cents versus 52 cents consensus analyst estimates. Full year 2024 revenues are expected to be between $424 million and $428 million versus $421.82 million.
CEO comments
JFrog CEO Shlomi Ben Haim commented, "Our 2023 performance showcases JFrog's solid execution across our strategic pillars, driving growth in the cloud, leveraging complete software supply chain capabilities, and enhancing our security offerings…"
Haim added, "The market demands a consolidated solution for DevOps and DevSecOps around binary management, and we are excited to see new opportunities for expansion in security in 2024, as well as potential tailwinds within MLOps and MLSecOps, which are supported natively by our platform."
JFrog analyst ratings and price targets are at MarketBeat. JFrog peers and competitor stocks can be found with the MarketBeat stock screener.
Daily ascending triangle breakout pattern
The daily candlestick chart on FROG illustrates an ascending breakout triangle pattern. The ascending trend commenced at the $31.13 swing low on January 4, 2024—the flat-top upper trendline resistance formed at $35.35. While FROG appeared to potentially break down through the ascending trendline on January 29, 2024, shares were able to stage a rally back up through the flat-top trendline to peak at $40.40 on February 12, 2024, before falling back into the triangle. The Q4 2023 earnings release, with its raised guidance, gapped up FROG to $44.25 on February 15, 2024. The daily relative strength index (RSI) spiked through the 70-band before retesting it back down. The daily 50-period moving average (MA) support is rising at $33.92. Pullback support levels are at $42.33, $40.40, $37.13 and $34.44.
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