2024-05-10 17:44:24 ET
Summary
- JFrog reported strong Q1 earnings, beating consensus estimates and raising guidance for sales growth.
- The company's subscription revenues grew by 28% year-over-year, accounting for 95% of total revenue. Enterprise+ subscriptions now account for 49% of total revenues.
- JFrog's customer and operational metrics showed some sequential weakness, but I believe seasonality is at play and I expect higher growth in the back half of FY24.
- I still maintain my Buy rating on JFrog but have lowered my price targets.
Investment Thesis
JFrog ( FROG ) posted quarterly earnings and revenue for their first quarter of FY24. The maker of niche development operations (DevOps) and source code management tools and solutions delivered a robust earnings beat in the first quarter while marginally raising its guidance ahead of its own prior projections on sales growth.
Going into Q1, markets had high expectations of JFrog, with consensus estimates for its full-year FY24 growth being higher than what management had originally guided for. Management’s guidance did not raise guidance high enough to justify its forward PE, which may have dented the post-earnings stock performance, in my opinion....
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JFrog Q1 Earnings Review: Seasonality Is The Devil In The Details