JFrog Stock Soars 30% as AI Coding Boom Drives 60% Cloud Growth and Guidance Crushes Wall Street Estimates

Shares of JFrog Ltd. soared more than 30% on Friday after the software supply chain company reported third-quarter results and a fourth-quarter forecast that far exceeded Wall Street expectations, as developers using AI coding tools drove a surge in cloud demand.

JFrog shares rose $22.66, or 30.37%, to $97.28 in Friday trading, lifting the company's market value to about $11.6 billion. The stock is now up about 24% over the past year.

The rally reversed a sharp drop. The move higher more than reversed the 13.57% decline of the regular session on Thursday, when technology stocks were swept up in a broad AI selloff.

Results top forecasts

JFrog reported adjusted earnings of 32 cents a share, beating the consensus of 23 cents, while revenue reached $179.2 million, up 31% from a year earlier and above the $165.77 million estimate.

Management said the beat was broad. On the earnings call, executives said the results exceeded the top end of the company's guidance range across every key metric.

Cloud surge

The cloud business was the standout. Cloud revenue was $101.5 million, up 60% year over year, and represented 57% of total revenue, compared with 46% a year earlier.

CEO Shlomi Ben Haim said growth was supported by increased cloud consumption from developers using AI tools and rising adoption of JFrog's security products, particularly among large enterprise customers.

Large customers are spending more. Customers with annual recurring revenue above $1 million grew to 112, up 58% year over year, and trailing four-quarter net dollar retention reached 124%, up from 118%.

Guidance far above estimates

The outlook was the biggest surprise. Fourth-quarter revenue guidance of $184 million at the midpoint was 9.3% above what analysts expected.

Profitability and cash

Non-GAAP operating income was $40.7 million, a 22.7% margin, and free cash flow was $66.5 million. Cash, cash equivalents and investments stood at $880.9 million, and remaining performance obligations rose 60% to $812.4 million.

Caveats

Not everything was flawless. JFrog still reported a $1.8 million GAAP operating loss, and its non-GAAP profitability benefits from adjustments including $41.8 million of share-based compensation.

The company's results stand in contrast to the broader selloff in AI hardware, showing that software tied to developer productivity is still drawing strong demand.