JFrog Stock Jumps as Earnings Top Estimates. CEO Sees No Disruption to Growth From Israel War.

For the quarter, JFrog (ticker: FROG) posted reported third-quarter revenue of $88.6 million, up 23% from a year ago, ahead of both the company’s guidance range of $87 million to $88 million, and the Street consensus forecast at $87.6 million as tracked by FactSet. On an adjusted basis, profits were 15 cents a share, likewise beating both its guidance range of 8 cents to 9 cents, and Street consensus at 8 cents. Under generally accepted accounting principles, the company lost 13 cents a share.

JFrog said cloud revenue in the quarter was $30.6 million, up 46% from a year earlier, and accounting for 35% of total revenue, up from 29% a year ago. Jfrog added six customers each generating annualized revenue for the company of more than $1 million, bringing the total to 30, which is up from 18 a year earlier.

For the fourth quarter, JFrog sees revenue of $92.5 million to $93.5 million, with a non-GAAP profit of 12 cents to 13 cents a share; Street consensus estimates had been for revenue of $92.9 million and earnings of 8 cents per share.

JFrog provides tools used by developers to secure, create, and distribute software. CEO Shlomi Ben Haim said in an interview with Barron’s from the company’s office in Tel Aviv that while the company entered the year anticipating a potential recession, he added that customers can’t reduce their focus on the speed and security of software delivery. “That’s where JFrog shines,” he says.

Ben Haim noted that about 800 of the company’s 1,400 employees are based in Israel, and that fewer than 100 have been called up to active duty by the Israel Defense Forces. He said that two days after the conflict started on Oct. 7, he left the Bay Area to be with his team in Israel. (At the start of the interview, he made a point of saying that if there were any air-raid sirens during the interview, he’d have to stop the discussion. There weren’t any sirens.)

Ben Haim said the company activated its business continuity plan two hours after the attack by Hamas started, and that he’s tried to keep the business running with minimal distraction. He said the company’s staff are safe and accounted for; he also noted that two of his daughters are serving in the IDF.

“We are looking at the situation and monitoring it, and being very thoughtful,” Ben Haim said. “We are not changing our financial guidance, and we have full confidence that we will deliver.”

JFrog stock has underperformed the market this year, with a gain of about 6%. The stock is off about 9% since the start of the current conflict between Hamas and Israel started more than three weeks ago.

Write to Eric J. Savitz at [email protected]