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JFrog has reported third-quarter results that exceeded analyst expectations, highlighted by a record US$136.91 million in revenue and a 50% year-over-year increase in cloud revenue, with the company also raising its outlook for the fourth quarter and full year 2025.
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Cloud revenue now accounts for 46% of total sales, indicating a marked shift toward cloud-based services and reinforcing JFrog’s role in software supply chain management as enterprises increase adoption of AI-driven solutions.
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We’ll explore how JFrog’s accelerating cloud revenue growth impacts its investment narrative and future expectations for sustainable earnings expansion.
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Owning JFrog means believing that trusted software supply chain management, especially with a focus on cloud and AI model delivery, will see ongoing enterprise adoption at scale. The recent Q3 results and raised 2025 guidance are clear positives for near-term sentiment, particularly given the 50% surge in cloud revenue; however, the most important catalyst, continued acceleration of cloud and security product adoption, remains vulnerable to competition and evolving enterprise IT buying patterns, while ongoing operating losses highlight the biggest risk right now. The strong quarter strengthens the company’s growth narrative, but does not remove the risk of lumpy enterprise deal flow and longer sales cycles tied to cloud migration trends. One announcement standing out this quarter is JFrog’s launch of new AI agent-based features and JFrog Fly, which enhance automation and developer workflow within its core platform. These innovations tie directly to the catalyst of deeper enterprise integration for trusted AI and hybrid deployments, supporting the potential for sustained growth but not fully offsetting risks associated with margin pressure as larger rivals embrace similar strategies. Yet even amid this progress, investors should pay close attention to how heightened competition could pressure JFrog’s pricing power and margins…
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JFrog’s narrative projects $736.3 million revenue and $96.4 million earnings by 2028. This requires 15.8% yearly revenue growth and a $182.7 million increase in earnings from -$86.3 million.
Uncover how JFrog’s forecasts yield a $56.44 fair value, a 6% downside to its current price.
Four recent fair value estimates from the Simply Wall St Community put JFrog’s share price between US$35 and US$141. Some see opportunities as AI-driven DevOps gains traction, but others caution that risks like pricing pressure could limit upside. Consider exploring a range of these views.