JFrog, an Israeli software company, recently marked five years on the Nasdaq with a significant milestone. The company’s stock surged by 27% after it released financial results that exceeded expectations and raised its forecast for 2025. This impressive increase propelled JFrog’s valuation to approximately $7 billion, establishing it as one of the top-performing Israeli tech companies since the IPO wave of 2020–2021.
From IPO to Strong Valuation
Founded in 2008, JFrog went public in September 2020 with a valuation of $3.9 billion. Its initial trading day was marked by a 62% surge, pushing the stock price to $84. As of now, the stock has doubled in value since the beginning of 2025, trading around $60, although it has not yet surpassed its all-time high.
Growth and Expansion
- Employees: JFrog employs over 1,600 people, with approximately 1,000 based in Israel.
- CEO: Shlomi Ben Haim serves as the founder and CEO and has emphasized the company’s roots during public engagements.
- Acquisitions: Following its IPO, JFrog has exclusively acquired Israeli startups, enhancing its innovative edge in the local market.
The company’s investment thesis is centered on its operations in DevOps, focusing on automated software updates without human intervention. This field has gained traction as businesses seek efficiency in their software development processes. Unlike other software sectors facing disruption due to AI advancements, JFrog’s domain has remained resilient.
Strategic Moves in AI and Cloud
In 2021, JFrog strengthened its cybersecurity capabilities through a $300 million acquisition of the Israeli startup Vdoo. This acquisition has fortified its software testing and approval processes against vulnerabilities during development.
In mid-2024, JFrog made another strategic move by acquiring the Israeli startup Qwak. This cash-and-stock transaction added roughly 45 employees focused on AI, tapping into a talent pool that is increasingly valuable in the tech industry.
Revenue Insights
JFrog’s cloud revenue surged by 50% year-over-year, reaching $64 million in the last quarter alone. This substantial growth reflects a shift in the company’s business model, with cloud operations now accounting for almost half of its total revenue. Overall, JFrog reported quarterly revenues of $137 million, demonstrating a remarkable increase compared to its total annual revenue at the time of its IPO.
Market Performance and Future Outlook
Due to this growth in cloud operations, JFrog has raised its forecast for 2025 revenue to $525 million, a 22% increase from the previous year. The number of customers with annual contracts exceeding $1 million has also risen, indicating a focus on larger enterprise clients.
| Metric | 2024 | 2025 (Forecast) |
|---|---|---|
| Total Revenue | Estimated to reach $430 million | $525 million |
| Cloud Revenue Growth | 50% year-over-year | Expected to grow further |
Despite the recent jump in valuation, JFrog trades at a multiple of 13 times its expected revenue. The company is not yet GAAP-profitable, but management aims for a gross margin of 83% and a reduction in operating expenses from 69% to 65%. For the third quarter, it reported a net profit of $27.5 million, excluding non-cash items, while posting a GAAP net loss of $16 million.
As investor sentiment fluctuates amid rising market valuations, JFrog remains a company to watch. The current earnings season reflects an environment where positive results can lead to sharp gains, while disappointments resonate just as strongly. JFrog’s ongoing adaptability in a rapidly evolving tech landscape positions it well for future growth.
