Software development tooling platform JFrog Ltd. beat Wall Street’s expectations today as its revenue grew by 24% from a year earlier, sending its stock slightly higher in extended trading.

The company reported second-quarter earnings before certain costs such as stock compensation of 11 cents per share, beating Wall Street’s forecast of just five cents. Revenue came to $84.2 million, ahead of the consensus estimate of $83 million. JFrog also shaved its overall loss to just $15.5 million, down from a loss of $23.7 million a year earlier.

JFrog co-founder and Chief Executive Shlomi Ben Haim (pictured) said the company’s robust operating performance demonstrated solid execution during the quarter. “The continuous adoption of our DevOps and Security solutions as crucial enterprise infrastructure has been a driving force behind these results,” he insisted.

JFrog is a growing player in DevOps, the practice of developing code faster by combining software developers and information technology staff on teams. The company is best known for its open-source binary code repository manager, called Artifactory.

It’s an open platform that developers use to host their application code. However, unlike GitHub, which stores application code, Artifactory is used to store the binary files created when engineers compile their code into a functioning application.

The company’s other main product is JFrog Pipelines. It’s a continuous integration and continuous delivery platform that’s used by developers to create automated software workflows that can transform raw code into binaries before deploying them automatically.

The popularity of those tools has enabled JFrog to grow at a time when most other enterprise software vendors are struggling. The company noted that its cloud revenue rose 44% from a year earlier, to $27.6 million, meaning it now accounts for 33% of its total sales, compared with 28% a year earlier.

JFrog also reported a net dollar retention rate of 120% for the trailing four quarters. That’s a key performance indicator measuring how much money existing customers from one year ago are spending today. It shows that, even if JFrog didn’t land any new customers over the last year, its revenue would still have grown by 20%. For investors, it shows a strong level of customer satisfaction.

In any case, JFrog continued to add new customers during the quarter. It said it now has 813 customers that deliver at least $100,000 in annual revenue, compared to just 647 one year ago.

Like many software-as-a-service firms, JFrog employs a strategy of getting developers to use one product before enticing them to use its entire suite of offerings. The strategy is working, as customers on JFrog Platform Enterprise+ subscriptions now count for 45% of total revenue, up from 36% last year.

Holger Mueller of Constellation Research Inc. said JFrog has demonstrated that it’s quite possible for companies to grow into profitability without cutting back on costs. “Of course, JFrog is helped by today’s reality that software rules the world,” he added. “JFrog powers the software supply chain and so it has become critical for many enterprises. So long as it continues to create value, it will keep on growing.”

During the quarter, JFrog expanded its product lineup with a new offering called JFrog Curation, which helps prevent unwanted and malicious packages from entering user’s software supply chains.

For the current quarter, JFrog anticipates revenue of between $87 million and $88 million, right in line with Wall Street’s target of $87.5 million.

Photo: JFrog/YouTube