Shares of the software supply chain company JFrog Ltd. shot up more than 25% in extended trading today after it posted solid third-quarter results that flew past analysts’ expectations and followed with strong guidance going forward.

The company reported earnings before certain costs such as stock compensation of 22 cents per share, easing past Wall Street’s target of 16 cents. Revenue for the period rose 26% to $139.6 million, crushing the analyst forecast of $128.3 million. The results helped the company inch closer toward profitability, with a net loss of just $16.4 million, down from a loss of $22.9 million in the year-ago quarter.

JFrog is the creator of a comprehensive software supply chain platform that’s used by DevOps, DevSecOps, MLOps and MLSecOps teams to secure and manage the components of business critical applications. Its platform is centered on Artifactory, which is an open-source code repository, somewhat similar to GitHub except that it’s used for storing binary files rather than application code. Those are the files used by the underlying server hardware to understand the human-readable programming language those apps are written in.

In addition, the company sells a continuous integration and continuous delivery platform called JFrog Pipelines, which is used to create automated software workloads that transform the raw application code into binaries.

JFrog co-founder and Chief Executive Shlomi Ben Haim (pictured) said the results underline how his company has become the “system of record” for how modern software is built, secured and deployed by enterprises. “[We are] the foundation of enterprise software supply chains in the era of AI,” he said. “Our results highlight strong execution across DevOps, DevSecOps and MLOps, as we continue to expand into governance and compliance, innovating and automating in the evolving domain of DevGovOps.”

The expansion into governance and compliance came in September during JFrog’s annual user conference JFrog swampUp in Napa, California, when it revealed a slate of new product releases that it said represent a turning point in how companies deliver, secure and govern artificial intelligence software. The headline of that release was a new offering called JFrog Fly, which was said to be the first “agentic repository” for accelerating the delivery of AI agents that automate work on behalf of humans.

In addition, JFrog announced what it said is the world’s first “DevGovOps” solution in JFrog AppTrust, which is designed to carry out audits and compliance on new software autonomously.

The company seems to be confident that it will continue its strong execution into the current quarter. For guidance, it’s forecasting earnings of between 78 cents and 80 cents per share, above the analysts consensus estimate of 70 cents. In terms of revenue, it’s targeting a range of $523 million to $525 million, way ahead of the Street’s forecast of $509 million.

JFrog said much of its growth was driven by new cloud subscriptions. During the quarter, its cloud-based revenue jumped 50% to $63.4 million, which means that it now accounts for more than half of all the company’s sales. The company said customers who have adopted the complete JFrog Platform Enterprise+ subscription were responsible for 55% of its total revenue, up from 50% last year.

Today’s late surge means that JFrog’s stock is now up more than 60% in the year to date, well ahead of the broader S&P 500 Index, which has gained just over 14% so far this year.

Photo: JFrog