JFrog (FROG) Q4 2023 earnings summary

Executive summary

• FY23 revenue reached $349.9M, up 25% YoY; LTM free cash flow was $72.2M and Q4 net dollar retention was 119%.

• 100% subscription revenue, supported by an organic land-and-expand strategy and a multi-product software supply chain platform.

Financial highlights

• FY23 revenue was $349.9M versus $280.0M in FY22; Q4 revenue was $97.3M, up 27% YoY.

• FY23 GAAP gross profit was $272.8M (78.0% margin) and non-GAAP gross profit was $293.0M (83.7%); Q4 figures were $76.8M (79.0%) and $82.3M (84.6%).

• FY23 GAAP operating loss was $75.5M and net loss was $61.3M; non-GAAP operating income was $39.0M (11.1% margin) and diluted EPS was $0.51.

• Q4 GAAP operating loss was $15.4M and net loss per share was $0.11; non-GAAP operating income was $16.2M (16.6% margin) and diluted EPS was $0.19.

• FY23 operating cash flow was $74.2M and free cash flow was $72.2M; Q4 operating cash flow was $32.6M and free cash flow was $32.0M.

Outlook and guidance

• Q1 2024 revenue guidance is $98.0M–$99.0M; non-GAAP operating income is $12.5M–$13.5M and diluted EPS is $0.13–$0.15 on ~113M weighted-average diluted shares.

• FY24 revenue guidance is $424M–$428M; non-GAAP operating income is $56M–$58M, diluted EPS is $0.58–$0.60 on ~116M weighted-average diluted shares, and operating margin is 13.0%–13.5%.

• FY24 gross margin guidance is 83%–84%; free cash flow guidance is $74M–$76M, or 17%–18% of revenue.

• FY27 targets: revenue of $775M–$825M, gross margin of ~80%, operating margin of 21%–23%, and free cash flow of $200M–$240M, or 26%–29% margin.