Shares of JFrog were plunging 31% after a guidance cut and mixed quarter from the provider of software-development tools.
For its second quarter, JFrog reported adjusted earnings of 15 cents per share, beating Wall Street's estimate by a penny, according to FactSet.
Revenue of $103 million fell slightly short of the $103.4 million analysts had forecast. Cloud revenue equaled $39.3 million during the quarter, soaring 42% from a year ago.
For its third quarter, JFrog expects revenue of $105 million to $106 million, and adjusted earnings per share of 9 cents to 11 cents. Analysts were anticipating revenue of $105.8 million and earnings of 11 cents.
It also lowered guidance for fiscal 2024. It's now calling for revenue between $422 million and $424 million and adjusted earnings between 54 cents and 56 cents. Analysts had penciled in revenue of $423.6 million and earnings per share of 56 cents.
KeyBanc Capital Markets analysts led by Jason Celino weighed in on the report. "Management cited a challenging macro environment leading to greater budget scrutiny and deal delays, resulting in overall slower growth," they wrote on Wednesday.
The analyst team listed several positives about the company including its product leadership, but added that a challenging macro environment makes delivering on company objectives more risky. This prompted KeyBanc to lower its price target on JFrog stock to $30 from $46, and reiterate an Overweight rating.
William Blair analysts led by Jason Ader, who rate shares at Outperform, offered a similar view.
"Not surprisingly, the stock is taking it on the chin after hours (down roughly 28%), but we believe it is important to keep things in perspective as the guide-down was quite modest and looks entirely attributable to the macro environment," the William Blair analysts wrote on Thursday.
