Investors in software stocks on Friday rewarded JFrog (FROG) and punished Twilio (TWLO) stock amid the two companies second quarter financial results.
Twilio reported Q2 earnings and revenue that topped estimates but a key metric, gross profit, matched views amid margin pressure.
The maker of communications software said EPS rose 37% to $1.19, topping estimates of $1.05. Revenue climbed 13% to $1.228 billion, above estimates of $1.188 billion.
"Twilio raised its full year 2025 organic revenue growth guidance from 7.5% to 8.5% to 9% to 10%, reflecting accelerating growth in both messaging and voice channels, traction from new products, and go-to-market execution," said William Blair analyst Arjun Bhatia in a report. "However, despite the top-line strength, Twilio maintained its operating income guidance, which is likely a surprise to most investors and the reason shares are (down)."
He added: "Twilio is ramping up investments in R&D in response to elevated customer demand in voice, rich communication services and its artificial intelligence offerings. The investments should help accelerate the time to market for key functionality. Though the margin guide is surprising and may slightly delay the margin expansion story, it is ultimately a long-term positive for the business."
JFrog's EPS rose 20% to 18 cents, topping estimates of 16 cent profit, while revenue climbed 23% to $127.2 million, topping estimates of $122.8 million.
On the stock market today, Twilio stock tumbled more than 18% to 99.21. JFrog stock popped over 5% to 41.01.
"We see JFrog entering its next phase of growth driven by steady demand for Artifactory, growing cross-sell opportunities for software supply chain security, increasing DevSecOps consolidation and the Qwak acquisition," said Jason Ader, also a William Blair analyst, in a report
JFrog stock holds a Composite Rating of 81 out of a best-possible 99, according to IBD Stock Checkup.
Meanwhile, JFrog stock holds an Accumulation/Distribution Rating of C-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. (A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.)
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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