Watch These 5 Internet Stocks for Q3 Earnings: Beat or Miss?

Internet Software industry stocks’ upcoming third-quarter 2025 results are anticipated to reflect the benefits of continued technological innovation, particularly in artificial intelligence (AI), cloud computing and automation.

The third quarter of 2025 is likely to have seen steady demand for AI-powered software solutions, sustained cloud migration and expanding enterprise IT budgets. As companies increasingly integrate AI and data-driven tools into operations, leading players in the Internet Software industry — including Backblaze BLZE, Datadog, Inc. DDOG, JFrog FROG, Affirm Holdings AFRM and Block XYZ — spanning SaaS, cloud infrastructure and analytics platforms, are expected to have benefited from rising adoption and subscription renewals.

AI and generative AI continued to serve as major growth catalysts, driving automation, enhanced productivity and improved customer engagement across verticals. Expanding cloud and edge computing capabilities, alongside increasing data-center investments, likely provided a further lift. Broader digital transformation initiatives, supported by resilient enterprise spending and new AI use cases, are expected to have reinforced top-line momentum during the quarter.

However, the industry's performance could be dampened by macroeconomic and valuation-related headwinds. High interest rates and continued market volatility are likely to impact investor sentiment.

Based on the above factors, the Internet Software industry is expected to report modest-to-solid revenue growth for the third quarter of 2025. Companies with strong AI features, solid cloud platforms and flexible SaaS models are likely to have performed better than their peers.

Insight Into Key Releases

Ahead of their upcoming third-quarter 2025 earnings releases, let's take a look at the five abovementioned Internet Software stocks, each slated to report on Nov. 6.

The Zacks model suggests that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Backblaze’s third-quarter 2025 results are anticipated to reflect strong momentum in its B2 Cloud Storage business and expanding AI-driven demand. Rising data storage needs from generative AI workloads and a doubling of qualified sales opportunities are expected to have driven growth in the to-be-reported quarter. The addition of new enterprise-focused features and customers likely strengthened adoption and retention, supporting overall top-line performance.

However, continued weakness in the Computer Backup segment, which is expected to decline at a low-to-mid single-digit rate in the second half of 2025, is likely to weigh on performance. Intensifying competition from larger players like Dropbox, Datadog and Snowflake likely added pressure, as these rivals capitalized on their deep enterprise ties and extensive resources to capture market share. (Read more: BLZE Set to Report Q3 Earnings: How Should Investors Play the Stock?)

Backblaze has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. The company’s earnings beat estimates in all the trailing four quarters, the average surprise being 51.02%. You can see the complete list of today’s Zacks #1 Rank stocks here.

For the third quarter, the Zacks Consensus Estimate for BLZE’s revenues is pegged at $36.95 million, indicating an increase of 13.37% year over year.

The consensus mark for loss is pegged at a penny per share, which is a 90% improvement from the year-ago quarter’s reported loss of 10 cents. The estimate has remained unchanged over the past 30 days.

Backblaze, Inc. Price and EPS Surprise

Backblaze, Inc. price-eps-surprise | Backblaze, Inc. Quote

Datadog’s third-quarter 2025 results are expected to have benefited from strong momentum in its security and AI-focused offerings. Expanding adoption of products such as Code Security, Workload Protection and threat detection tools likely bolstered its position in the fast-growing cloud security market. Additionally, rising engagement with AI-native companies and enterprises deploying large-scale AI workloads likely drove broader platform adoption and multi-product usage during the quarter.

However, margin pressures are expected to have persisted due to elevated research and development spending and higher cloud infrastructure costs to support Datadog’s expanding customer base. (Read more: Datadog Gears Up to Report Q3 Earnings: What's in the Offing?)

Datadog has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 13.41%.

For the third quarter, the Zacks Consensus Estimate for DDOG's revenues is pegged at $849.77 million, indicating an increase of 23.15% year over year.

The consensus estimate for earnings is pegged at 45 cents per share, implying a year-over-year decline of 2.17%. The estimate has been unchanged over the past 30 days.

Datadog, Inc. Price and EPS Surprise

Datadog, Inc. price-eps-surprise | Datadog, Inc. Quote

JFrog’s third-quarter 2025 performance is expected to have benefited from continued strength in its cloud business and expanding enterprise customer base. Cloud revenues grew roughly 45% year over year in the prior quarter, accounting for a larger share of total sales. The number of customers generating over $1 million in annual recurring revenue increased notably, while net dollar retention held firm at 118%. These indicators of expanding large-account engagement and strong recurring demand are likely to have driven sustained top-line momentum and strengthened JFrog’s growth trajectory in the to-be-reported quarter. Additionally, wider adoption of JFrog’s integrated DevOps, DevSecOps and MLOps platform is likely to have driven stronger deal activity and supported margin expansion in the third quarter.

However, the company remains cautious due to macro uncertainty, deal-timing risks, margin pressure and competition. Its third-quarter 2025 revenue guidance of $127-$129 million and operating income of $16.5-$18.5 million reflect a balanced outlook.

JFrog has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 30.8%.

For the third quarter, the Zacks Consensus Estimate for FROG's revenues is pegged at $128.4 million, indicating an increase of 17.73% year over year.

FROG’s third-quarter 2025 diluted non-GAAP earnings per share are expected to be between 15 and 17 cents. The consensus estimate for earnings is pegged at 16 cents per share, implying year-over-year growth of 6.67%. The estimate has been unchanged over the past 30 days.

JFrog Ltd. Price and EPS Surprise

JFrog Ltd. price-eps-surprise | JFrog Ltd. Quote

Affirm Holdings’ first-quarter fiscal 2026 performance is expected to have benefited from a solid uptick in the merchant network and Gross Merchandise Volume (GMV). Management projects GMV in the range of $10.1 billion to $10.4 billion, reflecting healthy transaction momentum. This momentum likely resulted from expanded merchant partnerships, broader business adoption and steady consumer engagement. An increase in the number of transactions conducted through the Affirm platform is likely to have been supported by higher active merchants and consumers. Also, growing adoption of Affirm Holdings’ virtual cards is expected to have boosted card network revenues during the quarter. (Read more: Should You Buy, Hold or Sell Affirm Stock Before Q1 Earnings Report?)

Notably, Affirm Holdings has an Earnings ESP of +3.53% and a Zacks Rank #3 at present. The company has surpassed consensus earnings estimates in each of the last four quarters, delivering an average earnings surprise of 105.46%.

For the fiscal first quarter, the Zacks Consensus Estimate for AFRM's revenues is pegged at $885.01 million, implying a rise of 26.7% year over year.
The consensus estimate for earnings is pegged at 11 cents per share, implying an improvement from the year-ago quarter’s reported loss of 31 cents. The estimate has inched upward by a penny over the past 30 days.

Affirm Holdings, Inc. Price and EPS Surprise

Affirm Holdings, Inc. price-eps-surprise | Affirm Holdings, Inc. Quote

Block is likely to have gained in the third quarter of 2025 from the continued scaling of its fintech ecosystem across Square and Cash App. Square’s recovering market share reflects its innovative offerings and strategic merchant acquisitions. Additionally, the launch of Square Cash Advance in the U.K. and partnerships with Live Nation Canada, Purdys Chocolatier and Caleres likely broadened Block’s payment and commerce opportunities. Cash App’s rollout of group payment pools and Tap to Pay on iPhone is expected to have deepened user engagement and supported higher transaction volumes.

However, the company is likely to have felt the impact of unfavorable macro conditions in the third quarter of 2025, as trade tariffs and weaker discretionary spending curtailed Cash App Card activity. (Read more: Block Gears Up to Report Q3 Earnings: What's in the Offing?)

Block has an Earnings ESP of -0.18% and a Zacks Rank #3 at present. The company’s earnings missed the Zacks Consensus Estimate in two of the trailing four quarters, surpassed it once, and matched it once, delivering an average negative surprise of 11.87%.

For the third quarter, the Zacks Consensus Estimate for XYZ's revenues is pegged at $6.34 billion, indicating an increase of 6.12% year over year.

The consensus estimate for earnings is pegged at 63 cents per share, suggesting a decline of 28.41% from the figure reported in the year-ago quarter. The estimate has been unchanged over the past 30 days.

Block, Inc. Price and EPS Surprise

Block, Inc. price-eps-surprise | Block, Inc. Quote

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This article originally published on Zacks Investment Research (zacks.com).

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