JFrog — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for Q2 2026 was $163.8 million, up 29% year-over-year.
• Cloud revenue was $87.5 million, up 53% year-over-year, representing 53% of total revenue compared to 45% in the prior year period.
• GAAP gross profit was $127.6 million with a gross margin of 77.9%; Non-GAAP gross profit was $136.2 million with a margin of 83.2%.
• GAAP operating loss was $13.2 million (margin of -8.1%); Non-GAAP operating income was $32.6 million (margin of 19.9%).
• GAAP net loss per share was $0.03; Non-GAAP diluted earnings per share was $0.27.
• Operating cash flow was $57.1 million; Free cash flow was $53.7 million.
• Cash, cash equivalents, and investments totaled $824.5 million as of June 30, 2026.
• Remaining performance obligations were $659.0 million as of June 30, 2026, an increase of 38% year-over-year.
• Trailing four-quarter Net Dollar Retention was 121%, compared to 118% in the prior year.

Guidance and Future Outlook

• Q3 2026 revenue is projected between $164 million and $166 million.
• Q3 2026 Non-GAAP operating income is projected between $27 million and $29 million.
• Q3 2026 Non-GAAP net income per diluted share is projected between $0.22 and $0.24, assuming approximately 130 million weighted average diluted shares outstanding.
• Full-year 2026 revenue is projected between $648 million and $652 million.
• Full-year 2026 Non-GAAP operating income is projected between $116 million and $120 million.
• Full-year 2026 Non-GAAP net income per diluted share is projected between $0.96 and $1.00, assuming approximately 129 million weighted average diluted shares outstanding.

Business Segments and Product Lines

• Customers with ARR greater than $1 million increased to 97, up from 61 in the prior year.
• Customers with ARR greater than $100,000 increased to 1,291, up from 1,076 in the prior year.
• Customers adopting the end-to-end JFrog Platform Enterprise+ subscription represented 59% of total revenue in Q2 2026, up from 55% in the prior year.
• JFrog delivered a plugin in collaboration with Anthropic for enterprise-grade software supply chain governance and security on Claude Code.
• Security solutions were delivered to over 1 million AI developers via the Cursor Coding agent plugin.
• JFrog was positioned as a Leader in the first Gartner® Magic Quadrant™ for Software Supply Chain Security.

Market and Competitive Landscape

• Management stated AI is fundamentally reshaping software creation, accelerating the volume of software artifacts flowing into production.
• Enterprises are standardizing on JFrog as their Software Supply Chain System of Record, driving strong cloud adoption and demand for security solutions.
• The company notes increasing sophistication in cyber threats raising the bar for trust.
• JFrog serves approximately 6,600 organizations worldwide, including a majority of the Fortune 100.

Risks and Challenges

• Forward-looking statements identify risks including managing rapid growth, history of losses, and limited operating history.
• Risks include the ability to retain and upgrade existing customers, attract new customers, and effectively develop sales and marketing capabilities.
• Potential risks involve security breach incidents, product vulnerabilities, interruptions, or performance problems associated with the platform.
• Challenges include adapting to rapidly changing technology, customer needs, and competition in the markets participated in.
• Risks related to integrating technology from acquisitions and realizing anticipated synergies are noted.
• General market, political, economic, and business conditions, including macroeconomic uncertainty, are cited as factors that could cause actual results to differ materially.

Management Commentary and Tone

• CEO Shlomi Ben Haim described Q2 as reflecting the strength of strategy and disciplined execution.
• Management expressed confidence in JFrog's position to capture long-term opportunities driven by AI coding agents and sophisticated cyber threats.
• The tone emphasized continued execution with discipline and efficiency while benefiting from strong cloud adoption.

Other Key Points

• The company repurchased ordinary shares for $2.028 million during the quarter.
• Proceeds from the exercise of share options were $4.244 million in the quarter.
• Proceeds from employee equity transactions, net of payments to tax authorities and employees, were $26.819 million in the quarter.
• The press release includes detailed reconciliations of GAAP to Non-GAAP financial measures, including gross profit, operating expenses, operating income, net income, and free cash flow.
• A conference call regarding the results was held on August 6, 2026, at 2:00 p.m. PT.