Summary
JFrog closed the first quarter of fiscal 2021 with revenue of $45.1 million, up 37.4% from the prior-year quarter. Gross profit rose 38.8% to $36.7 million, and gross margin was 81.3%, up 0.8 percentage points. The top line carried strong operating momentum. Net dollar retention for the trailing four quarters was 130%, compared with 142% as of March 31, 2020. At quarter end, 395 customers had annual recurring revenue above $100,000, up from 352 as of December 31, 2020, and 10 customers had ARR above $1 million, unchanged from December 31, 2020. SaaS subscriptions produced 23% of revenue, up from 19% a year earlier. Enterprise Plus subscriptions accounted for 29% of revenue versus 16%. Management said the first quarter set a solid tone for the year and pointed to increasing net new customer additions.
Profitability went the other way. Operating loss widened to $10.6 million, and operating margin was negative 23.5%, down 17.1 percentage points from the prior-year quarter. Net loss widened to $7.9 million, and diluted EPS was negative $0.09. Non-GAAP measures show a different picture. Non-GAAP gross profit was $37.6 million, and non-GAAP gross margin was 83.4%. Non-GAAP operating income was $1.9 million, and non-GAAP operating margin was 4.1%. Non-GAAP net income per diluted share was $0.02. The gap between GAAP and non-GAAP results reflects adjustments such as share-based compensation, but the GAAP loss still widened sharply on higher operating costs.
Cash generation improved. Operating cash flow was $8.8 million, up 805.4% from the prior-year quarter. Free cash flow, a non-GAAP measure, was $7.7 million. Capital expenditures were $1.1 million, down 1.2%. Deferred revenue ended the quarter at $121.0 million, up 53.9% year over year. Remaining performance obligations were $129.2 million. Those metrics suggest customers continued to commit to the platform even as the income statement showed heavier spending.
The product story centered on platform expansion. Management highlighted releases around security, software distribution, and scalability, plus integrations with Atlassian, Datadog, AWS GovCloud, and Microsoft Government Cloud. JFrog also pointed to APAC expansion, including China. The push toward a full end-to-end DevOps platform is visible in the mix. For the first quarter, 91% of revenue came from subscriptions giving customers access to multiple products, compared with 85% a year earlier. That mix shift can support revenue per customer over time, but it also raises execution demands. JFrog describes its platform as an end-to-end, hybrid, universal DevOps platform for continuous software release management.
Guidance points to continued growth. For the second quarter of fiscal 2021, management guided revenue to $47.6 million to $48.6 million, non-GAAP operating income to $0.5 million to $1.5 million, and non-GAAP net income per share to $0.00 to $0.01, assuming about 104 million weighted average diluted shares. For the full fiscal year 2021, the company guided revenue to $198 million to $204 million and non-GAAP operating income to $5 million to $7 million, with an approximately 3% increase in weighted average diluted shares.
Risks remain material. The 10-Q cites COVID-19 as a continuing source of uncertainty, with slowed growth, lower upgrade orders from existing customers, longer sales cycles, and delays in new projects. JFrog also lists risks tied to managing rapid growth, its history of losses, limited operating history, retaining and upgrading customers, attracting new customers, expanding sales and marketing, security breaches, product interruptions, competition, and general market, political, economic, and business conditions. The first quarter showed healthy demand and cash generation, but the widening GAAP loss and the reliance on non-GAAP adjustments keep the profitability path in focus.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $45.1M | $42.7M | +5.6% | — | — |
| Gross profit | $36.7M | $34.6M | +6.0% | — | — |
| Gross margin | 81.3% | 81.0% | +0.3 pp | — | — |
| Research & development | $13.8M | $11.7M | +18.7% | — | — |
| Sales & marketing | $19.8M | $18.2M | +8.6% | — | — |
| General & administrative | $13.7M | $12.8M | +7.0% | — | — |
| Total operating expenses | $47.3M | $42.6M | +10.9% | — | — |
| Operating income (loss) | -$10.6M | -$8.0M | -32.1% | — | — |
| Operating margin | -23.5% | -18.8% | -4.7 pp | — | — |
| Net income (loss) | -$7.9M | -$3.7M | -112.6% | — | — |
| Net margin | -17.5% | -8.7% | -8.8 pp | — | — |
| Customers | 352 | 352 | ±0.0% | — | — |
| Net retention rate | 130.0% | 133.0% | -3.0 pp | — | — |
Risks
Materially expanded privacy and data protection risk citing the CCPA, the new CPRA (obligations from January 1, 2022), the Virginia Consumer Data Protection Act enacted March 2021, and the EU GDPR, which carries fines of up to the greater of EUR 20 million or 4% of global annual turnover. Compliance has already required the company to modify data practices and incur costs.
Risk that a breach or perceived breach of the company's or its vendors' systems, including supply chain attacks, could expose customers' proprietary and personal data. The filing references recent incidents affecting SolarWinds Orion, Accellion FTA, and Microsoft Exchange as raising customer expectations and potentially triggering new compliance and reporting obligations.
Newly disclosed risk that evolving labor and employment laws, particularly the classification of U.S. employees as exempt versus non-exempt, may increase wage obligations and expose the company to federal and state claims and civil penalties. The filing states California requires exempt employees be paid at least twice the applicable state minimum wage.
The Schrems II decision invalidated the EU-U.S. Privacy Shield and now requires case-by-case assessments for data transfers from the EEA to the U.S., which may force changes to data transfer policy and contract renegotiations. The filing also flags uncertainty over the U.K. GDPR regime following Brexit and possible data localization in Israel, India, China, and Japan.
Newly disclosed risk tied to expanding operations in China, including Renminbi convertibility limits, uncertainty in enforcing intellectual property rights, ability to secure proprietary information from unauthorized acquisition, and increased restrictions on data transfer under the Chinese Cyber Security Law, as well as potential U.S.-China trade controversies.
MD&A states the company experienced slowed growth during the COVID-19 pandemic and expects continued slowed growth and lower upgrade orders from existing customers, with an increase in the average length of sales cycles and delays in new projects. Net dollar retention rate declined to 130% as of March 31, 2021 from 142% as of March 31, 2020.
Operating expenses rose sharply, with general and administrative expense up 163% and total share-based compensation expense up 501% for the three months ended March 31, 2021 versus the prior-year period, contributing to the operating loss widening to $10.6 million from $2.1 million. The company states it expects R&D, sales and marketing, and G&A expenses to continue to increase.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Cloud Revenue
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from JFrog Ltd's SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.