Summary
JFrog started fiscal 2024 with revenue of $100.3 million in the first quarter, up 25.7% year over year. Gross profit was $79.7 million, up 29.8%. Gross margin rose to 79.5%, up 2.5 percentage points. The company still posted an operating loss of $16.6 million, but that loss narrowed and operating margin improved to -16.6%, up 12.5 percentage points. Net loss narrowed to $8.8 million, a 57.8% improvement. Diluted EPS was -$0.08, a 61.9% improvement. Operating cash flow was $17.5 million, up 1647.3%. Capital expenditures were $0.8 million, up 216.2%. Deferred revenue was $211.2 million, up 18.4%. Remaining performance obligations were $261.7 million, up 24.3%.
Operational metrics showed broad adoption. Cloud revenue grew 47% year over year and represented 37% of total revenue, compared to 31% in the year-ago period. Enterprise+ subscription revenue grew 39% year over year and represented 49% of total revenue, compared to 44%. Customers with annual recurring revenue above $1 million reached 40, up from 21 in the year-ago period. Customers with ARR above $100,000 increased to 911, compared with 785 in the year-ago period. The net dollar retention rate for the trailing four quarters was 118%. Management said the company expects the net dollar retention rate to stabilize around current levels. JFrog also announced MLflow and Qwak MLOps platform integrations and a partnership with Carahsoft to enhance public sector channel sales.
Non-GAAP results were stronger. Non-GAAP gross profit was $85.3 million, and non-GAAP gross margin was 85.1%. Non-GAAP operating income was $14.1 million, and non-GAAP operating margin was 14.0%. Non-GAAP diluted earnings per share was $0.16. Free cash flow was $16.6 million. The company ended the quarter with a three-pillar business continuity plan in place because of the Israel-Hamas war. Management stated that there had been no major interruption or material adverse impact on operating results as of the date of the quarterly report. The company also listed risks including managing rapid growth, its history of losses, its limited operating history, the ability to retain and upgrade existing customers, the ability to attract new customers, the ability to develop and expand sales and marketing, the integration of acquisitions, security breach incidents or product vulnerabilities, interruptions or performance problems, adapting to changing technology or customer needs, competition, and general market, political, economic, and business conditions.
Guidance for the second quarter of 2024 calls for $103 million to $104 million in total revenue. Non-GAAP operating income is expected between $13 million and $14 million. Non-GAAP net income per diluted share is expected between $0.13 and $0.15, assuming approximately 116 million weighted average diluted shares outstanding. For the full fiscal year 2024, guidance calls for $425.5 million to $429.5 million in revenue. Full-year non-GAAP operating income is expected between $56 million and $58 million. Full-year non-GAAP net income per diluted share is expected between $0.59 and $0.61, assuming approximately 116 million weighted average diluted shares outstanding. The guidance is for the next quarter and the full fiscal year, respectively.
The quarter showed improving profitability on a GAAP basis, with gross margin expansion and a narrower operating loss. Still, the company remains unprofitable on a GAAP basis, and its net dollar retention rate was 118%, down from 124% as of March 31, 2023. The MD&A notes that the net dollar retention rate may fluctuate and is expected to stabilize around current levels. Deferred revenue grew year over year, but the cash flow statement shows a $2.9 million decrease in deferred revenue during the quarter due to higher recognition of revenue relative to billings. The company's ability to sustain growth depends on expanding usage by existing customers, acquiring new customers, and executing on its platform strategy amid competitive and geopolitical risks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $100.3M | $97.3M | +3.1% | $79.8M | +25.7% |
| Gross profit | $79.7M | $76.8M | +3.7% | $61.4M | +29.8% |
| Gross margin | 79.5% | 79.0% | +0.5 pp | 76.9% | +2.5 pp |
| Research & development | $35.8M | $32.8M | +9.3% | $34.9M | +2.7% |
| Sales & marketing | $43.6M | $40.9M | +6.5% | $35.5M | +22.8% |
| General & administrative | $16.9M | $18.5M | -8.4% | $14.2M | +19.0% |
| Total operating expenses | $96.3M | $92.2M | +4.5% | $84.6M | +13.9% |
| Operating income (loss) | -$16.6M | -$15.4M | -8.2% | -$23.2M | +28.3% |
| Operating margin | -16.6% | -15.8% | -0.8 pp | -29.1% | +12.5 pp |
| Net income (loss) | -$8.8M | -$11.2M | +21.7% | -$20.8M | +57.8% |
| Net margin | -8.8% | -11.6% | +2.8 pp | -26.1% | +17.3 pp |
| Diluted EPS | -$0.08 | -$0.11 | +$0.03 | -$0.21 | +$0.13 |
| Customers | 886 | 736 | +20.4% | 736 | +20.4% |
| Net retention rate | 118.0% | 119.0% | -1.0 pp | 124.0% | -6.0 pp |
Risks
Operations and R&D are materially concentrated in Israel, and the filing states that certain employees and consultants have been called for military service due to the Israel-Hamas war and related hostilities with Hezbollah, the Houthi movement, and Iran. The company says the intensity and duration of the war are difficult to predict and could disrupt operations or reduce revenues.
The filing states that adverse macroeconomic conditions, including inflation, higher interest rates, and tighter credit, have led to longer sales cycles and enhanced budget scrutiny by customers. It expects these challenges to continue given the current macroeconomic environment, which could limit growth.
The filing states that competitors or third parties may incorporate AI technology into their products more quickly or successfully than JFrog, and that support for MLOps may fall behind rapidly changing standards. This could impair JFrog's ability to compete effectively and adversely affect results.
The EU AI Act, approved by the European Council on February 2, 2024 and the European Parliament on March 13, 2024, will impose obligations on AI providers and users, with fines up to €30 million or 6% of global income. The filing also notes increasing AI regulation in the U.S., Brazil, China, and Israel.
The filing states that the length of the sales cycle can be unpredictable, particularly for large customers, and that large individual sales have in some cases occurred in quarters subsequent to those anticipated or not at all. Because a substantial proportion of expenses are relatively fixed in the short term, results could suffer if revenue falls below expectations.
MD&A reports net dollar retention rate was 118% as of March 31, 2024, down from 124% as of March 31, 2023, and says it expects the rate to stabilize around current levels. Slower expansion within existing customers could reduce future revenue growth.
A limited-functionality version of JFrog Artifactory is licensed under AGPL, and the filing states that commercial licensees can use it internally for free or provide it for free to compete in JFrog's markets. This could reduce demand, put pricing pressure on subscriptions, and lower operating margins.
The filing states that competition for experienced DevSecOps professionals is intense, especially for engineers, security experts, and support roles in Israel and the San Francisco Bay Area, and that this often results in increasing wages. Failure to attract or retain key personnel could harm the business.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Cloud Revenue
Non-GAAP Gross Margin
Remaining Performance Obligations
Cloud Revenue % of Total Revenue
Customers with >$100K ARR
Customers with >$1M ARR
Enterprise+ Subscription % of Total Revenue
Summary, forecast, risks and KPIs are extracted from JFrog Ltd's SEC filings for Q1 FY2024 (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 1, 2026.