Summary
JFrog reported first quarter fiscal 2026 revenue of $154.0 million, up 25.8% year over year. Gross profit rose 30.5% to $120.4 million, and gross margin was 78.2%, up 2.8 percentage points. The company still posted an operating loss of $12.9 million, but that loss narrowed from the prior-year quarter. Operating margin was -8.4%, an improvement of 10.4 percentage points. Net loss was $8.3 million, also narrower year over year, and diluted EPS was -$0.07, a narrower loss than the prior-year quarter. On a non-GAAP basis, operating income was $32.9 million and diluted EPS was $0.27. The gap between GAAP and non-GAAP results remains wide, driven by share-based compensation and other adjustments.
Cash generation was a bright spot. Operating cash flow rose 33.2% to $38.4 million. Capital expenditures were $1.07 million, up 65.4%. Free cash flow, a non-GAAP measure, was $37.3 million. Deferred revenue was $341.5 million, up 24.0% year over year. Remaining performance obligations were $574.9 million, up 35.5%. Those backlog and billings metrics suggest customers are committing to longer or larger contracts.
Operational metrics showed similar momentum. Cloud revenue grew 50% year over year and represented 51% of total revenue, compared with 43% in the year-ago period. Net dollar retention for the trailing four quarters was 120%, up from 116%. Customers with more than $1 million in ARR reached 80, up from 54. Customers with more than $100,000 in ARR reached 1,225, compared with 1,051. Enterprise Plus subscriptions accounted for 58% of total revenue, versus 55%. The board authorized a share repurchase program of up to $300 million. JFrog also launched an MCP Registry and a Skills Registry with NVIDIA. Management tied cloud acceleration to demand from development organizations using AI-powered coding agents.
Guidance points to continued growth. For the second quarter of 2026, management issued a revenue outlook and non-GAAP profitability targets. For the full fiscal year 2026, the company also provided a revenue range, along with non-GAAP operating income and per-share targets. The company did not provide GAAP guidance. The full-year outlook rests on continued cloud momentum and expansion among large customers. Management also noted that the second-quarter revenue range sits close to the first-quarter result, which points to stable sequential growth.
Risks remain. JFrog is domiciled in Israel, and the Middle East conflict continues to pose operational uncertainty. The company notes a temporary ceasefire reached on April 8, 2026, but warns the situation remains volatile with potential for renewed escalation. Other risks include a history of losses, rapid growth management, security breaches or product vulnerabilities, competition, and macroeconomic uncertainty. The share repurchase program may be suspended or modified at any time. Investors will watch whether cloud growth and large-customer expansion can sustain the premium valuation while GAAP profitability remains out of reach.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $154.0M | $145.3M | +6.0% | $122.4M | +25.8% |
| Gross profit | $120.4M | $113.1M | +6.4% | $92.2M | +30.5% |
| Gross margin | 78.2% | 77.9% | +0.3 pp | 75.3% | +2.8 pp |
| Research & development | $51.8M | $53.2M | -2.5% | $43.3M | +19.6% |
| Sales & marketing | $57.8M | $59.7M | -3.3% | $52.8M | +9.4% |
| General & administrative | $23.7M | $21.6M | +10.1% | $19.0M | +24.6% |
| Total operating expenses | $133.3M | $134.5M | -0.9% | $115.2M | +15.7% |
| Operating income (loss) | -$12.9M | -$21.3M | +39.4% | -$23.0M | +43.7% |
| Operating margin | -8.4% | -14.7% | +6.3 pp | -18.8% | +10.4 pp |
| Net income (loss) | -$8.3M | -$15.2M | +45.6% | -$18.5M | +55.3% |
| Net margin | -5.4% | -10.5% | +5.1 pp | -15.1% | +9.8 pp |
| Diluted EPS | -$0.07 | -$0.13 | +$0.06 | -$0.16 | +$0.09 |
| Customers | 1,168 | 1,018 | +14.7% | 1,018 | +14.7% |
| Net retention rate | 120.0% | 119.0% | +1.0 pp | 116.0% | +4.0 pp |
Risks
Operations are concentrated in Israel, with more than half of employees and consultants located there. The filing describes the February 28, 2026 Israel and U.S. offensive against Iran, retaliatory attacks, and an April 8, 2026 temporary ceasefire, and warns that employee reserve duty and renewed escalation could disrupt operations.
Competitors or third parties may incorporate AI technology into products more quickly or successfully, and suppliers of third-party AI models used in the platform could terminate relationships, cease making models available, or raise prices. The filing also warns that investor sentiment about AI strategy can move the share price even if operating results remain strong.
The EU AI Act entered into force on August 1, 2024, with fines up to 35 million euros or 7% of global income, and other U.S. state and federal AI rules are emerging. Compliance could require changes to offerings and increase operating costs.
SaaS subscriptions contributed 51% of total revenue for the three months ended March 31, 2026, compared to 43% for the three months ended March 31, 2025. The filing notes that a shift from self-managed to SaaS offerings, which have lower gross margin, could reduce gross profit.
The length of the sales cycle, especially for large customers, is unpredictable, and large individual sales have in some cases occurred in later quarters than anticipated or not at all. The filing says customers have experienced enhanced budget scrutiny and longer sales cycles in the current macroeconomic environment.
Adverse macroeconomic conditions, including inflationary trends, slower growth or recession, higher interest rates, and newly imposed tariffs and non-tariff trade barriers, could reduce enterprise IT spending and demand for the platform.
Public cloud providers AWS, Microsoft Azure, and Google Cloud are also partners but may compete with a subset of JFrog functionality, and some competitors have greater financial, technical, and other resources. Recent acquisition announcements in the industry could lead to heightened competition.
A significant portion of revenue comes from renewals, and customers have no contractual obligation to renew. The filing notes net dollar retention was 120% as of March 31, 2026, compared with 116% as of March 31, 2025, but if customers renew on shorter or less favorable terms, revenue growth could slow or decline.
The company outsources substantially all cloud infrastructure to public cloud providers and provides uptime service-level commitments. Any provider service interruption, capacity limitation, or termination could disrupt SaaS offerings and expose the company to credits or liability.
A limited-functionality version of JFrog Artifactory is licensed under AGPL, and competitors could use the publicly available source code to create competing offerings, reducing demand and putting pricing pressure on subscriptions.
In February 2026 the Board authorized a share repurchase program of up to $300.0 million. The filing warns the program may fail to enhance shareholder value, reduce cash available for working capital and acquisitions, and the market price could decline below repurchase levels.
The company relies on traditional web search engines and AI-powered synopses to direct unpaid traffic to its website. Changes to search ranking algorithms or AI-generated results could reduce traffic and require higher customer acquisition spending.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Cloud Revenue
Non-GAAP Gross Margin
Remaining Performance Obligations
Customers with ARR > $100K
Customers with ARR > $1M
Cloud Revenue % of Total Revenue
Total Revenue
Summary, forecast, risks and KPIs are extracted from JFrog Ltd's SEC filings for Q1 FY2026 (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.