Summary
JFrog reported second quarter fiscal 2025 revenue of $127.2 million, up 23.5% from the prior-year quarter. Year-to-date revenue was $249.6 million, up 22.8%. Cloud revenue was $57.1 million, up 45% year over year, and represented 45% of total revenue, compared with 38% in the year-ago period. The mix shift toward SaaS is a central part of the story. It lifts recurring revenue but also raises hosting costs and pressures gross margin.
Gross profit was $97.0 million, up 19.6%, but gross margin fell to 76.3% from 78.8%. Operating loss was $26.0 million, compared with $19.1 million, and operating margin was negative 20.4%, down from negative 18.6%. Net loss was $21.7 million, compared with $14.3 million, and diluted EPS was negative $0.19, compared with negative $0.13. The loss widened even as revenue grew because operating expenses rose faster than gross profit. Share-based compensation and acquisition-related costs remain large non-GAAP adjustments. On a non-GAAP basis, operating income was $19.4 million and non-GAAP diluted EPS was $0.18.
Operating cash flow was $36.1 million, up 116.1% from the prior-year quarter. Year-to-date operating cash flow was $64.9 million, up 89.9%. Capital expenditures were $0.6 million, down 14.3%. Free cash flow, a non-GAAP measure, was $35.5 million. Deferred revenue was $281.9 million, up 27.4%, and remaining performance obligations were $476.7 million, up 75.3%. The RPO increase suggests customers are committing to longer or larger contracts.
Customers with ARR greater than $1 million reached 61, up from 42 a year earlier. Customers with ARR greater than $100,000 reached 1,076, compared with 928 a year earlier. Net dollar retention was 118%. Enterprise Plus subscriptions represented 55% of total revenue, compared with 50% a year earlier. For the third quarter of 2025, guidance calls for non-GAAP operating income of $16.5 million to $18.5 million and non-GAAP diluted EPS of $0.15 to $0.17. For the full fiscal year 2025, guidance is non-GAAP operating income of $75.0 million to $78.0 million and non-GAAP diluted EPS of $0.68 to $0.70.
The quarter came with familiar risks. Management cited ongoing macroeconomic uncertainty. The company remains exposed to the Middle East conflict, where hostilities continue and could disrupt operations or employee availability. JFrog has a history of losses and faces competition, rapid technology change, and risks from integrating acquisitions. Gross margin pressure from the SaaS mix and intangible amortization is likely to persist. The company also flagged risks related to security breaches, product vulnerabilities, and the ability to retain and upgrade customers. Guidance is for the next quarter and full fiscal year, and it is non-GAAP, so it excludes share-based compensation and other items.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $127.2M | $122.4M | +3.9% | $103.0M | +23.5% |
| Gross profit | $97.0M | $92.2M | +5.2% | $81.2M | +19.6% |
| Gross margin | 76.3% | 75.3% | +0.9 pp | 78.8% | -2.5 pp |
| Research & development | $47.4M | $43.3M | +9.4% | $37.1M | +27.8% |
| Sales & marketing | $55.4M | $52.8M | +5.0% | $45.9M | +20.8% |
| General & administrative | $20.1M | $19.0M | +5.7% | $17.3M | +16.6% |
| Total operating expenses | $123.0M | $115.2M | +6.8% | $100.3M | +22.6% |
| Operating income (loss) | -$26.0M | -$23.0M | -13.1% | -$19.1M | -35.8% |
| Operating margin | -20.4% | -18.8% | -1.6 pp | -18.6% | -1.9 pp |
| Net income (loss) | -$21.7M | -$18.5M | -17.1% | -$14.3M | -51.5% |
| Net margin | -17.0% | -15.1% | -1.9 pp | -13.9% | -3.2 pp |
| Diluted EPS | -$0.19 | -$0.16 | -$0.03 | -$0.13 | -$0.06 |
| Customers | 1,018 | 1,018 | ±0.0% | 886 | +14.9% |
| Net retention rate | 118.0% | 116.0% | +2.0 pp | 118.0% | ±0.0 pp |
Risks
Net loss widened to $21.7 million for the quarter ended June 30, 2025 from $14.3 million in the prior-year quarter, and to $40.2 million for the six months ended June 30, 2025 from $23.1 million in the prior-year period. Operating loss also widened to $26.0 million for the quarter and $48.9 million for the six months, and the company has incurred annual losses since inception with an accumulated deficit of $359.7 million as of December 31, 2024.
Gross margin decreased to 76.3% for the quarter ended June 30, 2025 from 78.8% in the prior-year quarter, and to 75.8% for the six months ended June 30, 2025 from 79.1% in the prior-year period. MD&A attributes the decline primarily to a continuous shift in revenue mix toward SaaS subscriptions, which incur higher hosting costs, and increased intangible amortization.
The company is expanding into AI/MLOps through the Qwak acquisition and faces competitors that may incorporate AI technology more quickly or successfully. The EU AI Act entered into force on August 1, 2024, with additional requirements applying from August 2, 2025 and fines up to €35 million or 7% of global income, and third-party AI model suppliers could terminate or increase costs.
Because more than half of employees and consultants are located in Israel, the company is exposed to the June 2025 direct military conflict between Israel and Iran, missile and drone attacks, and employee military reserve duty. Although no major interruption has occurred as of the filing date, the situation remains volatile and could disrupt operations.
Total revenue grew 23% for both the three and six months ended June 30, 2025, but the company states it expects its revenue growth rate to decline in future periods due to greater market penetration, increased competition, market consolidation, slowing demand, and macroeconomic factors. Recent results may not be indicative of future performance.
The company has experienced longer sales cycles for certain products and enhanced budget scrutiny by customers and expects these challenges to continue given macroeconomic uncertainty, including inflationary trends, tariffs, and non-tariff trade barriers. A substantial proportion of expenses are relatively fixed in the short term, so revenue falling below expectations in a quarter could harm results.
The market is highly fragmented and competitive, with public cloud providers AWS, Microsoft Azure, and Google Cloud competing with a subset of JFrog functionality, and vendors such as GitHub, GitLab, Snyk, and Sonatype competing in DevOps and security. Many competitors have greater financial, technical, and other resources, and industry consolidation could heighten competition.
The company depends on highly skilled personnel, especially engineers for research and development, security experts, and support roles experienced in DevOps, DevSecOps, or MLOps. Competition for these employees is intense and often results in increasing wages, particularly in Israel where most R&D positions are located and in the San Francisco Bay Area.
The company acquired Qwak in July 2024 and may pursue future acquisitions, which could require significant management attention, disrupt the business, dilute shareholders, and adversely affect results. For the six months ended June 30, 2025, it recognized $5.3 million in share-based compensation expense mostly in research and development related to acquisition holdback ordinary shares and replacement RSUs.
A limited-functionality version of JFrog Artifactory is licensed under the AGPL, which allows commercial licensees to use it for free and competitors to provide it for free or develop their own software based on it. This could reduce demand for paid products and put pricing pressure on subscriptions.
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 as % of Total Revenue
Summary, forecast, risks and KPIs are extracted from JFrog Ltd's SEC filings for Q2 FY2025 (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.