Summary
JFrog's fiscal 2026 second quarter revenue rose to $163.8 million, up 29% from the prior-year quarter. GAAP gross profit was $127.6 million, and GAAP gross margin was 77.9%. The company still recorded a GAAP operating loss of $13.2 million and a GAAP net loss of $4.2 million, or a GAAP diluted loss per share of -$0.03. The operating loss and net loss both narrowed from the prior-year quarter. Non-GAAP operating income was $32.6 million, and non-GAAP diluted earnings per share was $0.27. Operating cash flow was $57.1 million. Free cash flow, which the company defines as operating cash flow minus capital expenditures, was $53.7 million, and capital expenditures were $3.3 million.
The quarter's operating metrics leaned toward larger customers and cloud consumption. Cloud revenue was $87.5 million, up 53% year-over-year, and represented 53% of total revenue compared with 45% in the year-ago period. Trailing four-quarter net dollar retention was 121%, compared with 118% in the prior year. Customers with ARR above $1 million reached 97, up from 61 a year earlier. Customers with ARR above $100,000 reached 1,291, compared with 1,076. Enterprise+ subscriptions generated 59% of revenue, up from 55% in the year-ago period. Remaining performance obligations were $659.0 million, up 38% year-over-year, and deferred revenue was $351.5 million, up 35.2% year-over-year. Product news included a Leader position in the first Gartner Magic Quadrant for Software Supply Chain Security, a JFrog plugin built with Anthropic for Claude Code, and security solutions for 1M AI developers through a Cursor coding agent plugin.
Guidance points to continued growth, though the company only provides non-GAAP profit targets. For the third quarter of 2026, JFrog expects revenue between $164 million and $166 million, non-GAAP operating income between $27 million and $29 million, and non-GAAP net income per diluted share between $0.22 and $0.24, based on approximately 130 million weighted average diluted shares outstanding. For the full fiscal year 2026, the company expects revenue between $648 million and $652 million, non-GAAP operating income between $116 million and $120 million, and non-GAAP net income per diluted share between $0.96 and $1.00, based on approximately 129 million weighted average diluted shares outstanding.
Risks remain familiar for a high-growth software company. JFrog has a history of losses and rapid growth that could strain management and operations. The company must retain and upgrade existing customers and attract new ones, expand sales and marketing, and integrate acquisitions and strategic collaborations. A security breach, product vulnerability, or interruption in platform performance could damage trust. Competition, changing technology needs, and macroeconomic or geopolitical conditions also pose threats. The MD&A discusses the Middle East conflict, noting that JFrog is domiciled in Israel and has a business continuity plan; some employees and consultants have been called into military service, but there has been no major interruption or material adverse impact as of the filing date. On liquidity, material cash requirements include $17.2 million in operating lease obligations and $265.0 million in purchase obligations, plus an additional $122.2 million commitment for office space occupied beginning in July 2026. The board authorized a share repurchase program of up to $300.0 million, with $298.0 million remaining available as of June 30, 2026.
Across the first half of fiscal 2026, revenue was $317.7 million, up 27.3% from the prior-year period. The net loss was $12.4 million, and operating cash flow was $95.4 million, up 47.1% from the first half of fiscal 2025. The mix shift toward cloud, the growing base of large customers, and the RPO balance give JFrog several levers for future growth, but GAAP profitability remains the central question.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $163.8M | $154.0M | +6.4% | $127.2M | +28.7% |
| Gross profit | $127.6M | $120.4M | +6.0% | $97.0M | +31.5% |
| Gross margin | 77.9% | 78.2% | -0.3 pp | 76.3% | +1.7 pp |
| Research & development | $54.0M | $51.8M | +4.3% | $47.4M | +13.9% |
| Sales & marketing | $61.1M | $57.8M | +5.9% | $55.4M | +10.3% |
| General & administrative | $25.7M | $23.7M | +8.2% | $20.1M | +27.6% |
| Total operating expenses | $140.9M | $133.3M | +5.7% | $123.0M | +14.5% |
| Operating income (loss) | -$13.2M | -$12.9M | -2.5% | -$26.0M | +49.0% |
| Operating margin | -8.1% | -8.4% | +0.3 pp | -20.4% | +12.3 pp |
| Net income (loss) | -$4.2M | -$8.3M | +49.6% | -$21.7M | +80.8% |
| Net margin | -2.5% | -5.4% | +2.8 pp | -17.0% | +14.5 pp |
| Diluted EPS | -$0.03 | -$0.07 | +$0.04 | -$0.19 | +$0.16 |
| Customers | 1,168 | 1,168 | ±0.0% | 1,018 | +14.7% |
| Net retention rate | 121.0% | 120.0% | +1.0 pp | 118.0% | +3.0 pp |
Risks
More than half of employees and consultants are located in Israel, and a material part of research and development is conducted there. The filing describes the February 28, 2026 Israel and U.S. offensive against Iran, Iranian retaliation, renewed Hezbollah attacks, and an April 8, 2026 temporary ceasefire, noting the situation remains volatile and subject to further escalation; employees have been called for military service.
Competitors or third parties may incorporate AI technology into their products more quickly or successfully than JFrog, and suppliers of third-party AI models used in the platform could terminate relationships, cease making models available, or make them more expensive. The filing also states that investor sentiment about AI can affect the share price independent of operating results.
The EU AI Act entered into force on August 1, 2024, with obligations related to certain AI practices and AI literacy effective February 2, 2025, and provisions for General Purpose AI Models effective August 2, 2025. New or modified legal and regulatory obligations for AI may increase compliance costs and liability.
The filing states JFrog has experienced longer sales cycles for certain products and enhanced budget scrutiny by customers and expects to continue to experience these challenges given the current macroeconomic environment. Adverse macroeconomic conditions, tariffs, and non-tariff trade barriers could reduce enterprise spending.
The market is highly fragmented and competitors include Microsoft GitHub, GitLab, Cloudsmith, Sonatype, Aqua Security, Snyk, Checkmarx, Synopsys, and public cloud providers AWS, Microsoft Azure, and Google Cloud, some of which have greater financial, technical, and other resources. Industry consolidation could result in heightened competition.
SaaS offerings rely on public cloud providers AWS, Microsoft Azure, and Google Cloud, which also may compete with a subset of JFrog functionality. Any service interruption, capacity limitation, or termination of agreements could disrupt access and require significant delays and additional expense to re-architect.
Competition for engineers, security experts, and support personnel is intense and can result in increasing wages. Changes in U.S. immigration laws, including H-1B visa availability, could make it more difficult or more expensive to hire and retain qualified personnel.
Products are complex and have in the past and may in the future contain defects, errors, or security vulnerabilities, especially when first introduced. As use expands to more sensitive, secure, or mission critical deployments, JFrog may face increased contractual liability, scrutiny, and loss of customers.
Revenue mix is expected to vary over time, including between self-managed and SaaS subscriptions. SaaS revenue contributed 53% and 52% of total revenue for the three and six months ended June 30, 2026, compared to 45% and 44% for the corresponding periods in 2025, and a shift to SaaS, which has lower gross margin, could harm gross margin.
A limited-functionality version of JFrog Artifactory is licensed under the AGPL, and competitors could develop their own software based on it, reducing demand and putting pricing pressure on subscriptions. JFrog has limited ability to detect violations of the open source license.
Total revenues grew 29% for the three months ended June 30, 2026 and 27% for the six months ended June 30, 2026, and employee headcount increased from approximately 1,600 as of December 31, 2024 to approximately 1,800 as of December 31, 2025. The growth places strain on management, operational, and financial resources and requires improved systems, processes, and controls.
JFrog relies on inbound sales and a land-and-expand model, and a significant downturn in inbound sales could affect future growth. Expanding strategic and enterprise sales teams may change the cost structure and may not be successful.
In February 2026, the Board authorized a share repurchase program of up to $300.0 million, with $298.0 million remaining available as of June 30, 2026. Repurchases reduce cash available for working capital, capital expenditures, strategic acquisitions, and other general corporate purposes, and there is no guarantee the program will increase shareholder value.
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
Enterprise+ Subscription as % of Total Revenue
Non-GAAP Operating Income
Total Revenue
Summary, forecast, risks and KPIs are extracted from JFrog Ltd's SEC filings for Q2 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.