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    FROG
    Earnings call· Mar 2026(Q1 FY26)

    JFrog Q1 FY26 earnings call FROG

    May 7, 2026 Source

    Executive summary

    JFrog Q1 FY26 — Strong Cloud Growth and AI-Driven Demand

    JFrog delivered a strong Q1 FY26, driven by exceptional cloud revenue growth and increasing demand for its software supply chain security solutions, fueled by the proliferation of AI-generated binaries. The company is seeing significant customer adoption of its platform, particularly Enterprise Plus subscriptions, as organizations navigate the complexities of integrating AI technologies while maintaining robust security and governance. Management maintains a conservative guidance philosophy, not yet incorporating cloud usage above contractual minimums into its outlook, despite strong current trends.

    Highlights

    6

    • Total revenue reached $154 million, representing 26% year-over-year growth.

    • Cloud revenue grew 50% year-over-year to $78.9 million, now comprising 51% of total revenue.

    • Customers with annual spend exceeding $1 million increased to 80, up 48% year-over-year.

    • Net dollar retention for the trailing four quarters was 120%, a 4 percentage point year-over-year increase.

    • Non-GAAP operating margin expanded to 21.4% from 17.4% in the prior year period.

    • Free cash flow reached $37.3 million, or a 24.2% margin, up from 23% in the prior year period.

    Concerns

    3

    • Rising software supply chain attacks

    • Budget overruns and lack of predictability in AI usage

    • Hesitancy to commit to larger contracts for cloud usage

    Guidance & targets

    8
    CategoryTargetConfidence
    Q2 FY26 Revenue
    $154M - $156M
    high materiality
    High
    Q2 FY26 Non-GAAP Operating Profit
    $28M - $30M
    medium materiality
    High
    Q2 FY26 Non-GAAP EPS
    $0.23 - $0.25
    high materiality
    High
    FY26 Revenue
    $628M - $632M
    high materiality
    High
    FY26 Non-GAAP Operating Income
    $112M - $116M
    medium materiality
    High
    FY26 Non-GAAP EPS
    $0.93 - $0.97
    high materiality
    High
    FY26 Baseline Cloud Growth
    33% - 35%
    high materiality
    High
    FY26 Net Dollar Retention Floor
    118%
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Cloud
    Cloud revenue grew significantly, now representing 51% of total revenues, driven by robust usage across the customer portfolio exceeding contractual minimum commitments.
    		$78.9M50%——
    Self-managed (On-prem)
    The company continues to engage on-prem customers to migrate workloads to the cloud or explore hybrid solutions.
    		$75.1M8%——
    Enterprise Plus Subscriptions
    Revenue contribution from Enterprise Plus subscriptions increased, up from 55% in the prior year, driven by broader customer adoption of the JFrog platform.
    Revenue contribution: 58% of total revenues
    		—33%——

    Operational metrics

    9
    Non-GAAP operating margin
    21.4%up from 17.4% in Q1 FY25
    Q1 FY26

    Operating margin for the quarter, demonstrating commitment to profitable growth.

    Free cash flow margin
    24.2%up from 23% in Q1 FY25
    Q1 FY26

    Free cash flow margin for the quarter.

    Cash and short-term investments balance
    $741.2Mup from $704.4M at end of 2025
    as of March 31, 2026

    Balance sheet position at the end of the quarter.

    Share repurchase authorization
    $300M
    announced late February

    First-ever share repurchase authorization.

    Gross profit margin
    83.8%up from 82.5% in Q1 FY25
    Q1 FY26

    Gross profit margin for the quarter.

    Operating expenses
    $96Mup from $79.7M in Q1 FY25
    Q1 FY26

    Operating expenses for the quarter, showing improved efficiency compared to 65% of revenues in Q1 FY25.

    Customers with annual spend >$1M
    80up from 54 in Q1 FY25 (48% YoY growth)
    Q1 FY26

    Growth in high-value customers.

    Customers with annual spend >$100K
    1225up from 1051 in Q1 FY25 (17% YoY growth)
    Q1 FY26

    Growth in larger customers.

    Annual gross margins
    82% to 83%
    FY26

    Reiterated annual gross margin guidance, anticipating a larger share of revenues from the cloud.

    Industry KPIs

    6
    MetricValueDetails
    Revenue growth$154MUSD
    Rpo current rpo$574.9MUSD
    Customer account count80customers
    Gross retention renewal rate97%%
    Operating FCF margin rule of 4021.4%%
    Net revenue net dollar retention120%%

    Orderbook & backlog

    1
    Total RPO$574.9MMarch 31, 2026

    36% increase year-over-year

    Excludes any benefit from customers' usage over contractual minimum commitments.

    Product announcements

    2
    ProductTypeDetails
    JFrog MCP Registrylaunch
    JFrog Skills Registrylaunch

    Deals & partnerships

    1
    NVIDIACollaboration on AI ecosystem integration

    JFrog Artifactory will serve as a registry for AI models and agent skills within NVIDIA AI-Q Blueprint, part of the NVIDIA Agent toolkit. This partnership aims to provide security and control for deploying long-running AI agents in the enterprise.

    Risks & headwinds

    3
    Rising software supply chain attacksOngoing

    Increasing frequency, targeting open source creators and package maintainers.

    Mitigation: JFrog Curation serves as a critical control point, enforcing policies. JFrog Xray and Advanced Security continuously secure and govern binary flow, providing ongoing visibility and protection.

    Budget overruns and lack of predictability in AI usageNear-term

    Organizations willing to accept budget overruns for AI adoption until clarity on long-term usage requirements and prior to increases in annual commitment.

    Mitigation: JFrog is strategically working to convert this usage over minimum commitments into higher annual commitments. Sales organization is deployed for this conversion.

    Hesitancy to commit to larger contracts for cloud usageNear-term

    Customers are using cloud services above contractual minimums but are hesitant to commit to higher annual contracts due to lack of predictability in AI workload usage.

    Mitigation: Management's guidance philosophy remains unchanged, only including committed contracts. Sales efforts are focused on converting over-usage into annual commitments.

    What to watch in Q2 FY26

    5

    Cloud usage conversion to commitments

    Next quarter
    CurrentSignificant usage over minimum commitments
    TargetIncreased conversion into higher annual contracts

    Why it matters

    Conversion of over-usage into commitments is key to realizing the full revenue potential from AI-driven cloud consumption and will impact future guidance.

    We are deploying our sales organization, of course, to convert that into annual commitments. But until it becomes an annual commitment, it will not be part of our guidance, aligned with our philosophy.

    Q&A highlights

    6

    Why is the full-year revenue guidance raise less than the Q1 beat plus the Q2 raise, given the strong Q1 performance?

    Management explained that while Q1 was very strong, particularly cloud growth, their guidance philosophy remains unchanged. They only guide on committed contracts and do not include cloud usage above contractual minimums until it's converted into annual commitments, leading to a conservative full-year outlook.

    “But until it becomes an annual commitment, it will not be part of our guidance, aligned with our philosophy.”

    asked by Sanjit Singh · answered by Ed Grabscheid

    2 min read5 chapters

    Detailed Narrative

    01

    AI-Fueled Binary Tsunami and Cloud Growth

    JFrog reported a 50% year-over-year increase in cloud revenue, now representing 51% of total revenue. This growth is attributed to a 'true AI-fueled tsunami of binaries,' as AI coding agents accelerate software output. The company observes a fundamental shift in how software is generated and consumed, leading to increased consumption of cloud services and a surge in open-source component usage across nearly every supported software package.

    02

    Software Supply Chain Security Demand

    The threat landscape is becoming more complex with rising software supply chain attacks, particularly targeting open-source maintainers. JFrog's Curation product effectively protected customers from recent attacks by enforcing policies at the gate. The company emphasizes that a trusted software supply chain requires a single authoritative system of record for all binaries and AI artifacts, with Artifactory, Xray, and Advanced Security providing end-to-end protection and governance.

    03

    Innovation and Strategic Partnerships for AI Era

    JFrog introduced the MCP Registry, the first enterprise-grade registry for MCP servers, and the JFrog Skills Registry, providing centralized management for reusable AI capabilities. These innovations extend the platform to support the growing AI ecosystem. A key partnership with NVIDIA was announced, where Artifactory will serve as a registry for AI models and agent skills within NVIDIA AI-Q Blueprint, highlighting JFrog's role in securing agentic workflows.

    04

    Enterprise Adoption and Go-to-Market Success

    The company saw continued momentum at the high end of its customer portfolio, with customers spending over $1 million annually growing 48% to 80, and those spending over $100,000 increasing 17% to 1,225. Enterprise Plus subscriptions now account for 58% of total revenue, growing 33% year-over-year. This reflects successful execution of the enterprise go-to-market strategy and broader customer adoption of the JFrog platform.

    05

    Conservative Guidance Philosophy Amidst Strong Performance

    Despite a strong Q1 performance that exceeded guidance on all metrics, JFrog maintains its conservative guidance philosophy. The company's outlook does not yet fully incorporate the benefit from cloud usage above contractual minimum commitments, as these need to be converted into higher annual contracts. Management is confident in its ability to manage expenses and drive efficiency, prioritizing strategic investments in innovation while committing to profitable growth.

    AI-generated summary of the company’s earnings call. Not investment advice.