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JFrog (FROG) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

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

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

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%——

FROG operating KPIs by quarter

FROG operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Customers above an annual spend threshold Annual spend exceeding $1 million
80 The number of customers with annual spend exceeding $1 million grew to 80, up from 54 a year ago, representing 48% year-over-year growth. Source: earnings call transcript
97 Customers with annual spend exceeding $1 million grew to 97, up from 61 a year ago, representing 59% year-over-year growth. Source: earnings call transcript
+21.3%
Customers above an annual spend threshold Spending more than $100,000 annually
1,225 Customers spending more than $100,000 annually increased to 1,225 compared to 1,051 in the prior year, representing 17% year-over-year growth. Source: earnings call transcript
1,291 Customers spending more than $100,000 annually grew to 1,291 compared to 1,076 in the prior year, an increase of 20% year-over-year. Source: earnings call transcript
+5.4%
Net revenue retention rate
120% Net dollar retention for the 4 trailing quarters was 120%, representing a year-over-year increase of 4 percentage points and 1 percentage point improvement sequentially. Source: earnings call transcript
121% Net dollar retention for the 4 trailing quarters was 121%, representing a year-over-year increase of 3 percentage points and a 1 percentage point improvement sequentially. Source: earnings call transcript
+1 pt
Gross retention rate
97% We continue to demonstrate that our customers view JFrog as a mission-critical system of record to their software supply chain with gross retention that equaled 97% as of the first quarter of 2026. Source: earnings call transcript
97% We continue to demonstrate the strategic value of JFrog as a mission-critical trusted system of record for our customers' software supply chain with gross retention of 97% as of the second quarter 2026. Source: earnings call transcript
0 pt
Remaining performance obligation (RPO)
$574.9M As of March 31, 2026, our RPO totaled $574.9 million, a 36% increase year-over-year, highlighting the successful execution of our go-to-market strategy as customers continue to make larger multiyear commitments to our DevSecOps solutions. Source: earnings call transcript
$659M As of June 30, 2026, our RPO totaled $659 million, a 38% increase year-over-year, once again, highlighting the successful execution of our go-to-market strategy as customers continue to make larger commitments to the JFrog Platform. Source: earnings call transcript
+14.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total RPO $574.9M March 31, 2026

36% increase year-over-year

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

Product announcements

ProductTypeDetails
JFrog MCP Registrylaunch
JFrog Skills Registrylaunch

Deals & partnerships

NVIDIA Collaboration 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

Rising software supply chain attacks Ongoing

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 usage Near-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 usage Near-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

Cloud usage conversion to commitments

Next quarter
Current Significant usage over minimum commitments
Target Increased 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.

Find out whether FROG delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.