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    FROG
    Earnings call· Jun 2026(Q2 FY26)

    JFrog Q2 FY26 earnings call FROG

    Aug 6, 2026 Source

    Executive summary

    JFrog Q2 FY26 — Strong Cloud Growth and Security Momentum Driven by AI

    JFrog delivered a strong Q2 FY26, exceeding guidance across all metrics, driven by accelerated cloud revenue and robust security product adoption, fueled by the rapid expansion of AI workloads. The company is strategically positioning its platform as the control plane for AI-driven software delivery, focusing on securing and governing the increasing volume of binaries produced by human and AI agents. Management emphasized the importance of transparency and rapid remediation in the face of escalating software supply chain attacks.

    Highlights

    5

    • Total revenue reached $163.8 million, representing 29% year-over-year growth and exceeding the high end of guidance.

    • Cloud revenue accelerated to $87.5 million, growing 53% year-over-year and now comprising 53% of total revenue.

    • Customers with annual spend exceeding $1 million grew to 97, up 59% year-over-year.

    • Free cash flow reached a record $53.8 million, with a 33% margin, compared to 28% in the prior year.

    • Remaining Performance Obligations (RPO) totaled $659 million, a 38% increase year-over-year.

    Concerns

    2

    • An OpenAI self-hosted Artifactory 0-day vulnerability was discovered by an AI model, requiring immediate remediation and highlighting security risks in AI-driven development.

    • Continued uncertainty in the evolving AI economy is making forecasting difficult for customers, leading them to favor flexible consumption models.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 baseline cloud growth
    41% to 43%
    high materiality
    High
    Net dollar retention floor
    120%
    high materiality
    High
    Revenue
    $164 million and $166 million
    high materiality
    High
    Non-GAAP operating profit
    $27 million and $29 million
    medium materiality
    High
    Non-GAAP earnings per diluted share
    $0.22 to $0.24
    high materiality
    High
    Revenue
    $648 million to $652 million
    high materiality
    High
    Non-GAAP operating income
    $116 million and $120 million
    high materiality
    High
    Non-GAAP diluted earnings per share
    $0.96 to $1
    high materiality
    High
    Annual gross margins
    82% to 83%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Cloud
    Cloud revenues accelerated, driven by robust usage across customer portfolio, exceeding contractual minimum commitments, and increased adoption of security core products. Represents 53% of total revenues.
    		$87.5M53%——
    Self-managed (on-prem)
    JFrog continues to proactively engage on-prem customers to migrate workloads to cloud or hybrid offerings.
    		$76.3M9%——

    Operational metrics

    8
    Non-GAAP operating margin
    19.9%vs 15.2% in Q2 FY25
    Q2 FY26

    Reflects continued balance between strategic investment and operational efficiency.

    Free cash flow margin
    33%vs 28% in Q2 FY25
    Q2 FY26

    Improved year-over-year.

    Cash and investments balance
    $824.5Mvs $704.4M at end of 2025
    as of June 30, 2026

    Strong balance sheet.

    Operating expenses
    $103.6Mvs $86.4M in Q2 FY25
    Q2 FY26

    Improved efficiency as a percentage of revenue.

    Gross profit
    $136.2M
    Q2 FY26

    Represents a gross margin of 83.2%.

    Enterprise Plus subscriptions revenue contribution
    59%vs 55% in prior year
    Q2 FY26

    Driven by ongoing execution of enterprise go-to-market strategy and broader customer adoption.

    Security attach rate on new $1M+ customers
    >80%
    Q2 FY26

    Reflects strong momentum in the security business.

    Security attach rate on overall new logos
    >40%
    Q2 FY26

    Indicates strong initial adoption of security offerings.

    Industry KPIs

    8
    MetricValueDetails
    Revenue growth$163.8MUSD
    Rpo current rpo$659MUSD
    Customer account count97customers
    Large deal new logo metrics97customers
    Gross retention renewal rate97%%
    Operating FCF margin rule of 4019.9%%
    Ai product adoption monetization—
    Net revenue net dollar retention121%%

    Orderbook & backlog

    1
    Total RPO$659MJune 30, 2026

    38% increase year-over-year

    Excludes any benefit from customer usage over contractual minimum commitments.

    Product announcements

    2
    ProductTypeDetails
    JFrog Security and Governance solutions with Claude Codeexpansion
    Development and governance workflows with Cursorexpansion

    Deals & partnerships

    4
    AnthropicIntegration to bring JFrog security and governance solutions to Claude Code developers.

    Solidifying JFrog as an enterprise standard for AI-powered software supply chain infrastructure.

    CursorIntegration to provide development and governance workflows to Cursor's 1 million+ daily users.

    Users now have access to JFrog's capabilities directly in their development environment.

    Leading publicly traded provider of electronic design, simulation, validation and test solutions for AI infrastructure7-figure agreement for JFrog AppTrust bundled with software supply chain security solutions.7-figure agreement

    Expanded investment to embed DevGovOps across the software delivery life cycle, enabling centralized governance, compliance, trusted software consumption, and policy enforcement.

    AI-native companyNew logo win, displacing a competitive solution.

    Migrated to JFrog Platform as its software supply chain system of record and binary distribution engine across a multi-region hybrid deployment. Validates JFrog's strategy for AI-native development.

    Risks & headwinds

    3
    OpenAI self-hosted Artifactory 0-day vulnerabilityQ2 FY26

    Vulnerability discovered by an AI model in OpenAI's self-hosted Artifactory.

    Mitigation: JFrog remediated immediately, worked with OpenAI security researchers, released a patch for self-hosted customers, and emphasized the benefits of cloud solutions and integrated security practices.

    Escalating software supply chain attacksOngoing

    Attacks growing in scale and sophistication, with threat actors increasingly targeting open source package ecosystems (e.g., millions of open source packages from npm).

    Mitigation: JFrog Curation, tightly integrated with Artifactory, acts as a policy-driven firewall to block malicious and risky packages. JFrog Security provides a comprehensive solution for managing and securing binaries.

    Uncertainty in the evolving AI economyOngoing

    Making forecasting difficult for customers.

    Mitigation: Customers favor the flexibility of a consumption-based on-demand cloud model. JFrog's business model provides this flexibility while strategically converting over-usage into higher annual commitments.

    What to watch in Q3 FY26

    5

    Cloud Revenue Growth

    Next quarter
    Current53% YoY
    TargetContinued acceleration or sustained high growth

    Why it matters

    Cloud revenue is a primary growth driver, and its acceleration indicates strong demand for JFrog's platform in AI-driven environments.

    Cloud revenues in the second quarter accelerated to $87.5 million, up 53% year-over-year, now representing 53% of total revenues versus 45% in the prior year.

    Q&A highlights

    6

    How has the OpenAI self-hosted Artifactory 0-day vulnerability incident impacted pipeline conversions, and will JFrog leverage AI models for future patch searches?

    Shlomi explained that OpenAI's AI model found a vulnerability in their self-hosted Artifactory, which JFrog immediately remediated in partnership with OpenAI. He emphasized that AI models should be treated with zero trust and that the incident highlights the benefits of JFrog's cloud solution and integrated security offerings. He noted that such incidents will become more common, and rapid remediation and transparency are key.

    “Once this AI model found a vulnerability within Artifactory, they contacted the JFrog team immediately. We remediated fast, worked in great partnership with the security researchers of OpenAI and throughout the last week, kept improving this communication between us.”

    asked by Matthew Calitri · answered by Shlomi Haim

    2 min read5 chapters

    Detailed Narrative

    01

    AI's Transformative Impact on Software Supply Chains

    AI is rapidly accelerating software creation, shifting the focus from generating source code to managing the 'tsunami of binaries' it produces. JFrog is evolving its platform to treat AI agents as trusted participants, aiming to be the control plane for next-generation software delivery. This shift is driving customers to reaffirm JFrog as their single source of truth for software artifacts, models, agents, and packages.

    02

    Accelerated Cloud Business Growth

    JFrog's cloud business expanded significantly in Q2, with revenue growing 53% year-over-year to $87.5 million, now representing 53% of total revenue. This growth is fueled by the rapid adoption of AI tools, increasing volumes of binaries, and a rise in AI-specific software packages. Customers are also favoring the flexibility of consumption-based cloud models amidst economic uncertainty, reinforcing the value of JFrog's cloud offering.

    03

    Momentum in Security and DevGovOps

    The security business is a significant growth driver, with JFrog recently named a leader in Gartner's Magic Quadrant for Software Supply Chain Security. Over 80% of new customers in the over $1 million cohort and over 40% of overall new logos included security. The company is also addressing the emerging DevGovOps trend, embedding governance, compliance, and auditability directly into software development workflows, as AI adoption requires trusted and auditable systems.

    04

    Strategic Enterprise Execution and Customer Wins

    JFrog's enterprise-focused go-to-market strategy continues to yield strong results, with customers spending over $1 million annually increasing by 59% year-over-year to 97. The company announced partnerships with Anthropic and Cursor, integrating security and governance solutions. A notable win included displacing a competitor at a leading AI-native company, which migrated to JFrog's platform for its multi-region hybrid deployment.

    05

    Monetization Strategy Aligned with AI Economy

    As organizations shift towards token economy optimization and govern token consumption, JFrog's value proposition remains aligned by monetizing binary traffic, not prompts or lines of code. This focus ensures that whether software is human or AI-generated, the trusted binaries that power production are secured, managed, governed, and distributed through the JFrog Platform.

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