Inve US ▾
FRFROG

JFrog (FROG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 6, 2026

Source: earnings call transcript

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

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

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%——

FROG operating KPIs by quarter

FROG operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call 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 $659M June 30, 2026

38% increase year-over-year

Excludes any benefit from customer usage over contractual minimum commitments.

Product announcements

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

Deals & partnerships

Anthropic Integration to bring JFrog security and governance solutions to Claude Code developers.

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

Cursor Integration 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 infrastructure 7-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 company New 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

OpenAI self-hosted Artifactory 0-day vulnerability Q2 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 attacks Ongoing

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 economy Ongoing

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

Cloud Revenue Growth

Next quarter
Current 53% YoY
Target Continued 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.

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

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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