JFrog Ltd. (FROG) Earnings & Analysis

Latest quarter

JFrog reported Q2 FY2026 revenue of $163.8 million, above the $155.4 million consensus. Adjusted earnings per share were $0.27, also above the $0.24 consensus.

Revenue rose 28.7% from $127.2 million a year earlier. CFO Ed Grabscheid said cloud revenue, demand for security products and expansion in Enterprise Plus contributed to the results. Cloud revenue reached $87.5 million, while self-managed revenue rose to $76.3 million. JFrog’s filing said approximately $30.3 million of the increase in subscription revenue came from existing customers, with the remainder attributable to new customers.

JFrog reported gross margin of 77.9%, compared with 76.3% a year earlier; its filing attributed the increase primarily to revenue growth and improved operating leverage. Operating margin was −8.09%, compared with −20.4%, and diluted earnings per share were −$0.03, compared with −$0.19. Free cash flow rose to $53.7 million from $35.5 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CFO Ed Grabscheid said cloud customers used more than their contractual minimum commitments and adopted more security products. JFrog is working on “converting this usage into higher annual commitments,” he said. Enterprise Plus subscriptions accounted for 59.0% of quarterly revenue, and Grabscheid said the company was engaging self-managed customers about moving workloads to cloud or hybrid offerings.

Asked about revenue from usage above commitments, Grabscheid said JFrog does not generally split that amount from commitment revenue. He said usage across a diverse group of existing customers continued, without a decline in usage above minimum commitments. He also said JFrog’s remaining performance obligations were $659.0 million at quarter-end and excluded usage above contractual minimums.

On security demand, executive Shlomi Haim said customers were adopting JFrog Curation as they sought to protect their organizations from software supply chain attacks. He said Curation works with Artifactory, while Xray and Advanced Security help customers scan and monitor packages. Grabscheid said security products were contributing to higher average selling prices and that customers purchasing security typically entered multiyear agreements.

Asked about an Artifactory vulnerability, Haim said JFrog protected cloud customers and released a patch for self-hosted customers, which OpenAI confirmed resolved the vulnerability. He also described a new AI customer that chose JFrog after another provider could not scale, using the platform in the cloud alongside self-hosted Artifactory servers.

For the quarter ahead, Grabscheid said JFrog’s pipeline and AI workloads were contributing to its outlook. He said the guidance approach continued to account for timing uncertainty on large deals and exclude benefits from cloud usage above contractual commitments. Grabscheid also said JFrog remained focused on cloud hosting cost optimization and investment across its platform.

Guidance

JFrog raised its FY2026 revenue guidance to $648.0 million–$652.0 million. Grabscheid also said the company raised its estimated baseline cloud revenue growth for the year to 41.0%–43.0%. He said the outlook reflected anticipated contributions from security products and higher baseline cloud growth assumptions.