JFrog Q2 Earnings Beat Estimates on Cloud and Security Growth

JFrog FROG reported second-quarter 2026 non-GAAP earnings of 27 cents per share, up 50% year over year and ahead of the Zacks Consensus Estimate by 12.5%.  

Revenues of $163.77 million increased 28.7% year over year and topped the consensus mark by 5.36%.

Results benefited from strong cloud consumption, growing security adoption and broader platform expansion. Cloud revenues rose 53% year over year to $87.5 million, while trailing four-quarter net dollar retention reached 121%.

FROG’s Cloud Growth Accelerates in Q2

Cloud represented 53% of total revenues in the quarter, up from 45% a year earlier. Management said that robust usage across the customer base continued to exceed contractual minimum commitments, supported by higher software artifact volumes and adoption of security products.

JFrog Ltd. Price, Consensus and EPS Surprise

JFrog Ltd. price-consensus-eps-surprise-chart | JFrog Ltd. Quote

Self-managed revenues totaled $76.3 million, up 9% year over year. JFrog continues to engage on-premises customers around cloud and hybrid offerings as enterprises evaluate software supply chain needs in a rapidly changing security environment.

JFrog Security Adoption Lifts Enterprise Mix

Security remained a major expansion driver. More than 80% of customers that joined the cohort spending over $1 million annually added security, while more than 40% of new-logo wins included security in the initial purchase.

Enterprise+ subscriptions accounted for 59% of total revenues, up from 55% a year ago, with related revenues growing 39%. Customers with annual recurring revenue above $1 million rose to 97 from 61, while those above $100,000 increased to 1,291 from 1,076.

FROG Benefits From AI-Driven Software Activity

Management highlighted that AI adoption is increasing the volume of binaries and other software artifacts moving through customer pipelines. JFrog is positioning its platform as infrastructure for managing, securing, and governing software created by both human developers and AI agents.

The company also highlighted integrations with Claude Code and Cursor, along with a new AI-native customer that adopted JFrog in a hybrid deployment after replacing a competing solution. Management said that this customer required greater scale for binary traffic and distribution across regions.

FROG Expands Margins as Operating Leverage Improves

Non-GAAP gross margin was 83.2% compared with 83.1% in the year-ago quarter. Management reiterated its expectation for full-year non-GAAP gross margin to remain in the 82%-83% range as cloud becomes a larger part of the revenue mix.

Non-GAAP operating expenses were $103.6 million, or 63% of revenues, compared with $86.4 million, or 68%, a year ago. 

Non-GAAP operating income reached $32.6 million, translating to a 19.9% margin compared with 15.2% in the prior-year quarter.

JFrog Cash Flow and RPO Strengthen

JFrog ended June with $824.5 million in cash and short-term investments, up from $704.4 million at the end of 2025. Remaining performance obligations, or contracted revenue not yet recognized, totaled $659 million and increased 38% year over year.

Operating cash flow was $57.1 million in the second quarter. Free cash flow reached a record $53.7 million, representing a 33% margin compared with $35.5 million and a 28% margin a year earlier.

JFrog Raises 2026 Outlook on Cloud Momentum

For the third quarter of 2026, JFrog expects revenues of $164 million to $166 million. Non-GAAP operating income is projected to be between $27 million and $29 million, with non-GAAP earnings expected in the 22-24 cents per share range.

For 2026, JFrog raised revenue guidance to $648 million-$652 million, representing 22% growth at the midpoint. Non-GAAP operating income is expected to be between $116 million and $120 million, while non-GAAP earnings are projected to be in the range of 96 cents to $1 per share. The company also raised its baseline cloud growth expectation to 41%-43% and now expects a net dollar retention floor of 120% for the year.

JFrog’s Zacks Rank & Stocks to Consider

JFrog currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Applied Materials AMAT, Inuvo INUV and Analog Devices ADI. Each stock carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Materials shares have gained 105.3% in the year-to-date period. Applied Materials is set to report second-quarter 2026 results on Aug. 13.

Shares of Inuvo have plunged 58.9% in the year-to-date period. Inuvo is set to report the second-quarter 2026 results on Aug. 11.

Shares of Analog Devices have rallied 39.1% year to date. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19.

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