JFrog Ltd.

JFrog reported Q2 2026 revenue of $163.8 million, up 29% year over year. Cloud revenue was $87.5 million, up 53% year over year, while self-managed revenue was $76.3 million, up 9%. Gross profit was $136.2 million, with gross margin of 83.2% versus 83.1% a year ago. Operating profit was $32.6 million, or a 19.9% operating margin, versus 15.2% in Q2 2025. Cash flow from operations was $57.1 million and free cash flow was a record $53.8 million, or a 33% margin. The company ended the quarter with $824.5 million in cash and short-term investments, and RPO was $659 million, up 38% year over year. For Q3 2026, JFrog expects revenue of $164 million-$166 million, non-GAAP operating profit of $27 million-$29 million, and non-GAAP EPS of $0.22-$0.24. For full-year 2026, revenue guidance was raised to $648 million-$652 million, non-GAAP operating income to $116 million-$120 million, and non-GAAP EPS to $0.96-$1. Management also reiterated 2026 gross margin guidance of 82%-83% and said baseline cloud growth is now expected to be 41%-43% for the year.

Shlomi Ben Haim framed JFrog as infrastructure for an AI-era software supply chain, emphasizing that the company is evolving from managing binaries to securing, governing, and trusting them across human and AI-agent workflows. He said AI is increasing the volume and complexity of software artifacts, making JFrog’s platform more central as a “single source of truth” and a control plane for software delivery. His tone was highly confident and expansive, but grounded in specific customer wins, AI integrations, and security momentum.

Ed Grabscheid emphasized that the quarter beat the top end of guidance across every key metric and highlighted strong execution in cloud, security, and Enterprise Plus. He pointed to 83.2% gross margin, $57.1 million in operating cash flow, $53.8 million in free cash flow, and $824.5 million in cash and short-term investments. He also noted strong demand signals in the 121% net dollar retention rate, 97% gross retention, and 38% year-over-year RPO growth to $659 million, and he raised full-year revenue guidance while reiterating 82%-83% gross margin expectations.

Analysts focused heavily on the OpenAI vulnerability incident, asking whether it hurt pipeline conversions and how customers reacted. Management said JFrog remediated quickly, issued a patch, and used the event to reinforce the case for cloud security and tighter controls around AI models; they stressed transparency and said SaaS was not breached. Questions also centered on security demand, overages versus commitments, and the new AI-native customer win. Management said usage above commitment remains strong but guidance still excludes it, security is driving larger ASPs and longer contracts, and the latest AI-native win used a hybrid cloud/on-prem setup because the prior competitor could not scale.