JFrog NASDAQ: FROG reported first-quarter 2026 results that management said exceeded the top end of its guidance range across all metrics, citing accelerating cloud usage trends tied to AI-driven software development and continued demand for its software supply chain security products.
“We entered 2026 strong,” CEO and co-founder Shlomi Ben Haim said, adding that the company’s focus on JFrog Artifactory as a “system of record for trusted binaries, software packages, and AI artifacts” is resonating as organizations adopt AI tools while maintaining legacy pipelines and increasing security and governance requirements.
Quarterly results and cloud mix milestone
CFO Ed Grabscheid said total revenue in Q1 was $154 million, up 26% year-over-year. Cloud revenue rose 50% year-over-year to $78.9 million, representing 51% of total revenue versus 43% in the prior year, which he described as “a milestone for JFrog where we see more revenue coming from our cloud offering than we do from self-hosted.”
Self-managed (on-prem) revenue was $75.1 million, up 8% year-over-year. Grabscheid said the company continues to engage on-prem customers about migrating workloads to cloud or using hybrid and “fit-for-purpose” deployments.
Grabscheid also highlighted customer expansion metrics, including net dollar retention of 120% over the four trailing quarters and gross retention of 97% as of Q1 2026. He said 58% of revenue came from Enterprise+ subscriptions, up from 55% a year ago, with Enterprise+ revenue contribution rising 33% year-over-year.
AI-driven usage trends and customer behavior
Ben Haim repeatedly framed AI as increasing the volume of compiled software moving through the platform, arguing that “binaries become king” as code generation becomes faster and cheaper through AI coding agents. He said JFrog is seeing “an acceleration in the volume of compiled software flowing through the JFrog platform,” describing the effect as “a true AI-fueled tsunami of binaries.”
Management also addressed why cloud usage above contractual commitments has been rising. Grabscheid said Q1 outperformance was “being driven by usage over minimum commitments,” and he reiterated that JFrog’s guidance includes only committed amounts, not overages, in line with the company’s stated philosophy.
Ben Haim attributed some customer willingness to tolerate overages to uncertainty in AI adoption planning. “If you go to the CFO and you say, ‘JFrog asked me to commit,’ the CFO will ask, ‘Commit to what?’” he said, adding that JFrog’s sales team is focused on converting over-usage into higher commitments as customers gain predictability.
On the breadth of demand, Grabscheid said the cloud strength was “broad-based” and “not concentrated on one geography or one industry,” describing the quarter as strong “from start to finish.” Asked about the contribution of AI-native customers, he said the quarter was driven by “a broad set of customers,” including traditional enterprises, and noted a previously discussed $1 million deal with an AI-native customer renewed.
Security demand, Curation monetization, and governance focus
Ben Haim said supply chain attacks targeting open source maintainers are increasing and are contributing to demand for a “trusted control layer” and stronger governance practices. He pointed to JFrog Curation as a “critical control point at the gate,” saying customers subscribed to Curation were “effectively protected from recent software supply chain attacks.”
He described the company’s security approach as extending beyond scanning to policy enforcement and governance of binaries and artifacts. “Scanners are important, but the system of record of where you secure, manage, store, govern your artifact is actually more important,” Ben Haim said, particularly in “a world of multi agents.”
In response to a question about how JFrog monetizes Curation and whether attacks drive usage, Grabscheid said Curation is monetized “based off of seats,” and that while attacks can drive demand for more seats or adoption, “it doesn’t necessarily drive data consumption.” He said consumption is driven by packages “coming in and out of the organization or going into production,” and “Curation itself is not driving the usage over minimum commits.”
Ben Haim also discussed Xray’s role, describing it as part of the DevOps offering that runs over Artifactory. He acknowledged other tools can perform software composition analysis, but argued that customers prefer it “as part of their DevOps subscription with JFrog” because it is built into the system of record.
Product updates: MCP Registry and Agent Skills Registry
Ben Haim highlighted announcements made at the company’s LEAP conference in New York in March, including the JFrog MCP Registry, which he called “the first enterprise-grade registry for MCP servers.” He said customers are asking for a centralized registry so they can direct AI agents and developers to trusted MCP servers.
JFrog also introduced the JFrog Agent Skills Registry in Q1 and announced a collaboration with NVIDIA. Ben Haim said JFrog Artifactory will serve as a registry for AI models and agent skills within NVIDIA AI-Q Blueprint, part of the NVIDIA Agent Toolkit. He quoted NVIDIA Vice President of Enterprise Partnerships Pat Lee, who said, “Security and governance are key to deploying AI agents in the enterprise,” and that JFrog’s registry supports “security and control for deploying long-running agents.”
Ben Haim emphasized that JFrog is aiming to unify “binaries, models, skills, and MCP servers” under a single governance framework in Artifactory.
Profitability, cash flow, and updated guidance
On profitability, Grabscheid said gross profit was $129 million, with gross margin of 83.8% versus 82.5% a year ago, and reiterated full-year gross margin expectations of 82% to 83% as cloud becomes a larger share of revenue. Operating profit was $32.9 million, translating to a 21.4% operating margin compared to 17.4% in the year-ago quarter.
Cash flow from operations was $38.4 million, and free cash flow was $37.3 million, or a 24.2% margin. JFrog ended the quarter with $741.2 million in cash and short-term investments, up from $704.4 million at the end of 2025. Grabscheid also noted the company announced its “first-ever share repurchase authorization of up to $300 million” in late February.
Remaining performance obligations (RPO) totaled $574.9 million, up 36% year-over-year, which Grabscheid said reflected larger multi-year commitments. He noted RPO excludes any benefit from usage above minimum commitments.
Looking ahead, Grabscheid provided guidance for the second quarter and full year:
- Q2 revenue: $154 million to $156 million
- Q2 non-GAAP operating profit: $28 million to $30 million
- Q2 non-GAAP EPS: $0.23 to $0.25 (assuming ~126 million shares)
- FY2026 revenue: $628 million to $632 million (18.5% year-over-year growth at the midpoint)
- FY2026 non-GAAP operating income: $112 million to $116 million
- FY2026 non-GAAP EPS: $0.93 to $0.97 (assuming ~128 million shares)
Grabscheid said JFrog raised its estimated baseline cloud growth for 2026 to 33% to 35% and now expects a net dollar retention “floor” of 118% for 2026. He added that while cloud usage trends are accelerating, the company will continue to “de-risk our largest deals due to timing uncertainties” and exclude usage above commitments from guidance.
In closing remarks, Ben Haim said AI is “transitioning from experimentation to tangible revenue,” and pointed to durable cloud growth, rising new-logo average selling prices, and increasing demand for security solutions amid more frequent supply chain attacks.
About JFrog NASDAQ: FROG
JFrog is a software company specializing in DevOps solutions designed to streamline the management, distribution and security of software binaries. Its core offering, JFrog Artifactory, serves as a universal artifact repository manager compatible with all major package formats, enabling development teams to store, version and share build artifacts across the software delivery pipeline. The company's platform also includes tools for continuous integration and delivery (CI/CD), security scanning and release automation.
Among JFrog's flagship products are JFrog Xray, a security and compliance scanning service that analyzes artifacts and dependencies for vulnerabilities; JFrog Pipelines, a CI/CD orchestration engine that automates build and release workflows; and JFrog Distribution, which accelerates the secure distribution of software releases to edge nodes and end users.
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