FROG

As the Q2 earnings season wraps, let's dig into this quarter's best and worst performers in the software development industry, including JFrog (NASDAQ:FROG) and its peers. As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. The 12 software development stocks we track reported a very strong Q2. As a group, revenues beat analysts' consensus estimates by 3.2% while next quarter's revenue guidance was 1.8% above. Luckily, software development stocks have performed well with share prices up 14.1% on average since the latest earnings results. Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ:FROG) provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system. JFrog reported revenues of $163.8 million, up 28.7% year on year. This print exceeded analysts' expectations by 5.2%. Overall, it was an exceptional quarter for the company with a solid beat of analysts' billings estimates and an impressive beat of analysts' adjusted operating income estimates. Interestingly, the stock is up 10.4% since reporting and currently trades at $91.67. Read why we think that JFrog is one of the best software development stocks, our full report is free. Taking its name from the core advantage it delivers to customers, Fastly (NASDAQ:FSLY) operates an edge cloud platform that processes, secures, and delivers web content as close to end users as possible, enabling faster digital experiences. Fastly reported revenues of $183.3 million, up 23.3% year on year, outperforming analysts' expectations by 5.3%. The business had an exceptional quarter with EPS guidance for next quarter exceeding analysts' expectations and a solid beat of analysts' adjusted operating income estimates. Fastly delivered the biggest analyst estimate beat and highest full-year guidance raise in the group. The market seems happy with the results as the stock is up 9.6% since reporting. It currently trades at $28.54. Is now the time to buy Fastly? Access our full analysis of the earnings results here, it's free. With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ:AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online. Akamai reported revenues of $1.1 billion, up 5.4% year on year, exceeding analysts' expectations by 0.6%. Still, it was a slower quarter as it posted a miss of analysts' adjusted operating income estimates and full-year revenue guidance meeting analysts' expectations. Akamai delivered the weakest performance against analyst estimates and weakest guidance update among its peers. The stock is flat since the results and currently trades at $118.46. Read our full analysis of Akamai's results here. With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ:GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster. GitLab reported revenues of $286.3 million, up 21.3% year on year. This print topped analysts' expectations by 4.8%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts' billings estimates and EPS guidance for next quarter exceeding analysts' expectations. The stock is up 9% since reporting and currently trades at $49.16. Read our full, actionable report on GitLab here, it's free. With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace (NYSE:DT) provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments. Dynatrace reported revenues of $554.5 million, up 16.2% year on year. This number surpassed analysts' expectations by 0.9%. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts' adjusted operating income estimates but a significant miss of analysts' billings estimates. Dynatrace had the weakest full-year guidance update of the whole group. The stock is up 28.6% since reporting and currently trades at $58.78. Read our full, actionable report on Dynatrace here, it's free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market's biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market's primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market's dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

It has been about a month since the last earnings report for BILL Holdings (BILL). Shares have added about 0.4% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is BILL Holdings due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for BILL Holdings, Inc. before we dive into how investors and analysts have reacted as of late. BILL Holdings reported fourth-quarter fiscal 2026 non-GAAP net income of 84 cents per share, beating the Zacks Consensus Estimate of 69 cents. The figure rose 58.5% from a year ago. The profitability upside reflected earlier workforce reduction timing and lower fraud and credit losses. Revenues of $436.2 million increased 13.8% year over year and surpassed the Zacks Consensus Estimate by 1.5%. Total payment volume reached $98 billion, up 14% year over year. Core revenues, comprising subscription and transaction fees, increased 16% year over year to $400.5 million. Subscription fees rose 11% to $76.2 million, while transaction fees climbed 17% to $324.3 million. Float revenues were $35.7 million, down from $37.4 million in the prior-year quarter. BILL accounts payable/receivable, or AP/AR, core revenues increased 10% to $192.4 million. Spend and Expense revenues rose 22.6% to $184.6 million, while Embedded Solutions and Other core revenues advanced 15.2% to $23.5 million. The company served 479,300 businesses at quarter-end, down from 493,800 a year earlier. Embedded Solutions and Other customers fell to 249,500 from 283,200, while BILL AP/AR customers increased to 183,300 from 169,500. Despite the lower total business count, transactions processed increased 13.7% to 37.4 million, while network members grew 11% to 9.2 million. Spend and Expense spending businesses reached 46,500, up from 41,100 a year ago. Non-GAAP operating income increased to $101.6 million from $56.4 million. Non-GAAP operating margin reached 23%, expanding 860 basis points year over year. GAAP operating expenses rose to $390.4 million from $332 million and included a $76.6 million restructuring charge. Research and development expense declined to $63.1 million from $90.1 million, while the provision for expected credit losses decreased to $13.5 million from $15.8 million. More than 175,000 businesses were using BILL's AI agents. Organizations using the W-9 agent more than tripled sequentially above 40,000, while the invoice coding agent had been used by more than 60,000 companies. The touchless transactions agent automated more than seven million transaction fields for 30,000 customers. Customer spend on AI through BILL increased more than 50% year over year in the quarter, while total payment volume from AI-first customers nearly doubled sequentially. The number of joint customers using both accounts payable and Spend and Expense grew 35% year over year. Customers present in both the current and year-ago quarters posted net revenue retention of 111%. Net cash provided by operating activities was $111 million, up from $83.8 million a year earlier. Free cash flow increased to $96.5 million from $68.5 million. BILL ended fiscal 2026 with $1.03 billion in cash and cash equivalents and $906.5 million in short-term investments. BILL repurchased approximately 8.4 million shares during the fourth quarter for about $300 million. On the Aug. 19 earnings call, management said $400 million remained under the $1 billion share repurchase authorization. For the first quarter of fiscal 2027, management expects total revenues of $432.5-$442.5 million and core revenues of $398-$408 million, implying core growth of 11%-14%. Non-GAAP net income per share is projected at $0.96-$1.00. For fiscal 2027, BILL forecasts total revenues of $1.81-$1.86 billion, core revenues of $1.67-$1.72 billion and non-GAAP net income per share of $3.56-$3.79. The revenue guidance is stated on the historical presentation basis before rewards expense is deducted. Beginning with first-quarter fiscal 2027 reporting, rewards expense will be presented as a reduction of revenues rather than sales and marketing expense, with no impact on operating income or net income. It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 104.59% due to these changes. At this time, BILL Holdings has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the top 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise BILL Holdings has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. BILL Holdings belongs to the Zacks Internet - Software industry. Another stock from the same industry, JFrog Ltd. (FROG), has gained 4.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. JFrog reported revenues of $163.77 million in the last reported quarter, representing a year-over-year change of +28.7%. EPS of $0.27 for the same period compares with $0.18 a year ago. JFrog is expected to post earnings of $0.23 per share for the current quarter, representing a year-over-year change of +4.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for JFrog. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BILL Holdings, Inc. (BILL) : Free Stock Analysis Report JFrog Ltd. (FROG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

JFrog’s second quarter was marked by strong cloud adoption, increased demand for security solutions, and expanded enterprise customer relationships, driving results ahead of Wall Street’s expectations. Management credited the surge in cloud usage to rapid adoption of AI development tools, which are generating more software binaries, and emphasized the growing need for integrated security as software supply chain attacks become more frequent. CEO Shlomi Ben Haim described JFrog’s platform as the “control plane for the next generation of software delivery,” highlighting the company’s ability to adapt as AI becomes an integral part of software engineering processes. Is now the time to buy FROG? Find out in our full research report (it’s free). Revenue: $163.8 million vs analyst estimates of $155.6 million (28.7% year-on-year growth, 5.2% beat) Adjusted EPS: $0.27 vs analyst estimates of $0.24 (12.4% beat) Adjusted Operating Income: $32.59 million vs analyst estimates of $28.93 million (19.9% margin, 12.7% beat) The company lifted its revenue guidance for the full year to $650 million at the midpoint from $630 million, a 3.2% increase Management raised its full-year Adjusted EPS guidance to $0.98 at the midpoint, a 3.2% increase Operating Margin: -8.1%, up from -20.4% in the same quarter last year Customers: 1,291 customers paying more than $100,000 annually Net Revenue Retention Rate: 121%, up from 120% in the previous quarter Annual Recurring Revenue: $652.3 million (23.9% year-on-year growth, beat) Billings: $208.1 million at quarter end, up 55.8% year on year Market Capitalization: $10.61 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Matt Calitri (Needham): Asked if recent AI-discovered vulnerabilities in self-hosted Artifactory impacted pipeline conversions or could be leveraged for future product improvements. CEO Shlomi Ben Haim emphasized rapid remediation, transparency with customers, and opportunities to highlight the security advantages of JFrog’s cloud solution. William Miller Jump (Truist Securities): Inquired whether high-profile open source vulnerabilities led to security pipeline acceleration or pull-forward. Ben Haim acknowledged that ongoing supply chain attacks have increased urgency among CISOs and contributed to higher security adoption and cloud growth. Mark Cash (Raymond James): Questioned customer reactions to the OpenAI incident and whether it could drive demand for cloud or broader platform adoption. Ben Haim described prompt patching, proactive communication, and a potential shift toward cloud as customers reassess security postures. George McGreehan (Bank of America): Asked about the relative contribution of security products and changes in cloud consumption behavior. Ben Haim highlighted rapid adoption of the Curation firewall product and continued conversion of overages into higher annual commitments. Jason Celino (KeyBanc): Sought details on the unique hybrid deployment by a new AI-native customer and the opportunity to land similar deals. Ben Haim explained that scalability needs drove the customer to JFrog, and that the company’s infrastructure is well-suited to support further wins in the AI-native segment. In future quarters, the StockStory team will be monitoring (1) the pace at which self-managed customers migrate to cloud and hybrid models, (2) the adoption rates and attach levels of security and governance products among both new and existing enterprise clients, and (3) the ability of JFrog to secure additional large-scale AI-native customer wins. We will also track how effectively the company converts usage overages into longer-term commitments. JFrog currently trades at $86.27, up from $83.04 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. JFrog (FROG) is in focus after its latest quarterly earnings and updated outlook, which highlighted revenue of US$163.77 million for Q2 2026, ongoing net losses, and guidance that points investors toward its cloud and security driven model. See our latest analysis for JFrog. JFrog’s latest earnings and raised 2026 revenue guidance have coincided with strong momentum, with a 90 day share price return of 43.82% and a 1 year total shareholder return of 122.68% suggesting enthusiasm around its cloud and security focus. If the AI theme around JFrog has your attention, this can be a good moment to see what else is moving and check out 74 profitable AI stocks that aren't just burning cash Bulls see JFrog as a core AI and security platform that justifies the sharp share price move. Bears point to ongoing losses and execution risk. Which side does the current valuation actually support next? JFrog’s most followed narrative puts fair value at $93.57, just under the last close of $95.15, which frames the current optimism as relatively full. Read the complete narrative. Curious what has to happen for that fair value to hold up? The narrative leans on brisk revenue expansion, higher margins and a rich future earnings multiple. Result: Fair Value of $93.57 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, JFrog’s story could be tested if large enterprise deals are delayed or if security and DevOps competition pressures pricing and slows expected platform adoption. Find out about the key risks to this JFrog narrative. If this mix of optimism and concern around JFrog feels familiar, use it as a prompt to move quickly and review the data yourself. You can start with the 1 key reward and 2 important warning signs. Do not stop with JFrog. Use this moment of focus to broaden your watchlist and pressure test your thinking across a wider set of stocks. Spot potential value opportunities by scanning companies that combine quality fundamentals with appealing pricing through the 51 high quality undervalued stocks. Strengthen the income side of your portfolio by checking out reliable payers that appear in the 11 dividend fortresses. Reduce portfolio stress by zeroing in on companies that show resilient financial profiles using the 88 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FROG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 5:00 p.m. ET Chief Executive Officer and Co-Founder - Shlomi Ben Haim Chief Financial Officer - Ed Grabscheid Head of Investor Relations - Jeffrey Schreiner Operator: Ladies and gentlemen, thank you for joining us, and welcome to the JFrog Second Quarter 2026 Financial Results Earnings Call. [Operator Instructions] I will now hand the conference over to Jeffrey Schreiner, Head of Investor Relations. Jeffrey, please go ahead. Jeffrey Schreiner: Thank you, Nicole. Good afternoon, and thank you for joining us as we review JFrog's Second Quarter 2026 financial results, which were announced following the market close today via press release. Leading the call today will be JFrog's CEO and Co-Founder, Shlomi Ben Haim; and Ed Grabscheid, JFrog's CFO. During this call, we may make statements related to our business that are forward-looking under federal securities laws and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance and including our outlook for the third quarter and full year of 2026. The words anticipate, believe, continue, estimate, expect, intend, will and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our views only as of today and not as of any subsequent date. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to our Form 10-Q for the quarter ended March 31, 2026, which is available on the Investor Relations section of our website and the earnings press release issued earlier today. Additional information will be made available in our Form 10-Q for the quarter ended June 30, 2026, and other filings and reports that we may file from time to time with the SEC. Additionally, non-GAAP financial measures will be discussed on this conference call. These non-GAAP financial measures, which are used as measures of JFrog's performance, should be considered in addition to, not as a substitute for or in isolation from GAAP measures. Please refer to the tables in our earnings release for a reconciliation of those measures to their most directly comparable GAAP financial measures. A replay of this call will be available on the JFrog Investor Relations website for a limited time. With that, I'd like to turn the call over to JFrog's CEO, Shlomi Ben Haim. Shlomi? Shlomi Haim: Thank you, Jeff. Good afternoon, and thank you all for joining the call. We are pleased with our second quarter results, which exceed the high end of our guidance across all metrics. Our first half 2026 achievements reflect strong execution and the clear strategic importance of JFrog in enterprise software supply chains. It is clear now that the world is moving at the speed of AI. What began as a technology shift is becoming the foundation of every business and increasingly ambient infrastructure as they build and deliver software. As AI accelerates software creation, engineering velocity and code quality, the challenge is no longer generating source code but managing the tsunami of binaries compiled. It is now about establishing trust in these software artifacts, models, agents and packages that AI and human increasingly produce without sacrificing speed. The JFrog Platform is evolving for a future where AI agents become first-class citizens of the software supply chain. By extending our platform to treat AI agents as trusted participants alongside human developers, we believe JFrog is building the control plane for the next generation of software delivery. We see software engineering evolving into software supply chain engineering not because every developer becomes a supply chain expert but because every developer or AI agent must rely on a trusted software supply chain delivered by the organization. For this new era, our customers are reaffirming JFrog as the single source of truth, and we believe this reality is fueling the momentum we are seeing across our business. During the second quarter, JFrog's total revenue was $163.8 million, representing 29% year-over-year growth. Cloud revenue grew 53%, driven by increased secure binary consumption throughout the factory, reinforcing its central role as the single source of truth for software supply chains. In addition to continued strength in cloud growth, our enterprise-focused go-to-market strategy continues to deliver strong results at the high end of our customer base. Customers with annual spend exceeding $1 million grew to 97, up from 61 a year ago, representing 59% year-over-year growth. 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. On today's call, I will walk you through the second quarter in more detail, and Ed will then follow with additional financial insights and outlook. First, I will cover our cloud business where strong consumption trends continue to drive demand across traditional and AI software artifacts. Second, I will discuss our security business. As software supply chain attacks grow in scale and sophistication, customers are looking for a unified security integrated with their system of record. Last, I will discuss governance and compliance. The era of agentic software development is driving the industry's next evolution DevGovOps. I'll start with cloud. In Q2, our cloud business continued to expand, as we supported the scaling volume of software artifacts flowing through our customers' software supply chain pipelines. As AI accelerates software development, customers are creating, storing and distributing more binaries than before. Over the past several quarters and even more since the beginning of the year, we have observed the following key trends driving this change in cloud consumption: first, the rapid adoption of AI tools accelerate software development activity and increases the volume of binaries moving through our platform as agents and tools consume more software at the pace and scale no human workflow ever could; second, the increase in the number of AI-specific software packages, such as MCP, skills and others that organizations create and manage; third, continued uncertainty is making forecasting difficult for customers in the evolving AI economy, leading them to sometimes favor the flexibility of a consumption-based on-demand cloud model. These trends and the first half results validate our strategy and business model, continuing to reinforce the value of our cloud offering, which enables customers to scale with demand while maintaining efficiency and operational flexibility. Our enterprise sales teams remain focused on securing long-term enterprise commitments allowing customers better unit economics in the evolving AI spending environment. At the same time and as always, we give customers the flexibility to determine the balance between committed capacity and on-demand usage. Consistent with our guidance philosophy, we continue to exclude usage above committed levels from our outlook. Ed would refer to it later on the call. Now to the continued momentum we are seeing in security. JFrog provides the infrastructure for creating, managing and securing software artifacts at enterprise scale. By integrating comprehensive software supply chain security directly with Artifactory, our customers' single source of truth, we enable them to build and deploy software we trust at the scale and speed of AI. As software supply chain threats continue to grow in scale and sophistication, CISO's team increasingly see JFrog Security as a mission-critical component of the software infrastructure, not an optional capability. Validating this fact, JFrog was recently named a leader in the Gartner Magic Quadrant for Software Supply Chain Security based not only on our highest rated ability to execute but also on our strategy of incorporating security alongside the software supply chain single source of truth in one platform. We continue to see strong momentum in our security business reflected in higher attach rate on new customers win, continued expansion with existing accounts and an increasing number of larger security-led transactions. In the second quarter, more than 80% of the customers that joined our over $1 million cohort added security. This momentum extends to our new logo business, where over 40% of overall new logo wins included security as part of their initial land with JFrog. In addition, AI-powered software supply chain attacks continue to escalate this quarter with threat actors increasingly targeting open source package ecosystems. As AI accelerates software creation, it also accelerate the pace and sophistication of software supply chain attacks. Throughout these incidents, customers using JFrog Curation remain protected. By tightly integrating Curation with Artifactory, JFrog delivers a trusted policy-driven software supply chain firewall that blocks malicious and risky packages before they enter the enterprise, allowing developers and AI coding agents to move fast without compromising trust or security. In Q2, we will focus on making sure our security solutions become too integrated to fail powered by the AI ecosystem. In the past, we focused on securing human developers. Today, we are extending that same trusted experience to AI agents that increasingly interact with the JFrog Platform. Consistent with our universal trust layer strategy, we recently announced integrations with leading AI coding agents, including Claude Code and Cursor, protecting our customers, developers and agents from vulnerable or malicious dependencies, enforcing enterprise security policies and receiving trusted remediation guidance in real time. By embedding security directly into AI-driven development workflows, JFrog helps customers accelerate software delivery while preserving trust across the entire software supply chain. The continued validation of our strategy by security leaders, accelerating customers' adoption, expanding platform usage, larger security-driven transactions and our deep partnerships across the AI ecosystem reinforce our confidence in JFrog's security road map. We expect our security core to remain one of JFrog's most significant long-term growth drivers. Finally, on security, we are excited to welcome keynote security executive from both Anthropic and Cursor as speakers at our annual swampUP user conference this September in New York City. Next, I want to briefly address governance and DevGovOps. It is becoming increasingly clear that AI will only be adopted at enterprise scale if it is trusted. That trust requires governance, compliance and auditability to be engineered directly into the software development workflows, not introduced as a separate manual step. The challenge is not whether these controls can be enforced but how they can be enforced in a multi-agent and hybrid development environment without slowing AI-driven delivery. This is why we believe DevGovOps represent the next evolution of software supply chain management and automation, embedding governance into the software delivery life cycle, so organizations can move fast while remaining secure, compliant and auditable. In Q2, a leading publicly traded provider of electronic design, simulation, validation and test solutions for AI infrastructure signed a 7-figure agreement with JFrog, adopting JFrog AppTrust bundled with our software supply chain security solutions. Building on JFrog's role as the customers' system of record, they expanded their investment to embed DevGovOps across the software delivery life cycle, enabling centralized governance, compliance, trusted software consumption and policy enforcement to meet evolving global regulatory and audit requirements for distributed software assets. As governance, compliance and DevGovOps continue to rise to the boardroom level, we believe JFrog is uniquely positioned to capture this opportunity. As the infrastructure layer powering the software supply chain, JFrog sits at the center of the software delivery life cycle, enabling customers to automate governance, enforce policies and embed compliance natively into their development pipelines rather than relying on manual downstream processes. As we execute on the security expansion of our platform, we continue to invest in expanding our platform to help enterprises not only build and secure software but also govern it with the same level of control, automation, trust and scale. Finally, I want to deliver comments on AI adoption and revenue. AI is meaningfully impacting our customers' software supply chain as they increasingly see the need for JFrog to function as their infrastructure for the software that both machines and humans build and consume. We see their usage of AI-specific packages and their dependencies expanding on top of their traditional DevOps and DevSecOps workload growth. In Q2, we were excited to announce partnerships and integrations that are solidifying JFrog as the enterprise standard for AI-powered software supply chain infrastructure. These investments included the tight integration with Anthropic that brings JFrog security and governance solutions to the millions of Claude Code developers. We also announced the partnership with Cursor, which powers over 1 million daily users that now have access to development and governance workflows directly in their development environment. We also continued to expand our footprint with the world's leading AI-native companies, welcoming a new logo, displacing a competitive solution that failed to scale with its growth. This customer migrated to JFrog Platform as its software supply chain system of record and binary distribution engine across a multi-region hybrid deployment. As AI leaders increasingly build software with AI for AI, this win further validates our strategy and reinforces JFrog's position as the trusted software infrastructure for the next generation of AI-native autonomous and multi-agent software development. The accelerating adoption of AI development practices and coding agents across our customer base combined with our deep partnerships with the world's leading AI companies is also helping us navigate the enterprise shift toward token economy optimization. As organizations increasingly govern and cap token consumption, the economics of software development are changing. JFrog's value proposition is fundamentally aligned with this transition because we are focused on the compiled output of software, the binary, not on the number of prompts or lines of code generated. Whether software is written by a human developer, an AI agent or both, it ultimately results in more trusted binaries that must be secured, managed, governed and distributed. As AI reshapes how software is created, we remain focused not only on what is growing but also on why it's growing and what matters most, the trusted binaries that power production. And with that, I will hand it over to Ed for a detailed review of our second quarter financials and our updated outlook for the third quarter and full year of 2026. Ed? Ed Grabscheid: Thank you, Shlomi, and good afternoon, everyone. We are incredibly energized by our second quarter results, which, as Shlomi noted, exceeded the top end of our guidance range across every key metric. These results once again showcase our consistent strategic execution and operational discipline. During the second quarter, total revenues equaled $163.8 million, up 29% year-over-year. These results demonstrate the continued execution of our go-to-market strategy, fueled by our cloud revenues, growing demand for our security core products and expansion in our Enterprise Plus portfolio. 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. Our outperformance in the cloud was driven by robust usage across our customer portfolio, which continues to exceed contractual minimum commitments and increased adoption of our security core products. We strategically work towards converting this usage into higher annual commitments. During the second quarter, our self-managed or on-prem revenues were $76.3 million, up 9% year-over-year. We continue to proactively engage our on-prem customers to migrate workloads to our cloud or hybrid offerings as they explore solutions better aligned with the rapidly changing security environment. In Q2, 59% of total revenues came from Enterprise Plus subscriptions, up from 55% in the prior year. Driven by the ongoing execution of our enterprise go-to-market strategy and broader customer adoption at the JFrog Platform, revenue contribution from Enterprise Plus subscriptions grew 39% year-over-year in Q2 2026. 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. These results continue to highlight the strong adoption of our security core products, increased cloud usage and conversion of customers into higher annual contracts. 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. Now I'll review the income statement in more detail. Gross profit in the quarter was $136.2 million, representing a gross margin of 83.2% versus 83.1% in the year ago period. We remain focused on cloud hosting cost optimization as we anticipate a larger share of our revenues being generated from the cloud. Given our expected increase in cloud revenue contribution to total revenue, we reiterate annual gross margins to be in the range of 82% to 83% in 2026. Operating expenses in the second quarter were $103.6 million, equaling 63% of revenues. This is compared to $86.4 million or 68% of revenues in the year ago period. Our operating profit in Q2 was $32.6 million or an operating margin of 19.9% compared to 15.2% operating margin in the second quarter of 2025. The continued balance between strategic investment and operational efficiency demonstrates our ongoing commitment to profitable growth. Cash flow from operations equaled $57.1 million in the second quarter. After taking into consideration CapEx requirements, our free cash flow reached a record $53.8 million or 33% margin compared to $35.5 million or 28% margin in the year ago period. Now turning to the balance sheet. We ended the second quarter with $824.5 million in cash and short-term investments compared to $704.4 million at the end of 2025. 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. As a reminder, RPO excludes any benefit from the customer's usage over contractual minimum commitments. And now let's turn to the outlook and guidance for the third quarter and full year of 2026. As we enter the third quarter of 2026, we remain optimistic by the strength in our pipeline and the tailwinds of emerging AI workload trends driving increased cloud usage and security core product adoption. Even as usage trends accelerated through the first half of 2026, our guidance philosophy will remain unchanged as we continue to derisk large deals due to timing uncertainties and any benefit from cloud usage above contractual commitments. Looking ahead, our outlook remains anchored by 3 key drivers: growing contributions from security core products, ongoing adoption of our full platform and cloud growth driven from higher annual customer commitments. We are raising our estimated full year 2026 baseline cloud growth to be in the range of 41% to 43%. Given the anticipated contribution from our security core products and increased baseline cloud growth assumptions, we now expect our net dollar retention floor be 120% for 2026. Turning to our operating expenses. We continue to focus investments on innovation across our entire platform. We remain committed to a disciplined spending philosophy and confident in our ability to drive ongoing operational efficiency in line with prior execution. For Q3, we anticipate revenues to be in the range of $164 million and $166 million with non-GAAP operating profit anticipated to be between $27 million and $29 million and non-GAAP earnings per diluted share of $0.22 to $0.24, assuming a share count of approximately 130 million shares. For the full year of 2026, we are again raising our revenue guidance now anticipating a range of $648 million to $652 million, representing 22% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be between $116 million and $120 million and non-GAAP diluted earnings per share of $0.96 to $1, assuming a share count of approximately 129 million shares. Now I'll turn the call back to Shlomi for some closing remarks before we take your questions. Shlomi Haim: Thank you, Ed. Our second quarter reflected the strength of our strategy and the dedication of our team. We delivered continued cloud expansion, security as a meaningful growth engine, strong enterprise execution, increasing customer platform consolidation and solid free cash flow momentum, all while maintaining the discipline to grow responsibly and efficiently. To every Frog around the world, thank you. These outstanding results are your achievements. Together, you turn Q2 into a major win for JFrog. Your passion, resilience and focus on our customers didn't just deliver another great quarter but laid the foundation for future growth. As we conclude today's call, we look forward to welcoming many of you to swampUP New York in just a few weeks. Together with customers and industry leaders from Anthropic, Cursor, Morgan Stanley, Microsoft, CoreWeave, NVIDIA and many others, we'll demonstrate how the software supply chain is evolving for the AI era and how JFrog is helping enterprises control, secure, govern and scale software creation and delivery in a world powered by developers and AI agents alike. May the frog be with you. Operator, we are ready for questions. Operator: [Operator Instructions]. Your first question comes from the line of Mike Cikos with Needham. Matthew Calitri: This is Matt Calitri on for Mike Cikos over at Needham. We were hoping you could share some color on the conversations you've been having since the OpenAI models discovered the self-hosted Artifactory 0 days vulnerability. It's worth noting, from our perspective, it seemed like the whole ordeal was very well handled. But we were just curious if it's delayed pipeline conversions at all or if there's any plan to continue to leverage these AI models to search for other potential patches going forward. Just anything you could share on that whole experience would be helpful. Shlomi Haim: Yes. Well, thank you for the question, obviously, 1 that we were dealing with in the past 2 weeks and great partnership with OpenAI. So as you mentioned, OpenAI have self-hosted Artifactory and they ran a model that worked on a sandbox with limited guardrails. AI models in today's world should not be treated as free. They should be treated with zero trust with the security practices that are required around that. 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. Obviously, this is also a great opportunity to discuss the cloud solution, the SaaS solution that, to remind everyone, was not breached and also to discuss the security solution that JFrog can provide on top of Artifactory. So great relationship will build a better product. More and more vulnerabilities will be fine as models are getting into the pipelines. And I think that what counts is how fast vendors are remediating. We are very pleased, very honored with the relationship we built with OpenAI before and during the incident. Operator: Your next question comes from the line of Miller Jump with Truist Securities. William Miller Jump: Congrats on the continued really strong momentum here. I want to stay on security. It was really great to hear about the momentum you saw in the quarter. There were a number of pretty significant open source vulnerabilities that came to light at the end of Q1. Wondering like, did that have an impact on the Q2 security contribution in your view? And was there any of the second half pipeline of security that actually got pulled forward into the first half as a result of those vulnerabilities? Shlomi Haim: Yes, Miller, that's a great question that represent everything we've seen in the past few quarters. Software supply chain attacks are becoming a daily thing. Just 2 days ago, another massive attack over millions of open source packages coming from npm, yet another one. So obviously, we start to see that every CISO asks herself or himself what's the right firewall we should put from the get-go, then what the right scanners we should put on top of our system of record. Obviously, this generates a lot of traction around JFrog because JFrog is one of the unique security solution that is not just providing a security solution but also the system of record that need to be protected. So yes, the pipeline is impacted by it. We were very pleased to see the results in Q2 that are showing yet another growth after the results of Q1. It supports not only our penetration into the DevSecOps world but also the growth in the cloud. And looking forward, we are very optimistic, as mentioned on the call, that security will keep being a very strong growth engine for the company. Operator: Your next question comes from the line of Mark Cash with Raymond James. Mark Cash: Yes. Shlomi, if I can go back to the OpenAI incident, look, absolutely novel. Your team was great and transparent with disclosing what happened, had solutions in place to take care of customers. And I fully understand like this is a strong argument for adopting cloud and for security. So I did want to ask, though, considering 47% of your business is self-hosted, how have customers reacted? What have you done to ensure customers are patched and the risk wouldn't spread? And then could you actually turn this to a positive for demand as we've seen with some other security companies that use incidents to actually get closer to customers and then drive broader platform adoption? And that's it for me. Shlomi Haim: Thank you, Mark. A great point. So I'm thinking about how fast you remediate and how fast you take it to the market. But there is also a very responsible way to treat your customers, and that's transparency. The moment it happened, the first thing that our team did was protecting our cloud customers and releasing a patch to the self-hosted customers. Obviously, this is not in our control, so it can become a tailwind of customers that see the SaaS as a more secured environment. But we immediately released the patch version. It was confirmed by OpenAI as resolving the vulnerability. We were very happy to see that they keep running their models to check if Artifactory is secured and bulletproof and the answer was yes. And just yesterday, on Black Hat stage, they shared with more transparency what happened there. And obviously, some of it has to do with how you configure your environment and what guardrails you put around models. I think that the entire industry is learning about it. What I see inside JFrog is how fast we remediated the level of transparency with the market, no hidden stuff by going straight and bold to our customers and demand that they will protect the software supply chain. But I also see an opportunity here to say, hey, it can be much more secured in the cloud. You can even be more secured with security around the model's behavior. Now what we will see next, and have no doubt about that, we will see more models getting more sophisticated, finding more vulnerabilities. It's not a matter of being the scanner anymore. It's a matter of how fast and how efficient you are in remediating and communicating to your customers. Operator: Your next question comes from the line of Howard Ma with Guggenheim. Howard Ma: Congratulations on a really strong quarter and the full year guidance raise. One for Ed. If you look at the Q2 outperformance, how would you compare the mix of higher commitments and overages relative to Q1? And if you could comment on if there was any contribution from the fourth frontier lab customer that you added in the quarter and for the full year as well. So kind of 2 questions there. Ed Grabscheid: Yes. Thanks for the question, Howard. We don't necessarily split out in terms of providing guidance or updates of what was overcommitted revenue versus commitment revenue. But what I can tell you is, in Q2, we saw something very similar to what we saw in Q1, which was strong usage across the customer, a diverse group of customers in our installed base, continuation of packages going through the software development life cycle and Artifactory. And we didn't see a decline by any means in the usage over that minimum commitment. And we're very pleased with the end result. In addition to that, we also had -- as Shlomi talked about in the prepared statements, we extended the -- our foundational AI labs. We have 4 of those customers, and Shlomi can share a little bit more about that customer that we landed during the quarter. Operator: Your next question comes from the line of George McGreehan with Bank of America. George McGreehan: This is George McGreehan on for Koji Ikeda, Bank of America. I wanted to ask about kind of the contribution you guys are seeing from your suite of security products between the 3, Advanced Security, Runtime and Curation. Kind of how do you stack rank the contribution from those? Shlomi Haim: Yes. I'll take it, George, and thank you for the question. We spoke a moment ago about the amount of software supply chain attack and the kind of I don't want to say panic but alerted response from customers and prospects. So obviously, the first thing that they are applying is a firewall between the software supply chain, their organization and the open source hubs. This is JFrog Curation, and we saw JFrog Curation being adopted rapidly. And also referred on the call, JFrog Curation by itself is an amazing firewall, but when it comes with the Artifactory integration, that's a bulletproof solution that prevents any malicious package, any vulnerability known, any type of unrequired packages to come into your organization. So because it's so simple and because it's implemented in very high integration with Artifactory, obviously, our customers and prospects are betting on Curation. And as mentioned on the script, none of our customers got affected by this massive attack of software supply chain out there. The second thing is that -- what happened once you start to run your pipeline. This is where JFrog Xray, JFrog Advanced Security are providing a comprehensive holistic solution on top of your source code -- sorry, on top of your system of record to make sure that all the binaries, all the software packages and everything that you will distribute will not only be secured but also known, traceable and monitored, so later on, when you need to govern it, when you need to audit it, you have all the information. So obviously, because of the amount of software supply chain attack, Curation gets the spotlights now, but our customers are requiring more and more security solution from JFrog mainly because of the advantage that we also manage all the binaries for them and we also play as the single source of truth. George McGreehan: That makes a lot of sense. And if I could follow up with the second question here. Last quarter, in cloud consumption, there was usage above commitment. This quarter, you guys noted as well. But I'm kind of wondering if there's any change in kind of customer behavior in terms of are customers kind of getting a better sense of maybe how much they're going to be consuming on JFrog over -- in the future and kind of getting more comfortable committing at higher levels of usage. Or is that maybe not the case? Shlomi Haim: Well, George, this is a wonderful question. What we see is what I'm going to share. A, we see more AI tools being part of the software supply chain that drives scale. B, we see more AI software packages, unique software packages, and we call some specifics like MCP and skills. Just half a year ago, you wouldn't hear those terms. There are new assets. These are all binaries, so new assets with new software packages. And the third thing is the uncertainty. JFrog provides this flexibility that is amazing not only for the CIO but also for the CFO. They need to settle on what is the right estimation a moment before they decide what would be the budget of 2027. Now with our philosophy of guiding you guys with the commitment only, if you combine that with the number of customers over $1 million, the number of customers over $100,000, the growth in the cloud, you probably understand that our team is doing great work converting those over usage to commitment. But we provide you with the full predictability and the certainty around our model, and this is why we follow commitments and not usage. Usage over commitment is growing, and we will still be focused on the commitment and the cloud migration of our self-hosted customers to the cloud. Operator: Your next question comes from the line of Radi Sultan with UBS. Radi Sultan: Just one for me. Shlomi, wanted to ask on the shift we're seeing towards increased adoption of open source and open weight models. Like can you just walk through how you see that trend impacting demand and usage? I'd imagine maybe it's increasing pull-through on the security side but be curious if this could increase the need on Artifactory as well. Shlomi Haim: Well, yes, if you refer to the security, you are very much right. That's a great driver that fuels the growth and the adoption of our security solution, but it's not only because of the open source that this bring both to the organization. It's also because of the new practices that requires new packages to be managed and secure. Now every vendor provide an MCP software package. You need to govern that. You need to have an MCP registry, and you need to make sure that it's secure. JFrog security provide all of these assets on top of JFrog Artifactory, which makes the solution far more comprehensive and holistic. I'm not talking now about who has a better scanner. I'm talking about the outcome. What's the real value that we bring? So of course, we see growth there, Radi. And the second thing, it's also the speed and how fast things are happening. And we also mentioned that AI starts to be a wallpaper. It starts to be ambient infrastructure. People just use AI every day for everything, and they expect the software supply chain to be secure. They expect the pipeline to be secured. Now with the amount of attacks that they see out there, our customers were not affected by it. Just think about the amount of time that they save for not having the need to remediate and recover. So I think that more and more customers put their trust in JFrog security and the holistic solution and coming up next, also governance because you also need to trust those software packages that you mentioned before you ship them. Operator: Your next question comes from the line of Brian Essex with JPMorgan. Brian Essex: Congrats on the results. I just want to follow up to a previous question that was asked about the way that customers are -- may or may not be managing their overages. It seems like demand is pretty healthy. Shlomi, are you privy to any conversations with your customers in terms of how they might be addressing more efficient spend just in general but also on your platform? That's question number one. And then as we approach swampUP, just wanted to get a sense of -- sometimes it's difficult to time product releases with a specific conference. Sometimes companies release products when they're ready. How should -- like what should we expect as we head into swampUP, being kind of relatively new to the story here? Shlomi Haim: Brian, thank you for bringing swampUP up. It's going to be an amazing conference. Again, we already see the speaker lineup. I'll start with that. I'll just say that, obviously, the main thing that we see at swampUP is that the world's biggest organization are using JFrog and willing to share their best practices. And this is gold for our users. Alongside that, there are the JFrog announcement, which are exciting, very much aligned with the future road map. But in the world of AI, if I will wait for swampUP to release our product, our company will go backward and not leap forward. So expect a lot of excitement also on stage, but also with the customers' conversation. Regarding the efficiency and management of budget, so what is it that we see, right? We see more token being spent that generate more software because AI agents are being fueled, and that generates probably a higher cloud consumption. But people are asking, will that be forever like that? The answer, for sure not because now we are getting -- we are transforming from the CIO FOMO, which was around technology to the CFO FOMO, which is around budget control. And then we have to ask ourselves what is the desired outcome of software pipeline, of software supply chain of the AI world. What's the desired outcome? The desired outcome is that you will have more software being shipped in a higher quality. What I just said equals binary. And this is what JFrog is monetizing on. We are monetizing on binary traffic. So we think -- we suspect that CFOs will be smart enough and disciplined enough not to block innovation. Inside JFrog, we keep saying that you can also optimize how much you want to pay for the electricity you consume at home, but you still don't sit in the dark, right? You just train yourself to close the light before you leave. That's the difference between source code and binaries, the desired outcome of a better AI is -- better binaries in high quality and higher consumption. Operator: Your next question comes from the line of Andrew Sherman with TD Cowen. Andrew Sherman: Congrats on another quarter of acceleration here. Ed, the billings and RPO were extremely strong. RPO added a record $84 million. Could you talk about the breadth and nature of the big deals that went into that? And was there any pull forward from the second half pipeline? And how is the second half pipeline looking? Ed Grabscheid: Yes. Thanks for recognizing that and the RPO. We're very proud of that. And that actually comes from the efforts that we have around our security products. That's driving increase in our ASPs. And you saw that in the $1 million number. 80% of the $1 million customers that we added this quarter had security attached to it. And that, along with even the new customer lands, 40% of those customers was security, are driving much of the RPO. In addition to that, customers that land with security typically take a multiyear agreement as well. So the construct is a larger ASP, longer in duration, and that results in a strong RPO. And that's what we're seeing. We did not pull really anything in from Q3. We just had strong build in the quarter and execution from the team. And that pipeline that we built really came from the Shai-Hulud events that started in Q3 of last year and it continued to build. The sales organization executed on those deals, and it's reflected in our results. Shlomi Haim: I might just add to it, is that I completely agree with everything that Ed said. Some of those macro impact of open source attack is out of our control. Obviously, these are awful things that are happening, but AI also make the hacker more sophisticated. And this software supply chain rapid attack might expedite some of what -- some of the opportunities we have in the pipeline. Operator: Your next question comes from the line of Jason Celino with KeyBanc. Jason Celino: Shlomi, I don't think you had the opportunity to talk about your important fourth AI customer here. It seems like the hybrid deployment model is unique and interesting. Maybe can you speak to why this is maybe different from your other AI-native customer deals? And then secondly, we on the Street always -- we always want more, right? I mean is there a pipeline or opportunity to land other AI natives of this magnitude? Shlomi Haim: Yes. Well, listen, we are so honored and so excited to add more and more companies that are building the world of AI. And this one that we just won this quarter was a great win, and it was sweeter also because of the fact that we displaced a competitor that couldn't scale. The amount of binaries and the traffic that needed to be supported was not something that they could do. This AI factory moved to JFrog, and they moved to JFrog in a very interesting way. They took JFrog Platform as their mother ship in the cloud and with some self-hosted Artifactory servers in their data center. So they will not only have the power of the JFrog Platform supported by our services but also to have a super robust distribution mechanism from this mother ship to all data centers from Artifactory to Artifactory. Working with these companies that build with AI for AI makes JFrog better. We spoke earlier about the OpenAI incident. This is how JFrog becomes 1,000x stronger because these guys, they take you to the limit with the security scanning, with scaling with different deployment environment, and we are very pleased and very honored to have them onboard. Obviously, they look at JFrog as the planners of their pipelines, the providers of the infrastructure to the software supply chain. Operator: Your next question comes from the question Sanjit Singh with Morgan Stanley. Sanjit Singh: Congrats on an awesome quarter. It was great to see. Shlomi, I think you and I have discussed before in terms of some of the evolution that JFrog is going through. You guys were one of the key destinations for container registries and those kind of traditional software artifacts. You mentioned the initiative to be the home of models and some of the newer kind of AI-native artifacts. And just to get a sense of how that trend is evolving in terms of winning those newer artifacts. Shlomi Haim: Yes. Sanjit, great to see you on the call. You are right, and you watch the JFrog transformation before AI and hopefully, with AI. So what do we see happening? We see that the world of software supply chain management move from just managing the pipelines to also secure them and govern them. And by being focused on the right asset, what we keep saying from the foundation days of the company, binary is the primary asset. By being focused on that, we are not only providing our customers with the smart storage that can scale in the cloud and on-prem, but we also provide them with a comprehensive security solution. And now as you probably heard on the call, we just started to win our first DevGovOps customers and deals. People understand, and we saw it again this week with OpenAI, models need to be governed. So to your point, Sanjit, we became the biggest container registry after Docker boom. And now we are becoming the biggest model registry for our customers, mainly because of the following. They can scale with us. They can trust and they can secure and they can govern. So if we will provide them this fundamental, and it's on us to prove, then I think that you will see the next leap in our evolution. What also matters is that the AI companies, the AI-native and the AI labs companies trust JFrog to do it for them. So we are learning a lot. We are improving a lot. Just to stay humble, we are in the beginning of the journey. Operator: Your final question comes from the line of Kingsley Crane with Canaccord. William Kingsley Crane: Just to build off what we've been talking about earlier. As novel agentic attacks, they become more apparent, how do you manage an intelligence that we don't necessarily fully understand that's now capable enough to be dangerous? So you mentioned earlier that AI models should not be treated as free. Is it consensus that customers are treating coding agents with that same scrutiny they do with third-party packages? Or are they still adjusting to that? Shlomi Haim: Well, Kingsley, I'll be honest with you. With over 6,000 customers, you see everything. You see customers that are just kind of being attracted by the technology and adopt AI with no responsibility, and you see customers that are terrified and take it one step at a time. I think that what is special for the experience that we get from companies like OpenAI and other leading AI labs is that they are showing us not only what need to be done but also what happened if you don't do it right. And if you don't do it right, models are becoming sophisticated and even smarter than our most senior developers and engineers. So I believe that the world will become mature and the regulation and guardrails and security around models will become a bit more powerful. What we are discussing with our customers is how important it is not only to host the models and to host the binaries and the outcomes for them but also how we secure the entire pipeline. And there is no better school than this AI labs to learn it from them. It's a great privilege to have all of this as our customers. Operator: This concludes the question-and-answer session. I will now turn the call back to Shlomi for closing remarks. Shlomi Haim: Thank you, everyone, for joining our call. Obviously, Q2 was yet an amazing quarter for us. We are focusing on delivering what we committed in 2026. And looking forward to seeing you at swampUP, where we will host and investor meet-up to keep answering your question in full transparency and with the right excitement. And may the frog be with you. Take care. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in JFrog, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and JFrog wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. 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JFrog (FROG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

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%. 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-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. 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. 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. 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 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. 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 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. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JFrog Ltd. (FROG) : Free Stock Analysis Report Analog Devices, Inc. (ADI) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Inuvo, Inc (INUV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended June 2026, JFrog Ltd. (FROG) reported revenue of $163.77 million, up 28.7% over the same period last year. EPS came in at $0.27, compared to $0.18 in the year-ago quarter. The reported revenue represents a surprise of +5.36% over the Zacks Consensus Estimate of $155.43 million. With the consensus EPS estimate being $0.24, the EPS surprise was +12.5%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how JFrog performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue- License- self-managed: $8.23 million compared to the $7.21 million average estimate based on seven analysts. The reported number represents a change of +33.8% year over year. Revenue- Subscription- self-managed and SaaS: $155.55 million compared to the $148.21 million average estimate based on seven analysts. The reported number represents a change of +28.5% year over year. Revenue- Subscription- SaaS: $87.49 million versus the five-analyst average estimate of $80.85 million. The reported number represents a year-over-year change of +53.2%. Revenue- Self-managed subscription- Subscription: $68.06 million compared to the $67.6 million average estimate based on five analysts. The reported number represents a change of +6.4% year over year. Revenue- Self-managed subscription: $76.28 million compared to the $74.75 million average estimate based on five analysts. The reported number represents a change of +8.8% year over year. View all Key Company Metrics for JFrog here>>> Shares of JFrog have returned -13.1% over the past month versus the Zacks S&P 500 composite's +2.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JFrog Ltd. (FROG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in JFrog Ltd.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 29% year over year to $163.8 million, led by 53% cloud growth, increased security adoption and larger enterprise commitments. Free cash flow reached a record $53.8 million, while operating margin expanded to 19.9%. Security and AI are key growth drivers: More than 80% of new customers spending over $1 million annually added security products, while JFrog expanded integrations with AI coding tools Claude Code and Cursor. The company also patched an Artifactory zero-day vulnerability identified by an OpenAI model; its cloud offering was not breached. 2026 outlook raised: JFrog increased its full-year revenue forecast to $648 million-$652 million, raised its baseline cloud-growth outlook to 41%-43%, and established a 120% floor for net dollar retention. JFrog Stock Gets Punished for Solid Results: Buy the Dip JFrog (NASDAQ:FROG) reported second-quarter 2026 results above the high end of its guidance, with revenue growth led by cloud consumption, security-product adoption and larger enterprise commitments. Total revenue rose 29% year over year to $163.8 million. Cloud revenue increased 53% to $87.5 million and represented 53% of total revenue, compared with 45% a year earlier. Self-managed, or on-premises, revenue grew 9% to $76.3 million. → 3 Drone Stocks That Should Soar After the Summer Slump JFrog leaps on EPS beat and raised guidance Chief Executive Officer and Co-Founder Shlomi Ben Haim said AI-driven software development is increasing the volume of binaries, packages, models and other artifacts that organizations must manage, secure and distribute. He described JFrog’s platform as evolving to support AI agents as participants in the software supply chain alongside human developers. Management attributed cloud growth to higher usage across its customer base, including usage above contractual minimum commitments, as well as adoption of Security Core products. The company said it continues to seek to convert excess usage into higher annual commitments, while excluding usage above committed levels from its outlook. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 2 Tech stocks getting bullish upgrades ahead of Q1 JFrog reported 97 customers with annual spending above $1 million at the end of the quarter, up from 61 a year earlier. The number of customers spending more than $100,000 annually grew 20% year over year to 1,291. Enterprise+ subscriptions accounted for 59% of total revenue, up from 55% in the prior-year period. Revenue from Enterprise+ subscriptions increased 39% year over year. Net dollar retention for the trailing four quarters was 121%, improving three percentage points from a year earlier, while gross retention was 97%. → Jersey Mike's Serves Fresh Gains After IPO Stumble Chief Financial Officer Ed Grabscheid said the company is continuing to encourage on-premises customers to move workloads to cloud or hybrid offerings as customers evaluate options that better align with changing security requirements. Ben Haim said software supply chain attacks are prompting customers to seek security tools integrated with their system of record for software artifacts. He said more than 80% of customers joining JFrog’s over-$1 million annual-spend cohort in the second quarter added security products. More than 40% of overall new-logo wins included security in their initial purchase. JFrog highlighted its Curation product, which is integrated with Artifactory and is intended to block malicious or risky packages before they enter an organization. In response to analyst questions, Ben Haim said customers are increasingly focused on a “firewall” for the software supply chain as open-source package attacks become more frequent. The company also discussed a recently disclosed Artifactory zero-day vulnerability identified through an OpenAI model operating in a sandboxed environment. Ben Haim said OpenAI contacted JFrog after finding the issue, and JFrog released a patch for self-hosted customers. He said JFrog’s cloud offering was not breached and that OpenAI confirmed the patch resolved the vulnerability. Ben Haim said the incident underscored the importance of secure AI-model deployment, configuration guardrails and rapid remediation. He also said it could increase customer interest in JFrog’s SaaS cloud offering and security products, though the company did not quantify any impact on demand. During the quarter, JFrog announced integrations with AI coding tools Claude Code and Cursor. Ben Haim said the integrations are intended to provide developers and coding agents with security policy enforcement and remediation guidance within AI-driven development workflows. JFrog generated gross profit of $136.2 million, for an 83.2% gross margin, compared with 83.1% in the year-earlier quarter. Operating profit was $32.6 million, or a 19.9% operating margin, compared with a 15.2% margin a year earlier. Cash flow from operations totaled $57.1 million. Free cash flow reached a record $53.8 million, or a 33% margin, compared with $35.5 million and a 28% margin in the prior-year period. The company 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 totaled $659 million, a 38% year-over-year increase. Grabscheid said larger security-related average selling prices and multi-year agreements contributed to the RPO growth. Management said it did not pull material business from the third quarter into the second quarter. Grabscheid added that security adoption was a key factor in larger and longer-duration agreements. For the third quarter, JFrog forecast revenue of $164 million to $166 million, non-GAAP operating profit of $27 million to $29 million, and non-GAAP diluted earnings per share of $0.22 to $0.24, based on approximately 130 million diluted shares. For full-year 2026, the company raised its revenue outlook to $648 million to $652 million, representing 22% year-over-year growth at the midpoint. It projected non-GAAP operating income of $116 million to $120 million and non-GAAP diluted earnings per share of $0.96 to $1.00. JFrog also raised its estimated baseline cloud growth outlook for 2026 to 41% to 43% and set a 120% floor for full-year net dollar retention. The company reiterated its expected annual gross-margin range of 82% to 83% as cloud revenue becomes a larger portion of its business. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "JFrog Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.