JFrog(FROG) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Announcement JFrog reports strong Q2 2025 financial results, driven by its unified platform and growing presence in the AI ecosystem Executive Summary JFrog achieved strong Q2 2025 financial results, fueled by its unified platform and expanding role in the AI ecosystem CEO Commentary CEO highlights JFrog's leadership in the AI ecosystem and disciplined execution for sustainable growth - JFrog is positioned as a system of record for software packages and a leader in the AI ecosystem as a gold-standard model registry, with a unified focus on DevOps, Security, and MLOps[4] - Q2 results reflect strong execution amidst ongoing uncertainty, with a focus on disciplined operations and driving high-quality, sustainable growth[4] Second Quarter 2025 Financial Highlights Key financial metrics for Q2 2025 show significant revenue and cloud revenue growth, along with increased high-value customers Q2 2025 Key Financial Highlights | Metric | Q2 2025 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Total Revenues (in millions) | $127.2 | +23% | | Cloud Revenues (in millions) | $57.1 | +45% | | Customers with ARR > $1 million (count) | 61 | +45% | | GAAP Gross Profit (in millions) | $97.0 | - | | GAAP Gross Margin (%) | 76.3 | - | | Non-GAAP Gross Profit (in millions) | $105.7 | - | | Non-GAAP Gross Margin (%) | 83.1 | - | | GAAP Operating Loss (in millions) | ($26.0) | - | | Non-GAAP Operating Income (in millions) | $19.4 | - | | GAAP Net Loss Per Share ($) | ($0.19) | - | | Non-GAAP Diluted EPS ($) | $0.18 | - | | Operating Cash Flow (in millions) | $36.1 | - | | Free Cash Flow (in millions) | $35.5 | - | | Cash, Cash Equivalents and Investments (as of June 30, 2025, in millions) | $611.7 | - | | Remaining Performance Obligations (as of June 30, 2025, in millions) | $476.7 | - | - Cloud revenue constituted 45% of total revenue in Q2 2025, up from 38% in the prior-year period[8] - Net Dollar Retention rate for the trailing four quarters was 118%[8] Recent Business & Product Highlights Recent product innovations and strategic partnerships underscore JFrog's platform expansion and customer adoption - JFrog released a remote AI MCP server to enable agentic AI interaction with the JFrog Platform[7][8] - The company deepened its relationship with NVIDIA as part of their 'Enterprise AI Factory' validated design[7][8] - Customers adopting the end-to-end JFrog Platform Enterprise+ subscription represented 55% of total revenue in Q2 2025, an increase from 50% in the year-ago period[8] Customer Growth Metrics | Metric | Q2 2025 (count) | Q2 2024 (count) | YoY Change | | :-------------------------- | :-------------- | :-------------- | :--------- | | Customers with ARR > $1 million | 61 | 42 | +45% | | Customers with ARR > $100K | 1,076 | 928 | +16% | Detailed Financial Performance This section details JFrog's Q2 and H1 2025 GAAP financial performance, covering operations, balance sheet, and cash flows Condensed Consolidated Statements of Operations Presents GAAP statements of operations for Q2 and H1 2025, showing revenue growth and increased net losses Condensed Consolidated Statements of Operations (GAAP) - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :--------- | | Total subscription revenue | $127,220 | $103,043 | +23.46% | | Total cost of revenue—subscription | $30,202 | $21,893 | +37.96% | | Gross profit | $97,018 | $81,150 | +19.55% | | Total operating expenses | $122,989 | $100,277 | +22.65% | | Operating loss | ($25,971) | ($19,127) | +35.79% | | Net loss | ($21,675) | ($14,303) | +51.54% | | Net loss per share, basic and diluted | ($0.19) | ($0.13) | +46.15% | Condensed Consolidated Statements of Operations (GAAP) - Six Months Ended June 30, 2025 vs 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Total subscription revenue | $249,627 | $203,354 | +22.76% | | Total cost of revenue—subscription | $60,383 | $42,497 | +42.09% | | Gross profit | $189,244 | $160,857 | +17.65% | | Total operating expenses | $238,185 | $196,620 | +21.14% | | Operating loss | ($48,941) | ($35,763) | +36.84% | | Net loss | ($40,178) | ($23,093) | +74.07% | | Net loss per share, basic and diluted | ($0.35) | ($0.21) | +66.67% | Condensed Consolidated Balance Sheets Provides GAAP balance sheet data for June 30, 2025, and December 31, 2024, detailing asset and liability changes Condensed Consolidated Balance Sheets (GAAP) - June 30, 2025 vs December 31, 2024 | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------ | :---------------- | :----- | | Total current assets | $737,203 | $649,227 | +13.55% | | Total assets | $1,208,185 | $1,129,906 | +6.93% | | Total current liabilities | $346,722 | $317,515 | +9.20% | | Total liabilities | $381,731 | $356,380 | +7.11% | | Total shareholders' equity | $826,454 | $773,526 | +6.84% | | Cash and cash equivalents | $51,277 | $49,869 | +2.82% | | Short-term investments | $560,423 | $472,138 | +18.69% | | Deferred revenue (current) | $260,066 | $247,187 | +5.21% | Condensed Consolidated Statements of Cash Flows Outlines GAAP cash flow statements for Q2 and H1 2025, highlighting operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (GAAP) - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :--------- | | Net cash provided by operating activities | $36,085 | $16,697 | +116.11% | | Net cash provided by (used in) investing activities | ($39,548) | $135,188 | -129.25% | | Net cash provided by (used in) financing activities | $9,592 | ($4,673) | +305.29% | | Net increase in cash, cash equivalents, and restricted cash | $6,927 | $146,918 | -95.29% | Condensed Consolidated Statements of Cash Flows (GAAP) - Six Months Ended June 30, 2025 vs 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :--------- | | Net cash provided by operating activities | $64,877 | $34,166 | +89.89% | | Net cash provided by (used in) investing activities | ($85,330) | $88,267 | -196.68% | | Net cash provided by (used in) financing activities | $21,097 | $11,922 | +76.96% | | Net increase in cash, cash equivalents, and restricted cash | $1,408 | $133,538 | -98.95% | Outlook JFrog provided financial guidance for the third quarter and full fiscal year 2025, projecting continued revenue growth and non-GAAP operating income, along with non-GAAP diluted earnings per share Third Quarter 2025 Outlook Provides specific financial guidance for Q3 2025, including revenue, non-GAAP operating income, and EPS Third Quarter 2025 Outlook | Metric | Range | | :-------------------------------- | :-------------------------- | | Revenue | $127.0 million - $129.0 million | | Non-GAAP operating income | $16.5 million - $18.5 million | | Non-GAAP net income per diluted share | $0.15 - $0.17 (assuming ~122M shares) | Fiscal Year 2025 Outlook Presents full fiscal year 2025 financial guidance for revenue, non-GAAP operating income, and EPS Fiscal Year 2025 Outlook | Metric | Range | | :-------------------------------- | :-------------------------- | | Revenue | $507.0 million - $510.0 million | | Non-GAAP operating income | $75.0 million - $78.0 million | | Non-GAAP net income per diluted share | $0.68 - $0.70 (assuming ~121M shares) | Non-GAAP Financial Information and Operating Metrics This section details JFrog's use of non-GAAP financial measures, providing definitions, rationale for their use, and reconciliations to the most directly comparable GAAP measures. It also defines key operating metrics such as ARR and Net Dollar Retention rate About Non-GAAP Financial Measures Explains JFrog's rationale for using non-GAAP measures and the types of adjustments made - JFrog uses non-GAAP measures (e.g., operating income, gross profit, net income, free cash flow) internally for budgeting, forecasting, and evaluating financial performance, believing they supplement GAAP measures for investors[17] - Non-GAAP adjustments include share-based compensation, amortization of acquired intangibles, acquisition-related costs, and income tax effects, as these are considered non-operational or non-recurring[20][21][22][23][24] - Free cash flow is defined as net cash provided by operating activities minus capital expenditures, viewed as a necessary component of ongoing operations[20][26] Reconciliation of GAAP to Non-GAAP Results Reconciles GAAP to non-GAAP gross profit, operating income, and net income for Q2 2025 and Q2 2024 Reconciliation of GAAP to Non-GAAP Gross Profit and Margin - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP gross profit | $97,018 | $81,150 | | Non-GAAP gross profit | $105,724 | $86,932 | | GAAP gross margin | 76.3% | 78.8% | | Non-GAAP gross margin | 83.1% | 84.4% | Reconciliation of GAAP to Non-GAAP Operating Income and Margin - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP operating loss | ($25,971) | ($19,127) | | Non-GAAP operating income | $19,355 | $13,617 | | GAAP operating margin | (20.4)% | (18.6)% | | Non-GAAP operating margin | 15.2% | 13.2% | Reconciliation of GAAP to Non-GAAP Net Income - Q2 2025 vs Q2 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | GAAP net loss | ($21,675) | ($14,303) | | Non-GAAP net income | $22,034 | $17,461 | | Non-GAAP net income per share - diluted | $0.18 | $0.15 | | Non-GAAP weighted-average shares used to compute net income per share - diluted | 120,578 | 115,194 | Reconciliation of GAAP Cash Flow to Free Cash Flow Reconciles GAAP operating cash flow to free cash flow for Q2 and H1 2025 and 2024 Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $36,085 | $16,697 | $64,877 | $34,166 | | Less: purchases of property and equipment | ($627) | ($732) | ($1,274) | ($1,573) | | Free cash flow | $35,458 | $15,965 | $63,603 | $32,593 | Operating Metrics Definitions Defines key operating metrics such as Annual Recurring Revenue (ARR) and Net Dollar Retention rate - Annual Recurring Revenue (ARR) is defined as the annualized revenue run-rate of subscription agreements from all customers as of the last month of the quarter, including monthly subscription customers[27][28] - Net Dollar Retention rate is calculated by comparing ARR from the same set of customers (Base Customers) across comparable periods, capturing upsells, contraction, and attrition, and is averaged over the trailing four quarters[29] Company Overview and Disclosures This section provides background on JFrog, including its mission and platform, along with important legal disclaimers regarding forward-looking statements and details for the upcoming conference call and investor contact About JFrog Introduces JFrog's mission, unified platform capabilities, and global customer reach - JFrog Ltd. (Nasdaq: FROG) is the creator of a unified DevOps, DevSecOps, and MLOps platform, aiming to deliver software without friction from developer to production[12] - The JFrog Software Supply Chain Platform acts as a single system of record for building, managing, and distributing software quickly and securely, ensuring availability, traceability, and tamper-proof integrity, with integrated security features[12] - JFrog's hybrid, universal, multi-cloud platform is available as SaaS and self-hosted, serving millions of users and over 7,000 customers worldwide, including a majority of the Fortune 100[12] Forward-Looking Statements Discusses the nature of forward-looking statements and associated risks and uncertainties - The press release contains forward-looking statements regarding JFrog's future financial performance, market potential for its platform and products (Artifactory, Xray, Curation, Advanced Security, ML, Runtime Security), growth potential of its cloud business, and opportunities within DevOps, DevSecOps, Security, AI, and MLOps[13] - These statements are based on current assumptions and are subject to substantial risks and uncertainties that may cause actual results to differ materially, including risks related to rapid growth, history of losses, customer retention, sales and marketing capabilities, acquisitions, security breaches, and general economic conditions[15][16] Conference Call Details Provides information regarding the Q2 2025 earnings conference call and webcast access - JFrog's Second Quarter 2025 Financial Results Conference Call was scheduled for Thursday, August 7, 2025, at 2:00 p.m. PT (5:00 p.m. ET)[14] - A live webcast of the conference call is accessible from the investor relations website at https://investors.jfrog.com/events-and-presentations[11](index=11&type=chunk) Investor Contact Specifies the contact information for investor inquiries - Investor inquiries can be directed to Jeff Schreiner at jeffs@jfrog.com[30]