JFrog Ltd

Previous wording

We have designed our subscription structure and go-to-market strategy to align our growth with the success of our customers. Our business model benefits from our ability to serve the needs of all customers, from individual software developers, security teams, MLOps teams, and IT operators to the largest organizations, in a value-oriented manner. All references to our customers included in this Quarterly Report on Form 10-Q refer to paying customers.

Current wording

We have designed our subscription structure and go-to-market strategy to align our growth with the success of our customers. Our business model benefits from our ability to serve the needs of all customers, from individual software developers, security teams, AI/ML teams, and IT operators to the largest organizations, in a value-oriented manner. All references to our customers included in this Quarterly Report on Form 10-Q refer to paying customers.

Previous wording

We generate revenue from the sale of subscriptions to customers. We offer subscription tiers for self-managed deployments, where our customers deploy and manage our products across their public cloud, on-premise, private cloud, or hybrid environments, as well as JFrog-managed public cloud deployments, which we refer to as our SaaS subscriptions. Revenue from SaaS subscriptions contributed 46% and 45% of our total revenue for the three and nine months ended September 30, 2025, respectively, compared to 39% and 38% for the corresponding periods in 2024, respectively.

Current wording

We generate revenue from the sale of subscriptions to customers. We offer subscription tiers for self-managed deployments, where our customers deploy and manage our products across their public cloud, on-premises, private cloud, or hybrid environments, as well as JFrog-managed public cloud deployments, which we refer to as our SaaS subscriptions. Revenue from SaaS subscriptions contributed 51% of our total revenue for the three months ended March 31, 2026, compared to 43% for the three months ended March 31, 2025.

Previous wording

Our self-managed subscriptions are offered on an annual and multi-year basis, and our SaaS subscriptions are offered on a monthly, annual, and multi-year basis. Revenue from Enterprise Plus subscription represented approximately 56% and 55% of our total revenue for the three and nine months ended September 30, 2025, respectively, compared to approximately 50% for each of the corresponding periods in 2024. The growth in revenue from our Enterprise Plus subscription demonstrates the increased demand for our end-to-end solutions for customers’ entire software supply chain management.

Current wording

Our self-managed subscriptions are offered on an annual and multi-year basis, and our SaaS subscriptions are offered on a monthly, annual, and multi-year basis. Revenue from Enterprise Plus subscription represented approximately 58% of our total revenue for the three months ended March 31, 2026, compared to approximately 55% for the three months ended March 31, 2025. The growth in revenue from our Enterprise Plus subscription demonstrates the increased demand for our end-to-end solutions for customers’ entire software supply chain management.

Previous wording

We have an unwavering commitment to the software developer, security teams, MLOps teams, and IT operator communities, and show this commitment by offering varying forms of free access to our products in addition to the paid subscriptions described above. This free access takes the form of free trials and open source software, and helps generate demand for our paid offerings within the software developer, security, and IT operator communities.

Current wording

We have an unwavering commitment to the software developer, security teams, AI/ML engineers, and IT operator communities, and show this commitment by offering varying forms of free access to our products in addition to the paid subscriptions described above. This free access takes the form of free trials and open source software, and helps generate demand for our paid offerings within the software developer, security professionals, AI/ML engineers, and IT operator communities.

Previous wording

We generated revenue of $136.9 million and $109.1 million for the three months ended September 30, 2025 and 2024, respectively, representing 26% growth, and $386.5 million and $312.4 million for the nine months ended September 30, 2025 and 2024, respectively, representing 24% growth. We have continued to invest in our business and had a net loss of $16.4 million and $22.9 million for the three months ended September 30, 2025 and 2024, respectively, and $56.6 million and $46.0 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

We generated revenue of $154.0 million and $122.4 million for the three months ended March 31, 2026 and 2025, respectively, representing 26% growth. We have continued to invest in our business and had a net loss of $8.3 million and $18.5 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

On October 7, 2023, Hamas militants and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of terror attacks on civilian and military targets. Following the attack, Israel’s security cabinet declared war against Hamas and commenced a military campaign against these terrorist organizations. Since the commencement of these events, there have been additional active hostilities with other parties in the region, including escalating tensions and direct confrontations between Israel and Iran and its proxies. In October 2025, a ceasefire agreement was reached, resulting in a cessation of military activities. However, the situation remains volatile, with the potential for renewed escalation involving Hamas or other terrorist organizations. Additionally, the current political situation in Syria may create further geopolitical instability in the region.

Current wording

On October 7, 2023, Hamas militants and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of terror attacks on civilian and military targets. Following the attack, Israel declared war against Hamas and commenced a military campaign against these terrorist organizations. Israel has also been involved in military conflicts with Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies such as the Houthi movement in Yemen. In October 2025, a ceasefire agreement was reached between Israel and Hamas, leading to a cessation of direct military activities between these parties. In June 2025, following intelligence assessments indicating imminent attacks, Israel conducted strikes against Iranian military and nuclear infrastructure together with the United States, which led to Iranian counterattacks before a ceasefire was reached on June 24, 2025, after 12 days of hostilities. On February 28, 2026, Israel and the United States launched a second, larger-scale offensive against Iran. Iran retaliated with sustained attacks across the Middle East and was joined by renewed Hezbollah attacks on Israel. On April 8, 2026, a temporary ceasefire agreement was reached, resulting in a cessation of military activities. However, the situation remains volatile, with the potential for renewed escalation involving Iran or other terrorist organizations.

Previous wording

We quantify our expansion across existing customers through our net dollar retention rate. Our net dollar retention rate compares our annual recurring revenue (“ARR”) from the same set of customers across comparable periods. We define ARR as the annualized revenue run-rate of subscription agreements from all customers as of the last month of the quarter. The ARR includes monthly subscription customers so long as we generate revenue from these customers. We annualize our monthly subscriptions by taking the revenue we would contractually expect to receive from such customers in a given month and multiplying it by 12. We calculate net dollar retention rate by first identifying customers (the “Base Customers”), which were customers in the last month of a particular quarter (the “Base Quarter”). We then calculate the contracted ARR from these Base Customers in the last month of the same quarter of the subsequent year (the “Comparison Quarter”). This calculation captures upsells, contraction, and attrition since the Base Quarter. We then divide total Comparison Quarter ARR by total Base Quarter ARR for Base Customers. Our net dollar retention rate in a particular quarter is obtained by averaging the result from that particular quarter with the corresponding results from each of the prior three quarters. Our net dollar retention rate may fluctuate as a result of a number of factors, including the level of penetration within our customer base, expansion of products and features, and our ability to retain our customers. As of September 30, 2025 and 2024, our net dollar retention rate was 118% and 117%, respectively. We expect our net dollar retention rate to remain relatively stable, with minor fluctuations around current levels.

Current wording

We quantify our expansion across existing customers through our net dollar retention rate. Our net dollar retention rate compares our annual recurring revenue (“ARR”) from the same set of customers across comparable periods. We define ARR as the annualized revenue run-rate of subscription agreements from all customers as of the last month of the quarter. The ARR includes monthly subscription customers so long as we generate revenue from these customers. We annualize our monthly subscriptions by taking the revenue we would contractually expect to receive from such customers in a given month and multiplying it by 12. We calculate net dollar retention rate by first identifying customers (the “Base Customers”), which were customers in the last month of a particular quarter (the “Base Quarter”). We then calculate the contracted ARR from these Base Customers in the last month of the same quarter of the subsequent year (the “Comparison Quarter”). This calculation captures upsells, contraction, and attrition since the Base Quarter. We then divide total Comparison Quarter ARR by total Base Quarter ARR for Base Customers. Our net dollar retention rate in a particular quarter is obtained by averaging the result from that particular quarter with the corresponding results from each of the prior three quarters. Our net dollar retention rate may fluctuate as a result of a number of factors, including the level of penetration within our customer base, expansion of products and features, and our ability to retain our customers. As of March 31, 2026 and 2025, our net dollar retention rate was 120% and 116%, respectively. We expect our net dollar retention rate to remain relatively stable, with minor fluctuations around current levels.

Previous wording

We focus on growing the number of large customers as a measure of our ability to scale with our customers and attract larger organizations to adopt our products. As of September 30, 2025, 1,121 of our customers had ARR of $100,000 or more, increasing from 1,018 customers as of December 31, 2024. We had 71 customers with ARR of at least $1.0 million as of September 30, 2025, increasing from 52 customers as of December 31, 2024.

Current wording

We focus on growing the number of large customers as a measure of our ability to scale with our customers and attract larger organizations to adopt our products. As of March 31, 2026, 1,225 of our customers had ARR of $100,000 or more, increasing from 1,168 customers as of December 31, 2025. We had 80 customers with ARR of at least $1.0 million as of March 31, 2026, increasing from 74 customers as of December 31, 2025.

Previous wording

The following table summarizes our cash flows for the periods presented and provides a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, a non-GAAP financial measure, for each of the periods presented:

Current wording

The following table provides a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, a non-GAAP financial measure, for each of the periods presented:

Previous wording

Sales and marketing expenses primarily consist of personnel-related expenses, share-based compensation expenses, sales commissions primarily associated with our sales and marketing organizations, public cloud infrastructure costs associated with our free trials and open source software options, and costs associated with marketing programs and user events. Marketing programs include advertising, promotional events, and brand-building activities. We plan to increase our investment in sales and marketing over the foreseeable future, as we continue to hire additional personnel and invest in sales and marketing programs.

Current wording

Sales and marketing expenses primarily consist of personnel-related expenses, share-based compensation expenses, sales commissions, public cloud infrastructure costs associated with our free trials and open source software options, and costs associated with marketing programs and user events. Marketing programs include advertising, promotional events, and brand-building activities. We plan to increase our investment in sales and marketing over the foreseeable future, as we continue to hire additional personnel and invest in sales and marketing programs.

Previous wording

Income tax expense (benefit) consists primarily of income taxes related to the United States and other foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on deferred tax assets in Israel as we have concluded that it is not more likely than not that the deferred tax assets will be realized. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, non-deductible expenses, excess tax benefits from share-based compensation awards, and changes in our valuation allowance.

Current wording

Income tax expense consists primarily of income taxes related to the U.S. and other foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on deferred tax assets in Israel as we have concluded that it is not more likely than not that the deferred tax assets will be realized. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, non-deductible expenses, excess tax benefits from share-based compensation awards, and changes in our valuation allowance.

Previous wording

The increase in total subscription revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 consisted of approximately $24.0 million in growth from existing customers and the remaining attributable to new customers.

Current wording

The increase in total subscription revenue for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, consisted of approximately $26.2 million growth from existing customers and the remaining attributable to new customers.

Previous wording

Total cost of revenue increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to an increase of $1.6 million in third-party hosting costs mainly driven by increased revenue from SaaS subscriptions and an increase of $1.1 million in personnel-related expenses mainly as a result of increased headcount.

Current wording

Total cost of revenue increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily attributable to an increase of $2.1 million in third-party hosting costs mainly driven by increased revenue from SaaS subscriptions and an increase of $1.5 million in personnel-related expenses mainly as a result of increased headcount.

Previous wording

Gross margin increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily due to revenue growth with improved operating leverage.

Current wording

Gross margin increased for three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to revenue growth with improved operating leverage.

Previous wording

Research and development expense increased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily attributable to an increase of $12.8 million in personnel-related expenses mainly as a result of increased headcount and an increase of $10.0 million in share-based compensation expense.

Current wording

Research and development expense increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily attributable to an increase of $7.2 million in personnel-related expenses mainly as a result of increased headcount.

Previous wording

Sales and marketing expense increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to an increase of $2.3 million in personnel-related expenses mainly as a result of increased headcount, an increase of $2.0 million in commission expense, and an increase of $0.9 million in share-based compensation expense.

Current wording

Sales and marketing expense increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily attributable to an increase of $4.3 million in personnel-related expenses mainly as a result of increased headcount.

Previous wording

Research and development expense increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily attributable to an increase of $6.4 million in personnel-related expenses mainly as a result of increased headcount and an increase of $1.6 million in share-based compensation expense as discussed in the section titled “Share-Based Compensation Expense” below.

Current wording

General and administrative expense increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily attributable to an increase of $2.6 million in share-based compensation expense as discussed in the section titled “Share-Based Compensation Expense” below and an increase of $1.9 million in personnel-related expenses mainly as a result of increased headcount.

Previous wording

Share-based compensation expenses increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily attributable to grants to new and existing employees.

Current wording

Share-based compensation expense increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily within general and administrative expenses. The increase was attributable to equity awards granted to new and existing employees and an increased allocation to general and administrative functions.

Previous wording

Interest and other income, net increased for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to higher interest income on deposits and marketable securities as a result of higher investment balances.

Current wording

Interest and other income, net increased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to higher interest income as a result of increased investments in bank deposits and marketable securities.

Previous wording

As of September 30, 2025, our principal sources of liquidity were cash, cash equivalents, and short-term investments of $651.1 million. Cash and cash equivalents primarily consist of cash in banks and money market funds. Short-term investments generally consist of bank deposits, certificates of deposit, commercial paper, corporate debt securities, municipal securities, and government and agency debt. We believe our existing cash, cash equivalents, and short-term investments, together with cash provided by operations, will be sufficient to meet our needs for the next 12 months, as well as in the long-term.

Current wording

As of March 31, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term investments of $741.2 million. Cash and cash equivalents primarily consist of cash in banks and money market funds. Short-term investments generally consist of bank deposits, certificates of deposit, commercial paper, corporate debt securities, municipal securities, and government and agency debt. We believe our existing cash, cash equivalents, and short-term investments, together with cash provided by operations, will be sufficient to meet our needs for the next 12 months, as well as in the long-term.

Previous wording

Our future capital requirements will depend on many factors including our revenue growth rate, subscription renewal activity, billing frequency, the timing, and extent of spending to support further sales and marketing and research and development efforts, the continuing market acceptance of our products and services, as well as expenses associated with our international expansion, the timing, and extent of additional capital expenditures to invest in existing and new office spaces. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be materially and adversely affected.

Current wording

Our future capital requirements will depend on many factors including our revenue growth rate, subscription renewal activity, billing frequency, the timing, and extent of spending to support further sales and marketing and research and development efforts, the continuing market acceptance of our products and services, as well as expenses associated with our international expansion, the timing, and extent of additional capital expenditures to invest in existing and new office spaces. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights; additionally, we may repurchase our ordinary shares from time to time under our share repurchase program. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be materially and adversely affected.

Previous wording

Net cash provided by operating activities of $61.8 million for the nine months ended September 30, 2024 was related to our net loss of $46.0 million adjusted for non-cash charges of $108.5 million, including share-based compensation expense of $92.3 million and depreciation and amortization expense of $14.6 million, and net cash outflow of $0.6 million from changes in our operating assets and liabilities. The total cash outflows of $38.7 million from changes in our operating assets and liabilities were primarily related to an increase of $15.8 million in accounts receivable, an increase of $8.2 million in deferred contract acquisition costs, an increase of $6.9 million in prepaid expenses and other assets mainly due to timing of payments, and a decrease of $6.2 million in operating lease liabilities as a result of payments. These outflows were partially offset by an increase of $30.1 million in deferred revenue and an increase of $8.0 million in accrued expense and other liabilities mainly due to accrued compensation and benefits. The increases in deferred revenue, accounts receivable, and deferred contract acquisition costs were driven by higher sales.

Current wording

Net cash provided by operating activities of $38.4 million for three months ended March 31, 2026 was related to our net loss of $8.3 million, adjusted for non-cash charges of $46.3 million, including share-based compensation expense of $39.6 million and depreciation and amortization of $5.6 million, and changes in our operating assets and liabilities of $0.4 million. Changes in our operating assets and liabilities consisted primarily of a decrease of $6.3 million in accounts receivable due to timing of billing and collections, partially offset by an increase of $2.4 million in prepaid expenses and other assets due to timing of payments, a decrease of $2.1 million in operating lease liabilities as a result of lease payments, and a decrease of $1.8 million in accrued expense and other liabilities. The decrease in accrued expense and other liabilities were primarily attributable to commission payouts and a reduction in ESPP withholdings as a result of employee share purchases, partially offset by lease incentives received for a lease that has not yet commenced.

Previous wording

Net cash provided by operating activities of $95.0 million for the nine months ended September 30, 2025 was related to our net loss of $56.6 million adjusted for non-cash charges of $136.2 million, including share-based compensation expense of $115.7 million and depreciation and amortization expense of $18.9 million, and changes in our operating assets and liabilities of $15.4 million. Changes in our operating assets and liabilities were primarily related to an increase of $34.5 million in deferred revenue and an increase of $6.7 million in accounts payable due to timing of payments. The inflows were partially offset by an increase of $13.9 million in accounts receivable, an increase of $6.7 million in deferred contract acquisition costs, and a decrease of $6.6 million in operating lease liabilities as a result of payments. The increases in accounts receivable, deferred revenue, and deferred contract acquisition costs were driven by higher sales.

Current wording

Net cash provided by operating activities of $28.8 million for three months ended March 31, 2025 was related to our net loss of $18.5 million, adjusted for non-cash charges of $44.0 million, including share-based compensation expense of $36.8 million and depreciation and amortization of $6.7 million, and changes in our operating assets and liabilities of $3.3 million. Changes in our operating assets and liabilities consisted primarily of a decrease of $6.5 million in accounts receivable due to timing of billing and collections, partially offset by a decrease of $2.2 million in operating lease liabilities as a result of lease payments.

Previous wording

Net cash used in investing activities of $96.8 million for the nine months ended September 30, 2025 consisted primarily of net purchases of short-term investments of $94.1 million.

Current wording

Net cash used in investing activities of $53.1 million for the three months ended March 31, 2026 consisted primarily of net purchases of short-term investments of $52.0 million.

Previous wording

Net cash used in investing activities of $99.7 million for the nine months ended September 30, 2024 consisted primarily of payments for the business acquisition of $156.7 million, net of cash acquired, partially offset by the net proceeds from maturities and sales of short-term investments of $59.5 million.

Current wording

Net cash used in investing activities of $45.8 million for the three months ended March 31, 2025 consisted primarily of net purchases of short-term investments of $45.1 million.

Previous wording

Net cash provided by financing activities of $16.8 million for the nine months ended September 30, 2024 consisted primarily of proceeds from exercise of share options of $8.8 million and proceeds from employee share purchases under our ESPP of $8.7 million.

Current wording

Net cash used in financing activities of $0.2 million for the three months ended March 31, 2026 consisted primarily of net payments of $8.9 million to tax authorities and employees from our employee equity transactions, partially offset by proceeds from employee share purchases under our ESPP of $8.2 million.

Previous wording

Net cash provided by financing activities of $29.2 million for the nine months ended September 30, 2025 consisted of proceeds from employee share purchases under our ESPP of $11.9 million, proceeds from exercise of share options of $10.0 million, and net proceeds from employee equity transactions to be remitted to tax authorities of $7.3 million.

Current wording

Net cash provided by financing activities of $11.5 million for the three months ended March 31, 2025 consisted of proceeds from employee share purchases under our ESPP of $6.3 million, proceeds from exercise of share options of $3.8 million, and net proceeds of $1.5 million from our employee equity transactions to be remitted to tax authorities.

Previous wording

As of September 30, 2025, we had an additional commitment of $110.0 million for an operating lease related to a facility that had not yet commenced. The lease will commence in 2026 with a lease term of 10 years.

Current wording

As of March 31, 2026, we had an additional commitment of $114.9 million for an operating lease related to a facility that had not yet commenced. The lease is expected to commence in the third quarter of 2026 with a lease term of 10 years.

Previous wording

Our critical accounting policies and estimates were disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report. There have been no significant changes to these policies and estimates during the nine months ended September 30, 2025.

Current wording

Our critical accounting policies and estimates were disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report. There have been no significant changes to these policies and estimates during the three months ended March 31, 2026.