JFrog Ltd

Previous wording

Investing in our ordinary shares involves a high degree of risk. A description of the risks and uncertainties associated with our business and ownership of our ordinary shares is set forth below. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and the related notes thereto, before making a decision to invest in our ordinary shares. The risks and uncertainties described below are not the only ones we face. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, results of operations, financial condition, and prospects could be materially and adversely affected. In that event, the market price of our ordinary shares could decline and you could lose all or part of your investment.

Current wording

Investing in our ordinary shares involves a high degree of risk. A description of the risks and uncertainties associated with our business and ownership of our ordinary shares is set forth below. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and the related notes thereto, before making a decision to invest in our ordinary shares. The risks and uncertainties described below are not the only ones we face. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. Certain of these risks have occurred in the past, and some are currently affecting our business, as described below. If any of these risks occur or continue, our business, results of operations, financial condition, and prospects could be materially and adversely affected. In that event, the market price of our ordinary shares could decline and you could lose all or part of your investment.

Previous wording

our ability to maintain the security and availability of our products;

Current wording

our ability to maintain the security and availability of our products, including risks arising from disclosed product vulnerabilities, exploitation by threat actors, and customers’ failure to implement available patches or mitigations promptly;

Previous wording

We have experienced significant growth and increased demand for our products over time. Our total revenues for the three months ended June 30, 2026 and 2025 were $163.8 million and $127.2 million, respectively, representing 29% growth, and $317.7 million and $249.6 million for the six months ended June 30, 2026 and 2025, respectively, representing 27% growth. Our employee headcount has also increased from approximately 1,600 as of December 31, 2024 to approximately 1,800 as of December 31, 2025. As of June 30, 2026, 1,291 of our customers had ARR of $100,000 or more, increasing from 1,168 customers as of December 31, 2025, and 97 of our customers had ARR of $1,000,000 or more, increasing from 74 customers as of December 31, 2025. 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. The growth and expansion of our business places a continuous and significant strain on our management, operational, and financial resources. In addition, as customers adopt our products for an increasing number of use cases, we have had to support more complex commercial relationships. We must continue to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with cloud providers, technology partners, and other third parties, and our ability to manage headcount and processes in an efficient manner to manage our growth effectively.

Current wording

We have experienced significant growth and increased demand for our products over time. Our total revenues for the three months ended September 30, 2026 and 2025 were $179.2 million and $136.9 million, respectively, representing 31% growth, and $496.9 million and $386.5 million for the nine months ended September 30, 2026 and 2025, respectively, representing 29% growth. Our employee headcount has also increased from approximately 1,600 as of December 31, 2024 to approximately 1,800 as of December 31, 2025. As of September 30, 2026, 1,357 of our customers had ARR of $100,000 or more, increasing from 1,168 customers as of December 31, 2025, and 112 of our customers had ARR of $1,000,000 or more, increasing from 74 customers as of December 31, 2025. 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. The growth and expansion of our business places a continuous and significant strain on our management, operational, and financial resources. In addition, as customers adopt our products for an increasing number of use cases, we have had to support more complex commercial relationships. We must continue to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with cloud providers, technology partners, and other third parties, and our ability to manage headcount and processes in an efficient manner to manage our growth effectively.

Previous wording

As noted above, our total revenues for the three and six months ended June 30, 2026 grew by 29% and 27%, respectively, compared to the corresponding prior year periods. You should not rely on the results of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, our revenue growth rate may decline in future periods. Many factors may contribute to declines in our growth rate, including but not limited to

Current wording

As noted above, our total revenues for the three and nine months ended September 30, 2026 grew by 31% and 29%, respectively, compared to the corresponding prior year periods. You should not rely on the results of any prior quarterly or annual period as an indication of our future performance. Even if our revenue continues to increase, our revenue growth rate may decline in future periods. Many factors may contribute to declines in our growth rate, including but not limited to

Previous wording

If we are not able to keep pace with technological and competitive developments or fail to integrate our products with a variety of technologies that are developed by others, or the market perceives either of these to be true, our products may become less marketable, less competitive, or obsolete, and our results of operations and the price of our ordinary shares may be adversely affected.

Current wording

If we are not able to keep pace with technological and competitive developments, maintain the quality of our products, or fail to integrate our products with a variety of technologies that are developed by others, or the market perceives any of these to be true, our products may become less marketable, less competitive, or obsolete, and our results of operations and the price of our ordinary shares may be adversely affected.

Previous wording

In order to provide value for our customers, we must offer a platform that allows our customers to consume source code and open source libraries from repositories, manage the dependencies among components within software packages, move packages and ML models to a universal repository, ingest packages from third parties, including open source libraries, scan for vulnerabilities through various stages, distribute to endpoints, and deploy in production, all through a single user access point. The success of any new product introductions depends on a number of factors including, but not limited to, timely and successful product development, market acceptance, the quality of our product and the user experience, our ability to manage the risks associated with new product releases, the effective management of development and other spending in connection with anticipated demand for new products, and the availability of newly developed products. We have in the past experienced bugs, errors, or other defects or deficiencies in new products and product updates and delays in releasing new products, deployment options, and product enhancements and may have similar experiences in the future. As a result, some of our customers may either defer purchasing our products until the next upgrade is released or switch to a competitor if we are not able to keep up with technological developments. For example, AI and ML may change the way our industry operates, and businesses that are slow to adopt or fail to adopt these new technologies may face a competitive disadvantage. In addition, if defects are not discovered until after customers purchase our products, our customers could lose confidence in the quality of our products and our reputation and brand may be harmed. If significant bugs, errors, or other defects or deficiencies are not discovered and patched in a timely manner, unauthorized parties could gain access to such products. Any negative publicity related to the perceived quality of our products could harm our business, results of operations, and financial condition. See also, “We have acquired, and may in the future acquire, complementary businesses which could require significant management attention, disrupt our business, dilute shareholder value, and adversely affect our results of operations.” in this Part II, Item 1A.

Current wording

In order to provide value for our customers, we must offer a platform that allows our customers to consume source code and open source libraries from repositories, manage the dependencies among components within software packages, move packages and ML models to a universal repository, ingest packages from third parties, including open source libraries, scan for vulnerabilities through various stages, distribute to endpoints, and deploy in production, all through a single user access point. The success of any new product introductions depends on a number of factors including, but not limited to, timely and successful product development, market acceptance, the quality of our product and the user experience, our ability to manage the risks associated with new product releases, the effective management of development and other spending in connection with anticipated demand for new products, and the availability of newly developed products. We have in the past experienced bugs, errors, or other defects or deficiencies in new products and product updates and delays in releasing new products, deployment options, and product enhancements and may have similar experiences in the future. As a result, some of our customers may either defer purchasing our products until the next upgrade is released or switch to a competitor if we are not able to keep up with technological developments. For example, AI and ML may change the way our industry operates, and businesses that are slow to adopt or fail to adopt these new technologies may face a competitive disadvantage. In addition, if defects are not discovered until after customers purchase our products, our customers could lose confidence in the quality of our products and our reputation and brand may be harmed. Significant bugs, errors, defects, or deficiencies, including security vulnerabilities, have been and may in the future be exploited by unauthorized parties to gain access to our products, including where vulnerabilities are not discovered and patched prior to exploitation or where customers do not promptly implement available updates or mitigations. Any negative publicity related to the perceived quality of our products could harm our business, results of operations, and financial condition. See also, “We have acquired, and may in the future acquire, complementary businesses which could require significant management attention, disrupt our business, dilute shareholder value, and adversely affect our results of operations.” in this Part II, Item 1A.

Previous wording

A real or perceived defect, security vulnerability, error, or performance failure in our platform could cause us to lose revenue, expose us to liability, and damage our reputation.

Current wording

A real or perceived defect, security vulnerability, error, or performance failure in our platform, including delayed remediation or customer implementation of available updates, could cause us to lose revenue, expose us to liability, and damage our reputation.

Previous wording

Our products are inherently complex and, despite extensive testing and quality control, have in the past and may in the future contain defects or errors, or security vulnerabilities, especially when first introduced, or not perform as contemplated. These defects, security vulnerabilities, errors, or other performance failures could cause breach of contractual provisions, thereby exposing us to liabilities, termination of agreements, loss of customers or revenue, order cancellations, service terminations, damage to our reputation, or lack of market acceptance of our products. As the use of our products, including products that were recently acquired or developed, expands to more sensitive, secure, or mission critical uses by our customers, we may be subject to increased contractual liability, scrutiny, loss of revenue or customers, potential reputational risk, or potential liability should our products fail to perform as contemplated in such deployments. We have in the past and may in the future need to issue corrective releases of our products to fix these defects, errors, security vulnerabilities, or performance failures, and develop processes and controls which could require us to allocate significant research and development and customer support resources to address these problems.

Current wording

Our products are inherently complex and, despite extensive testing and quality control, have in the past and may in the future contain defects or errors, or security vulnerabilities, especially when first introduced, or not perform as contemplated. Threat actors have in the past and may in the future exploit vulnerabilities before customers apply security updates or otherwise complete remediation. Security updates also may not remedy unauthorized access or other compromises that occurred before the updates were applied. For example, earlier in 2026, we issued updates addressing vulnerabilities in our self-managed products, certain of which had been exploited previously, including within the environments of customers using hybrid deployments. Defects, security vulnerabilities, errors, or other performance failures could result in liabilities, termination of agreements, loss of customers or revenue, order cancellations, service terminations, damage to our reputation, or lack of market acceptance of our products. They could also result in unauthorized access, privilege escalation, exposure or modification of information, alteration of software artifacts, service disruption, or compromise of connected development, build, deployment, or production systems. Hybrid deployments that connect customer-managed components to our cloud offerings have allowed, and may in the future allow, a vulnerability exploited in a self-managed component to affect a customer's cloud instance. Although we have implemented additional security measures designed to address these risks, such measures may not be effective against all threats. As the use of our products, including products that were acquired or developed, expands to more sensitive, secure, or mission critical uses by our customers, we may be subject to increased contractual liability, scrutiny, loss of revenue or customers, potential reputational risk, or potential liability should our products fail to perform as contemplated in such deployments. We have in the past and may in the future need to issue corrective releases of our products to fix these defects, errors, security vulnerabilities, or performance failures, and develop processes and controls which could require us to allocate significant research and development and customer support resources to address these problems.

Previous wording

Incorrect implementation or use of, or our customers’ failure to update, our products could result in customer dissatisfaction and negatively affect our business, operations, financial results, and growth prospects.

Current wording

Incorrect implementation or use of our products, customer use of configurations that we permit but do not recommend, or our customers’ failure to install available security updates and mitigations promptly, could result in security incidents and customer dissatisfaction which could negatively affect our business, operations, financial results, and growth prospects.

Previous wording

Our products are often operated in large scale, complex IT environments. Our customers and some partners require training and experience in the proper use of and the benefits that can be derived from our products to maximize their potential. If users of our products do not implement, use, or update our products correctly or as intended, then inadequate performance and/or security vulnerabilities may result, and such customers may be at a higher risk of security incidents and breaches. Because our customers rely on our products to manage a wide range of operations, the incorrect implementation, use of, or our customers’ failure to update, our products or our failure to train customers on how to use our products productively has in the past and may in the future result in customer dissatisfaction and may adversely affect our reputation and brand. Our failure to effectively provide training and implementation services to our customers could result in lost opportunities for follow-on sales to these customers and decrease subscriptions by new customers, which would adversely affect our business and growth prospects.

Current wording

Our products are often operated in large scale, complex IT environments. Our customers and some partners require training and experience in the proper use of and the benefits that can be derived from our products to maximize their potential. Customers operating self-hosted deployments control the timing and manner of implementing patches, upgrades, configuration changes, and other updates and mitigations. Some customers use configurations that are allowed, but that we recommend against. Some customers may delay updates because of operational complexity, compatibility concerns, testing requirements, resource constraints, or maintenance schedules. If users of our products do not implement, use, configure, or update our products as recommended, correctly or as intended, then inadequate performance and/or security vulnerabilities may result, and such customers may be at a higher risk of security incidents and breaches, and certain customers have experienced such incidents. An available update may prevent future exploitation without detecting or eliminating compromise that occurred before installation. Actual or perceived delays in our release of security updates, customer application of such updates, or the effectiveness of other remediation measures could increase customer-support costs and claims. These circumstances could also reduce renewals, delay new sales, and harm our reputation. Because our customers rely on our products to manage a wide range of operations, the incorrect implementation, use of, or our customers’ failure to update, our products, use of configurations that are not recommended, or our failure to train customers on how to use our products productively has in the past and may in the future result in customer dissatisfaction and may adversely affect our reputation and brand. Our failure to effectively provide training and implementation services to our customers could result in lost opportunities for follow-on sales to these customers and decrease subscriptions by new customers, which would adversely affect our business and growth prospects.

Previous wording

In addition, our website and internal technology infrastructure may experience performance issues due to a variety of factors, including infrastructure changes, human or software errors, website or third-party hosting disruptions, capacity constraints, technical failures, natural disasters, or fraud or security attacks. If our website is unavailable, our business could be harmed. We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases of new features and applications for our products. To the extent that we do not effectively upgrade our systems as needed and continually develop our technology to accommodate actual and anticipated changes in technology, our business and results of operations may be harmed.

Current wording

In addition, our website and internal technology infrastructure have in the past and may in the future experience performance issues due to a variety of factors, including infrastructure changes, human or software errors, website or third-party hosting disruptions, capacity constraints, technical failures, natural disasters, or fraud or security attacks. If our website is unavailable, our business could be harmed. We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases of new features and applications for our products. To the extent that we do not effectively upgrade our systems as needed and continually develop our technology to accommodate actual and anticipated changes in technology, our business and results of operations may be harmed.

Previous wording

Sales to government entities are subject to a number of risks that are specific to public sector customers. Selling to government entities can be highly complex, competitive, and may have longer sales cycles, often requiring significant upfront time, expertise, and expense without any assurance that these efforts will generate a sale. Government requirements for software like ours may change, thereby restricting our ability to sell into the U.S. federal government, U.S. state and local governments, or non-U.S. government entities, or non-U.S. government-controlled entities until we have complied with such requirements. Government demand and payment for our platform may be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform. Additionally, any actual or perceived privacy, data protection, or data security incident, or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our platform.

Current wording

Sales to government entities are subject to a number of risks that are specific to public sector customers. Selling to government entities can be highly complex, competitive, and may have longer sales cycles, often requiring significant upfront time, expertise, and expense without any assurance that these efforts will generate a sale. Government requirements for software like ours may change, thereby restricting our ability to sell into the U.S. federal government, U.S. state and local governments, or non-U.S. government entities, or non-U.S. government-controlled entities until we have complied with such requirements. Government authorities have in the past and may in the future identify vulnerabilities affecting our products as known exploited vulnerabilities or otherwise require accelerated patching, mitigation, forensic review, or discontinuation of affected versions. Such actions may increase procurement scrutiny, delay or restrict sales, increase support obligations, or require additional security assurances. Actual or perceived failure by us, our partners, or customers to satisfy applicable remediation requirements could adversely affect our public-sector business and reputation. Government demand and payment for our platform may be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform. Additionally, any actual or perceived privacy, data protection, or data security incident, or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our platform.

Previous wording

We have deployed AI and ML technologies in our products and business, including developing new features utilizing AI technologies. AI technology may become more important to our operations or to our future growth over time. We may fail to properly implement or market our AI features and platform. Our platform and systems may become targets for abuse powered by AI, and our support for MLOps may fall behind existing demands which are changing rapidly. Additionally, with the introduction of new technologies, the evolution of AI, and new market entrants, we expect competition may intensify in the future. Our competitors or other third parties may incorporate AI technology into their products, offerings, and solutions more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Suppliers of the third-party AI models we use in our platform and business could terminate their relationship with us, cease to make certain models available to us, or make certain models more expensive for us to use.

Current wording

We have deployed AI and ML technologies in our products and business, including developing new features utilizing AI technologies. AI technology has become more important to our operations or to our future growth over time. We may fail to properly implement or market our AI features and platform. Our platform and systems have in the past been, and may in the future be, targets of abuse by AI systems, including autonomous AI agents, and our support for MLOps may fall behind existing demands which are changing rapidly. Additionally, with the introduction of new technologies, the evolution of AI, and new market entrants, we expect competition may intensify in the future. Our competitors or other third parties may incorporate AI technology into their products, offerings, and solutions more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Suppliers of the third-party AI models and agents we use in our platform and business could terminate their relationship with us, cease to make certain models or agents available to us, or make certain models or agents more expensive for us to use.

Previous wording

AI-generated content, became effective on August 2, 2026. Under the AI Act, fines can reach up to €35 million or 7% of global annual turnover. In May 2026, the EU Council and European Parliament reached a provisional political agreement on the Digital Omnibus on AI, which amends the AI Act in several respects. The agreement defers the compliance deadlines for high-risk AI system obligations to December 2, 2027 for standalone high-risk systems and to August 2, 2028 for AI systems embedded in regulated products and expands the enforcement powers of the EU AI Office. The AI Act may impact the incorporation of AI technologies into our offerings and business in Europe. Other countries, including the U.S. at both the state and federal level, are increasingly looking to regulate AI, or have already done so. For example, several AI bills have been introduced in Congress and in state legislatures. We may not be able to anticipate how to respond to rapidly evolving legal frameworks, and we may have to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks on AI and ML technologies are not consistent across jurisdictions. New laws, decisions, and guidance regarding AI technologies may limit our ability to use AI models, or require us to make changes to our operations or platform, which would result in an increase to operating costs and hinder our ability to improve our offering to our customers. Accordingly, it is not possible to predict all of the risks related to the use of AI and ML technologies that we may face, and changes in laws, rules, directives, and regulations governing the use of AI and ML technologies may adversely affect our ability to use or sell these technologies or subject us to legal liability.

Current wording

AI technology also may be the subject of new or modified legal and regulatory obligations. For example, the EU AI Act (the “AI Act”) entered into force on August 1, 2024, with obligations related to certain AI practices and AI literacy, effective February 2, 2025, and provisions pertaining to General Purpose AI Models, effective August 2, 2025. Transparency obligations under the AI Act, including requirements to disclose to users when they are interacting with AI systems and obligations relating to AI-generated content, became effective on August 2, 2026. Under the AI Act, fines can reach up to €35 million or 7% of global annual turnover. In May 2026, the EU Council and European Parliament reached a provisional political agreement on the Digital Omnibus on AI, which amends the AI Act in several respects. The agreement defers certain compliance deadlines for high-risk AI system obligations to December 2, 2027 for standalone high-risk systems and to August 2, 2028 for AI systems embedded in regulated products and expands the enforcement powers of the EU AI Office. The AI Act may impact the incorporation of AI technologies into our offerings and business in Europe. Other countries, including the U.S. at both the state and federal level, are increasingly looking to regulate AI, or have already done so. For example, several AI bills have been introduced in Congress and in state legislatures. We may not be able to anticipate how to respond to rapidly evolving legal frameworks, and we may have to expend resources to adjust our offerings in certain jurisdictions if the legal frameworks on AI and ML technologies are not consistent across jurisdictions. New laws, decisions, and guidance regarding AI technologies may limit our ability to use AI models, or require us to make changes to our operations or platform, which would result in an increase to operating costs and hinder our ability to improve our offering to our customers. Accordingly, it is not possible to predict all of the risks related to the use of AI and ML technologies that we may face, and changes in laws, rules, directives, and regulations governing the use of AI and ML technologies may adversely affect our ability to use or sell these technologies or subject us to legal liability.

Previous wording

can be waived by the employee and that, in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, applying interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although we generally enter into assignment of invention and waiver agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us, and pursuant to which such individuals explicitly and irrevocably waive any right to claim royalties or other consideration in respect of service inventions, including under Section 134 of the Patents Law, we may nevertheless face claims demanding remuneration in consideration for assigned inventions. Such waivers are generally recognized and enforceable under Israeli law and are taken into account by the Committee when evaluating such claims. As a consequence of such claims, we could be required to incur legal costs and expend management time in responding to or defending against such claims, which are generally assessed in light of the explicit waivers executed by our employees, and such circumstances and developments could negatively affect our business.

Current wording

A significant portion of our intellectual property has been developed by our employees in the course of their employment for us. Under the Israeli Patents Law, 5727-1967 (the “Patents Law”), inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patents Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Patents Law, shall determine whether the employee is entitled to remuneration for his or her inventions. Case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that, in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, applying interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although we generally enter into assignment of invention and waiver agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us, and pursuant to which such individuals explicitly and irrevocably waive any right to claim royalties or other consideration in respect of service inventions, including under Section 134 of the Patents Law, we may nevertheless face claims demanding remuneration in consideration for assigned inventions. Such waivers are generally recognized and enforceable under Israeli law and are taken into account by the Committee when evaluating such claims. As a consequence of such claims, we could be required to incur legal costs and expend management time in responding to or defending against such claims, which are generally assessed in light of the explicit waivers executed by our employees, and such circumstances and developments could negatively affect our business.

Previous wording

Techniques used to sabotage or obtain unauthorized access to systems or networks are constantly evolving and, in some instances, are not identified until launched against a target. For example, AI technologies may be used in connection with certain cybersecurity attacks and vulnerabilities, resulting in heightened risks of security breaches and incidents, including through inadvertent or intentional actions by our employees, contractors, consultants, partners, and/or other third parties. We and our vendors and service providers may be unable to anticipate these techniques, react, remediate, or otherwise address any security breach or other security incident in a timely manner, or implement adequate preventative measures. We have experienced vulnerabilities in the past, and we identify product vulnerabilities from time to time, including through our bug bounty program. Certain vulnerabilities could be exploited if our customers do not patch vulnerable versions of the product. We may experience security breaches and incidents, including those resulting from a cybersecurity attack or phishing attack, whether from hackers, criminal groups, or state-sponsored organizations, or other means, including unauthorized access, unauthorized usage, malware, similar events or causes, or employee or contractor error or negligence, or those of vendors, service providers, and strategic partners on which we rely. There also have been and may continue to be significant supply chain attacks. Our vendors and service providers have been and, in the future may be, the targets of cyberattacks, malicious software, supply chain attacks, phishing schemes, fraud, and other risks to the confidentiality, security, and integrity of their systems and the data they process for us. Certain of our vendors and service providers have suffered from security breaches and incidents, and from disruptions to their systems and networks, and we cannot guarantee that our or our vendors or service providers’ systems and networks have not been breached or do not contain exploitable vulnerabilities, defects, or bugs that could result in a breach of, incident impacting, or other disruption to our systems and networks or the systems or networks of third parties that support us and our services. In addition, our customers and users may disclose or leak their passwords, API keys, or secrets that could lead to unauthorized access to their accounts and data, including information about their software, source code, and security environment, stored within our products and associated systems.

Current wording

We may experience security breaches and incidents, including those resulting from a cybersecurity attack or phishing attack, whether from hackers, criminal groups, or state-sponsored organizations, or other means, including unauthorized access, unauthorized usage, malware, similar events or causes, or employee or contractor error or negligence, or those of vendors, service providers, and strategic partners on which we rely. There also have been and may continue to be significant supply chain attacks. Our vendors and service providers have been and, in the future may be, the targets of cyberattacks, malicious software, supply chain attacks, phishing schemes, fraud, and other risks to the confidentiality, security, and integrity of their systems and the data they process for us. Certain of our vendors and service providers have suffered from security breaches and incidents, and from disruptions to their systems and networks, and we cannot guarantee that our or our vendors or service providers’ systems and networks have not been breached or do not contain exploitable vulnerabilities, defects, or bugs that could result in a breach of, incident impacting, or other disruption to our systems and networks or the systems or networks of third parties that support us and our services. In addition, our customers and users may disclose or leak their passwords, API keys, or secrets that could lead to unauthorized access to their accounts and data, including information about their software, source code, and security environment, stored within our products and associated systems.

Previous wording

Any allegations or violation of the FCPA or other applicable anti-bribery, anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, sanctions, settlements, prosecution, enforcement actions, fines, damages, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, or suspension or debarment from U.S. government contracts, all of which may have an adverse effect on our reputation, business, results of operations, and prospects. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. In addition, the U.S. government may seek to hold us liable for successor liability for FCPA violations committed by companies in which we invest or that we acquire. As a general matter, investigations, enforcement actions, and sanctions could harm our reputation, business, results of operations, and financial condition.

Current wording

Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. In addition, the U.S. government may seek to hold us liable for successor liability for FCPA violations committed by companies in which we invest or that we acquire. As a general matter, investigations, enforcement actions, and sanctions could harm our reputation, business, results of operations, and financial condition.

Previous wording

In addition, increased international sales in the future may result in greater foreign currency denominated sales, increasing our foreign currency risk. A material portion of our leases are denominated in currencies other than the U.S. Dollar, mainly in NIS. The associated lease liabilities are remeasured using the current exchange rate, which may result in material foreign exchange gains or losses. Moreover, operating expenses incurred outside the U.S. and denominated in foreign currencies are increasing, particularly in Israel, and are subject to fluctuations due to changes in foreign currency exchange rates. For example, on June 1, 2026, the Israeli shekel reached 2.80 against the US dollar, a near 33-year high. Further, over the full trailing 12 months ending June 30, 2026, the shekel is up approximately 14% against the dollar. If we are not able to successfully hedge against the risks associated with currency fluctuations, our financial condition and results of operations could be adversely affected. To date, we have entered into hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to continue to enter into hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited and we may not be able to successfully hedge our exposure, which could adversely affect our financial condition and results of operations.

Current wording

In addition, increased international sales in the future may result in greater foreign currency denominated sales, increasing our foreign currency risk. A material portion of our leases are denominated in currencies other than the U.S. Dollar, mainly in NIS. The associated lease liabilities are remeasured using the current exchange rate, which may result in material foreign exchange gains or losses. Moreover, operating expenses incurred outside the U.S. and denominated in foreign currencies are increasing, particularly in Israel, and are subject to fluctuations due to changes in foreign currency exchange rates. For example, on June 1, 2026, the Israeli shekel reached 2.80 against the US dollar, a near 33-year high. Further, over the full trailing 12 months ended September 30, 2026, the shekel was up approximately 8% against the dollar. If we are not able to successfully hedge against the risks associated with currency fluctuations, our financial condition and results of operations could be adversely affected. To date, we have entered into hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to continue to enter into hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited and we may not be able to successfully hedge our exposure, which could adversely affect our financial condition and results of operations.

Previous wording

Our executive officers, directors, current 5% or greater shareholders (excluding passive institutional investors who hold their shares for investment purposes only and do not seek to influence control), and affiliated entities together beneficially owned approximately 11% of our ordinary shares outstanding as of June 30, 2026. As a result, these shareholders, acting together, will likely have control over certain matters that require approval by our shareholders, including matters such as the appointment and dismissal of directors, capital increases, amendment to our articles of associations, and approval of certain corporate transactions. Corporate action might be taken even if other shareholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of us that other shareholders may view as beneficial. It should be noted that we are not aware of any voting agreement or arrangement between our shareholders.

Current wording

Our executive officers, directors, current 5% or greater shareholders (excluding passive institutional investors who hold their shares for investment purposes only and do not seek to influence control), and affiliated entities together beneficially owned approximately 10% of our ordinary shares outstanding as of September 30, 2026. As a result, these shareholders, acting together, will likely have control over certain matters that require approval by our shareholders, including matters such as the appointment and dismissal of directors, capital increases, amendment to our articles of associations, and approval of certain corporate transactions. Corporate action might be taken even if other shareholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of us that other shareholders may view as beneficial. It should be noted that we are not aware of any voting agreement or arrangement between our shareholders.

Previous wording

In October 2023, Hamas militants and members of other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and carried out attacks against both civilian and military targets. Hezbollah militants also launched attacks against civilian and military targets from Israel’s northern border. Since these events began, additional hostilities have involved other parties in the region, including Iran and its proxies, and tensions between the U.S. and Iran have increased. In October 2025, Israel and Hamas reached a ceasefire agreement, resulting in a cessation of direct conflict between them; On February 28, 2026, Israel and the U.S. launched a large-scale offensive against Iran. Iran has 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. Since then, however, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile and subject to further escalation. The intensity and duration of these conflicts and their economic implications for the Company and Israel’s economy are difficult to predict. These events may also have broader macroeconomic consequences, including a deterioration of Israel’s economic standing (for example, a downgrade of Israel’s credit rating by certain agencies), which could have a material adverse effect on the Company and its ability to conduct its operations effectively.

Current wording

In October 2023, Hamas militants and members of other terrorist organizations crossed Israel’s southern border from the Gaza Strip and carried out attacks against civilian and military targets. Hezbollah also launched attacks against Israel across Israel’s northern border. These events escalated into a broader regional conflict involving, among others, Iran and its proxies, Israel, and the United States. The conflict has been characterized by periods of intensified hostilities, ceasefire arrangements, and renewed attacks. Despite efforts to de-escalate the conflict, the regional security situation remains volatile and subject to further escalation. The scope, intensity and duration of these hostilities and their economic implications for the Company and Israel’s economy are difficult to predict. These developments may also have broader macroeconomic consequences, including a deterioration in Israel’s economic standing, and downgrades of its credit rating, which could have a material adverse effect on the Company and its ability to conduct its operations effectively.

Previous wording

The war involving Israel, the U.S., Iran and Hezbollah, and the regional conflict in the Middle East, the war between Russia and Ukraine, and other areas of geopolitical tension around the world continue to impact worldwide economic activity and financial markets. In October 2025, a ceasefire agreement was reached between Israel and Hamas, resulting in a cessation of active hostilities between these parties. On February 28, 2026, Israel and the U.S. launched a large-scale offensive against Iran. Iran has 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. Since then, however, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile and subject to further escalation. As a result, we could experience disruptions in our business or the business of our partners, customers, or the economy as a whole, any of which could adversely affect and could materially adversely impact our business, results of operations, and overall financial condition in future periods.

Current wording

The war involving Israel, the U.S., Iran and Hezbollah, and the regional conflict in the Middle East, the war between Russia and Ukraine, and other areas of geopolitical tension around the world continue to impact worldwide economic activity and financial markets. On February 28, 2026, Israel and the U.S. launched a large-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 ceasefire ended in July 2026 after fighting resumed following attacks in the Strait of Hormuz. Since then, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile. As a result, we could experience disruptions in our business or the business of our partners, customers, or the economy as a whole, any of which could adversely affect and could materially adversely impact our business, results of operations, and overall financial condition in future periods.