JFrog (FROG -7.69%), a provider of platform software for managing and securing the software supply chain, released its Q2 FY2025 earnings on August 7, 2025. The company posted GAAP revenue of $127.2 million, ahead of the $122.8 million GAAP analyst consensus, and delivered non-GAAP earnings per share (EPS) of $0.18 versus $0.16 expected. Revenue marked a double-digit percentage gain year-over-year. The quarter stands out for its strong cloud segment growth—cloud revenue was $57.1 million, up 45% year-over-year and representing 45% of total revenue—and customer expansion at the high end, with customers having greater than $1 million in ARR increasing to 61 from 42 in the prior year, though GAAP operating losses increased compared to the prior year. Overall, the period showed meaningful financial and operational progress, with results above prior guidance.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.18 | $0.16 | $0.15 | 20.0% |
| Revenue | $127.2 million | $122.8 million | N/A | N/A |
| Operating Margin (Non-GAAP) | 15.2% | 13.2% | 2.0 pp | |
| Free Cash Flow (Non-GAAP) | $35.5 million | $16.0 million is invalid; the correct value is "$15.97 million" | 122.3% | |
| Cloud Revenue | $57.1 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
JFrog operates as a technology enterprise serving organizations that build, secure, and deliver software. Its platform helps customers manage, automate, and protect the flow of software packages, from code development through deployment. The core offering covers binary management, vulnerability scanning, compliance, and integration with cloud infrastructure.
Recent corporate focus has centered on integrating security directly into software development processes and expanding support for new technologies, like machine learning models. The company highlights DevSecOps (embedding security into DevOps practices) and MLOps (tools for managing machine learning models and workflows) as key differentiators. Extending its universal platform, building strategic partnerships with major cloud and AI players, and scaling to support large enterprise customers are integral to sustaining growth. JFrog’s ability to combine wide technology support, embedded security, and scalability forms the backbone of its value proposition.
Quarter Highlights: Growth Drivers and Financial Performance
Cloud revenue reached $57.1 million, a 45% increase year-over-year, and now accounts for 45% of total company revenue, up from 38% in the prior year. Management noted that part of this growth in Q1 2025 came from customer usage that exceeded annual contract commitments—referred to as "overage." Leaders emphasized that estimates for the coming quarters remain cautious, as they do not assume continued unusually high usage above contract minimums.
Customer expansion at the upper end continued. The number of customers contributing over $1 million in annual recurring revenue (ARR) increased 45% to 61. Accounts spending more than $100,000 in recurring revenue rose to 1,076, a year-over-year gain of 16%. Larger enterprise customers are adopting the company’s Enterprise+ full-platform subscription, representing 55% of revenue -- up from 50% in the prior year.
Product innovation played a prominent role during the quarter. JFrog launched new machine learning operations (MLOps) modules. These tools let organizations manage, track, and secure AI and machine learning model artifacts, which are the underlying files and data sets that train or drive AI software. Security functions were enhanced for both standard software components and for machine learning models, as customers increasingly integrate security scans to protect against vulnerabilities or malicious models. Strategic partnerships expanded, including deeper collaborations with NVIDIA (enterprise AI hardware and software solutions), Hugging Face (a hub for open-source machine learning models), and GitHub (developer collaboration platform). These partnerships drive new enterprise deals and platform adoption across AI-focused organizations.
Financially, JFrog’s non-GAAP operating income improved to $19.4 million, up from $13.6 million in the prior year, with non-GAAP operating margin rising to 15.2%. Free cash flow (non-GAAP) more than doubled from the prior year to $35.5 million. However, the company posted a deeper operating loss on its GAAP (Generally Accepted Accounting Principles) results: $(26.0) million, compared to $(19.1) million in the prior year. While overall gross margins (GAAP) contracted modestly -- typical for a company expanding its cloud segment as these services often have lower margins.
Remaining performance obligations (RPO), which represent contracted revenue not yet recognized, were $476.7 million. The expansion in the number of high-value accounts and RPO signals continued momentum in onboarding large customers and platform-wide adoption.
FROG does not currently pay a dividend.
Product and Technology Progress
The company grew its suite of products. The JFrog Platform, its main offering, supports a wide range of software package types and development frameworks. Within this ecosystem, Artifactory (for storing and managing software binaries), Xray (vulnerability and security scanning), and Advanced Security tools have been actively adopted by larger customers.
MLOps, which are tools and features for machine learning lifecycle management and security, were added as a key module, and Hugging Face's adoption of JFrog’s ML scanning further validates these capabilities. ML is available to Enterprise X and Enterprise Plus customers, encouraging more customers to migrate and deepen adoption.
Outlook and Guidance
Management provided new guidance for Q2 FY2025 and revised its full-year FY2025 expectations, including revenue, non-GAAP operating income, and non-GAAP net income per diluted share targets. For Q3 2025, the company expects revenue between $127.0 million and $129.0 million, and non-GAAP EPS in the range of $0.15 to $0.17 for Q3 2025. The full-year revenue outlook was raised to a range of $507.0 million to $510.0 million for FY2025, up from prior guidance. Non-GAAP operating income is projected between $75.0 million and $78.0 million for FY2025, with non-GAAP EPS guidance unchanged at $0.68 to $0.70 for FY2025.
Leadership reiterated its conservative approach to forecasting. Guidance for Q2 and FY2025 does not factor in continued above-commitment cloud usage as seen in Q1 2025. Potential upside from large enterprise deals in the pipeline is also not included in these numbers. Management expects net dollar retention rates to stabilize in the mid-teens percent.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
