JFrog's Cloud Shift Drives Revenue Growth Back Above 29%
JFrog reported second-quarter revenue of $163.8 million, up 29% from a year earlier, as cloud revenue growth accelerated to 53% and reversed three straight quarters of slowing top-line growth.
JFrog (FROG) reported second-quarter revenue of $163.8 million, up 29% from a year earlier. The gain marked an acceleration from 26% growth in the first quarter and reversed a deceleration trend that had run from 26% in the third quarter of 2024 through 25% in the fourth quarter.
The turn traces to JFrog's cloud business. Cloud revenue rose 53% from a year earlier to $87.5 million, up from 50% growth in the first quarter and 42% in the fourth quarter of 2024, extending a steady multi-quarter climb from 50% growth in the third quarter. Cloud now makes up 53% of total revenue, its fourth consecutive quarterly increase from 51% in the first quarter, 48% in the fourth quarter of 2024 and 46% in the third.
Large-customer additions and retention moved in the same direction. Customers generating more than $1 million in annual recurring revenue grew 59% from a year earlier to 97, up from 48% growth in the first quarter, with sequential net adds rising to 17 from six. Trailing four-quarter net dollar retention reached 121%, its fourth straight quarterly increase from 118% in the third quarter of 2024. Remaining performance obligations climbed 38% from a year earlier to $659.0 million, an acceleration from $574.9 million in the first quarter and $565.7 million, up 40% from a year earlier, in the fourth quarter of 2024.
Profitability trends diverged by measure. GAAP operating margin narrowed its loss for a fourth straight quarter, to negative 8.1% from negative 8.4% in the first quarter and negative 14.7% in the fourth quarter of 2024. Non-GAAP operating margin, by contrast, slipped to 19.9% from a first-quarter peak of 21.4%, though it remained above the 17.7% and 18.7% posted in the two prior quarters. Adoption of the company's higher-tier JFrog Platform Enterprise+ offering continued to climb, reaching 59% of revenue from 58% in the first quarter, 57% in the fourth quarter of 2024 and 56% in the third.
JFrog raised its full-year revenue guidance to a range of $648 million to $652 million from $628 million to $632 million given alongside first-quarter results, a roughly $20 million increase at the midpoint, and lifted its non-GAAP operating income guidance to $116 million to $120 million from $112 million to $116 million. Third-quarter revenue guidance of $164 million to $166 million implies roughly flat sequential growth from the second quarter's $163.8 million, a smaller step-up than the $9.8 million sequential gain from the first to second quarter.
The company disclosed new third-party validation and product partnerships during the quarter. JFrog was named a Leader in Gartner's first Magic Quadrant for Software Supply Chain Security, and it disclosed AI-ecosystem integrations including a plugin with Anthropic for Claude Code and security tools delivered to more than 1 million AI developers through a Cursor plugin, building on the JFrog MCP Registry and NVIDIA-linked Skills Registry launched in the first quarter. The company no longer breaks out its standalone "JFrog Security Core" metric, which had been reported as 7% of revenue and 10% of ARR in fiscal 2024.
JFrog also executed its first-ever share repurchases in the quarter, buying back $2.0 million of stock under the $300 million buyback program its board authorized in the first quarter.