FROG 10-K & 10-Q changes, risk factors and insider trading

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 Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and ResultResults of Operations” and our audited 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.

marketcustomers’ acceptanceadoption of our products and our ability to develop new products or enhancements to existing products and to bring them to market in a timely manner;

our expectations about the impact of global economic disruptions resulting from natural disasters, public health epidemics, protests or riots, and geopolitical tensions or war,tensions, such as the warimposition betweenof Hamas, Hezbollah,tariffs and Israel,other non-tariff trade barriers, or regional conflict in the Middle East, and the war in Ukraine, on our business, results of operations and financial condition;

We have experienced significant growth and increased demand for our products over time. Our total revenues for the years ended December 31, 2025, 2024, and 2023 andwere 2022$531.8 weremillion, $428.5 million, $349.9 million, and $280.0$349.9 million, respectively, representing a growth rate of 22%24% and 25%22% for the years ended December 31, 20242025 and 2023,2024, respectively. Our employee headcount has also increased from approximately 1,4001,600 as of December 31, 20232024 to approximately 1,6001,800 as of December 31, 2025. As of December 31, 2025, 1,168 of our customers had ARR of $100,000 or more, increasing from 1,018 customers as of December 31, 2024, and 74 of our customers had ARR of $1,000,000 or more, increasing from 52 customers as of December 31, 2024. 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 December 31, 2024, 1,018 of our customers had ARR of $100,000 or more, increasing from 886 customers as of December 31, 2023, and 52 of our customers had ARR of $1,000,000 or more, an increase from 37 customers as of December 31, 2023. 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 variouscloud partnersproviders, andtechnology partners, other third parties, and our ability to manage headcount and processes in an efficient manner to manage our growth effectively.

In 2024,2025, we released multiple JFrog Platform features across our core functionalities in DevOps, DevSecOps, DevGovOps and AI/MLOps, as we continued to expand our position as the system of record for the unified software release lifecycle. We released significant enhancements to JFrogour Advanced Security,platform, including the release of agentic security capabilities, AI Catalog and JFrog RuntimeAppTrust Security,for asDevGovOps welland ascompliance. greatlyWe expandedalso ourreleased MLOpsnew functionalitysubscription bundles to align more closely with the acquisitionemerging ofmarket Qwakneeds AI,around Ltd.application (“Qwak”)security asand aAI foundational technology for our JFrog ML offering.development. These enhancements and releases represent continuing expansion within and beyond our core DevOps business, delving more deeply into DevSecOpsDevSecOps, DevGovOps and Artificial IntelligenceAI/MLOps. We may not be able to sustain the pace of improvements to our products successfully or implement systems, processes, and controls in an efficient or timely manner or in a manner that does not negatively affect our results of operations. Our failure to improve our systems, processes, and controls, or their failure to operate in the intended manner, may result in our inability to manage the growth of our business and to forecast our revenue, expenses, and earnings accurately, or to prevent losses.

As noted above, our total revenues for the years ended December 31, 2025, 2024, and 2023 andwere 2022$531.8 weremillion, $428.5 million, $349.9 million, and $280.0$349.9 million, respectively, representing a growth rate of 22%24% and 25%22% for the years ended December 31, 20242025 and 2023,2024, respectively. 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, we expect our revenue growth rate tomay decline in future periods. Many factors may contribute to declines in our growth rate, including greaterbut marketnot penetration, increased competition, market consolidation, slowing demand for our platform, a failure by uslimited to continue capitalizing on growth opportunities, the maturation of our business, the protracted conflict in the Middle East, and global economic downturn, among others. If our growth rate declines, investors’ perceptions of our business and the market price of our ordinary shares could be adversely affected.:

Our results of operations, including our revenue, cost of revenue, gross margin, operating expenses, and cash flow, and deferred revenue, have fluctuated from quarter to quarter in the past and may continue to vary significantly in the future so that period-to-period comparisons of our results of operations may not be meaningful. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may or may not fully reflect the underlying performance of our business. Factors that may cause fluctuations in our quarterly financial results include, but not limited to:

customer satisfaction with our products and platformproduct capabilities and customer support;

increasescustomers may increase or decreases indecrease the number of elements of our subscriptions or may negotiate pricing changes upon any renewals of customer agreementssubscriptions;

decisions by potential customers to develop in-house DevOps, DevSecOps, DevGovOps, and MLOps solutions as alternatives to our products;

fluctuations in foreign currency exchange rates; and the impact of political uncertainty or unrest, including the Russia-Ukraine war, the war between Israel, Hamas and Hezbollah, the regional conflict in the Middle East, other areas of geopolitical tension around the world, including Syria, or the worsening of suchregional conflicts or tensions and any related global economic disruptions.disruptions, including as a result of the imposition of tariffs and other non-tariff trade barriers.

Although we have achieved positive operating cash flow and free cash flow, we have incurred annual losses since our inception. We incurred a net loss of $69.2$71.8 million, $61.3$69.2 million and $90.2$61.3 million in the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. As a result, we had an accumulated deficit of $359.7$431.5 million as of December 31, 2024.2025. We anticipate that our operating expenses will increase substantially in the foreseeable future as we continue to enhance our products, broaden our customer base, expand our sales and marketing activities, including strengthening our customer success team and continuing to invest in our strategic sales team, expanding our operations, hiring additional employees, investing in larger lease spaces for employees, and continuing to develop our technology. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses. Revenue growth may slow or revenue may decline for a number of possible reasons, including but not limited to slowing demand for our products, increasing competition, or changes in macroeconomic conditions. Any failure to increase our revenue as we grow our business could prevent us from achieving profitability or maintaining positive operating cash flow and free cash flow at all or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.

The markets for our products are maturing in ways we may be unable to anticipate accurately. Accordingly, it is difficult to predict customer adoption and renewals and demand for our platform and our products, the entry of competitive products, the success of existing competitive products, or the future growth rate, expansion, longevity, and the size of the DevOps, DevSecOps, AI/MLOps, and software release management software markets. The expansion of, and our ability to penetrate, these evolving markets depends on a number of factors, includingincluding, but not limited to, the cost, performance, and perceived value associated with DevOps, DevSecOps, DevGovOps, and AI/MLOps technologies, as well as the ability of DevOps workflows to improve critical steps in the lifecycle of software, including managing software security. If we or other software and SaaS providers experience security incidents, loss of customer data, or disruptions in delivery or service, the market for these applications as a whole, including our platform and products, may be negatively affected. If DevOps, DevSecOps, DevGovOps, AI/MLOps, and software release management software do not continue to achieve market acceptance, or there is a reduction in demand caused by decreased customer acceptance, technological challenges, weakening economic conditions, privacy, data protection and data security concerns, governmental regulation, competing technologies and products, or decreases in information technology or other spending, the market for our platform and products might not continue to develop or might develop more slowly than we expect, which could adversely affect our business, financial condition, and results of operations.

In order to provide value for our customers, we must offer productsa platform that allowallows our customers to compile software fromconsume source code and open source libraries from repositories, manage the dependencies among components within software packages, move packages and machine learningML 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 machine learningML 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 I, Item 1A.

Our platform consists of multiple products in DevOps, DevSecOps, DevGovOps, and AI/MLOps, and we compete in each product category as well as at the entire platform level. The market for our products is highly fragmented, quickly evolving, and subject to rapid changes in technology. We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including, but not limited to, the following:

ability to provide an end-to-end, unified platform solution for the DevOps, MLOpsDevSecOps, DevGovOps, and DevSecOpsAI/MLOps workflows;

ability to deploy our products in any combination of cloud, multi-cloud, on-premise,on-premises, or hybrid environments;

Security point solutions. Some security-focused companies may compete with a subset of JFrog’s holistic security offerings or address only developer-level security, such as Aqua Security, Snyk, Checkmarx, Sonatype, and Synopsys.

Our subscription structure is aligned with the way we have built our platform, and JFrog Artifactory is at the center of our platform and all subscriptions. Accordingly, market acceptance of JFrog Artifactory is critical to our success. If demand for JFrog Artifactory declines, the demand for our other products will also decline. Demand for JFrog Artifactory is affected by a number of factors, many of which are beyond our control, such as continued market acceptance of JFrog Artifactory and products by customers for existing and new use cases, the timing of development and release of new features, functionality, and lower cost alternatives introduced by our competitors, technological changes and developments within the markets we serve, and growth or contraction in our addressable markets. If we are unable to continue to meet customer demand, if our products fail to compete with the products of our competitors, if we fail to achieve more widespread market acceptance of JFrog Artifactory, or if our platform and products fail to meet statutory, regulatory, contractual, or other applicable requirements, then our business, results of operations, and financial condition would be harmed.

We expect to derive a significant portion of our revenue from renewals of existing subscriptions. Our customers have no contractual obligation to renew their subscriptions after the completion of their subscription term. Our self-managed subscriptions are offered on an annual and multi-year basis, while our SaaS subscriptions are offered on a monthly, annual, and multi-year basis and can consist of fixed and usage-based fees. Our customers’ renewals may decline or fluctuate as a result of a number of factors, including their satisfaction with our products and our customer support, the frequency and severity of product outages,outages (including, without limitation, possible outages with public cloud providers), our product uptime or latency, the pricing of our, or competing, products, additional new features and capabilities that we offer, new integrations, and updates to our products as a result of updates by technology partners. If our customers renew their subscriptions, they may renew for shorter subscription terms or on other terms that are less economically beneficial to us. We may not accurately predict future renewal trends. If our customers do not renew their subscriptions, or renew on less favorable terms, our revenue may grow more slowly than expected or decline.

Our future success depends, in part, on our ability to continue to attract and retain key executives and other highly skilled personnel. The loss of the services of any of our key personnel, the inability to attract or retain qualified personnel, or delays in hiring required personnel, particularly in engineering and sales, may seriously harm our business, financial condition, and results of operations. For example, we onboarded a new Chief Legal Officer in late 2023, and a new Chief Financial Officer in early 2024. Our future performance also depends on the continued services and continuing contributions of our senior management to execute on our business plan and to identify and pursue new opportunities and product innovations. The loss of services of senior management could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition, and results of operations.

Additionally, the industry in which we operate is generally characterized by significant competition for skilled personnel as well as high rates of employee attrition. We are also substantially dependentrely on the continued service of our existing engineering personnel because of the complexity of our products. There is currently a high demand for experienced professionals in all areas required to run a complex, multinational business, including but not limited to DevOps, DevSecOps,engineering and MLOps.other technical roles. We may not be successful in attracting, integrating, or retaining qualified personnel to fulfill our current or future needs. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited, that they have divulged proprietary or other confidential information, or that their former employers own their inventions or other work product.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these employees is intense, specifically for engineers for research and development, security experts, and support positions who are experienced in DevOps, DevSecOps, or MLOps,positions, and such competition oftencan resultsresult in increasing wages, especially in Israel, where most of our research and development positions are located, and in the San Francisco Bay Area, where our U.S. headquarters are located.wages. Therefore, we may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. OurIn recentaddition, hireschanges andin plannedU.S. hiresimmigration maylaws, notregulations, becomepolicies, or their interpretation or implementation (including the availability, timing, or cost of work authorization such as productiveH-1B asvisas) wecould expect,make andit wemore may be unable to hire, integrate,difficult or retainmore sufficient numbers of qualified individuals. Many of the companies with which we compete for experienced personnel have greater resources than we have, and due to our profile and market position, such competitors actively seekexpensive to hire skilledand retain qualified personnel away from us, even if such employees have entered into a non-compete agreement with us. Israeli labor courts have required employers seeking to enforcework non-competein undertakingsthe United States, which could adversely affect our business, financial condition, and results of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer that have been recognized by the courts, such as the protection of a company’s trade secrets or other intellectual property. We may not be able to make such a demonstration.operations.

In addition, in making employment decisions, particularly in the internet, software, and high-technology industries, job candidates often consider the value of the total compensation that may include equity, bonus, commissions, and other benefits that they may receive in connection with their employment. Employees may be more likely to leave us if the sharestrading theyprice ownof orour theordinary shares underlying their equity incentive awards have significantly appreciated or significantly declined in value. ManyThe resulting direct effect on the value of ouremployee employeesequity awards and perceived compensation, may receiveadversely significant proceeds from sales ofaffect our equity in the public markets, which may reduce their motivationability to continue to work for usrecruit and couldretain lead to employee attrition.employees. If we fail to attract new personnel,personnel or fail to retain and motivate our current personnel, our business and growth prospects could be harmed.

We make a limited-functionality version of JFrog Artifactory that only supports Java-based packages, and also lacks other features required for organization-wide adoption by DevOps teams, available under an open source license, the Affero General Public License version 3.0 (“AGPL”). The AGPL grants licensees broad freedom to view, use, copy, modify, and redistribute the source code of this limited version of JFrog Artifactory. Anyone can download a free copy of this limited version of JFrog Artifactory from the Internet, and we neither know who all of our AGPL licensees are, nor have visibility into how JFrog Artifactory is being used by licensees, so our ability to detect violations of the open source license is extremely limited.

The AGPL has a “copyleft” requirement that further distribution of AGPL-licensed software and modifications or adaptations to that software be made available pursuant to the AGPL as well. This leads some commercial enterprises to consider AGPL-licensed software to be unsuitable for commercial use. However, the AGPL would not prevent a commercial licensee from taking this open source version of JFrog Artifactory under AGPL and using it for internal purposes for free. AGPL also would not prevent a commercial licensee from taking this open source version of JFrog Artifactory under AGPL and using it to compete in our markets by providing it for free.

This competition can develop without the degree of overhead and lead time required by traditional proprietary software companies, due to the permissions allowed under AGPL. It is also possible for competitors to develop their own software based on our open source version of JFrog Artifactory. Although this software would also need to be made available for free under the AGPL, it could reduce the demand for our products and put pricing pressure on our subscriptions. We cannot guarantee that we will be able to compete successfully against current and future competitors, some of which may have greater resources than we have, or that competitive pressure or the availability of new open source software will not result in price reductions, reduced operating margins, and loss of market share, any one of which could harm our business, financial condition, results of operations, and cash flows.

In addition, we have historically experienced seasonality in usage patterns by users of our SaaS subscriptions. We typically experience reduced usage by our customers during holiday periods, particularly at the end of the fourth quarter. As revenue from our SaaS subscriptions isincludes recognizedusage-based basedoverage uponabove usage,minimum commitments, the changes in usage patterns may negatively affect revenues from our SaaS subscriptions and our results of operations.

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.

Any limitation of liability provisions that may be contained in our customer, user, third-party vendor, service provider, and partner agreements may not be accepted by customers, users, third-party vendors, service providers, and partners, or enforceable or adequate or effective as a result of existing or future applicable law or unfavorable judicial decisions, and they may not function to limit our liability arising from regulatory enforcement. The sale and support of our products entail the risk of liability claims, which could be substantial in light of the use of our products in large scale and in enterprise-wide environments, depending on the nature of the limitation of liability provisions.

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.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 negative publicity 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.

We typically provide service-level commitments under our subscription agreements. If we fail to meet these or materially breach other contractual commitments, we could face liabilities or subscription termination with refunds of prepaid amounts, which would decrease our revenue and harm our business, financial condition, and results of operations.

Our cloud subscription agreements typically contain service-leveluptime commitments. If we are unable to meet the stated service-level commitments, including failure to meet the uptime and response time requirementscommitments under our customer subscription agreements, we may be contractually obligated to provide these customers with certain credits which could significantly affect our revenue in the periods in which the failure occurs and the credits are applied. We could also face subscription terminations and a reduction in renewals, which would significantly affect our future revenue. We offer multiple tiers of subscriptions toAs our productscloud andoffering asexpands, such our service-level commitments will increase if more customers choose subscriptions of JFrog Pro X, JFrog Enterprise X, and JFrog Enterprise Plus. Anyany service-level failures could also damage our reputation, which could also adversely affect our business, financial condition, and results of operations.

Our operations and financial performance depend in part on global economic conditions and the impact of these conditions on levels of information technology spending and the willingness of our current and prospective customers to purchase our products. Adverse macroeconomic conditions, including inflation,inflationary trends, slower growth or recession, bank failures or instability in the financial services sector, changes to fiscal and monetary policies, tighter credit, higher interest rates, and currency fluctuations, and adverse changes to global trade relationships, including newly imposed tariffs and non-tariff trade barriers, could adversely impact confidence and enterprise spending and negatively affect demand for our products.

For example, we are currently operating in a period of heightened economic uncertainty. While interest rates have begun to decline and inflation is significantly lower than in past quarters in the U.S., costs of labor, capital, employee compensation, and other similar effects have increased in the recent past. If conditions in the national and global economy do not continue to improve or instead worsen, our current and potential customers’ operating costs will likely increase, which could result in reduced operating and information technology budgets. To the extent our products are perceived by customers and potential customers as discretionary, our revenue may be disproportionately affected by delays or reductions in information technology spending. Such delays or reductions in technology spending are often associated with enhanced budget scrutiny by our customers including additional levels of approvals, cloud optimization efforts, and additional time to evaluate and test our products, which can lead to long and unpredictable sales cycles. We have experienced longer sales cycles for certain products and enhanced budget scrutiny by our customers and expect to continue to experience these challenges given the current macroeconomic environment. Also, customers may choose to develop in-house software as an alternative to using our products, and competitors may respond to such negative conditions in the general economy by lowering prices, any of which could adversely affect demand for our products and limit our ability to grow our business.

The present conditions and state of the U.S. and global economies make it difficult to predict whether, when, and to what extent a recession has occurred or will occur in the future. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry. Further, we cannot yet predict the effect of changing global trade relationships, including the recent imposition of tariffs and non-tariff trade barriers, on the global economy or markets in which we operate. If the economic conditions of the general economy or markets in which we operate do not improve, or worsen from present levels, our business, results of operations, and financial condition could be adversely affected.

As part of our business strategy, and to keep pace with technological and competitive developments, we may acquire or make investments in the acquisition of complementary businesses, technologies, services, products, and other assets that expand the products that we can offer our customers. We have in the past acquired, and expect in the future to acquire, businesses that we believe will complement or augment our existing business. For example, in July 2024, we acquired Qwak, a privately-held AI development platform company, and in 2021, we acquired both Vdoo Connected Trust Ltd. (“Vdoo”), a privately-held security company, and Upswift Ltd., a privately-held cloud-based platform company and creator of connected device management software for developers. The identification of suitable acquisition candidates is difficult, and we may not be able to complete such acquisitions on favorable terms, if at all. If we do complete future acquisitions, we may not ultimately strengthen our competitive position or achieve our goals and business strategy, we may be subject to claims or liabilities assumed from an acquired company, product, or technology, and any acquisitions we complete could be viewed negatively by our customers, investors, and securities analysts. In addition, if we are unsuccessful at integrating future acquisitions, including retaining employees of the acquired company, or the technologies associated with such acquisitions, the revenue and results of operations of the combined company could be adversely affected. Any integration process may require significant time and resources, which may disrupt our ongoing business and divert management’s attention, and we may not be able to manage the integration process successfully.

Our failure to generate the significant capital or raise additional capital necessary to expand our operations and invest in new products could reduce our ability to compete and could harm our business.

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, expensive, and time-consuming,may have longer sales cycles, often requiring significant upfront time, expertise, and expense without any assurance that these efforts will generate a sale. Government certification requirements for productssoftware 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 sectorsentities, or non-U.S. government-controlled entities until we have attainedcomplied with such revised certification or certifications.requirements. Government demand and payment for our productsplatform may be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products.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 products.platform.

Additionally, we rely on certain partners to provide technical support services to certain of our government entity customers to resolve any issues relating to our products.platform. If our partners do not effectively assist our government entity customers in deploying our products,platform, succeed in helping our government entity customers quickly resolve post-deployment issues, or provide effective ongoing support, our ability to expand and to sell additional products to new and existing government entity customers would be adversely affected and our reputation could be damaged.

Government entities may have statutory, contractual, or other legal rights to terminate contracts with us for convenience or due to a default, and any such termination may adversely affect our future results of operations. Government entities may have statutory, contractual, or other legal rights that limit our ability to negotiate limitations of liability, or other provisions of the agreements that may shift more risk to us. Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our subscriptions, a reduction of revenue, or fines or civil or criminal liability if the audit uncovers improper or illegal activities, which could materially and adversely affect our results of operations.

We have deployed machine learningAI and AIML technologies in our products and business, including developing new product 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 productsfeatures and business.platform. Our productsplatform and systems may become targets for abuse powered by AI, and our support for MLOps may fall behind existing standardsdemands which are changing rapidly. 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 productsplatform 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.

AI technology also may be the subject of new or modified legal and regulatory obligations. For example, the EU AI Act (the “AI Act”) which entered into force on August 1, 2024, will imposewith obligations onrelated providersto certain AI practices and usersAI ofliteracy, AI.effective February 2, 2025, and provisions pertaining to General Purpose AI Models, effective August 2, 2025. Under the AI Act, fines can reach up to €35 million or 7% of global income. 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.AI, or have already done so. For example, several AI bills have been introduced in Congress. A significant number of other countries are contemplating laws regulating AI and numerous U.S. states have proposed,Congress and in certainstate cases enacted, legislation relating to AI.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 machine learningML 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 products,platform, which would result in an increase to operating costs and hinder our ability to improve our products.offering to our customers. Accordingly, it is not possible to predict all of the risks related to the use of AI and machine learningML technologies that we may face, and changes in laws, rules, directives, and regulations governing the use of AI and machine learningML technologies may adversely affect our ability to use or sell these technologies or subject us to legal liability. For instance, the European Commission’s Digital Omnibus Proposal, published in November 2025, includes proposed amendments to certain EU laws and regulations, including among other matters the AI Act. At this time, however, such proposed amendments remain at an early stage of the EU legislative process.

Uncertainty regarding new and emerging AI technologies, such as agentic AI, generative AIAI, and machineadvances learning,in ML, may require us to incur costly additional expenses to research and integrate AI technologies into our future product offerings and our internal systems. Any such research, implementation, and integration may be costly and could impact our results of operations. Additionally, AI may create content that appears correct, but is factually inaccurate, biased, insufficient, poor quality, flawed, or contain other errors or inadequacies, any of which may not be easily detectable. AI and machine learningML technologies have been known to produce false or hallucinatory inferences or outputs. Our use of AI technologies may expose us to additional claims, demands, and proceedings by private parties, customers, and regulatory authorities and subject us to legal liability as well as brand and reputational harm, confidentiality or security risks, competitive harm, ethical and social concerns, or other complications that could adversely affect our business, reputation, or financial results. If we do not have sufficient rights to use the output of such AI and machine learningML tools, or other data or content on which the AI and machine learningML tools we use rely, we also may incur liability by violation of applicable laws and regulations, third-party intellectual property or other rights, or contracts to which we are a party.

We have undertaken and expect to continue to undertake certain sustainability and governance-related initiatives, goals, and commitments, which we have communicated on our website, in our SEC filings, and elsewhere. These initiatives, goals, or commitments could be difficult to achieve and costly to implement. We could fail to achieve, or be perceived to fail to achieve, these initiatives, goals, or commitments. In addition, we could be criticized for the timing, scope, or nature of these initiatives, goals, or commitments, or for any revisions to them. Stakeholders could also challenge the accuracy, adequacy, or completeness of our disclosures related to these initiatives. For example, many sustainability initiatives leverage data, methodologies, technologies, and/or standards that are complex, subject to varying interpretations, and continuing to evolve. As with other companies, our approach is expected to continue to evolve as well, and we cannot guarantee that our approach will align with the expectations or interpretations of any particular stakeholder. Stakeholders (including, without limitation, policymakers) have varying, and at times conflicting, expectations. Our actual or perceived failure to achieve some or all of these initiatives, goals, or commitments or maintain sustainability or governance practices that meet evolving stakeholder expectations or regulatory requirements could harm our reputation,reputation (including, without limitation, impacts to any related ratings), adversely impact our ability to attract and retain employees or customers, and expose us to increased scrutiny from sustainability and governance-focused investors, regulatory authorities, and others, or subject us to liability. Damage to our reputation or reduced demand for our products may adversely impact our business, financial condition, or results of operations.

Despite our precautions, it may be possible for unauthorized third parties to copy our productsplatform, in whole or in part, and use information that we regard as proprietary to create offerings that compete with ours. Effective patent, trademark, copyright, and trade secret protection may not be available to us in every country in which our productsplatform areis available. We may be unable to prevent third parties from acquiring domain names or trademarks that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights. The laws of some countries may not be as protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. As we continue to expand our international activities, our exposure to unauthorized copying and use of our products and proprietary information will likely increase. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

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-inventionassignment 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 payincur additionallegal remunerationcosts and expend management time in responding to or royaltiesdefending to our current and former employees, or be forced to litigateagainst 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. .

Our agreements with customers and other third parties maygenerally include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims by third parties against customers, alleging intellectual property infringement, misappropriation or violation, or other liabilities relating to or arising from our software, services or other contractual obligations. Large indemnity payments could harm our business, results of operations, and financial condition. Pursuant to certain agreements,Typically, we do not have a cap on our liability for indemnity claims and any payments under such agreements would harm our business, results of operations, and financial condition. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business and results of operations.

Our paid productsplatform incorporateincorporates open source software, and we expect to continue to incorporate open source software in our paid productsplatform in the future. Few of the licenses applicable to open source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our paid products. There have been claims challenging the ownership rights in open source software against companies that incorporate open source software into their products, and the licensors of such open source software provide no warranties or indemnities with respect to such claims. In addition, if an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software, and required to comply with onerous conditions or restrictions on these products, which could disrupt the distribution and sale of these products. In any of these events, we and our customers could be required to seek licenses from third parties in order to continue offering our products, and to re-engineer our products or discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis. We and our customers may also be subject to suits by parties claiming infringement, misappropriation, or violation due to the reliance by our solutions on certain open source software, and such litigation could be costly for us to defend or subject us to an injunction. Some open source projectssoftware provided on an “as-is” basis have knownhas vulnerabilities and architectural instabilities which, if not properly addressed, could negatively affect the performance of our product. Any of the foregoing could require us to devote additional research and development resources to re-engineer our solutions, could result in customer dissatisfaction, and may adversely affect our business, results of operations, and financial condition.

We docollect, collectstore, and storeprocess certain sensitive and proprietary information, and to a lesser degree,certain personal data and personal information, in the operation of our business. This information includes trade secrets, intellectual property, employee data, and other confidential data. We have taken measures to protect our own sensitive and proprietary information, personal data, and personal information, as well as such information that we otherwise obtain,obtain or process, including from our customers. Although our products do not involve processing large amounts of personal data or personal information, our platform and products support customers’ software, which may involve processing large amounts of personal data, personal information, and information that is confidential or otherwise sensitive or proprietary. Embedded AI in our products may increase these risks for us and our customers. We also engage vendors and service providers to store and otherwise process some of our and our customers’ data, including sensitive and proprietary information, personal data, and personal information. 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. Our ability to monitor our vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorized or unlawful access to, misuse, disclosure, loss, acquisition, corruption, unavailability, alteration, modification, or destruction of our and our customers’ data, including sensitive and proprietary information, personal data, and personal information.

JFrog provides a hybrid,foundational universal,platform end-to-endfor managing and securing the software supply chainchain. platformThe forJFrog deliveringPlatform trusted,enables secureorganizations to unify software updatesdevelopment, fromsecurity, codegovernance, toand production.distribution Ouracross goalhybrid isteams, to function as the single source of truth for an organization’s software footprint, bridging digital gaps betweenincluding developers, security teams,professionals, machineArtificial learningIntelligence/Machine engineers,Learning data(“AI/ML”) scientists,engineers and otherArtificial businessIntelligence unitsagents. It supports the consumption, creation, and continuous delivery of software from any user to empowerany a world of always-on, always-current softwaredestination which we refer to as “Liquid Software.” During 2025, we revised our customer logo methodology to eliminate friction for our customers and sales teams to better align with global go-to-market practices, which resulted in the consolidation of certain organizations with multiple subsidiaries into a single entity. As of December 31, 2024,2025, we had a global customer base of approximately 7,3006,600 organizations across all industries and sizes, including approximately 82%83% of Fortune 100 organizations. All of the top 10 technology organizations and top 10 financial services organizations, 8 of the top 10 retail organizations, 8 of the top 10 healthcare organizations, and all of the top 57 telecommunications organizations in the Fortune 500 have adopted the JFrog platform,Platform, embarking on their journey towards Liquid Software. For the year ended December 31, 2024,2025, our 10 largest customers represented approximately 8%9% of our total revenue and 40% of our revenue was generated from customers outside of the United States.

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, MLOpsAI/ML teams, and IT operators to the largest organizations, in a value-oriented manner.

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,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 39%46% of our total revenue for the year ended December 31, 2024,2025, compared to 34%39% for the year ended December 31, 2023.2024.

We have an unwavering commitment to the software developer, security teams, MLOpsAI/ML teams,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.

We believe that our future performance will depend on many factors, includingincluding, but not limited to, the following:

Sales and marketing expenses primarily consist of personnel-related expenses, share-based compensation expenses, sales commissions primarily associated with our sales and marketing organizations,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.

_________________________________________ (1) Includes share-based compensation expense as follows:

Total cost of revenue increased for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily attributable to an increase of $9.9$10.6 million in third-party hosting costs primarily driven by increased revenue from SaaS subscriptions, an increase of $4.8$5.9 million in personnel-related expenses mainly as a result of increased headcount, an increase of $4.8 million in share-based compensation expense as discussed in the section titled “Share-Based Compensation Expense” below, and an increase of $4.0$3.8 million in intangible amortization mainly as a result of our acquisition of Qwak AI Ltd. (“Qwak”) in July 2024, partiallyand offsetan by a decreaseincrease of $2.5$2.2 million in costsshare-based associatedcompensation withexpense softwareas anddiscussed subscriptionin costs.the section titled “Share-Based Compensation Expense” below.

Gross margin slightlyremained decreasedconsistent for the year ended December 31, 20242025 compared to the year ended December 31, 2023, reflecting a shift in our revenue mix, as SaaS subscriptions, which incur higher hosting costs, contributed to a lower overall margin.2024.

Research and development expense increased for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily attributable to an increase of $15.5 million in share-based compensation expense, an increase of $9.0$20.7 million in personnel-related expenses mainly as a result of increased headcount,headcount and an increase of $3.0$10.0 million in costs of development environments and tools, partially offset by a decrease of $3.6 million inshare-based compensation expense associated with holdback and retention arrangements from our acquisitions.expense.

Sales and marketing expense increased for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily attributable to an increase of $17.3 million in share-based compensation expense, an increase of $13.6$11.9 million in personnel-related expenses mainly as a result of increased headcount, an increase of $2.7$8.1 million in share-based compensation expense, an increase of $7.3 million in commission expense, and an increase of $5.1 million in allocated overhead costs, and an increase of $2.6 million in commissions.costs.

General and administrative expense increased for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily attributable to an increase of $5.1$5.2 million in share-based compensation expense and an increase of $5.0 million in personnel-related expenses mainly as a result of increased headcount and an increase of $2.7 million in professional fees mainly related to legal and recruiting services.headcount.

The increase in share-based compensation expenses for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily attributable to grants to new and existing employees. Additionally,The inincrease 2024,also weincludes recognized$5.4 $5.2million, million share-based compensation expense primarilymostly in research and development, related to Qwak acquisition holdback ordinary sharesshare holdbacks and replacement RSUs.equity awards from the Qwak acquisition.

Interest and other income, net increasedremained consistent for the year ended December 31, 20242025 compared to the year ended December 31, 2023, primarily due to higher interest income as a result of higher interest rates on our deposits and marketable securities.2024.

Income tax expense decreasedincreased for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 primarily due to higherthe excessabsence tax benefits from share-based compensation awards andof a discrete tax benefit in Israel in 2024 attributable to the release of valuation allowance as a result of recognizing deferred tax liabilities associated with the Qwak acquisition.acquisition, partially offset by higher excess tax benefits from share-based compensation awards.

Net cash provided by financing activities of $21.2$31.2 million for the year ended December 31, 20242025 consisted primarily of proceeds from exercise of share options of $10.4$12.1 millionmillion, proceeds from our employee share purchase plan of $11.9 million, and net proceeds from employee shareequity purchasestransactions underto ourbe ESPPremitted to tax authorities or employees of $8.7$7.2 million.

Net cash provided by financing activities of $18.4$21.2 million for the year ended December 31, 20232024 consisted primarily of proceeds from exercise of share options of $10.0$10.4 million and proceeds from our employee share purchasespurchase under our ESPPplan of $6.7$8.7 million.

Investing in our ordinary shares involves a high degree of risk because our business is subject to numerous risks and uncertainties, including those outside of our control that could cause our actual results to be harmed, including, but not limited toto, risks related to:

We have experienced significant growth and increased demand for our products over time. Our total revenues for the three months ended MarchJune 31,30, 2026 and 2025 were $154.0$163.8 million and $122.4$127.2 million, respectively, representing 26%29% growth.growth, Ourand total$317.7 revenuesmillion and $249.6 million for the yearssix months ended DecemberJune 31,30, 20252026 and 2024 were $531.8 million and $428.5 million,2025, respectively, representing 24%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 MarchJune 31,30, 2026, 1,2251,291 of our customers had ARR of $100,000 or more, increasing from 1,168 customers as of December 31, 2025, and 8097 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.

As noted above, our total revenues for the three and six months ended MarchJune 31,30, 2026, and for the year ended December 31, 2025,2026 grew by 26%29% and 24%,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 greater market penetration, increased competition, market consolidation, slowing demand for our platform, a failure by us to continue capitalizing on growth opportunities, the maturation of our business, protracted global disputes, the imposition of tariffs and other non-tariff trade barriers, and global economic downturn.

Our results of operations, including our revenue, cost of revenue, gross margin, operating expenses, and cash flow, have fluctuated from quarter to quarter in the past and may continue to vary significantly in the future so that period-to-period comparisons of our results of operations may not be meaningful. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may or may not fully reflect the underlying performance of our business. Factors that may cause fluctuations in our quarterly financial results include, but are not limited to:

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 income.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. For instance, the European Commission’s Digital Omnibus Proposal, published in November 2025, includes proposed amendments to certain EU laws and regulations, including among other matters the AI Act. At this time, however, such proposed amendments remain in the EU legislative process.

Uncertainty regarding new and emerging AI technologies, such as agentic AI, generative AI, and advances in ML, may require us to incur costly additional expenses to research and integrate AI technologies into our future product offerings and our internal systems. The emergence of token-based or consumption-based pricing models for AI-powered software tools across our industry may increase, and introduce unpredictability into, the costs we incur to operate our business, which could adversely affect our operating results and ability to forecast expenses. Seasonal or project-driven spikes in development activity, onboarding of new engineering teams, adoption of additional platform features, and changes in vendor pricing tiers or overage rates could each independently or collectively cause our actual expenditures under these arrangements to exceed budgeted amounts, which could adversely affect our financial condition. Additionally, AI may create content that appears correct, but is factually inaccurate, biased, insufficient, poor quality, flawed, or contain other errors or inadequacies, any of which may not be easily detectable. AI and ML technologies have been known to produce false or hallucinatory inferences or outputs. Our use of AI technologies may expose us to additional claims, demands, and proceedings by private parties, customers, and regulatory authorities and subject us to legal liability as well as brand and reputational harm, confidentiality or security risks, competitive harm, ethical and social concerns, or other complications that could adversely affect our business, reputation, or financial results. If we do not have sufficient rights to use the output of such AI and ML tools, or other data or content on which the AI and ML tools we use rely, we also may incur liability by violation of applicable laws and regulations, third-party intellectual property or other rights, or contracts to which we are a party.

We are subject to stringentstringent, and changingchanging, laws, regulations, standards, and contractual obligations related to privacy, data protection, and data security. Our actual or perceived failure to comply with such obligations could harm our business.

Our primary research and development operations are located in Israel. As of MarchJune 31,30, 2026, we had customers located in over 90 countries, and our strategy is to continue to expand internationally. In addition, as a result of our strategy of leveraging a distributed workforce. As of MarchJune 31,30, 2026, we had employees located primarily in eleven countries. Our current international operations involve, and we expect future initiatives will involve, a variety of risks, including:

changes in a specific country’s or region’s political or economic conditions, such as the war involving Israel, the U.S., Iran and Hezbollah, the regional conflict in the Middle EastEast, and associated geopolitical tensions, as well as economic sanctions the U.S., the EU, and other countries have imposed on Russia and certain of its allies and the impact of the foregoing on the global economy;

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 increasingincreasing, 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.

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 MarchJune 31,30, 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.

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. However,Since then, however, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile,volatile withand thesubject potentialto forfurther renewed escalation involving Iran or other terrorist organizations.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.

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. However,Since then, however, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile,volatile withand thesubject potentialto forfurther renewed escalation involving Iran or other terrorist organizations.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.

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%53% and 52% of our total revenue for the three and six months ended MarchJune 31,30, 2026, respectively, compared to 43%45% and 44% for the threecorresponding monthsperiods endedin March2025, 31, 2025.respectively.

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%59% of our total revenue for the three and six months ended MarchJune 31,30, 2026, respectively, compared to approximately 55% for each of the threecorresponding monthsperiods ended March 31,in 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.

We generated revenue of $154.0$163.8 million and $122.4$127.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, representing 26%29% growth, and $317.7 million and $249.6 million for the six months ended June 30, 2026 and 2025, respectively, representing 27% growth. We have continued to invest in our business and had a net loss of $8.3$4.2 million and $18.5$21.7 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $12.4 million and $40.2 million for the six months ended June 30, 2026 and 2025, respectively.

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,Since then, however, there have been mutual attacks between Iran and the United States, indicating that the situation remains volatile,volatile withand thesubject potentialto forfurther renewed escalation involving Iran or other terrorist organizations.escalation.

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 MarchJune 31,30, 2026 and 2025, our net dollar retention rate was 120%121% and 116%,118%, respectively. We expect our net dollar retention rate to remain relatively stable, with minor fluctuations around current levels.

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 MarchJune 31,30, 2026, 1,2251,291 of our customers had ARR of $100,000 or more, increasing from 1,168 customers as of December 31, 2025. We had 8097 customers with ARR of at least $1.0 million as of MarchJune 31,30, 2026, increasing from 74 customers as of December 31, 2025.

Research and development costscosts, net of applicable refundable tax credits, primarily consist of personnel-related expenses, share-based compensation expenses, associated with our engineering personnel responsible for the design, development, and testing of our products, cost of development environments and tools, and allocated overhead. We expect that our research and development expenses will continue to increase as we increase our research and development headcount to further strengthen and enhance our products and invest in the development of our software.

Income Tax Expense (Benefit)

Income tax expense (benefit) 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.

_________________________________________ (1) Includes share-based compensation expense as follows:

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The increase in total subscription revenue for the three months ended MarchJune 31,30, 2026,2026 compared to the three months ended MarchJune 31,30, 2025,2025 consisted of approximately $26.2$30.3 million in growth from existing customers and the remaining attributable to new customers.

Total cost of revenue increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to an increase of $2.1$4.2 million in third-party hosting costs mainly driven by increased revenue from SaaS subscriptions and an increase of $1.5$1.4 million in personnel-related expenses mainly as a result of increased headcount.

Gross margin increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 20252025, primarily due to revenue growth with improved operating leverage.

Research and development expense increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025,2025. The increase was primarily attributable to an increase of $7.2$6.1 million in personnel-related expenses mainly as a result of increased headcount.headcount and an increase of $2.3 million in costs for third-party software, development environment, and engineering tools, partially offset by $1.5 million refundable tax credits commencing in 2026.

Sales and marketing expense increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily attributable to an increase of $4.3$4.9 million in personnel-related expenses mainly as a result of increased headcount.

General and administrative expense increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to an increase of $2.6$2.7 million in share-based compensation expense as discussed in the section titled “Share-Based Compensation Expense” below and an increase of $1.9$2.3 million in personnel-related expenses mainly as a result of increased headcount.

Share-based compensation expenseexpenses increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 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.

Interest and other income, net increased for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily due to higher interest income on short-term investments as a result of increasedhigher investmentsinvestment in bank deposits and marketable securities.balances.

As of MarchJune 31,30, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term investments of $741.2$824.5 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.

Net cash provided by operating activities of $28.8$95.4 million for threethe six months ended MarchJune 31,30, 20252026 was related to our net loss of $18.5$12.4 million,million adjusted for non-cash charges of $44.0$93.1 million, including share-based compensation expense of $36.8$79.2 million and depreciation and amortization expense of $6.7$11.1 million, and changes in our operating assets and liabilities of $3.3$14.7 million. Changes in our operating assets and liabilities consistedwere primarily related to an increase of $43.8 million in deferred revenue and an increase of $16.3 million in accrued expense and other liabilities mainly due to accrued compensation and benefits, accrued acquisition-related compensation, and incentives received in connection with a decreaselease that has not commenced. The inflows were partially offset by an increase of $6.5$15.9 million in accounts receivablereceivable, an increase of $10.6 million in deferred contract acquisition costs, an increase of $8.5 million in prepaid expenses and other assets mainly due to timing of billingpayments for software subscriptions and collections,hosting partiallyservices, offset byand a decrease of $2.2$6.1 million in operatingaccounts leasepayable liabilitiesdue asto a resulttiming of leasepayments. payments.The increases in deferred revenue, accounts receivable, and deferred contract acquisition costs were driven by higher sales.

Net cash used in investing activities of $53.1$103.1 million for the threesix months ended MarchJune 31,30, 2026 consisted primarily of net purchases of short-term investments of $52.0$98.8 million.

Net cash used in investing activities of $45.8$85.3 million for the threesix months ended MarchJune 31,30, 2025 consisted primarily of net purchases of short-term investments of $45.1$84.1 million.

Net cash usedprovided inby financing activities of $0.2$28.9 million for the threesix months ended MarchJune 31,30, 2026 consisted primarily of net paymentsproceeds offrom $8.9employee millionequity transactions to be remitted to tax authorities andor refunded to employees fromof our$18.0 employeemillion equity transactions, partially offset byand proceeds from employee share purchases under our ESPP of $8.2 million.

The following table summarizes our non-cancellable contractual obligations as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026, we had an additional commitment of $114.9$122.2 million forunder an operating lease relatedfor tooffice a facilityspace that hadwe notoccupied yet commenced. The lease is expected to commencebeginning in the third quarter ofJuly 2026 withand has a lease term of 10 years.

In February 2026, the Board of Directors approved a share repurchase program authorizing the repurchase of up to $300.0 million of our ordinary shares. The program became effective in March 2026 and has no expiration date but may be suspended, terminated, or modified at any time. Shares may be repurchased from time to time in the open market or through negotiated transactions at prevailing market rates, or by other means in accordance with U.S. federal securities laws. The timing of the repurchases will depend on certain factors, including market conditions, prices, and management’s discretion. As of MarchJune 31,30, 2026, $300.0$298.0 million remained available for repurchases.

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 threesix months ended MarchJune 31,30, 2026.