0001193125-25-272362
SEC filingJFrog's 26% revenue growth drove gross margin expansion to 77%, though operating losses narrowed on improved leverage.
For the three months ended September 30, 2025, JFrog reported total subscription revenue of $136.9 million, a 26% increase compared to $109.1 million in the same period of 2024. The growth was driven by approximately $24.0 million from existing customers and the remainder from new customers. Gross margin improved to 77% from 75% in the prior year, primarily due to revenue growth with improved operating leverage. Operating loss narrowed to $21.6 million from $29.9 million, reflecting a 1,100 basis point improvement in operating margin to -16%. Net loss improved to $16.4 million from $22.9 million. The improvement in operating results was driven by revenue growth outpacing expense increases, particularly in sales and marketing (up 10%) and research and development (up 19%).
Subscription revenue from self-managed and SaaS offerings grew 25% to $128.9 million, while license revenue from self-managed deployments increased 44% to $8.0 million. SaaS subscriptions contributed 46% of total revenue in Q3 2025, up from 39% in Q3 2024, indicating a continued shift toward cloud-based deployments. Enterprise Plus subscriptions represented 56% of total revenue, up from 50% in the prior year, reflecting increased demand for end-to-end software supply chain solutions. The net dollar retention rate was 118% as of September 30, 2025, up from 117% a year earlier, demonstrating strong expansion within the existing customer base. The number of customers with ARR of $100,000 or more grew to 1,121 from 1,018 at year-end 2024, and customers with ARR of at least $1.0 million increased to 71 from 52.
Management expects the net dollar retention rate to remain relatively stable with minor fluctuations around current levels. The company plans to continue investing in research and development, sales and marketing, and international expansion to drive growth. Free cash flow improved to $92.4 million for the nine months ended September 30, 2025, compared to $59.3 million in the prior-year period, providing liquidity for strategic initiatives. The company believes its existing cash, cash equivalents, and short-term investments of $651.1 million, together with cash from operations, will be sufficient to meet needs for the next 12 months and long-term. No specific forward guidance was provided in the MD&A section.
As of September 30, 2025, JFrog holds $78.4M in cash and cash equivalents and $572.7M in short-term investments, totaling $651.1M in liquid assets. Shareholders’ equity stands at $859.4M, with no outstanding debt. The company maintains a strong liquidity position to fund operations and growth.
JFrog has $73.4M in non-cancelable purchase obligations, primarily for hosting services and software, with $36.1M due within 12 months. Additionally, a $110.0M operating lease commitment for a facility starting in 2026 (10-year term) was disclosed. Subsequent to quarter end, an $8.1M lease extension was entered. Total commitments amount to $183.4M.
No share buybacks or dividends were disclosed. Share-based compensation totaled $115.7M for the nine months, reflecting significant equity-based incentives. Capital expenditures are not separately detailed in the Notes but are consistent with prior periods.
JFrog operates as a single reportable segment. Revenue by geography: United States 60%, Israel 3%, Rest of World 37% for the nine months ended September 30, 2025. Long-lived assets are primarily in Israel ($7.3M), the U.S. ($4.1M), and India ($5.2M).
JFrog's operating cash flow (CFO) of $95.0M for the nine months ended September 30, 2025 significantly exceeded the net loss of ($56.6M), indicating strong cash generation from operations despite GAAP losses. The primary driver was a large non-cash add-back of $115.7M in share-based compensation, along with a $34.5M increase in deferred revenue. Working capital changes were a net source of cash, with accounts receivable increasing by $13.9M (a use) but deferred revenue growth more than offsetting that.
Capital expenditures remained modest at $2.6M, representing a capex intensity of roughly 2.7% of CFO. Free cash flow (CFO minus capex) was approximately $92.4M, though the filing does not explicitly state this figure. The company did not repurchase shares or pay dividends during the period. Investing activities were dominated by net purchases of short-term investments ($94.1M net outflow), reflecting ongoing cash management. Financing activities provided $29.2M, primarily from employee stock plan proceeds. Overall, cash generation improved markedly year-over-year, with CFO rising 53.7% from $61.8M.