NET changes
Pick any two versions below to diff them.
- Price
- $293.75
- Discount category
- Pricey
- Next earnings
- 2027-02-09
- Next earnings is estimate
- Yes
- Company name
- Cloudflare
- Sector
- Cloud networking & security
- About
- Cloudflare runs a global network that makes websites, applications and corporate networks faster and more secure. It sells security, performance, networking and developer products, including a platform on which developers build applications and AI agents. At September 30, 2026, its network had co-location facilities in more than 340 cities and over 130 countries. Its customers range from free users and small businesses to large companies and governments. Revenue was $782.5 million in Q3 2026, and 5,006 paying customers had more than $100,000 of annualized revenue. Its Class A common stock trades on the NYSE.
- Thesis
- The market doubts that Cloudflare can turn fast growth into lasting profit. Revenue grew 39% in Q3 2026, the fastest rate in nearly four years, but the GAAP operating loss was $67.9 million. Stock-based compensation and related taxes were $174.1 million in the quarter. The GAAP gross margin fell to 71.2% from 74.0% a year earlier, and free cash flow was only $82.1 million, or 10% of revenue. For the gap to close, three things must be true. Revenue growth must stay near 30% or more in 2027, with dollar-based net retention near the 122% of Q3 2026. The non-GAAP operating margin must keep rising from 17.5%, so that the savings from the workforce reduction of May 2026 show in results. Free cash flow must rise as the new network capacity earns revenue. The Q4 2026 report with 2027 guidance, expected in February 2027, gives the next test. Stockholder lawsuits about the Capitalization Changes, which add a non-voting Class C share to each share, can also change the share count and the timing. If growth and margins hold, the gap can close within one to two years.
- Risks
- Cloudflare still has GAAP losses. The GAAP operating loss was $335.6 million in the first nine months of 2026, including $161.7 million of restructuring and other charges, and stock-based compensation and related taxes were $442.2 million. If growth slows, GAAP profit comes later. Large cloud providers and security companies sell competing products. Price pressure, slower expansion by existing customers or the loss of large customers can slow revenue growth. Cloudflare has $2.0 billion of 2030 Notes and $2.5 billion of 2031 Notes. It can settle conversions in shares, which dilutes holders. The Capitalization Changes can make the 2030 Notes convertible for a short period. Stockholder lawsuits claim that the Capitalization Changes let the co-founders keep control without enough return to other holders. A court decision can delay, change or stop the changes. Customers depend on Cloudflare's network for their websites, applications and security. A large outage or a security breach can harm its reputation and cause customer losses.
- Balance sheet
- Cash: $5.1B Debt: $4.5B Net cash: $629M Debt due within 12 months: $0.0M Last debt due: 2031 At September 30, 2026, Cloudflare had cash, cash equivalents and available-for-sale securities of $5,128.7 million. Its debt was convertible senior notes with a principal of $4,500.0 million: $2,000.0 million of 2030 Notes and $2,500.0 million of 0% 2031 Notes, which it sold in August 2026. The carrying amount of the notes was $4,441.9 million, and none was due within one year. In August 2026, it settled the 2026 Notes at maturity with $1,293.4 million in cash and about 2.2 million shares. It also has a $400 million revolving credit facility from May 2024. Cash from operations was $491.3 million in the first nine months of 2026, and purchases of property and equipment were $237.0 million. Total stockholders' equity was $1,464.8 million. As of 2026-09-30.
- Checkpoints
- Nov 5, 2026: Q3 2026 results. Passed. Watch: Revenue growth above 30%, a higher non-GAAP operating margin and higher 2026 guidance pass; slower growth or lower guidance fail. Outcome: Revenue grew 39% to $782.5 million, the non-GAAP operating margin rose to 17.5% and 2026 revenue guidance rose to $2,963.0 million to $2,964.0 million. Feb 9, 2027 (estimate): Q4 2026 results and 2027 guidance. Pending. Watch: Q4 revenue of $845.0 million or more and 2027 guidance for revenue growth near 30% with a higher operating margin pass; much slower growth guidance or a lower margin fail.
- Recent events
- 2026-11-05: Cloudflare reported Q3 2026 results. Revenue rose 39% to $782.5 million. The GAAP operating loss was $67.9 million, and non-GAAP operating income was $137.1 million, or 17.5% of revenue. Non-GAAP EPS was $0.38, and free cash flow was $82.1 million. The dollar-based net retention rate was 122%. The company raised its 2026 guidance to revenue of $2,963.0 million to $2,964.0 million and non-GAAP EPS of $1.35. 2026-08-13: Cloudflare filed an 8-K for the sale of $2,500.0 million of 0% convertible senior notes due 2031, with net proceeds of $2,462.5 million. In August 2026, it also settled its 0% convertible notes due 2026 at maturity with $1,293.4 million in cash and about 2.2 million shares of Class A common stock. 2026-08-06: Cloudflare reported Q2 2026 results. Revenue rose 36% to $696.1 million. The GAAP operating loss was $205.7 million, including restructuring charges, and non-GAAP operating income was $96.1 million. The company raised its 2026 revenue guidance to $2,864.0 million to $2,870.0 million. 2026-06-30: Cloudflare stockholders approved the parts of the Capitalization Changes that needed their vote at the 2026 annual meeting. The changes add a non-voting Class C share to each Class A and Class B share and exchange the co-founders' Class B shares for Series FF preferred and Class A shares. Stockholder lawsuits challenge them, and the timing depends on that litigation. 2026-05-07: Cloudflare reported Q1 2026 results, with revenue up 34% to $639.8 million. It also announced a plan to move to an agentic AI-first operating model. The plan reduced its workforce by about 20%, with restructuring charges of up to $165 million. The company said the plan was substantially complete at September 30, 2026.