10-KPeriod: FY2025

Cloudflare, Inc. Annual Report, Year Ended Dec 31, 2025

Filed February 26, 2026For Securities:NET

Summary

Cloudflare, Inc. (NET) reported a substantial increase in revenue for the year ended December 31, 2025, reaching $2.17 billion, a 30% increase year-over-year. This growth was driven by a 40% increase in paying customers and a strong dollar-based net retention rate of 120%. Despite revenue growth, the company reported a net loss of $102.3 million, an increase from the previous year's loss of $78.8 million. This widening loss is attributed to increased operating expenses, particularly in sales and marketing, research and development, and general and administrative areas, reflecting significant investments in headcount and product development. The company's balance sheet strengthened with a substantial increase in cash and cash equivalents, largely due to the successful issuance of $2 billion in 0% Convertible Senior Notes due 2030. Cloudflare continues to invest heavily in its global network infrastructure, including servers with GPU capabilities to support AI workloads, and in expanding its workforce. The company's strategy of acquiring new customers, expanding relationships with existing ones, and developing new products remains central to its growth. Key financial metrics show a growing business, with paying customers increasing to over 332,000 and large customers (>$100,000 annualized revenue) growing to 4,298. While the company is still not profitable on a GAAP basis, non-GAAP income from operations and free cash flow show positive trends, indicating improving operational efficiency. Investors should monitor the company's continued investment in growth against its path to profitability.

Financial Highlights

49 data points
Beta

Revenue

$2.17B

74.5% Gross Margin

Net Income

-$102.27M

-4.7% Net Margin

EPS (Diluted)

$-0.29

Total Assets

$6.04B

Cash & Equivalents

$943.54M

Free Cash Flow

$287.50M

Financial Statements
Beta
Revenue$2.17B
Cost of Revenue$552.52M
Gross Profit$1.62B
R&D Expenses$512.49M
Operating Expenses$1.82B
Operating Income-$207.21M
Net Income-$102.27M
EPS (Basic)$-0.29
EPS (Diluted)$-0.29
Shares Outstanding (Basic)348.42M
Shares Outstanding (Diluted)348.42M

Key Highlights

  • 1Revenue increased by 30% to $2.17 billion for the year ended December 31, 2025.
  • 2Net loss widened to $102.3 million from $78.8 million in the prior year, driven by increased operating expenses.
  • 3The company raised $2 billion through the issuance of 0% Convertible Senior Notes due 2030.
  • 4Paying customers grew by 40% to 332,466, with a dollar-based net retention rate of 120%.
  • 5Cloudflare continued to invest heavily in its global network, including expanding its server presence for AI workloads.
  • 6Non-GAAP operating margin remained strong at 14% for 2025.
  • 7Free cash flow generation increased to $260.6 million, indicating improving operational cash generation.

Frequently Asked Questions

Cloudflare's primary growth drivers are acquiring new paying customers and expanding relationships with existing customers. The company continues to invest in its sales and marketing efforts to drive customer acquisition across all segments, from individual developers to large enterprises, and leverages its free tier to build brand awareness and attract new users.

While Cloudflare is still operating at a net loss on a GAAP basis, it is demonstrating improving operational efficiency through positive non-GAAP income from operations and increasing free cash flow. The company's strategy involves significant reinvestment in its network and product development, which impacts short-term profitability but is expected to fuel long-term growth and market expansion.

The growth in paying customers, especially those with annual revenue over $100,000, indicates successful penetration into larger enterprise markets. A dollar-based net retention rate of 120% signifies that Cloudflare is not only retaining its existing customer revenue but also expanding it through upsells and cross-sells, demonstrating strong customer satisfaction and the ability to grow revenue from its existing base.

Cloudflare's extensive, programmable, and distributed 'Connectivity Cloud' network is core to its business. By running all services on all servers, it achieves efficiency and scalability. This network allows Cloudflare to offer its services at competitive prices, innovate rapidly, and provide a unified platform for security, performance, and reliability, increasingly enabling customers to build applications, including AI workloads, directly on its network.