10-K/APeriod: FY2025

Cloudflare, Inc. Annual Report (Amendment), Year Ended Dec 31, 2025

Filed April 29, 2026For Securities:NET

Summary

Cloudflare, Inc.'s 2026 10-K filing reveals a robust governance structure and a compensation philosophy prioritizing long-term shareholder value. The company maintains a diverse and experienced Board of Directors, divided into staggered classes to ensure continuity. Key leadership roles, including Co-Chairs Matthew Prince (CEO) and Michelle Zatlyn (President), are well-established, with a Lead Independent Director providing additional oversight. The compensation committee, composed entirely of independent directors, uses a "pay-for-performance" model, heavily emphasizing long-term equity incentives over base salary. This aligns executive interests with those of stockholders, a strategy reinforced by stock ownership guidelines and prohibitions on hedging and pledging. Financially, the company reported a significant year-over-year revenue increase of 29.8% to $2,167.9 million in fiscal 2025. While GAAP gross margin saw a slight decrease, non-GAAP gross margin remained strong at 75.8%. The company also achieved non-GAAP income from operations of $303.9 million and non-GAAP net income of $342.9 million. Notably, net cash flow from operating activities surged to $603.1 million, and free cash flow improved to $260.6 million, indicating strong operational efficiency and cash generation capabilities. These financial results, coupled with a forward-looking compensation strategy, suggest a company focused on sustainable growth and shareholder returns.

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

  • 1Cloudflare reported strong revenue growth of 29.8% year-over-year, reaching $2,167.9 million in fiscal 2025.
  • 2The company achieved a non-GAAP net income of $342.9 million in fiscal 2025, an increase from the prior year.
  • 3Net cash flow from operating activities significantly increased to $603.1 million, demonstrating robust cash generation.
  • 4Free cash flow also saw substantial growth, reaching $260.6 million, indicating improved financial efficiency.
  • 5Cloudflare maintains a strong corporate governance framework with an independent compensation committee and a "pay-for-performance" compensation philosophy.
  • 6Executive compensation is heavily weighted towards long-term equity incentives, aligning executive and shareholder interests.
  • 7The company has a well-defined board structure with staggered director terms and clearly defined committee responsibilities (Audit, Compensation, Nominating & Corporate Governance).

Frequently Asked Questions

Cloudflare's executive compensation program emphasizes long-term incentive compensation in the form of equity awards (RSUs and PSUs) over base salary, reflecting a "pay-for-performance" philosophy. This structure is designed to align the interests of named executive officers with those of stockholders by directly linking their compensation realization to the company's long-term success and stock price performance. The company also maintains stock ownership guidelines for executives and directors and prohibits hedging or pledging of company securities.

In fiscal 2025, Cloudflare reported total revenue of $2,167.9 million, representing a 29.8% increase year-over-year. GAAP gross margin was 74.5%, while non-GAAP gross margin was 75.8%. The company achieved non-GAAP income from operations of $303.9 million and non-GAAP net income of $342.9 million. Furthermore, net cash flow from operating activities was $603.1 million, and free cash flow was $260.6 million, both showing significant year-over-year improvements.

Cloudflare's Board of Directors is divided into three staggered classes, with directors serving three-year terms to ensure continuity. The board comprises both employee and non-employee directors, with a majority of independent directors. Key committees include the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, all composed of independent directors. Matthew Prince (CEO) and Michelle Zatlyn (President) serve as Co-Chairs of the Board, and Scott Sandell serves as Lead Independent Director, balancing operational leadership with independent oversight.

Cloudflare has a Severance Policy that provides certain benefits to named executive officers upon termination of employment under specific circumstances, including involuntary termination without cause or constructive termination in connection with a change in control. These benefits typically include a lump sum payment of base salary and COBRA premiums. In the event of a change in control, there is a "double-trigger" requirement, meaning termination must occur in conjunction with the change in control. Equity awards may also accelerate under certain conditions, though performance-based awards have specific provisions.