Form 8-K

8-K — Cloudflare, Inc.

Accession: 0001477333-26-000053

Filed: 2026-08-06

Period: 2026-08-06

CIK: 0001477333

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Regulation FD Disclosure

Item: Financial Statements and Exhibits

Documents

8-K — cloud-20260806.htm (Primary)

EX-99.1 (q226exhibit991.htm)

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XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: cloud-20260806.htm · Sequence: 1

cloud-20260806

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 6, 2026

Cloudflare, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-39039

27-0805829

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

101 Townsend Street

San Francisco, CA

94107

(Address of principal executive offices) (Zip code)

(888) 993-5273

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Class A Common Stock, $0.001 par value NET New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2026, Cloudflare, Inc. (the “Company”) reported financial results for the fiscal quarter ended June 30, 2026. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated by reference.

The information contained in Items 2.02 and 7.01 of this report, including Exhibit 99.1 attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure.

On August 6, 2026, the Company posted supplemental financial and other information on its investor relations website (https://cloudflare.NET).

The Company announces material information to the public through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, the Company’s website (https://www.cloudflare.com), its investor relations website (https://cloudflare.NET), and its news site (https://www.cloudflare.com/press). The Company uses these channels, as well as social media, including its blog (https://blog.cloudflare.com), its X account (@Cloudflare), its Facebook account (@Cloudflare), and its Instagram account (@cloudflare), to communicate with investors and the public about the Company, its products, and other matters. Therefore, the Company encourages investors, the media, and others interested in the Company to review the information it makes public in these locations, as such information could be deemed to be material information.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

99.1

Press Release Issued by Cloudflare, Inc., dated August 6, 2026

104 Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Cloudflare, Inc.

Dated: August 6, 2026 By: /s/ Alissa Starzak

Alissa Starzak

Chief Legal Officer and Secretary

EX-99.1

Filename: q226exhibit991.htm · Sequence: 2

Document

Cloudflare Announces Second Quarter 2026 Financial Results

•Second quarter revenue totaled $696.1 million, representing an increase of 36% year-over-year

•GAAP loss from operations of $205.7 million, or 30% of total revenue, and non-GAAP income from operations of $96.1 million, or 14% of revenue

•Delivered Current RPO year-over-year growth of 35%

San Francisco, CA, August 6, 2026 — Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its second quarter ended June 30, 2026.

“We delivered a stellar second quarter, highlighted by revenue accelerating to $696.1 million, up 36% year-over-year, and record growth in total paying customers, large customers, and developers on our platform,” said Matthew Prince, co-founder & CEO of Cloudflare. “As the web shifts to AI answer engines and agent-driven commerce, we are seeing a fundamental rewrite of the Internet for machine-to-machine traffic. Cloudflare sits at the center of this paradigm shift—building the infrastructure, controls, developer tools, and payment rails for the Agentic Internet. The business model of the web is changing, and no company is better positioned than Cloudflare to help define its future.”

Second Quarter Fiscal 2026 Financial Highlights

•Revenue: Total revenue of $696.1 million, representing an increase of 36% year-over-year.

•Gross Profit: GAAP gross profit was $499.5 million, or 71.8% gross margin, compared to $383.6 million, or 74.9%, in the second quarter of 2025. Non-GAAP gross profit was $508.9 million, or 73.1% gross margin, compared to $390.7 million, or 76.3%, in the second quarter of 2025.

•Operating Income (Loss): GAAP loss from operations was $205.7 million, or 29.6% of revenue, compared to $67.3 million, or 13.1% of revenue, in the second quarter of 2025. Non-GAAP income from operations was $96.1 million, or 13.8% of revenue, compared to $72.3 million, or 14.1% of revenue, in the second quarter of 2025.

•Net Income (Loss): GAAP net loss was $170.0 million, compared to $50.4 million in the second quarter of 2025. GAAP net loss per basic and diluted share was $0.48, compared to $0.15 in the second quarter of 2025. Non-GAAP net income was $107.8 million, compared to $75.1 million in the second quarter of 2025. Non-GAAP net income per diluted share was $0.29, compared to $0.21 in the second quarter of 2025.

•Cash Flow: Net cash flow from operating activities was $117.6 million, compared to $99.8 million for the second quarter of 2025. Free cash flow was $56.4 million, or 8% of revenue, compared to $33.3 million, or 6% of revenue, in the second quarter of 2025.

•Cash, cash equivalents, and available-for-sale securities were $4,162.8 million as of June 30, 2026.

The section titled "Non-GAAP Financial Information" below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

Financial Outlook

For the third quarter of fiscal 2026, we expect:

•Total revenue of $736.0 to $737.0 million

•Non-GAAP income from operations of $129.0 to $130.0 million

•Non-GAAP net income per share of $0.34, utilizing weighted average common shares outstanding of approximately 374 million

For the full year fiscal 2026, we expect:

•Total revenue of $2,864.0 to $2,870.0 million

•Non-GAAP income from operations of $443.0 to $445.0 million

•Non-GAAP net income per share of $1.25 to $1.26, utilizing weighted average common shares outstanding of approximately 374 million

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Conference Call Information

Cloudflare will host an investor conference call to discuss its second quarter ended June 30, 2026 earnings results today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). Interested parties can access the call by dialing (646) 968-2727 or toll-free at (888) 596-4244 with conference ID 3723782. A live webcast of the conference call will be accessible from the investor relations website at https://cloudflare.NET. A replay will be available approximately two hours after the conclusion of the live event and will remain available for approximately one year.

Supplemental Financial and Other Information

Supplemental financial and other information can be accessed through the Company’s investor relations website at https://cloudflare.NET.

Non-GAAP Financial Information

Cloudflare believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. For further information regarding why Cloudflare believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section at the end of this press release.

Available Information

Cloudflare intends to use its press releases, website, investor relations website, news site, blog, X account, Facebook account, and Instagram account, in addition to filings made with the Securities and Exchange Commission (SEC) and public conference calls, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “explore,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding our future financial and operating performance, our reputation and performance in the market, general market trends, our estimated and projected revenue, non-GAAP income from operations and non-GAAP net income per share, shares outstanding, the benefits to customers from using our products, the expected functionality and performance of our products, the demand by customers for our products, our plans and objectives for future operations, growth, initiatives, or strategies, our

market opportunity, the plan to further accelerate our evolution to an agentic AI-first operating model and the intent for the plan to align our organizational structure with this new operating model, the estimated reduction of our current workforce, the estimated charges in connection with this plan, including the primary components of such charges, the anticipated timing of the implementation of this plan and the timing of such charges, the expected benefits from this plan and related actions, and comments made by our CEO and others. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the impact of adverse macroeconomic conditions on our and our customers’, vendors’, and partners’ operations and future financial performance; the impact of conflicts and geopolitical tension around the world, particularly in Eastern Europe or the Middle East, or any worsening or expansion of those conflicts or tensions, as well as other geopolitical events such as elections and other governmental changes, threats of tariffs and other impediments to cross-border trade; our history of net losses; risks associated with managing our growth; our ability to attract and retain new customers (including new large customers); our ability to retain and upgrade paying customers and convert free customers to paying customers; our ability to expand the number of products we sell to paying customers; our ability to effectively increase sales to large customers; our ability to incorporate AI tools and automation to increase productivity and maintain operational efficiency; our ability to increase brand awareness; our ability to continue to innovate and develop new products and product features; our ability to generate demand for our products; our ability to effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features; our sales team’s productivity; our ability to effectively attract, integrate and retain key personnel; problems with our internal systems, network, or data, including actual or perceived breaches or failures; rapidly evolving technological developments in the market, including advancements in AI; length of our sales cycles and the timing of payments by our customers; activities of our paying and free customers or the content of their websites and other Internet properties that use our network and products; foreign currency fluctuations; changes in the legal, tax, and regulatory environment applicable to our business; and other general market, political, economic, and business conditions. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Quarterly Report on Form 10-Q filed on May 8, 2026, as well as other filings that we may make from time to time with the SEC.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

About Cloudflare

Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company on a mission to help build a better Internet. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.

Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.

Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at radar.cloudflare.com.

Investor Relations Information

Phil Winslow

ir@cloudflare.com

Press Contact Information

Daniella Vallurupalli

press@cloudflare.com

Source: Cloudflare, Inc.

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three Months Ended

June 30, Six Months Ended

June 30,

2026 2025 2026 2025

Revenue $ 696,061 $ 512,316 $ 1,335,816 $ 991,403

Cost of revenue(1)(2)

196,544 128,677 380,702 244,253

Gross profit 499,517 383,639 955,114 747,150

Operating expenses:

Sales and marketing(1)(2)(3)

276,122 219,359 547,722 433,370

Research and development(1)

159,486 134,557 310,458 249,646

General and administrative(1)(3)(5)(6)

118,912 96,987 213,931 184,645

Restructuring and other charges 150,693 — 150,693 —

Total operating expenses 705,213 450,903 1,222,804 867,661

Loss from operations (205,696) (67,264) (267,690) (120,511)

Non-operating income (expense):

Interest income 39,932 25,406 80,098 46,805

Interest expense(4)

(3,089) (1,524) (5,652) (2,967)

Other income (expense), net 913 (3,907) 3,903 (7,375)

Total non-operating income, net 37,756 19,975 78,349 36,463

Loss before income taxes

(167,940) (47,289) (189,341) (84,048)

Provision for income taxes 2,041 3,157 3,567 4,852

Net loss $ (169,981) $ (50,446) $ (192,908) $ (88,900)

Net loss per share attributable to common stockholders, basic and diluted $ (0.48) $ (0.15) $ (0.55) $ (0.26)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 354,334 347,489 353,485 346,605

____________

(1) Includes stock-based compensation and related employer payroll taxes as follows:

Cost of revenue $ 4,311 $ 3,693 $ 8,455 $ 6,599

Sales and marketing 41,246 36,818 84,070 67,023

Research and development 55,435 50,956 104,936 89,225

General and administrative 39,601 40,526 70,589 75,041

Total stock-based compensation and related employer payroll taxes $ 140,593 $ 131,993 $ 268,050 $ 237,888

(2) Includes amortization of acquired intangible assets as follows:

Cost of revenue $ 5,050 $ 3,329 $ 11,011 $ 6,182

Sales and marketing 2,391 417 3,641 805

Total amortization of acquired intangible assets $ 7,441 $ 3,746 $ 14,652 $ 6,987

(3) Includes acquisition-related and other expenses as follows:

Sales and marketing $ 33 $ — $ 33 $ —

General and administrative 2,047 — 2,470 112

Total acquisition-related and other expenses $ 2,080 $ — $ 2,503 $ 112

(4) Includes amortization of debt issuance costs as follows:

Interest expense $ 2,439 $ 1,199 $ 4,865 $ 2,189

Total amortization of debt issuance costs $ 2,439 $ 1,199 $ 4,865 $ 2,189

(5) Includes lease impairment charges as follows:

General and administrative $ — $ 3,840 $ — $ 3,840

Total lease impairment charges $ — $ 3,840 $ — $ 3,840

(6) Includes legal reserve and settlements as follows:

General and administrative $ 1,000 $ — $ 1,000 $ —

Total legal reserve and settlements $ 1,000 $ — $ 1,000 $ —

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)

June 30,

2026 December 31,

2025

Assets

Current assets:

Cash and cash equivalents $ 1,663,773 $ 943,536

Available-for-sale securities 2,499,025 3,157,715

Accounts receivable, net 422,945 382,488

Contract assets 27,187 23,531

Restricted cash short-term 12,163 9,364

Prepaid expenses and other current assets 153,282 128,203

Total current assets 4,778,375 4,644,837

Property and equipment, net 703,209 618,691

Goodwill 376,204 226,563

Acquired intangible assets, net 57,369 41,799

Operating lease right-of-use assets 247,675 237,646

Deferred contract acquisition costs, noncurrent 240,523 219,499

Restricted cash — 1,457

Other noncurrent assets 70,772 45,764

Total assets $ 6,474,127 $ 6,036,256

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable $ 127,032 $ 84,115

Accrued expenses and other current liabilities 165,788 109,054

Accrued compensation 151,528 111,005

Operating lease liabilities 78,239 70,901

Deferred revenue 812,187 684,207

Current portion of convertible senior notes, net 1,293,260 1,291,281

Total current liabilities 2,628,034 2,350,563

Convertible senior notes, net 1,977,006 1,974,120

Operating lease liabilities, noncurrent 180,845 182,025

Deferred revenue, noncurrent 40,252 41,088

Other noncurrent liabilities 27,970 29,337

Total liabilities 4,854,107 4,577,133

Stockholders’ Equity

Class A common stock; $0.001 par value; 2,250,000 shares authorized as of June 30, 2026 and December 31, 2025; 322,176 and 317,319 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

322 317

Class B common stock; $0.001 par value; 315,000 shares authorized as of June 30, 2026 and December 31, 2025; 33,755 and 34,568 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

33 34

Additional paid-in capital 3,027,713 2,651,420

Accumulated deficit (1,397,815) (1,204,907)

Accumulated other comprehensive income (loss) (10,233) 12,259

Total stockholders’ equity 1,620,020 1,459,123

Total liabilities and stockholders’ equity $ 6,474,127 $ 6,036,256

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Six Months Ended June 30,

2026 2025

Cash Flows from Operating Activities

Net loss $ (192,908) $ (88,900)

Adjustments to reconcile net loss to cash provided by operating activities:

Depreciation and amortization expense 123,170 87,688

Non-cash operating lease costs 41,696 29,872

Amortization of deferred contract acquisition costs 63,486 47,296

Stock-based compensation expense 274,113 217,912

Amortization of debt issuance costs 4,865 2,189

Net accretion of discounts and amortization of premiums on available-for-sale securities (13,233) (11,987)

Deferred income taxes (7,013) (480)

Provision for bad debt 5,157 7,815

Other (6,814) 3,227

Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations:

Accounts receivable, net (45,614) 1,431

Contract assets (3,656) (4,707)

Deferred contract acquisition costs (84,510) (58,998)

Prepaid expenses and other current assets (60,612) (46,339)

Other noncurrent assets 7,142 4,312

Accounts payable 1,205 (247)

Accrued expenses and other current liabilities 48,699 758

Accrued compensation 40,523 (2,914)

Operating lease liabilities (45,567) (24,973)

Deferred revenue 127,144 82,643

Other noncurrent liabilities (1,379) (18)

Net cash provided by operating activities 275,894 245,580

Cash Flows from Investing Activities

Purchases of property and equipment (115,192) (145,786)

Capitalized internal-use software (20,244) (13,647)

Asset acquisitions and business combinations, net of cash acquired (75,098) (6,462)

Purchases of available-for-sale securities (783,933) (1,530,775)

Maturities of available-for-sale securities 1,442,199 810,825

Other investing activities 1,636 382

Net cash provided by (used in) investing activities 449,368 (885,463)

Cash Flows from Financing Activities

Proceeds from settlement of the 2025 capped calls

— 309,616

Gross proceeds from issuance of 2030 convertible senior notes

— 2,000,000

Purchases of capped calls related to the 2030 convertible senior notes

— (283,400)

Cash paid for issuance costs on 2030 convertible senior notes

— (27,873)

Proceeds from the exercise of stock options 9,815 17,942

Proceeds from the issuance of common stock for employee stock purchase plan 16,075 13,057

Payment of tax withholding obligation on RSU and PSU settlement (29,473) (18,217)

Payment of indemnity holdback (100) —

Net cash provided by (used in) financing activities (3,683) 2,011,125

Net increase in cash, cash equivalents, and restricted cash 721,579 1,371,242

Cash, cash equivalents, and restricted cash, beginning of period 954,357 154,214

Cash, cash equivalents, and restricted cash, end of period $ 1,675,936 $ 1,525,456

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

June 30, Six Months Ended

June 30,

2026 2025 2026 2025

Reconciliation of cost of revenue:

GAAP cost of revenue $ 196,544 $ 128,677 $ 380,702 $ 244,253

Less: Stock-based compensation and related employer payroll taxes (4,311) (3,693) (8,455) (6,599)

Less: Amortization of acquired intangible assets (5,050) (3,329) (11,011) (6,182)

Non-GAAP cost of revenue $ 187,183 $ 121,655 $ 361,236 $ 231,472

Reconciliation of gross profit:

GAAP gross profit $ 499,517 $ 383,639 $ 955,114 $ 747,150

Add: Stock-based compensation and related employer payroll taxes 4,311 3,693 8,455 6,599

Add: Amortization of acquired intangible assets 5,050 3,329 11,011 6,182

Non-GAAP gross profit $ 508,878 $ 390,661 $ 974,580 $ 759,931

GAAP gross margin 71.8% 74.9% 71.5% 75.4%

Non-GAAP gross margin 73.1% 76.3% 73.0% 76.7%

Reconciliation of operating expenses:

GAAP sales and marketing $ 276,122 $ 219,359 $ 547,722 $ 433,370

Less: Stock-based compensation and related employer payroll taxes (41,246) (36,818) (84,070) (67,023)

Less: Amortization of acquired intangible assets (2,391) (417) (3,641) (805)

Less: Acquisition-related and other expenses (33) — (33) —

Non-GAAP sales and marketing $ 232,452 $ 182,124 $ 459,978 $ 365,542

GAAP research and development $ 159,486 $ 134,557 $ 310,458 $ 249,646

Less: Stock-based compensation and related employer payroll taxes (55,435) (50,956) (104,936) (89,225)

Non-GAAP research and development $ 104,051 $ 83,601 $ 205,522 $ 160,421

GAAP general and administrative $ 118,912 $ 96,987 $ 213,931 $ 184,645

Less: Stock-based compensation and related employer payroll taxes (39,601) (40,526) (70,589) (75,041)

Less: Acquisition-related and other expenses (2,047) — (2,470) (112)

Less: Lease impairment charges — (3,840) — (3,840)

Less: Legal reserve and settlements

(1,000) — (1,000) —

Non-GAAP general and administrative $ 76,264 $ 52,621 $ 139,872 $ 105,652

GAAP restructuring and other charges $ 150,693 $ — $ 150,693 $ —

Less: Restructuring and other charges (150,693) — (150,693) —

Non-GAAP restructuring and other charges $ — $ — $ — $ —

Reconciliation of income (loss) from operations:

GAAP loss from operations $ (205,696) $ (67,264) $ (267,690) $ (120,511)

Add: Stock-based compensation and related employer payroll taxes 140,593 131,993 268,050 237,888

Add: Amortization of acquired intangible assets 7,441 3,746 14,652 6,987

Add: Acquisition-related and other expenses 2,080 — 2,503 112

Add: Lease impairment charges — 3,840 — 3,840

Add: Legal reserve and settlements

1,000 — 1,000 —

Add: Restructuring and other charges 150,693 — 150,693 —

Non-GAAP income from operations $ 96,111 $ 72,315 $ 169,208 $ 128,316

GAAP operating margin (29.6)% (13.1)% (20.0)% (12.2)%

Non-GAAP operating margin 13.8% 14.1% 12.7% 12.9%

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

June 30, Six Months Ended

June 30,

2026 2025 2026 2025

Reconciliation of interest expense:

GAAP interest expense $ (3,089) $ (1,524) $ (5,652) $ (2,967)

Add: Amortization of debt issuance costs 2,439 1,199 4,865 2,189

Non-GAAP interest expense $ (650) $ (325) $ (787) $ (778)

Reconciliation of provision for income taxes:

GAAP provision for income taxes $ 2,041 $ 3,157 $ 3,567 $ 4,852

Income tax effect of non-GAAP adjustments 26,485 15,275 47,059 28,644

Non-GAAP provision for income taxes $ 28,526 $ 18,432 $ 50,626 $ 33,496

Reconciliation of net income (loss) and net income (loss) per share:

GAAP net loss attributable to common stockholders $ (169,981) $ (50,446) $ (192,908) $ (88,900)

Add: Stock-based compensation and related employer payroll taxes 140,593 131,993 268,050 237,888

Add: Amortization of acquired intangible assets 7,441 3,746 14,652 6,987

Add: Acquisition-related and other expenses 2,080 — 2,503 112

Add: Amortization of debt issuance costs 2,439 1,199 4,865 2,189

Add: Lease impairment charges — 3,840 — 3,840

Add: Legal reserve and settlements

1,000 — 1,000 —

Add: Restructuring and other charges 150,693 — 150,693 —

Income tax effect of non-GAAP adjustments (26,485) (15,275) (47,059) (28,644)

Non-GAAP net income $ 107,780 $ 75,057 $ 201,796 $ 133,472

GAAP net loss per share, basic $ (0.48) $ (0.15) $ (0.55) $ (0.26)

GAAP net loss per share, diluted $ (0.48) $ (0.15) $ (0.55) $ (0.26)

Add: Stock-based compensation and related employer payroll taxes 0.40 0.38 0.76 0.69

Add: Amortization of acquired intangible assets 0.02 0.01 0.04 0.02

Add: Acquisition-related and other expenses 0.01 — 0.01 —

Add: Amortization of debt issuance costs 0.01 — 0.01 0.01

Add: Lease impairment charges — 0.01 — 0.01

Add: Legal reserve and settlements

— — — —

Add: Restructuring and other charges 0.43 — 0.43 —

Income tax effect of non-GAAP adjustments

(0.07) (0.04) (0.13) (0.08)

Effect of dilutive shares (0.03) — (0.03) (0.02)

Non-GAAP net income per share, diluted(1)

$ 0.29 $ 0.21 $ 0.54 $ 0.37

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic 354,334 347,489 353,485 346,605

Weighted-average shares used in computing non-GAAP net income per share attributable to common stockholders, diluted 373,683 365,264 374,672 363,962

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

Three Months Ended

June 30, Six Months Ended

June 30,

2026 2025 2026 2025

Free cash flow

Net cash provided by operating activities $ 117,564 $ 99,796 $ 275,894 $ 245,580

Less: Purchases of property and equipment (49,961) (59,897) (115,192) (145,786)

Less: Capitalized internal-use software (11,219) (6,619) (20,244) (13,647)

Free cash flow $ 56,384 $ 33,280 $ 140,458 $ 86,147

Net cash provided by (used in) investing activities $ 608,174 $ (793,025) $ 449,368 $ (885,463)

Net cash provided by (used in) financing activities $ 5,785 $ 2,007,603 $ (3,683) $ 2,011,125

Net cash provided by operating activities

(percentage of revenue) 17 % 19 % 21 % 25 %

Less: Purchases of property and equipment

(percentage of revenue) (7) % (12) % (9) % (15) %

Less: Capitalized internal-use software

(percentage of revenue) (2) % (1) % (1) % (1) %

Free cash flow margin(1)

8 % 6 % 11 % 9 %

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States (U.S. GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided above for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Items Excluded from Non-GAAP Measures. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. We exclude employer payroll tax expenses related to stock-based compensation, which is a cash expense, from certain of our non-GAAP financial measures because such expenses are dependent upon the price of our Class A common stock and other factors that are beyond our control and do not correlate to the operation of our business. We exclude amortization of acquired intangible assets, which is a non-cash expense, related to business combinations from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. We exclude acquisition-related and other expenses from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. Acquisition-related and other expenses can be cash or non-cash expenses and include third-party transaction costs and compensation expense for key acquired personnel. We exclude lease impairment charges related to real estate leases, which is a non-cash expense, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance. We exclude amortization of debt issuance costs, which is a non-cash expense, from certain of our non-GAAP financial measures because such expenses have no direct correlation to the operation of our business. We exclude legal reserve and settlements, which can be cash or non-cash expenses, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance. We exclude restructuring and other charges, which can be cash or non-cash expenses, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit and non-GAAP gross margin as U.S. GAAP gross profit and U.S. GAAP gross margin, respectively, excluding stock-based compensation and related employer payroll taxes and amortization of acquired intangible assets.

Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations and non-GAAP operating margin as U.S. GAAP loss from operations and U.S. GAAP operating margin, respectively, excluding stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, lease impairment charges, legal reserve and settlements, and restructuring and other charges.

Non-GAAP Net Income and Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net loss adjusted for stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, amortization of issuance costs, lease impairment charges, legal reserve and settlements, restructuring and other charges, and a non-GAAP provision for (benefit from) income taxes. Generally, the difference between our GAAP and non-GAAP income tax expense (benefit) is primarily due to adjustments in stock-based compensation and related employer payroll taxes, amortization of acquired intangibles associated with business combinations, acquisition-related and other expenses, amortization of issuance costs, lease impairment charges, legal reserve and settlements, and restructuring and other charges. We define non-GAAP net income per share, diluted, as non-GAAP net income divided by the weighted-average common shares outstanding, adjusted for dilutive potential shares that were assumed outstanding during period. Currently, potential

dilutive effect mainly consists of employee equity incentive plans and convertible senior notes. We believe that excluding these items from non-GAAP net income per share, diluted, provides management and investors with greater visibility into the underlying performance of our core business operating results.

Free Cash Flow and Free Cash Flow Margin. Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. Free cash flow margin is calculated as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property and equipment and capitalized internal-use software, can be used for strategic initiatives, including investing in our business, and strengthening our financial position. We believe that historical and future trends in free cash flow and free cash flow margin, even if negative, provide useful information about the amount of cash generated by our operating activities that is available (or not available) to be used for strategic initiatives. For example, if free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. One limitation of free cash flow and free cash flow margin is that they do not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period.

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