Cloudflare Announces Fourth Quarter and Fiscal Year 2025 Financial Results
Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its fourth quarter and fiscal year ended December 31, 2025. "We had an exceptionally strong ...
- Fourth quarter revenue totaled $614.5 million, representing an increase of 34% year-over-year; fiscal year 2025 revenue totaled $2,167.9 million, representing an increase of 30% year-over-year
- GAAP loss from operations of $49.2 million, or 8% of total revenue, and non-GAAP income from operations of $89.6 million, or 15% of total revenue
- Delivered RPO year-over-year growth of 48% and Current RPO year-over-year growth of 34%
SAN FRANCISCO: Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its fourth quarter and fiscal year ended December 31, 2025.
"We had an exceptionally strong end to 2025. In Q4, we closed our largest annual contract value deal ever-averaging $42.5 million per year-and total new ACV grew nearly 50 percent year-over-year, our fastest growth rate since 2021," said Matthew Prince, co-founder & CEO, Cloudflare. "The shift toward AI and agents represents a fundamental re-platforming of the Internet that's driving demand across Cloudflare's services. If agents are the new users of the web, Cloudflare is the platform they run on and the network they pass through. This creates a virtuous flywheel: more agents drive more code to Cloudflare Workers, which fuels demand for our performance, security, and networking services. We were built for this moment and the rise of the Agentic Internet."
Fourth Quarter 2025 Financial Highlights
- Revenue: Total revenue of $614.5 million, representing an increase of 33.6% year-over-year.
- Gross Profit: GAAP gross profit was $452.6 million, or 73.6% gross margin, compared to $351.3 million, or 76.4%, in the fourth quarter of 2024. Non-GAAP gross profit was $460.2 million, or 74.9% gross margin, compared to $356.8 million, or 77.6%, in the fourth quarter of 2024.
- Operating Income (Loss): GAAP loss from operations was $49.2 million, or 8.0% of total revenue, compared to $34.7 million, or 7.5% of total revenue, in the fourth quarter of 2024. Non-GAAP income from operations was $89.6 million, or 14.6% of total revenue, compared to $67.2 million, or 14.6% of total revenue, in the fourth quarter of 2024.
- Net Income (Loss): GAAP net loss was $12.1 million, compared to $12.8 million in the fourth quarter of 2024. GAAP net loss per basic and diluted share was $0.03, compared to $0.04 in the fourth quarter of 2024. Non-GAAP net income was $106.8 million, compared to $68.8 million in the fourth quarter of 2024. Non-GAAP net income per diluted share was $0.28, compared to $0.19 in the fourth quarter of 2024.
- Cash Flow: Net cash flow from operating activities was $190.4 million, compared to $127.3 million for the fourth quarter of 2024. Free cash flow was $99.4 million, or 16.2% of total revenue, compared to $47.8 million, or 10.4% of total revenue, in the fourth quarter of 2024.
- Cash, cash equivalents, and available-for-sale securities were $4,101.3 million as of December 31, 2025.
Full Year 2025 Financial Highlights
- Revenue: Total revenue of $2,167.9 million, representing an increase of 29.8% year-over-year.
- Gross Profit: GAAP gross profit was $1,615.4 million, or 74.5% gross margin, compared to $1,290.9 million, or 77.3%, in fiscal 2024. Non-GAAP gross profit was $1,643.2 million, or 75.8% gross margin, compared to $1,313.6 million, or 78.7%, in fiscal 2024.
- Operating Income (Loss): GAAP loss from operations was $207.2 million, or 9.6% of total revenue, compared to $154.8 million, or 9.3% of total revenue, in fiscal 2024. Non-GAAP income from operations was $303.9 million, or 14.0% of total revenue, compared to $230.1 million, or 13.8% of total revenue, in fiscal 2024.
- Net Income (Loss): GAAP net loss was $102.3 million, compared to $78.8 million for fiscal 2024. GAAP net loss per basic and diluted share was $0.29, compared to $0.23 for fiscal 2024. Non-GAAP net income was $342.9 million, compared to $269.0 million for fiscal 2024. Non-GAAP net income per diluted share was $0.93, compared to $0.75 for fiscal 2024.
- Cash Flow: Net cash flow from operating activities was $603.1 million, compared to $380.4 million for fiscal 2024. Free cash flow was $260.6 million, or 12.0% of total revenue, compared to $166.9 million, or 10.0% of total revenue, for fiscal 2024.
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 first quarter of 2026, we expect:
- Total revenue of $620.0 to $621.0 million
- Non-GAAP income from operations of $70.0 to $71.0 million
- Non-GAAP net income per share of $0.23, utilizing weighted average common shares outstanding of approximately 377 million
For the full year 2026, we expect:
- Total revenue of $2,785.0 to $2,795.0 million
- Non-GAAP income from operations of $378.0 to $382.0 million
- Non-GAAP net income per share of $1.11 to $1.12, utilizing weighted average common shares outstanding of approximately 377 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 fourth quarter and fiscal year ended December 31, 2025 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, 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, 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 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 October 30, 2025, 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.
CLOUDFLARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) | |||||||||||||||
| Three Months Ended December 31, |
| Year Ended December 31, | ||||||||||||
|
| 2025 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2024 |
|
Revenue | $ | 614,507 |
|
| $ | 459,946 |
|
| $ | 2,167,937 |
|
| $ | 1,669,626 |
|
Cost of revenue(1)(2) |
| 161,956 |
|
|
| 108,686 |
|
|
| 552,525 |
|
|
| 378,702 |
|
Gross profit |
| 452,551 |
|
|
| 351,260 |
|
|
| 1,615,412 |
|
|
| 1,290,924 |
|
Operating expenses: |
|
|
|
|
|
|
| ||||||||
Sales and marketing(1)(2)(4) |
| 251,138 |
|
|
| 191,967 |
|
|
| 920,817 |
|
|
| 745,791 |
|
Research and development(1) |
| 141,887 |
|
|
| 120,213 |
|
|
| 512,489 |
|
|
| 421,374 |
|
General and administrative(1)(3)(6)(7) |
| 108,760 |
|
|
| 73,799 |
|
|
| 389,311 |
|
|
| 278,520 |
|
Total operating expenses |
| 501,785 |
|
|
| 385,979 |
|
|
| 1,822,617 |
|
|
| 1,445,685 |
|
Loss from operations |
| (49,234 | ) |
|
| (34,719 | ) |
|
| (207,205 | ) |
|
| (154,761 | ) |
Non-operating income (expense): |
|
|
|
|
|
|
| ||||||||
Interest income |
| 41,885 |
|
|
| 21,988 |
|
|
| 131,219 |
|
|
| 87,426 |
|
Interest expense(5) |
| (2,887 | ) |
|
| (1,445 | ) |
|
| (8,766 | ) |
|
| (5,196 | ) |
Other income (expense), net |
| (272 | ) |
|
| 3,333 |
|
|
| (7,954 | ) |
|
| 1,660 |
|
Total non-operating income, net |
| 38,726 |
|
|
| 23,876 |
|
|
| 114,499 |
|
|
| 83,890 |
|
Loss before income taxes |
| (10,508 | ) |
|
| (10,843 | ) |
|
| (92,706 | ) |
|
| (70,871 | ) |
Provision for income taxes |
| 1,569 |
|
|
| 2,005 |
|
|
| 9,561 |
|
|
| 7,929 |
|
Net loss | $ | (12,077 | ) |
| $ | (12,848 | ) |
| $ | (102,267 | ) |
| $ | (78,800 | ) |
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.03 | ) |
| $ | (0.04 | ) |
| $ | (0.29 | ) |
| $ | (0.23 | ) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted |
| 351,087 |
|
|
| 344,003 |
|
|
| 348,421 |
|
|
| 341,411 |
|
(1) Includes stock-based compensation and related employer payroll taxes as follows: | |||||||||||||||
Cost of revenue | $ | 3,975 |
| $ | 2,821 |
| $ | 14,605 |
| $ | 11,597 | ||||
Sales and marketing |
| 36,038 |
|
|
| 24,682 |
|
|
| 137,848 |
|
|
| 95,763 |
|
Research and development |
| 46,947 |
|
|
| 45,391 |
|
|
| 174,622 |
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