# Cloudflare Inc. (NET) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-18  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NET/thesis · /stocks/NET/memo

## Financial Snapshot

---
ticker: NET
step: 04
generated: 2026-05-13
source: quick-research
---

### Cloudflare, Inc. (NET) — Financial Snapshot

#### Income Statement Summary

| Metric | FY2022 | FY2023 | FY2024 | YoY |
|--------|--------|--------|--------|-----|
| Revenue | $0.975B | $1.30B | $1.67B | +28.8% |
| Non-GAAP Gross Margin | ~77% | ~78% | ~78% | |
| GAAP Net Income | ~-$0.2B | ~-$0.2B | ~-$0.18B | improving |
| Non-GAAP EPS | ~$0.22 | ~$0.58 | ~$0.72 | |

*FY2025: Revenue $2.17B (+29.8%); Q4 2025 revenue +34% YoY. Q1 2026: Revenue +34% YoY (re-acceleration). $1M+ ARR customers: 269 (+55% YoY). May 2026: 1,100-person layoff announced, saving costs as AI changes operations.*

#### Cash Flow & Balance Sheet (FY2024)

| Metric | Value |
|--------|-------|
| Operating Cash Flow | ~$0.3B |
| Free Cash Flow | $0.17B |
| Capital Expenditures | ~$0.13B |
| Cash & Equivalents | ~$1.8B |
| Total Debt | ~$1.5B (convertible notes) |

*FCF margin is modest (10%) relative to revenue due to heavy investment in PoP expansion, R&D, and sales. Stock-based compensation is significant (~25%+ of revenue), compressing GAAP earnings. Net cash positive. FCF expected to scale as operating leverage improves.*

#### Key Ratios (approximate)
- P/E: ~182x (non-GAAP FY2026E) | EV/Sales: ~28x | FCF Yield: <1%
- Revenue Growth (TTM): ~30–34% | Non-GAAP Operating Margin: ~12–15%

#### Growth Profile
Cloudflare is a high-growth infrastructure platform with revenue compounding at ~30% annually: $975M (FY2022) → $2.17B (FY2025). Large customer growth ($1M+ ARR: 55% YoY) and Q4 2025/Q1 2026 re-acceleration to 34% are the strongest signals in years. However, the stock trades at ~28x forward revenues and ~182x non-GAAP earnings — one of the richest valuations in software. FCF margins remain thin (~10%) while the company invests aggressively in network expansion and new products.

#### Forward Estimates
- FY2026: Revenue ~$2.8–3.0B (+27–30%); FCF margin expanding toward 15–20% as scale improves
- $1M+ ARR customers: 269 → tracking toward 400+ by FY2026 year-end
- New product bookings growing nearly 50% (Q4 2025) — Workers AI, AI Gateway, R2 accelerating
- Analyst mean PT: ~$237 (~+12% from ~$210; 22 Buy / 11 Hold / 2 Sell)
- May 2026: 1,100-person layoff (~22% of workforce) targeting margin improvement as AI automates functions

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NET/fundamental

## Navigation

- Overview: /stocks/NET
- Financials (this page): /stocks/NET/financials
- Thesis: /stocks/NET/thesis
- Investment Memo: /stocks/NET/memo
- Coverage universe: /stocks