Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Cloudflare (NET) delivered strong FY2025 revenue growth of 29.8% to $2.17B, but operating losses widened to -$207.2M as cost of revenue surged 45.9%, while a large financing raise boosted cash to $943.5M and total assets grew 82.9%.
Revenue
$2.17B
+29.85% YoY
EPS (Diluted)
-$0.29
-26.09% YoY
Gross Margin
74.5%
-2.8 pts YoY
Operating Income
-$207.21M
-33.89% YoY
Source: SEC XBRL
Cloudflare (NET) reported FY2025 revenue of $2.17B, up 29.8% year over year. Operating margin was -9.6%, against -9.3% a year earlier. Operating cash flow was $603.11M, up 58.5% year over year.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 0.29 | 0.27 | Beat +6.5% |
| Mar 2026 | 0.25 | 0.24 | Beat +6.2% |
| Dec 2025This filing | 0.28 | 0.27 | Beat +2.4% |
| Sep 2025 | 0.27 | 0.24 | Beat +14.2% |
Reported EPS of $0.28 versus the $0.27 analyst consensus — a +2.4% beat for Dec 2025.
Compiled by AI from this SEC filing
Revenue grew 29.8% year-over-year from $1.67B to $2.17B in FY2025, reflecting continued demand for Cloudflare's network security and connectivity services and expansion within its existing customer base.
Source: 10-K Income Statement
Gross margin declined 2.8 percentage points to 74.5% as cost of revenue surged 45.9% YoY to $552.5M, outpacing revenue growth and indicating higher infrastructure or delivery costs to support the expanding platform.
Source: 10-K Income Statement
Operating loss deepened to -$207.2M (operating margin of -9.6%) from -$154.8M in the prior year, as total operating expenses — including R&D up 21.6% to $512.5M — continued to outpace gross profit growth of 25.1%.
Source: 10-K Income Statement
Financing cash flow surged to $2.00B (vs. $12.8M prior year), driving cash and equivalents up 538.9% to $943.5M and total assets up 82.9% to $6.04B, providing substantial liquidity for future investment and growth initiatives.
Source: 10-K Balance Sheet & Cash Flow Statement
Despite GAAP net losses, operating cash flow improved 58.5% to $603.1M in FY2025, supported by $189.7M in D&A and non-cash charges, demonstrating the business's ability to generate cash from operations.
Source: 10-K Cash Flow Statement
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Cloudflare has continued to report GAAP net losses, with net loss widening to -$102.3M in FY2025 from -$78.8M in FY2024. The company's ability to achieve sustained profitability depends on revenue growth outpacing operating expense growth, which has not yet occurred at the GAAP level.
Source: 10-K Income Statement
Cost of revenue grew 45.9% YoY — significantly faster than revenue growth of 29.8% — compressing gross margin by 2.8 percentage points to 74.5%. If this trend continues, it could structurally impair the company's path to operating profitability.
Source: 10-K Income Statement
Total liabilities reached $4.58B, resulting in a debt-to-equity ratio of 3.14x. Current liabilities surged 196.2% to $2.35B, though the current ratio of 1.98x suggests near-term obligations are covered, the rapid increase in liabilities warrants monitoring.
Source: 10-K Balance Sheet
Investing cash outflows ballooned to -$1.81B in FY2025 from -$330.2M in FY2024, a 447% increase, reflecting significant capital deployment. While operating cash flow is positive at $603.1M, the scale of investment activity substantially reduces free cash flow available to the business.
Source: 10-K Cash Flow Statement
R&D expenses totaled $512.5M in FY2025, representing a significant portion of revenue. Cloudflare operates in a highly competitive cybersecurity and networking market where sustained innovation investment is critical, creating ongoing pressure on operating margins.
Source: 10-K Income Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 2.17 $B | 1.67 $B | +29.85% |
Cost of Revenue $M | 552.53 $M | 378.70 $M | +45.90% |
Gross Profit $B | 1.62 $B | 1.29 $B | +25.14% |
Operating Income $M | -207.21 $M | -154.76 $M | -33.89% |
Net Income $M | -102.27 $M | -78.80 $M | -29.78% |
EPS (Basic) $ | -0.29 $ | -0.23 $ | -26.09% |
EPS (Diluted) $ | -0.29 $ | -0.23 $ | -26.09% |
R&D Expense $M | 512.49 $M | 421.37 $M | +21.62% |
Answers draw on this SEC filing and the data on this page
Cloudflare's Q2 FY2026 featured strong revenue growth and improved customer retention, but a large restructuring charge drove a steep net loss as the company pivots toward an AI-first operating model.
Cloudflare (NET) delivered strong Q1 2026 revenue growth of 33.5% YoY to $639.8M, while narrowing its net loss to $22.9M and maintaining positive operating cash flow of $158.3M, though gross margin compressed 4.7 percentage points to 71.2%.