Revenue growth remains strong at 33.5% year-over-year, though gross margins have contracted to 71.2% in 2026Q1, reflecting potential shifts in product mix or rising infrastructure costs.
| Sales/Revenue | 2.33B | 2.17B | 1.67B | 1.3B | 975.24M | 656.43M | 431.06M | 287.02M | 192.67M | 134.91M |
| Revenue Growth % | 31.55% | 29.85% | 28.76% | 32.97% | 48.57% | 52.28% | 50.18% | 48.97% | 42.81% | - |
| Cost of Goods Sold | 617.45M | 554.35M | 378.7M | 307M | 232.61M | 147.13M | 101.06M | 63.42M | 43.54M | 28.79M |
| COGS % of Revenue | - | 25.57% | 22.68% | 23.67% | 23.85% | 22.41% | 23.44% | 22.1% | 22.6% | 21.34% |
| Gross Profit | 1.71B | 1.61B | 1.29B | 989.74M | 742.63M | 509.29M | 330M | 223.6M | 149.14M | 106.13M |
| Gross Margin % | 73.48% | 74.43% | 77.32% | 76.33% | 76.15% | 77.59% | 76.56% | 77.9% | 77.4% | 78.66% |
| Gross Profit Growth % | - | 24.99% | 30.43% | 33.27% | 45.82% | 54.33% | 47.59% | 49.93% | 40.53% | - |
| Operating Expenses | 1.92B | 1.82B | 1.45B | 1.24B | 991.39M | 657.5M | 440.49M | 341.85M | 234.04M | 115.86M |
| OpEx % of Revenue | - | 83.81% | 86.59% | 95.67% | 101.66% | 100.16% | 102.19% | 119.1% | 121.47% | 85.87% |
| Selling, General & Admin | 1.38B | 1.31B | 1.02B | 817.08M | 645.27M | 447.19M | 309.07M | 240.88M | 179.57M | 82.21M |
| SG&A % of Revenue | - | 60.43% | 61.35% | 63.01% | 66.16% | 68.12% | 71.7% | 83.92% | 93.2% | 60.93% |
| Research & Development | 548.37M | 512.49M | 421.37M | 423.54M | 346.12M | 210.31M | 131.42M | 100.97M | 54.46M | 33.65M |
| R&D % of Revenue | - | 23.64% | 25.24% | 32.66% | 35.49% | 32.04% | 30.49% | 35.18% | 28.27% | 24.94% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | -211.73M | -203.3M | -154.76M | -250.88M | -248.76M | -148.2M | -110.49M | -118.25M | -84.9M | -9.73M |
| Operating Margin % | -9.09% | -9.38% | -9.27% | -19.35% | -25.51% | -22.58% | -25.63% | -41.2% | -44.06% | -7.21% |
| Operating Income Growth % | - | -31.36% | 38.31% | -0.86% | -67.85% | -34.13% | 6.56% | -39.28% | -772.55% | - |
| EBITDA | 156.21M | 88.07M | -27.04M | -56.11M | -103.64M | -53.74M | -44.16M | -88.77M | -65.99M | 2.44M |
| EBITDA Margin % | 6.71% | 4.06% | -1.62% | -4.33% | -10.63% | -8.19% | -10.25% | -30.93% | -34.25% | 1.81% |
| EBITDA Growth % | 254.93% | 425.71% | 51.81% | 45.86% | -92.87% | -21.67% | 50.25% | -34.51% | -2800.25% | - |
| D&A (Non-Cash Add-back) | 367.94M | 291.37M | 127.72M | 194.77M | 145.12M | 94.47M | 66.32M | 29.48M | 18.91M | 12.17M |
| EBIT | -110.19M | -83.94M | -65.67M | -237.39M | -237.25M | -219.64M | -110.01M | -113.9M | -85.09M | -8.85M |
| Net Interest Income | 140.1M | 122.45M | 82.23M | 62.3M | 9.89M | -47.26M | -18.38M | 4.67M | 903K | -100K |
| Interest Income | 149.99M | 131.22M | 87.43M | 68.17M | 14.88M | 1.97M | 6.59M | 5.79M | 1.9M | 762K |
| Interest Expense | 9.89M | 8.77M | 5.2M | 5.87M | 4.98M | 49.23M | 24.96M | 1.11M | 992K | 862K |
| Other Income/Expense | 134.38M | 110.59M | 83.89M | 7.62M | 6.52M | -120.67M | -24.48M | 3.23M | -1.19M | 15K |
| Pretax Income | -77.35M | -92.71M | -70.87M | -243.26M | -242.23M | -268.88M | -134.97M | -115.01M | -86.09M | -9.71M |
| Pretax Margin % | -3.32% | -4.28% | -4.24% | -18.76% | -24.84% | -40.96% | -31.31% | -40.07% | -44.68% | -7.2% |
| Income Tax | 9.39M | 9.56M | 7.93M | -59.31M | -48.85M | -8.57M | -15.6M | -9.19M | 1.08M | 1.03M |
| Effective Tax Rate % | -12.14% | -10.31% | -11.19% | 24.38% | 20.17% | 3.19% | 11.56% | 7.99% | -1.25% | -10.63% |
| Net Income | -86.74M | -102.27M | -78.8M | -183.95M | -193.38M | -260.31M | -119.37M | -105.83M | -87.16M | -10.75M |
| Net Margin % | -3.72% | -4.72% | -4.72% | -14.19% | -19.83% | -39.66% | -27.69% | -36.87% | -45.24% | -7.97% |
| Net Income Growth % | -6.15% | -29.78% | 57.16% | 4.88% | 25.71% | -118.07% | -12.8% | -21.41% | -710.98% | - |
| Net Income (Continuing) | -86.74M | -102.27M | -78.8M | -183.95M | -193.38M | -260.31M | -119.37M | -105.83M | -87.16M | -10.75M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.25 | -0.29 | -0.23 | -0.55 | -0.59 | -0.83 | -0.40 | -0.35 | -0.37 | -0.04 |
| EPS Growth % | -5.03% | -26.09% | 58.18% | 6.78% | 28.92% | -107.5% | -14.29% | 5.41% | -764.49% | - |
| EPS (Basic) | - | -0.29 | -0.23 | -0.55 | -0.59 | -0.83 | -0.40 | -0.35 | -0.37 | -0.04 |
| Diluted Shares Outstanding | 352.63M | 348.42M | 341.41M | 333.66M | 326.33M | 312.32M | 299.77M | 300.17M | 237.32M | 251.09M |
| Basic Shares Outstanding | 352.63M | 348.42M | 341.41M | 333.66M | 326.33M | 312.32M | 299.77M | 300.17M | 237.32M | 251.09M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - |
High stock-based compensation dilution
According to the latest quarterly filings, Cloudflare achieved a 33.5% year-over-year revenue growth rate in 2026Q1, signaling that the company's enterprise-focused expansion strategy continues to gain traction despite broader macroeconomic headwinds that have historically pressured software spending cycles across the infrastructure technology sector.
The acceleration in revenue growth to 33.5% suggests that the company is successfully capturing market share within the enterprise segment, likely driven by the adoption of its Zero Trust and SASE offerings. Investors should monitor whether this growth trajectory remains durable as the company scales, particularly as it faces tougher year-over-year comparisons in subsequent quarters.
As reported in recent financial statements, the company's gross margin contracted to 71.2% in 2026Q1, marking a notable departure from the mid-70% range maintained throughout 2024 and 2025, which may indicate rising infrastructure costs or a shift in product mix toward more resource-intensive compute services.
The decline in gross margin warrants further investigation into whether this is a temporary byproduct of deploying specialized hardware for AI inference or a permanent shift in the cost structure. While the company maintains a significant lead over peers like Fastly and Akamai, any sustained erosion in these margins could challenge the long-term thesis regarding the company's pricing power.
Based on the provided income statement data, operating expenses continue to outpace gross profit growth, resulting in an operating margin of -9.6% in 2026Q1, which suggests that the company is prioritizing aggressive market share acquisition over the immediate realization of operational efficiencies or GAAP profitability.
The persistent negative operating margin indicates that the company is still in a high-investment phase, heavily funding sales and R&D to support its platform expansion. Analysts should evaluate whether the current level of SG&A spending is yielding commensurate improvements in customer acquisition costs or if the company is reaching a point of diminishing returns on its marketing investments.
Analysis of the reported figures reveals that stock-based compensation remains a significant component of the company's cost structure, effectively obscuring the underlying cash-generative potential of the business and complicating the assessment of true GAAP net income for institutional investors evaluating long-term shareholder value.
The reliance on equity-based incentives appears to be a core component of the company's talent retention strategy, yet it creates a disconnect between reported EPS and actual cash flow performance. Investors should normalize these figures to better understand the company's path to sustainable profitability and the potential for future shareholder dilution.
While the company's Anycast architecture provides a distinct technical moat, the potential for hyperscalers to integrate similar edge-security features at lower price points poses a structural threat to the company's premium pricing model, as evidenced by the recent margin volatility observed in the 2026Q1 reporting period.
Short-sellers may focus on the company's inability to achieve consistent GAAP profitability despite its massive scale and high gross margins. If the company fails to demonstrate a clear path to operating leverage, the market may begin to re-rate the stock, particularly if enterprise sales cycles continue to lengthen and growth rates moderate.
Quick answers to the most common questions about buying NET stock.
For fiscal year 2025, Cloudflare, Inc. (NET) reported total revenue of $2.17B. This represents a 1506.9% increase compared to $134.9M in 2017.
Cloudflare, Inc. (NET) reported a net loss of $102.3M for the fiscal year ending 2025.
Cloudflare, Inc. (NET) reported an operating income of $-203.3M, resulting in an operating profit margin of -9.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Cloudflare, Inc. (NET) generated $1.61B in gross profit for the year, representing a gross profit margin of 74.4%. This demonstrates the company's core pricing power and production efficiency.