revenue
78.5–79.5 $million
Q4 2019
official guidance
CLOUDFLARE, INC.
Last · NYSE$327.85-19.85 (-5.71%)close · yahoo · 11h ago
Market cap$116.74B322.6M sh
P/E · TTM-565fwd 196 · eps -0.58 · loss
Beta1.65vs S&P 500
Div yield0.00%annual · TTM
52w range
$158.83$370.35
Volume1.9Msession
| Revenue | $2.3B |
|---|---|
| Operating income | $-62.0M |
| Net income | $-22.9M |
| Free cash flow | $320.7M |
| Operating margin | -2.7% |
| Net margin | -1.0% |
| Return on equity | -1.5% |
| Period | TTM 2026-03-31 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong platform traction is offset by decelerating growth, modest retention expansion, and substantial investment burn.
Hold: Cloudflare delivered strong Q3 execution with revenue of $73.9 million, up 48% year over year, 78.9% gross margin, and large customers up 71% to 475.
However, Q4 revenue guidance of $78.5–$79.5 million implies deceleration to roughly 42%–43% growth, while dollar-based net retention remained only 111% and free cash flow was negative $33.6 million; the enterprise and product-expansion thesis is promising but not yet sufficiently de-risked for an outright buy.
Themes
- Enterprise Sales
- Large Customers
- Dollar Based Net Retention
- Workers Serverless
- Access Zero Trust
- Magic Transit
Near term
Q4 revenue delivery against the $78.5–$79.5 million guide will test whether the implied growth deceleration is conservatism or a real slowdown.
Large-customer additions, enterprise sales productivity, and attach rates for Workers, Access, and Magic Transit are key indicators of continued mix improvement.
Sales and marketing investment is accelerating, with representatives taking three to six months to reach full productivity; near-term operating losses are expected to widen.
Longer term
The unified network and serverless architecture support high gross margins and cross-selling across security, performance, reliability, zero trust, and edge computing.
Enterprise momentum is encouraging: customers spending over $100,000 annually grew 71% year over year, while more than 20% of new enterprise customers attached Workers.
Access and Magic Transit could materially expand Cloudflare's addressable market by replacing legacy VPN, firewall, and network infrastructure.
Dollar-based net retention of 111% is a concern for the expansion thesis; management expects improvement, but acknowledged that progress will be gradual and provided no quantified target.
Competitive risk remains unresolved: management asserted Workers is more cost-effective than AWS Lambda, but did not provide adoption, revenue, or win-rate evidence sufficient to establish a durable serverless moat.
Red flags
Q4 guidance implies growth deceleration from the 48% Q3 rate, and the CFO's explanation emphasized prudence rather than identifying specific demand drivers.
Net retention was flat sequentially at 111%, below what would typically support a highly durable land-and-expand software thesis.
Free cash flow was negative $33.6 million, or negative 45% of revenue, while sales and marketing expense grew 68% year over year.
Magic Transit was gaining traction despite acknowledged gaps in policy management, log management, architecture, and performance; enterprise readiness is therefore not complete.
Management repeatedly cited platform breadth and customer enthusiasm, but gave limited quantitative disclosure on product-level revenue, competitive win rates, or expansion economics.
Forward outlook
eps diluted
-0.07–-0.06 $per share
Q4 2019
official guidance
revenue
281.5–282.5 $million
FY 2019
official guidance
eps diluted
-0.5–-0.49 $per share
FY 2019
official guidance
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest 10-K · 2026-02-26
- Revenue Growth
- Persistent Net Losses
- Convertible Debt
- Enterprise Customers
- Ai Infrastructure
- Export Controls
- Free Customer Conversion
- International Revenue
Red flags
- The company has recorded net losses in every period since inception; the 2025 net loss was $102.3 million and accumulated deficit was $1,204.9 million.
- The $2.0 billion 0% convertible notes due 2030 create a significant future settlement or dilution obligation; the initial conversion price is approximately $247.67 per share, and the company currently intends to settle principal in cash.
- Large-customer contracts can include early termination rights, usage-based pricing, lower margins, and pool-of-funds structures that make revenue and gross profit timing difficult to predict.
- Free customers generate no revenue while creating network, liability, litigation, and reputational costs; the company says a substantial majority historically have not converted to paying customers.
- The company disclosed potential violations of U.S. sanctions, export-control, and foreign-trade reporting rules and submitted voluntary self-disclosures to OFAC, the Bureau of Industry and Security, and the Census Bureau.
- The allowance for doubtful accounts ended 2025 at $7.1 million after $15.0 million of bad-debt provision and $16.1 million of write-offs, indicating meaningful customer-credit activity even though no customer exceeded 10% of revenue.
Upcoming earnings
9:00 PM UTC+1
Period
Sep 2026
Est. EPS
$0.34
Est. revenue
738.1M
Earnings transcripts
- Issuer IR
Q3 2025 earnings call transcript
CLOUDFLARE, INC.
- Issuer webcast
Earnings Webcast
CLOUDFLARE, INC.
- Issuer IR
Q2 2025 earnings call transcript
CLOUDFLARE, INC.
- Issuer webcast
Earnings Webcast
CLOUDFLARE, INC.
- Issuer webcast
Earnings Webcast
CLOUDFLARE, INC.
- Issuer IR
Q3 2024 earnings call transcript
CLOUDFLARE, INC.
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The rest of this company's wire — with summaries and source links — is part of Pro.
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