Start here if you're new
what it is
Cloudflare runs the pipes that make websites faster, safer, and easier to build without a stack of on-site hardware.
how it gets paid
Last year Cloudflare made $2.2B in revenue. security services was the main engine at $0.80B, or 36% of sales.
why it's growing
Revenue grew 29.8% last year. The business kept adding larger customers, with that count rising from 2,756 in 2023 to 3,497 by 12/31/24.
what just happened
Revenue in the September quarter rose 31% vs. prior year to $562 million, while Cloudflare was close to profitability.
At a glance
B balance sheet — gets the job done, barely
45/100 earnings predictability — expect surprises
13.0% return on capital — nothing to write home about
xvary composite: 41/100 — below average
-$0.05 fy2026 eps est
What they do
Cloudflare runs the pipes that make websites faster, safer, and easier to build without a stack of on-site hardware.
Cloudflare wins because it sits in the traffic path between your app and your users. That position matters when 238,000 paying customers in 120-plus countries want security, speed, and reliability from one network. Switching costs (leaving is painful) rise when your protection, performance, and developer tools all run on the same platform, and about 50% of revenue already comes from outside the U.S.
How they make money
$2.2B
annual revenue · their business grew +29.8% last year
security services
$0.80B
+31.0%
performance and cdn
$0.55B
+27.0%
network services
$0.42B
+25.0%
developer platform
$0.25B
+40.0%
zero trust
$0.18B
+35.0%
The products that matter
edge security and performance platform
Network Services
$2.2B revenue base
this is the core business customers already pay for. if you want to own NET, this is the part that proves the network has commercial value right now.
the core
developer platform and compute layer
Workers
the stock is pricing this in
the market is not paying $71B for break-even EPS. it is paying for the idea that developers do more on Cloudflare's network and expand the revenue base far beyond security and traffic acceleration.
valuation driver
early AI workload offering
AI inference
still early
management wants AI workloads to become another reason to run traffic through the network. the jd cloud partnership gives you direction, not proof of scale yet.
option value
Key numbers
32.5%
sales growth
Projected sales growth means revenue is expected to keep rising fast. So what: the stock needs that speed to justify a $71 billion market cap.
$4B
2028 revenue
That is the revenue target embedded in current forecasts. So what: Cloudflare needs to nearly double from $2.2B to make today's valuation look less absurd.
9.6%
operating margin
Operating margin means profit after running the business. So what: Cloudflare still loses money on core operations even with 74.9% gross margin.
238,000
paying customers
That customer base gives Cloudflare a lot of accounts to upsell. So what: more products per customer is the cleanest path from growth to profit.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- long-term debt $2.0B (3% of capital)
- net profit margin 9.6% — keeps 10 cents of every dollar in revenue
- return on equity 24% — $0.24 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in NET 3 years ago → it's now worth $44,590.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Revenue in the September quarter rose 31% vs. prior year to $562 million, while Cloudflare was close to profitability.
The business kept adding larger customers, with that count rising from 2,756 in 2023 to 3,497 by 12/31/24. Gross margin stayed high at 74.9%, which is the kind of buffer growth investors want to see.
$562M
revenue
-$0.04
eps
74.9%
gross margin
the number that mattered
31% revenue growth mattered most because this stock is still priced like a company that can grow fast and fix profits later.
-
cloudflare was on the cusp of profitability for the third quarter of 2025.the company managed to break even, with the help of higher interest income offsetting slightly tighter margins. based on the company’s early-stage growth position, we think operating expenses are poised to remain elevated to support business expansion. thus, while margins are expected to improve in tandem with revenue growth, it is likely that cloudflare may not post a quarterly profit until later this decade.
-
meanwhile, revenue growth was solid for the september period, rising 31% vs. prior year, to $562 million.overall, for this year and next, our model suggests that impressive double-digit top-line growth may well be in the cards.
-
a recent partnership with jd.com’s affiliate company jd cloud is encouraging.the collaboration will create a global platform that is expected to reduce latency for ai inference workloads to support developers in the management and scaling of ai cloud solutions. the partnership aims to capitalize on the rapid growth in ai-driven application development, and seeks to link chinese-based developers with global developers on a secure and high-level network.
-
the balance sheet is improving.
-
cloudflare ended the period with more than $4.0 billion in cash on hand.even after paying short-term obligations in excess of $1.0 billion, the company should have ample capital to pursue strategic bolt-on acquisitions and support growth initiatives.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
Cloudflare's risk profile is unusually specific: the business is improving, but the stock price already assumes you get fast growth, cleaner margins, and a credible AI story at the same time.
med
larger cloud vendors have deeper budgets
Cloudflare is pushing into AI inference and edge compute where hyperscalers already have money, customer relationships, and broader product bundles. the exact area investors want to see expand is the area where rivals can spend more.
if AI becomes a pricing battle instead of a profit pool, the premium multiple gets hit before the revenue line does.
med
32x sales leaves almost no grace period
the latest quarter grew 31% from a year ago. if that number slips while EPS stays near break-even, investors stop paying platform-company prices for future potential.
this is a stock where deceleration matters almost as much as deterioration.
med
margin expansion may lag the story
9.5% operating margin is real progress. it is also thin for a company valued this aggressively. the bull case needs higher earnings power, not just a larger top line.
if operating margins hover around current levels, the stock can de-rate even while revenue still grows nicely.
med
an outage or security incident would hit the moat directly
customers buy Cloudflare for uptime and security. a major reliability failure would not just create bad headlines — it would attack the reason customers trust the network in the first place.
when trust is the product, one incident can pressure new sales, retention, and valuation at the same time.
$71B of equity value against $2.2B of revenue, 9.5% operating margin, and break-even EPS means the market is underwriting several years of clean execution all at once.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly growth rate
31% growth is the number holding the story together right now. if that cools quickly, the stock math changes before the product story does.
trend
operating margin after more AI spend
watch whether the 9.5% operating margin keeps climbing. platforms eventually show profit expansion. if this one does not, the debate gets louder.
risk
competitive response from larger clouds
if hyperscalers bundle similar inference or edge products more aggressively, Cloudflare's AI upside looks less differentiated very quickly.
metric
EPS staying at or above break-even
$0.00 EPS mattered because it suggested discipline. slipping backward would tell you scale is still being absorbed by the cost base.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think the near-term setup is shakier than the long-term story people want to tell.
risk profile
below average
stability score 4 — more volatile than most stocks. this is not where you hide when markets get nervous.
chart momentum
top 20%
technical score 2 — the tape still looks healthier than the valuation argument.
earnings predictability
45 / 100
earnings predictability of 45 means estimates can move around. you should expect more noise here than with mature software peers.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 566 buyers vs. 385 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$124
$335
$202
current price
$230
target midpoint · +14% from current · 3-5yr high: $225 (+10% · 3% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive