# Cloudflare (NET) Q2 2025 Financial Results Summary
San Francisco, CA, July 31, 2025 — Cloudflare, Inc. (NYSE: NET) announced financial results for its second quarter ended June 30, 2025.
### Financial Highlights
– **Revenue**:
– Total revenue was **$512.3 million**, a **28% increase** year-over-year.
– **Gross Profit**:
– GAAP gross profit of **$383.6 million** with a gross margin of **74.9%**, down from **77.8%** in Q2 2024.
– Non-GAAP gross profit was **$390.7 million** with a gross margin of **76.3%**, decreased from **79.0%** in Q2 2024.
– **Operating Income (Loss)**:
– GAAP loss from operations was **$67.3 million**, accounting for **13.1%** of revenue; this contrasts with a loss of **$34.7 million**, or **8.7%** of revenue, in Q2 2024.
– Non-GAAP income from operations was **$72.3 million**, comprising **14.1%** of revenue, slightly down from **14.2%** in Q2 2024.
– **Net Income (Loss)**:
– GAAP net loss was **$50.4 million**, compared to a loss of **$15.1 million** in Q2 2024.
– The GAAP net loss per share was **$0.15**, compared to **$0.04** in Q2 2024.
– Non-GAAP net income was **$75.1 million**, up from **$69.5 million** in the same quarter last year.
– Non-GAAP net income per diluted share was **$0.21**, compared to **$0.20** in Q2 2024.
– **Cash Flow**:
– Net cash flow from operating activities was **$99.8 million**, versus **$74.8 million** in Q2 2024.
– Free cash flow stood at **$33.3 million**, or **6%** of revenue, down from **$38.3 million**, or **10%**, in the prior year.
– **Balance Sheet**:
– Cash, cash equivalents, and available-for-sale securities totaled **$3,959.7 million** as of June 30, 2025.
### Key Metrics Overview
– **Current Remaining Performance Obligations (RPO)**:
– Current RPO grew by **33%** year-over-year.
– Total RPO increased by **39%** year-over-year.
### Financial Outlook
– **Q3 2025 Expectations**:
– Projected total revenue of **$543.5 to $544.5 million**.
– Expected non-GAAP income from operations in the range of **$75 million to $76 million**.
– Anticipated non-GAAP net income per share of **$0.23** based on approximately **376.5 million** weighted average shares outstanding.
– **Full Year 2025 Expectations**:
– Total revenue forecasted at **$2,113.5 to $2,115.5 million**.
– Non-GAAP income from operations predicted between **$284 million and $286 million**.
– Expected non-GAAP net income per share in the range of **$0.85 to $0.86** with approximately **370 million** weighted average shares outstanding.
### Shareholder Returns
– Cloudflare did not declare any quarterly dividends during this reporting period.
### Summary
In Q2 2025, Cloudflare demonstrated significant revenue growth of **28%** year-over-year while navigating a GAAP operating loss that widened compared to the previous year. The company continues to see strong demand, particularly from larger customers, and remains focused on innovation within the rapidly advancing AI-driven Internet space. Despite the increase in operating losses, non-GAAP earnings metrics showed resilience, underlining the ongoing operational strength and commitment to growth.
For further details, interested parties can access the full report and supplementary information through the investor relations section on Cloudflare’s website or listen to the investor conference call hosted on the same day.
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |
| Revenue | $512,316 | $400,996 | $991,403 | $779,598 |
| Cost of revenue(1)(2) | 128,677 | 89,011 | 244,253 | 174,049 |
| Gross profit | 383,639 | 311,985 | 747,150 | 605,549 |
| Operating expenses: | ||||
| Sales and marketing(1)(2)(4) | 219,359 | 174,501 | 433,370 | 368,603 |
| Research and development(1) | 134,557 | 102,547 | 249,646 | 190,250 |
| General and administrative(1)(3)(6) | 96,987 | 69,635 | 184,645 | 135,944 |
| Total operating expenses | 450,903 | 346,683 | 867,661 | 694,797 |
| Loss from operations | -67,264 | -34,698 | -120,511 | -89,248 |
| Non-operating income (expense): | ||||
| Interest income | 25,406 | 21,715 | 46,805 | 42,967 |
| Interest expense(5) | -1,524 | -1,218 | -2,967 | -2,318 |
| Other income (expense), net | -3,907 | 269 | -7,375 | 1,393 |
| Total non-operating income, net | 19,975 | 20,766 | 36,463 | 42,042 |
| Loss before income taxes | -47,289 | -13,932 | -84,048 | -47,206 |
| Provision for income taxes | 3,157 | 1,146 | 4,852 | 3,415 |
| Net loss | -50,446 | -15,078 | -88,900 | -50,621 |
| Net loss per share attributable to | ||||
| common stockholders, basic and diluted | -0.15 | -0.04 | -0.26 | -0.15 |
| Weighted-average shares used in | ||||
| computing net loss per share | 347,489 | 340,648 | 346,605 | 339,617 |
| attributable to common stockholders, | ||||
| basic and diluted |
| June 30, 2025 | December 31, 2024 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $1,518,608 | $147,691 |
| Available-for-sale securities | 2,441,112 | 1,708,228 |
| Accounts receivable, net | 307,507 | 316,753 |
| Contract assets | 21,275 | 16,568 |
| Restricted cash short-term | 4,373 | 4,273 |
| Prepaid expenses and other current | 112,956 | 75,484 |
| assets | ||
| Total current assets | 4,405,831 | 2,268,997 |
| Property and equipment, net | 547,349 | 467,420 |
| Goodwill | 181,087 | 181,087 |
| Acquired intangible assets, net | 22,110 | 21,865 |
| Operating lease right-of-use assets | 185,355 | 168,379 |
| Deferred contract acquisition costs, noncurrent | 183,919 | 172,217 |
| Restricted cash | 2,475 | 2,250 |
| Other noncurrent assets | 34,235 | 18,947 |
| Total assets | $5,562,361 | $3,301,162 |
| Liabilities and Stockholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | 95,680 | 105,807 |
| Accrued expenses and other current | 80,463 | 81,602 |
| liabilities | ||
| Accrued compensation | 77,940 | 80,854 |
| Operating lease liabilities | 56,812 | 47,626 |
| Deferred revenue | 546,698 | 477,765 |
| Total current liabilities | 857,593 | 793,654 |
| Convertible senior notes, net | 3,260,506 | 1,287,321 |
| Operating lease liabilities, noncurrent | 144,795 | 128,266 |
| Deferred revenue, noncurrent | 35,805 | 22,095 |
| Other noncurrent liabilities | 23,935 | 23,625 |
| Total liabilities | 4,322,634 | 2,254,961 |
| Stockholders’ Equity | ||
| Class A common stock; $0.001 par value; 2,250,000 shares authorized as of June 30, 2025 and December 31, 2024; 312,677 and 307,892 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 312 | 307 |
| Class B common stock; $0.001 par value; 315,000 shares authorized as of June 30, 2025 and December 31, 2024; 35,738 and 36,963 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 36 | 37 |
| Additional paid-in capital | 2,414,291 | 2,152,750 |
| Accumulated deficit | -1,191,540 | -1,102,640 |
| Accumulated other comprehensive income (loss) | 16,628 | -4,253 |
| Total stockholders’ equity | 1,239,727 | 1,046,201 |
| Total liabilities and stockholders’ equity | $5,562,361 | $3,301,162 |
