Cloudflare, Inc.

Document

Cloudflare Announces First Quarter 2026 Financial Results

¶2

• First quarter revenue totaled $639.8 million, representing an increase of 34% year-over-year

¶3

• GAAP loss from operations of $62.0 million, or 10% of total revenue, and non-GAAP income from operations of $73.1 million, or 11% of revenue

¶1

• Delivered Current RPO year-over-year growth of 34% San Francisco, CA, May 7, 2026 — Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its first quarter ended March 31, 2026.

“We had a very strong start to 2026. AI is driving a fundamental re-platforming of the Internet and a paradigm shift in how software is created and consumed; it's shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history,” said Matthew Prince, co-founder & CEO, Cloudflare. “At Cloudflare, we don’t just build and sell AI tools and platforms, we're our own most demanding customer. With AI and agents now core parts of our workforce, the way we work at Cloudflare has fundamentally changed. As a result, we're being intentional in how we architect our company to supercharge the value we deliver to our customers. By embracing an agentic AI-first operating model, Cloudflare will be even faster and more innovative as we continue to help build a better Internet.”

First Quarter Fiscal 2026 Financial Highlights

• Gross Profit : GAAP gross profit was $455.6 million, or 71.2% gross margin, compared to $363.5 million, or 75.9%, in the first quarter of 2025. Non-GAAP gross profit was $465.7 million, or 72.8% gross margin, compared to $369.3 million, or 77.1%, in the first quarter of 2025.

• Operating Income (Loss) : GAAP loss from operations was $62.0 million, or 9.7% of revenue, compared to $53.2 million, or 11.1% of revenue, in the first quarter of 2025. Non-GAAP income from operations was $73.1 million, or 11.4% of revenue, compared to $56.0 million, or 11.7% of revenue, in the first quarter of 2025.

¶4

• Net Income (Loss) : GAAP net loss was $22.9 million, compared to $38.5 million in the first quarter of 2025. GAAP net loss per basic and diluted share was $0.07, compared to $0.11 in the first quarter of 2025. Non-GAAP net income was $94.0 million, compared to $58.4 million in the first quarter of 2025. Non-GAAP net income per diluted share was $0.25, compared to $0.16 in the first quarter of 2025.

• Cash Flow : Net cash flow from operating activities was $158.3 million, compared to $145.8 million for the first quarter of 2025. Free cash flow was $84.1 million, or 13% of revenue, compared to $52.9 million, or 11% of revenue, in the first quarter of 2025.

• Cash, cash equivalents, and available-for-sale securities were $4,163.9 million as of March 31, 2026.

The section titled "Non-GAAP Financial Information" below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

Operating Model Evolution This afternoon, we announced actions designed to further accelerate Cloudflare’s evolution to an agentic AI-first operating model. A letter from our founders can be viewed at https://blog.cloudflare.com/building-for-the-future/.

¶6

As part of the plan, we expect to reduce our current workforce by approximately 1,100 people. We currently estimate that we will incur charges of $140.0 to $150.0 million in connection with the plan, consisting primarily of cash expenditures for notice period, severance payments, employee benefits and related costs of $105.0 to $110.0 million and non-cash expenses related to vesting of share-based awards of $35.0 to $40.0 million. We expect that the majority of the restructuring charges will be incurred in the second quarter of fiscal 2026, and that the execution of the plan will be substantially complete by the end of the third quarter of fiscal 2026. Our estimates are subject to a number of assumptions, and the actual costs incurred may differ materially from those initial estimates.

Financial Outlook For the second quarter of fiscal 2026, we expect:

• Total revenue of $664.0 to $665.0 million

8-K/A

Exhibit 99.1

Compared with earlier periods