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Cloudflare, Inc.
NYSE: NET Technology IT 🔎 Screen
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$108.3B
Market Cap
P/E
6.57
PEG
-29.9%
ROCE
-8.2%
ROE
2.41
D/E
-9.1%
OPM
-5.9%
% from 52W High
87
α RS
🔍 NET is showing a high-conviction setup because it matches 3 of 39 tracked screener presets, Sector RRG has Technology in the Leading quadrant with the trail still strengthening, and RS Rating is 87. The main caution: margin_expansion's Backtest win rate is only 45.2%. Net: Mixed signal stack, not a recommendation. ? Conviction RRG RS Rating Backtest
Sources
Conviction 3/39 · Technology in Leading quadrant · RS Rating 87 · Backtest win rate 45.2%
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🌏 Global Investor Returns
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📈 Price History
Ratio Health
Excellent
Good
Average
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By Category
📊 Sector Averages
About

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides a cloud-based security solution to secure a range of combination of platforms, including public and private cloud, on-premises, software-as-a-service applications, and Internet of things (IoT) devices; and application security products comprising web application firewall, bot management, distributed denial of service mitigation, API security, SSL/TLS encryption, client-side security, and security center products. It also offers application performance solutions, such as content delivery, load balancing, DNS, smart shield, video stream delivery, web optimization, cloudfare waiting room, and cloudfare data localization suite; SASE platform that combines network services and Zero Trust and workplace security products that provides a cloud-based network and security-as-a-service; network services, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust security services which include cloudflare zero trust network access, secure web gateway, and one client; and remote browser isolation, cloud access security broker, cloud email security, digital experience monitoring, and data loss prevention products. Further, it provides developer-based solutions comprising workers AI, vectorize, AI gateway, cloudflare workers, cloudflare pages, R2 object storage, workers KV, durable objects, D1, hyperdrive, queues, cloudfare stream, cloudfare images, and cloudflare realtime; and consumer offerings, such as 1.1.1.1 DNS and with WARPm and cloudfare registrar that offers secure registration and management of domain names. The company serves customers in technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. The company was incorporated in 2009 and is headquartered in San Francisco, California.

Key Ratios Snapshot
📈 Growth Pattern
📊 Quick Scorecard
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⭐ Superinvestors Holding NET
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Manager Shares Value % of Fund Period
Steve Cohen Point72 Asset Management 429.0K $88.5M 0.11% Mar 2026
Cathie Wood ARK Investment Management 183.6K $37.9M 0.29% Mar 2026
Stan Druckenmiller Duquesne Family Office 52.5K $10.8M 0.32% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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Good quarter Investor Presentation One-Pager? Q2 2026
Revenue
$696.1M
+36% YoY
Operating Income
$96.1M
+33% YoY
Operating Margin
13.8%
-0.3pp YoY
Net Income
$107.8M
+44% YoY
What Went Right
  • Revenue accelerated to $696.1M, up 36% YoY, with large customers (>$100k) up 27% to 4,698 and a record 986 net adds year-over-year.
  • Added 80,000+ paying customers in Q2 alone — up 74% YoY — and 2 million developers, while non-human traffic crossed 50% of network traffic for the first time.
  • Free cash flow rose 69% YoY to $56.4M; gross margin improved sequentially for the first time in eight quarters to 73.1% and NRR reached 120%.
What to Watch
  • GAAP loss from operations was $205.7M and GAAP net loss was $170.0M, weighed down by $151M of Q2 restructuring charges; full-year charges raised to up to $165M.
  • Gross margin fell 320bps YoY to 73.1%, driven by paid-vs-free traffic network cost allocations, though management said the trend is starting to stabilize.
  • Management flagged that the shift toward pool-of-funds and consumption-based contracts introduces more quarterly revenue timing variability.
Management Guidance
  • Q3 2026 revenue guided at $736M-$737M, representing +31% YoY.
  • Q3 non-GAAP operating income guided at $129M-$130M and non-GAAP EPS at $0.34 on ~374M shares.
  • FY2026 revenue guided at $2,864M-$2,870M (+32% YoY), non-GAAP operating income at $443M-$445M, and non-GAAP EPS at $1.25-$1.26.
Investor Lens
The thesis is stronger after this call. Cloudflare delivered an acceleration in revenue and large customer additions, while NRR reached a multi-year high at 120%. The AI/agentic narrative is translating into tangible demand, reflected in developer growth, pool-of-funds deals, and record paying customer adds. The main drag is margin/G AAP profitability noise from restructuring and traffic-related cost allocation, but management's guidance implies continued operating leverage into the second half. Overall, the platform position at the center of agentic traffic gives investors a clear long-term growth story, though mix-driven revenue timing remains a forecast risk.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strong Q2: revenue +36% YoY, record large customer adds, NRR 120%
Revenue
Revenue reached $696.1M, up 36% YoY, with US revenue up 41%, EMEA up 30%, and APAC up 32%. Large customers grew 27% YoY to 4,698, and total paying customers grew 74% YoY.
Profitability
Non-GAAP net income was $107.8M, or $0.29 diluted EPS, versus $75.1M or $0.21 in the prior-year quarter. GAAP net loss was $170.0M, impacted by $151M of restructuring charges.
Margins
Non-GAAP operating income was $96.1M, with operating margin at 13.8% — down 30bps YoY but up 240bps sequentially. Non-GAAP gross margin was 73.1%, down 320bps YoY but improving 30bps sequentially.
Balance Sheet
Cash, cash equivalents, and available-for-sale securities ended the quarter at $4.2B. Free cash flow was $56.4M, or 8% of revenue, up from $33.3M a year ago.
Key Risks
Management cited gross margin pressure from paid/free traffic cost allocation, elevated restructuring costs, and increased quarter-to-quarter revenue variability from pool-of-funds and consumption-based deals.
Outlook
Cloudflare guided Q3 revenue to $736M-$737M and Q3 non-GAAP operating income to $129M-$130M. Full-year 2026 revenue is guided to $2,864M-$2,870M, with non-GAAP EPS of $1.25-$1.26.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-08-06
Q2 2026 saw 36% revenue growth, record customer and developer additions, and strong operating leverage. Gross margin improved sequentially, and the business is rapidly adapting to the surge in AI-driven, non-human Internet traffic. Guidance calls for continued robust growth and innovation.
Q1 2026 Q1 2026 2026-05-07
Revenue grew 34% year-over-year to $639.8M, with strong gains in large customers and developer adoption. Announced a 20% workforce reduction to accelerate an agentic AI-first model, incurring $140–$150M in restructuring charges, while maintaining robust cash flow and raising full-year guidance.
Q4 2025 Q4 2025 2026-02-10
Q4 revenue grew 34% year-over-year to $614.5 million, driven by strong enterprise and AI customer demand, record ACV growth, and expanding large customer base. Gross margin was 74.9%, with robust free cash flow and a strong outlook for 2026. AI and agentic workloads are accelerating platform adoption.
Q3 2025 Q3 2025 2025-10-30
Q3 2025 saw 31% revenue growth to $562M, strong gains in large customers, and improved net retention. Guidance for Q4 and full-year 2025 points to continued robust growth, with a focus on enterprise sales, AI, and partner-led strategies.
Q2 2025 Q2 2025 2025-07-31
Q2 revenue grew 28% year-over-year to $512.3 million, with strong gains in large customers and record ACV bookings. Gross margin remained within target, and net retention improved to 114%. Guidance for 2025 was raised, reflecting confidence in continued growth and innovation.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
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Information Sources:
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