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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

FORM 10-Q

__________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39039

__________________________________________________

Cloudflare, Inc.

(Exact name of registrant as specified in its charter)

__________________________________________________


Delaware						27-0805829
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

101 Townsend Street

San Francisco, California 94107

(Address of principal executive offices and zip code)

(888) 993-5273

(Registrant’s telephone number, including area code)

__________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Class A Common Stock, $0.001 par value	NET	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Table of contents

As of October 16, 2025, 315,250,214 shares of the registrant's Class A common stock were outstanding and 35,030,951 shares of the registrant's Class B common stock were outstanding.

Table of contents

TABLE OF CONTENTS



	PART I. FINANCIAL INFORMATION	Page

Item 1	Financial Statements (unaudited)	8
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	8
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024	9
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024	10
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024	11
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024	15
	Notes to Condensed Consolidated Financial Statements	16
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	Quantitative and Qualitative Disclosures about Market Risk	51
Item 4	Controls and Procedures	52

	PART II. OTHER INFORMATION

Item 1	Legal Proceedings	54
Item 1A	Risk Factors	54
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	106
Item 5	Other Information	106
Item 6	Exhibits	107
	Signatures	109

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our ability to retain and upgrade paying customers;

•our ability to attract new paying customers, including large customers, or convert free customers to paying customers;

•our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying customers, and free cash flow;

•our ability to achieve or maintain profitability and positive cash flow;

•the impact of adverse economic conditions on our customers’ spending ability and the overall demand for our products;

•the consequences we may face resulting from the activities of our customers and the actions we take in response, including associated theories of liability;

•the demand, and our ability to generate demand, for our products or for solutions for security, performance, and reliability in general;

•possible harm caused by significant disruption of service, loss or unauthorized access to customers’ content, or the actual or perceived failure of our products to prevent security incidents;

•our ability to compete successfully in competitive markets;

•our ability to respond to rapid technological changes;

•our ability to continue to innovate and develop new products;

•our expectations and management of future growth;

•the impact of the conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world, or any worsening or expansion of those conflicts or geopolitical tensions, as well as other geopolitical events such as elections and other governmental changes, threats of tariffs and other impediments to cross-border trade, and any related challenging macroeconomic conditions globally, including on our and our customers', vendors', and partners' respective businesses and the markets in which we and our customers, vendors, and partners operate;

•our ability to maintain favorable co-location relationships, Internet service provider (ISP) partnerships, and other interconnection arrangements around the world;

•our ability to offer high-quality customer support;

•our ability to manage our global operations;

•our expectations of and ability to comply with applicable laws around the world;

•our ability to correctly estimate our tax obligations around the world;

•our ability to repay our convertible senior notes and any outstanding borrowings under our revolving credit facility when due;

•our ability to attract, integrate, and retain key personnel and other highly qualified personnel;

•our ability to maintain our brand;

•our ability to prevent serious errors or defects across, and to otherwise maintain the uninterrupted operation of, our network;

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•our ability to maintain, protect, and enhance our intellectual property; and

•our ability to successfully identify, acquire, and integrate companies and assets.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report on Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission (SEC) that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

SELECTED RISKS AFFECTING OUR BUSINESS

Investing in our Class A common stock involves numerous risks, including those set forth below. This summary does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Below are summaries of some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

•We have a history of net losses and may not be able to achieve or sustain profitability in the future.

•We have experienced rapid revenue growth, which may not be indicative of our future performance.

•Adverse economic conditions, including reduced spending on products and solutions for network security, performance, and reliability, may adversely impact our revenue and profitability.

•The conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world, or any worsening or expansion of those conflicts or tensions, other geopolitical events such as elections and other governmental changes, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations, financial condition, and cash flows remain uncertain.

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•If we are unable to attract new paying and free customers, our future results of operations could be harmed.

•Our business depends on our ability to retain and upgrade paying customers, expand the number of products we sell to paying customers, and, to a lesser extent, convert free customers to paying customers, and any decline in renewals, upgrades, expansions, or conversions could adversely affect our future results of operations.

•If we are unable to effectively attract, expand, and retain sales to large customers, or we fail to mitigate the additional risks associated with serving large customers, our business, results of operation, and financial condition may suffer.

•Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others.

•We face intense and increasing competition, which could adversely affect our business, financial condition, and results of operations.

•If we do not effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features, we may be unable to add new contracted customers, or increase sales to our existing customers and our business would be adversely affected.

•We rely on our co-founders and other key technical, sales, and management personnel to grow our business, and the loss of one or more key employees or the inability to successfully attract, integrate, and retain qualified senior management and other personnel, or the failure of new members of our management team to successfully lead and scale our business, could harm our business.

•Problems with our internal systems, networks, or data, including actual or perceived breaches or failures, could cause our network or products to be perceived as insecure, underperforming, or unreliable, our customers to lose trust in our network and products, our reputation to be damaged, and our financial results to be negatively impacted.

•If our global network that delivers our products or the core co-location facilities we use to operate our network are damaged, interfered with, or otherwise fail to meet the requirements of our business or local regulations, our ability to provide access to our network and products to our customers and maintain the performance of our network could be negatively impacted, which could cause our business, results of operations and financial condition to suffer.

•Detrimental changes in, or the termination of, any of our co-location relationships, ISP partnerships, or our other interconnection relationships with ISPs could adversely impact our business, results of operations, and financial condition.

•The actual or perceived failure of our products to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, results of operations, and financial condition.

•Activities of our paying and free customers or the content of their websites and other Internet properties may violate applicable laws and/or our terms of service and could subject us to lawsuits, regulatory enforcement actions, and/or liability in various jurisdictions.

•Our actual or perceived failure to comply with privacy, data protection, information security, AI, and other applicable laws, regulations, and obligations could harm our business.

•Our network presence within China is dependent upon our commercial relationship with JD Cloud, and any detrimental changes in, or the termination of, that relationship could jeopardize our ability to offer an integrated global network that includes China.

•The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.

•The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our initial public offering, and it may depress the trading price of our Class A common stock.

•Repaying and servicing our existing and future debt, including our Notes and our Revolving Credit Facility, may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.

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PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)


	September 30, 2025		December 31, 2024

Assets
Current assets:
Cash and cash equivalents	$	1,052,644	$	147,691
Available-for-sale securities	2,990,864		1,708,228
Accounts receivable, net	351,890		316,753
Contract assets	22,645		16,568
Restricted cash short-term	4,373		4,273
Prepaid expenses and other current assets	114,349		75,484
Total current assets	4,536,765		2,268,997
Property and equipment, net	588,361		467,420
Goodwill	181,087		181,087
Acquired intangible assets, net	18,411		21,865
Operating lease right-of-use assets	222,148		168,379
Deferred contract acquisition costs, noncurrent	194,035		172,217
Restricted cash	2,475		2,250
Other noncurrent assets	43,113		18,947
Total assets	$	5,786,395	$	3,301,162
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	85,878	$	105,807
Accrued expenses and other current liabilities	92,514		81,602
Accrued compensation	90,201		80,854
Operating lease liabilities	65,321		47,626

Deferred revenue	598,978		477,765
Current portion of convertible senior notes, net	1,290,291		—
Total current liabilities	2,223,183		793,654
Convertible senior notes, net	1,972,707		1,287,321
Operating lease liabilities, noncurrent	173,432		128,266
Deferred revenue, noncurrent	45,900		22,095
Other noncurrent liabilities	24,157		23,625
Total liabilities	4,439,379		2,254,961

Commitments and contingencies (Note 8)

Stockholders’ Equity
Class A common stock; $0.001 par value; 2,250,000 shares authorized as of September 30, 2025 and December 31, 2024; 315,165 and 307,892 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	314		307
Class B common stock; $0.001 par value; 315,000 shares authorized as of September 30, 2025 and December 31, 2024; 35,037 and 36,963 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	35		37
Additional paid-in capital	2,525,193		2,152,750
Accumulated deficit	(1,192,830)		(1,102,640)
Accumulated other comprehensive income (loss)	14,304		(4,253)
Total stockholders’ equity	1,347,016		1,046,201
Total liabilities and stockholders’ equity	$	5,786,395	$	3,301,162

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024


Revenue	$	562,027	$	430,082	$	1,553,430	$	1,209,680
Cost of revenue	146,316		95,967		390,569		270,016
Gross profit	415,711		334,115		1,162,861		939,664
Operating expenses:
Sales and marketing	236,309		185,221		669,679		553,824
Research and development	120,956		110,911		370,602		301,161
General and administrative	95,906		68,777		280,551		204,721
Total operating expenses	453,171		364,909		1,320,832		1,059,706
Loss from operations	(37,460)		(30,794)		(157,971)		(120,042)
Non-operating income (expense):
Interest income	42,529		22,471		89,334		65,438
Interest expense	(2,912)		(1,433)		(5,879)		(3,751)

Other income (expense), net	(307)		(3,066)		(7,682)		(1,673)
Total non-operating income, net	39,310		17,972		75,773		60,014
Income (loss) before income taxes	1,850		(12,822)		(82,198)		(60,028)
Provision for income taxes	3,140		2,509		7,992		5,924
Net loss	$	(1,290)	$	(15,331)	$	(90,190)	$	(65,952)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.00)	$	(0.04)	$	(0.26)	$	(0.19)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	349,312		342,356		347,519		340,539

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

Net loss	$	(1,290)	$	(15,331)	$	(90,190)	$	(65,952)
Other comprehensive income (loss), net of tax:
Change in unrealized gain on investments	2,529		9,656		3,474		5,857
Cash flow hedges:
Change in unrealized gain (loss) on cash flow hedges	(3,057)		8,821		17,653		9,731
Reclassification of gain included in net loss	(1,796)		(1,211)		(2,570)		(1,625)
Net changes on cash flow hedges	(4,853)		7,610		15,083		8,106
Other comprehensive income (loss), net of tax	(2,324)		17,266		18,557		13,963
Comprehensive income (loss)	$	(3,614)	$	1,935	$	(71,633)	$	(51,989)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)



	Three Months Ended September 30, 2025
	Class A common stock			Class B common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance as of June 30, 2025	312,677	$	312	35,738	$	36	$	2,414,291	$	(1,191,540)	$	16,628	$	1,239,727

Issuance of common stock upon exercise of stock options	146	(1)		463	—		11,514		—		—		11,513



Issuance of common stock related to settlement of restricted stock units (RSUs) and performance stock units (PSUs)	1,250	2		—	—		(2)		—		—		—
Tax withholding on RSU settlement	(72)	—		—	—		(13,966)		—		—		(13,966)
Conversion of Class B to Class A common stock	1,164	1		(1,164)	(1)		—		—		—		—




Stock-based compensation	—	—		—	—		113,356		—		—		113,356
Net loss	—	—		—	—		—		(1,290)		—		(1,290)
Other comprehensive loss	—	—		—	—		—		—		(2,324)		(2,324)
Balance as of September 30, 2025	315,165	$	314	35,037	$	35	$	2,525,193	$	(1,192,830)	$	14,304	$	1,347,016

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)


	Three Months Ended September 30, 2024
	Class A common stock			Class B common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income (loss)		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance as of June 30, 2024	303,321	$	302	38,216	$	39	$	1,956,984	$	(1,074,461)	$	(1,319)	$	881,545


Issuance of common stock upon exercise of stock options	8	—		513	(1)		1,418		—		—		1,417


Vesting of shares issued upon early exercise of stock options	—	—		—	—		35		—		—		35
Issuance of common stock related to settlement of RSUs and PSUs	1,035	2		—	—		(2)		—		—		—
Tax withholding on RSU settlement	(46)	—		—	—		(3,828)		—		—		(3,828)
Conversion of Class B to Class A common stock	1,068	1		(1,068)	(1)		—		—		—		—


Stock-based compensation	—	—		—	—		91,986		—		—		91,986
Net loss	—	—		—	—		—		(15,331)		—		(15,331)
Other comprehensive income	—	—		—	—		—		—		17,266		17,266
Balance as of September 30, 2024	305,386	$	305	37,661	$	37	$	2,046,593	$	(1,089,792)	$	15,947	$	973,090

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)


	Nine Months Ended September 30, 2025
	Class A common stock			Class B common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income (loss)		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance as of December 31, 2024	307,892	$	307	36,963	$	37	$	2,152,750	$	(1,102,640)	$	(4,253)	$	1,046,201


Issuance of common stock upon exercise of stock options	385	—		1,462	1		29,454		—		—		29,455



Issuance of common stock related to settlement of RSUs and PSUs	3,520	4		—	—		(4)		—		—		—
Tax withholding on RSU settlement	(185)	—		—	—		(32,183)		—		—		(32,183)
Conversion of Class B to Class A common stock	3,388	3		(3,388)	(3)		—		—		—		—
Common stock issued under employee stock purchase plan	165	—		—	—		13,057		—		—		13,057
Reclassification of the 2025 capped calls from equity to derivative asset	—	—		—	—		308,299		—		—		308,299
Purchase of capped calls related to the 2030 convertible senior notes	—	—		—	—		(283,400)		—		—		(283,400)

Stock-based compensation	—	—		—	—		337,220		—		—		337,220
Net loss	—	—		—	—		—		(90,190)		—		(90,190)
Other comprehensive income	—	—		—	—		—		—		18,557		18,557
Balance as of September 30, 2025	315,165	$	314	35,037	$	35	$	2,525,193	$	(1,192,830)	$	14,304	$	1,347,016

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)


	Nine Months Ended September 30, 2024
	Class A common stock			Class B common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance as of December 31, 2023	298,089	$	297	39,443	$	40	$	1,784,566	$	(1,023,840)	$	1,984	$	763,047


Issuance of common stock upon exercise of stock options	194	—		2,105	1		9,030		—		—		9,031

Issuance of common stock related to early exercised stock options	—	—		2	—		—		—		—		—
Vesting of shares issued upon early exercise of stock options	—	—		—	—		98		—		—		98
Issuance of common stock related to settlement of RSUs and PSUs	3,189	4		—	—		(4)		—		—		—
Tax withholding on RSU settlement	(148)	—		—	—		(12,591)		—		—		(12,591)
Conversion of Class B to Class A common stock	3,889	4		(3,889)	(4)		—		—		—		—
Common stock issued under employee stock purchase plan	173	—		—	—		10,455		—		—		10,455
Other	—	—		—	—		1,689		—		—		1,689
Stock-based compensation	—	—		—	—		253,350		—		—		253,350
Net loss	—	—		—	—		—		(65,952)		—		(65,952)
Other comprehensive income	—	—		—	—		—		—		13,963		13,963
Balance as of September 30, 2024	305,386	$	305	37,661	$	37	$	2,046,593	$	(1,089,792)	$	15,947	$	973,090

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025		2024

Cash Flows from Operating Activities
Net loss	$	(90,190)	$	(65,952)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization expense	137,156		91,476
Non-cash operating lease costs	47,182		35,624
Amortization of deferred contract acquisition costs	73,700		56,707
Stock-based compensation expense	327,829		243,969
Amortization of debt issuance costs	4,630		2,970
Net accretion of discounts and amortization of premiums on available-for-sale securities	(21,544)		(33,980)
Deferred income taxes	(480)		(1,338)
Provision for bad debt	12,778		7,357

Other	3,074		361
Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations:
Accounts receivable, net	(47,915)		(12,016)
Contract assets	(6,077)		(2,417)
Deferred contract acquisition costs	(95,518)		(75,851)
Prepaid expenses and other current assets	(62,278)		(25,313)
Other noncurrent assets	4,442		621
Accounts payable	(4,329)		7,817
Accrued expenses and other current liabilities	17,610		7,631
Accrued compensation	9,347		3,685
Operating lease liabilities	(41,930)		(36,020)
Deferred revenue	145,018		46,933
Other noncurrent liabilities	198		857
Net cash provided by operating activities	412,703		253,121
Cash Flows from Investing Activities
Purchases of property and equipment	(230,427)		(111,884)
Capitalized internal-use software	(21,158)		(22,076)
Asset acquisitions and business combinations, net of cash acquired	(6,462)		(15,015)
Purchases of available-for-sale securities	(2,586,569)		(1,187,287)

Maturities of available-for-sale securities	1,328,956		1,173,041
Other investing activities	679		29
Net cash used in investing activities	(1,514,981)		(163,192)
Cash Flows from Financing Activities

Proceeds from settlement of the 2025 capped calls	309,616		—
Gross proceeds from issuance of 2030 convertible senior notes	2,000,000		—
Purchases of capped calls related to the 2030 convertible senior notes	(283,400)		—

Cash paid for issuance costs on 2030 convertible senior notes	(28,989)		—
Cash paid for issuance costs on revolving credit facility	—		(2,148)
Proceeds from the exercise of stock options	29,455		9,031
Proceeds from the early exercise of stock options	—		6

Proceeds from the issuance of common stock for employee stock purchase plan	13,057		10,455
Payment of tax withholding obligation on RSU settlement	(32,183)		(12,591)


Net cash provided by financing activities	2,007,556		4,753
Net increase in cash, cash equivalents, and restricted cash	905,278		94,682
Cash, cash equivalents, and restricted cash, beginning of period	154,214		91,224
Cash, cash equivalents, and restricted cash, end of period	$	1,059,492	$	185,906
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	24	$	70
Cash paid for income taxes, net of refunds	$	5,842	$	4,024
Cash paid for operating lease liabilities	$	49,232	$	36,623
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Stock-based compensation capitalized for software development	$	7,664	$	8,507
Accounts payable and accrued expenses related to property and equipment additions	$	41,598	$	36,394
Vesting of early exercised stock options	$	—	$	98
Indemnity holdback consideration associated with asset acquisitions and business combinations	$	—	$	2,023

Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	97,759	$	43,133

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CLOUDFLARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization and Basis of Presentation

Organization and Description of Business

Cloudflare, Inc. (the Company, Cloudflare, we, us, or our) is a global cloud services provider that delivers a broad range of services to businesses of all sizes and in all geographies, making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Cloudflare’s network serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premises, hybrid, cloud, and software-as-a-service (SaaS) applications. The Company was incorporated in Delaware in July 2009. The Company is headquartered in San Francisco, California.

Basis of Presentation and Principles of Consolidation

The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31.

Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying interim condensed consolidated balance sheet as of September 30, 2025, the condensed consolidated statements of operations and of comprehensive income (loss) for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments necessary to state fairly the Company’s financial position as of September 30, 2025, its results of operations for the three and nine months ended September 30, 2025 and 2024, and its cash flows for the nine months ended September 30, 2025 and 2024. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025 or any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, allowance for doubtful accounts, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, valuation of acquired intangible assets, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation and recognition of stock-based compensation awards, the assessment of uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and

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assumptions on historical experience and on various other assumptions that are believed to be reasonable. Due in part to the conflicts in the Middle East and Ukraine, the potential worsening and expansion of such conflicts, and other macroeconomic and geopolitical conditions, there is ongoing uncertainty and significant disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or assumptions or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates and assumptions may change in the future, however, as new events occur and additional information is obtained. Actual results could differ materially from these estimates.

Note 2. Summary of Significant Accounting Policies

Significant Accounting Policies

The Company's significant accounting policies are discussed in the "Notes to Consolidated Financial Statements, Note 2. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no changes to these policies that have had a material impact on the Company's condensed consolidated financial statements and related notes, except as noted below.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

There have been no recently adopted accounting pronouncements since the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 that may have a material impact on the Company's condensed consolidated financial statements.

Note 3. Revenue

Disaggregation of Revenue

Subscription and support revenue is recognized over time and accounted for substantially all of the Company’s revenue for the three and nine months ended September 30, 2025 and 2024.

The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global network and products:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024

	(dollars in thousands)								(dollars in thousands)
	Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue
United States	$	282,604	50	%	$	214,955	50	%	$	769,385	49	%	$	618,426	51	%
Europe, Middle East, and Africa	153,298		27	%	121,802		28	%	430,589		28	%	338,154		28	%
Asia Pacific	84,667		15	%	59,103		14	%	233,206		15	%	158,880		13	%
Other	41,458		8	%	34,222		8	%	120,250		8	%	94,220		8	%
Total	$	562,027	100	%	$	430,082	100	%	$	1,553,430	100	%	$	1,209,680	100	%

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The following table summarizes the revenue from contracts by type of customer:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024

	(dollars in thousands)								(dollars in thousands)
	Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue
Channel partners	$	149,859	27	%	$	88,865	21	%	$	392,829	25	%	$	236,002	20	%
Direct customers	412,168		73	%	341,217		79	%	1,160,601		75	%	973,678		80	%
Total	$	562,027	100	%	$	430,082	100	%	$	1,553,430	100	%	$	1,209,680	100	%

Contract Balances

Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the nine months ended September 30, 2025, the Company recognized revenue of $433.5 million, that was included in the corresponding contract liability balance at the beginning of the period presented.

The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced.

The following table summarizes the activity of the deferred contract acquisition costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(in thousands)				(in thousands)
Beginning balance	$	183,919	$	144,330	$	172,217	$	133,236
Capitalization of contract acquisition costs	36,520		27,766		95,518		75,851
Amortization of deferred contract acquisition costs	(26,404)		(19,716)		(73,700)		(56,707)
Ending balance	$	194,035	$	152,380	$	194,035	$	152,380

The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented.

Remaining Performance Obligations

As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $2,143.1 million. As of September 30, 2025, the Company expected to recognize 64% of its remaining performance obligations as revenue over the next 12 months with the remainder recognized thereafter.

Note 4. Fair Value Measurements

Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Assets and liabilities measured at fair value are classified into the following categories:

•Level I: Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

•Level II: Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and

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•Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

The Company classifies money market funds within Level I of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its time deposits and investments, which are comprised of U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds, within Level II of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented.

The following table summarizes the Company’s cash, cash equivalents and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash short-term, restricted cash, or available-for-sale securities as of September 30, 2025 and December 31, 2024.


(in thousands)									Reported as:
September 30, 2025	Amortized Cost		Unrealized Gain		Unrealized (Loss)		Fair Value		Cash & Cash Equivalents		Available-for-sale Securities		Restricted Cash (Current and Non-Current)
Cash	$	166,035	$	—	$	—	$	166,035	$	159,187	$	—	$	6,848
Level I:
Money market funds	503,026		—		—		503,026		503,026		—		—
Level II:
Time deposits	125,000		—		—		125,000		125,000		—		—
Corporate bonds	1,004,566		2,853		(36)		1,007,383		—		1,007,383		—
U.S. treasury securities	1,932,031		3,403		(56)		1,935,378		124,466		1,810,912		—
U.S. government agency securities	112,998		18		(137)		112,879		—		112,879		—
Commercial paper	200,655		—		—		200,655		140,965		59,690		—
Subtotal	3,375,250		6,274		(229)		3,381,295		390,431		2,990,864		—
Total assets measured at fair value on a recurring basis	$	4,044,311	$	6,274	$	(229)	$	4,050,356	$	1,052,644	$	2,990,864	$	6,848

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(in thousands)									Reported as:
December 31, 2024	Amortized Cost		Unrealized Gain		Unrealized (Loss)		Fair Value		Cash & Cash Equivalents		Available-for-sale Securities		Restricted Cash (Current and Non-Current)
Cash	$	51,410	$	—	$	—	$	51,410	$	44,887	$	—	$	6,523
Level I:
Money market funds	102,804		—		—		102,804		102,804		—		—
Level II:
Corporate bonds	466,769		1,125		(316)		467,578		—		467,578		—
U.S. treasury securities	1,120,478		2,403		(677)		1,122,204		—		1,122,204		—
U.S. government agency securities	69,872		55		(19)		69,908		—		69,908		—
Commercial paper	48,538		—		—		48,538		—		48,538		—
Subtotal	1,705,657		3,583		(1,012)		1,708,228		—		1,708,228		—
Total assets measured at fair value on a recurring basis	$	1,859,871	$	3,583	$	(1,012)	$	1,862,442	$	147,691	$	1,708,228	$	6,523

As of September 30, 2025, the Company had $6.8 million in total restricted cash mainly related to indemnity holdback consideration associated with asset acquisitions and business combinations.

The aggregate fair value of the Company’s money market funds and time deposits approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds and time deposits as of September 30, 2025 and December 31, 2024. Realized gains and losses, net of tax, were not material for any of the periods presented.

The amortized cost of available-for-sale investments with maturities less than one year was $1,886.6 million and $1,139.9 million as of September 30, 2025 and December 31, 2024, respectively. The amortized cost of available-for-sale investments with maturities greater than one year was $1,098.2 million and $565.8 million as of September 30, 2025 and December 31, 2024, respectively.

Net unrealized gain on investments was $6.0 million and $2.6 million as of September 30, 2025 and December 31, 2024, respectively and was included in accumulated other comprehensive income on the condensed consolidated balance sheet. The unrealized gains and losses on available-for-sale investments are related to U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds. The Company determined any unrealized losses to be temporary. Factors considered in determining whether a loss is temporary include the financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. As of September 30, 2025, the Company's investment portfolio consisted of investment grade securities with an average credit rating of AA.

The Company carries the Notes (as defined below) issued in August 2021 and June 2025 at face value less the unamortized issuance costs on its condensed consolidated balance sheets and presents that fair value for disclosure purposes only. As of September 30, 2025, the fair value of the 2026 Notes and 2030 Notes (each as defined below) were $1,588.1 million and $2,276.8 million, respectively. The fair value of the Notes, which are classified as Level II financial instruments, were determined based on the quoted bid prices of the Notes in an over-the-counter market on the last trading day of the reporting period. For further details on the Notes, refer to Note 7 to these condensed consolidated financial statements.

The Company classifies financial instruments in Level III of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level III financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or

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liability. There were no financial instruments classified as Level III of the fair value hierarchy as of September 30, 2025 and December 31, 2024.

Note 5. Balance Sheet Components

Accounts Receivable, Net

As of September 30, 2025 and December 31, 2024, the Company’s allowance for doubtful accounts was $8.0 million and $8.2 million, respectively. Provision for bad debt for the three months ended September 30, 2025 and 2024 was $5.0 million and $2.6 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $12.8 million and $6.7 million, respectively. Write-offs of uncollectible accounts receivable for the three months ended September 30, 2025 and 2024 was $4.3 million and $2.6 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $13.0 million and $5.0 million, respectively.

Property and Equipment, Net

Property and equipment, net consisted of the following:


	September 30, 2025		December 31, 2024

	(in thousands)
Property and equipment:
Servers—network infrastructure	$	672,942	$	488,799
Construction in progress	69,857		68,973
Capitalized internal-use software	126,877		98,055
Office and computer equipment	39,871		30,872
Office furniture	7,316		7,068
Software	7,439		4,097
Leasehold improvements	50,500		49,047
Asset retirement obligation	827		827
Gross property and equipment	975,629		747,738
Less accumulated depreciation and amortization	(387,268)		(280,318)
Total property and equipment, net	$	588,361	$	467,420

Depreciation and amortization expense on property and equipment for the three months ended September 30, 2025 and 2024 was $43.7 million and $27.9 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $120.9 million and $78.3 million, respectively. This includes amortization expense for capitalized internal-use software which totaled $7.9 million and $6.3 million for the three months ended September 30, 2025 and 2024, respectively, and $23.1 million and $17.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Goodwill

As of September 30, 2025 and December 31, 2024, the Company's goodwill was $181.1 million. No goodwill impairments were recorded during the nine months ended September 30, 2025 and 2024.

Acquired Intangible Assets, Net

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Acquired intangible assets, net consisted of the following:


	September 30, 2025
	Gross Carrying Amount		Accumulated Amortization		Net Book Value

	(in thousands)
Developed technology	$	24,820	$	17,144	$	7,676

Customer relationships	11,680		5,154		6,526
Other	4,462		253		4,209
Total acquired intangible assets, net	$	40,962	$	22,551	$	18,411


	December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Net Book Value

	(in thousands)
Developed technology	$	22,131	$	7,878	$	14,253

Customer relationships	11,600		3,988		7,612
Total acquired intangible assets, net	$	33,731	$	11,866	$	21,865

Amortization of acquired intangible assets was $3.7 million and $2.4 million for the three months ended September 30, 2025 and 2024, respectively, and $10.7 million and $9.7 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the estimated future amortization expense of acquired intangible assets was as follows:


	Estimated Amortization
	(in thousands)
Year ending December 31,
2025 (remaining three months)	$	3,099
2026	6,727
2027	2,117
2028	1,896
2029	1,896
Thereafter	2,676
Total	$	18,411

Note 6. Leases

The Company's lease portfolio consists of real estate and co-location agreements in the United States and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 9.0 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 10.1 years. All of the Company's leases are classified as operating leases.

The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,

	2025		2024		2025		2024
	(in thousands)				(in thousands)
Operating lease cost	$	17,310	$	12,500	$	47,182	$	35,624

Total lease cost	$	17,310	$	12,500	$	47,182	$	35,624

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Variable lease cost, short-term lease cost, and sublease income for the three and nine months ended September 30, 2025 and September 30, 2024 were not material.

As of September 30, 2025, the Company had $75.0 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the condensed consolidated balance sheets. These operating leases will commence between October 2025 and February 2027 and have an average lease term of 4.4 years.

As of September 30, 2025, the weighted-average remaining term of the Company’s operating leases was 4.8 years and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.8%.

Maturities of the operating lease liabilities as of September 30, 2025 are as follows:


	September 30, 2025
	(in thousands)
2025 (remaining three months)	$	22,910
2026	67,873
2027	61,392
2028	39,388
2029	27,020
Thereafter	48,201
Total lease payments	$	266,784
Less: Imputed interest	$	(28,031)
Total operating lease liabilities	$	238,753

Note 7. Financing Arrangements

2030 Convertible Senior Notes

In June 2025, the Company issued $2,000.0 million aggregate principal amount of 0% Convertible Senior Notes due 2030 (the 2030 Notes). The total proceeds from the issuance of the 2030 Notes, net of initial purchaser discounts and commissions and debt issuance costs, were $1,971.0 million.

The 2030 Notes are senior unsecured obligations of the Company and will mature on June 15, 2030, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the Indenture dated June 17, 2025 (the 2030 Indenture). The 2030 Notes do not bear regular cash interest.

The 2030 Notes are convertible at an initial conversion rate of 4.0376 shares of the Company's Class A common stock per $1,000 principal amount of the 2030 Notes, which is equivalent to an initial conversion price of approximately $247.67 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2030 Indenture. The 2030 Notes may be converted at any time on or after March 15, 2030 until the close of business on the second scheduled trading day immediately preceding the maturity date.

Holders of the 2030 Notes may convert all or any portion of their 2030 Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2030, only under the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending September 30, 2025 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2030 Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day;

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(3) if the Company calls such 2030 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

(4) upon the occurrence of specified corporate events.

None of the circumstances described in the paragraphs above were met during the quarter ended September 30, 2025.

In addition, if the 2030 Notes are converted prior to the maturity date following certain specified corporate events or because the Company issues a notice of redemption, the Company will increase the conversion rate for such 2030 Notes converted in connection with such a corporate event or during the related redemption period, as the case may be, in certain circumstances set forth in the 2030 Indenture.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's Class A common stock, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. It is the Company’s current intent to settle the principal amount of 2030 Notes in cash.

The Company may redeem for cash all or any portion of the 2030 Notes (subject to the partial redemption limitation (as defined below)), at its option, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2030 Notes, at least $100.0 million aggregate principal amount of 2030 Notes must be outstanding and not subject to redemption as of the relevant redemption date. No sinking fund is provided for the 2030 Notes.

If the Company undergoes a fundamental change (as defined in the 2030 Indenture), holders of the 2030 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid special interest to, but excluding, the fundamental change repurchase date.

2030 Capped Call Transactions

In connection with the offering of the 2030 Notes, the Company entered into privately-negotiated capped call option transactions (the 2030 Capped Calls) with certain financial institution counterparties. The 2030 Capped Calls each have an initial strike price of approximately $247.67 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2030 Notes. The 2030 Capped Calls each have an initial cap price of approximately $469.73 per share, subject to certain adjustments. The 2030 Capped Calls initially cover, subject to anti-dilution adjustments, approximately 8.1 million shares of the Company's Class A common stock. The 2030 Capped Calls are intended to generally offset potential dilution to the Company's Class A common stock upon conversion of the 2030 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion, subject to the cap price. The 2030 Capped Calls are subject to either adjustment or termination upon the occurrence of certain specified events affecting the Company, including a merger event, a tender offer, a nationalization, insolvency, or delisting involving the Company. The 2030 Capped Calls expire in incremental components on each trading date between May 16, 2030 and June 13, 2030. As of September 30, 2025, the terms of the 2030 Capped Calls have not been adjusted.

The 2030 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2030 Capped Calls of $283.4 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets.

2026 Convertible Senior Notes

In August 2021, the Company issued $1,293.8 million aggregate principal amount of 0% Convertible Senior Notes due 2026 (the 2026 Notes, and together with the 2030 Notes, the Notes). The total proceeds from the issuance of the 2026 Notes, net of initial purchaser discounts and commissions and debt issuance costs, were $1,274.0 million.

The 2026 Notes are senior unsecured obligations of the Company and will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the Indenture dated August 13, 2021 (the 2026 Indenture, and together with the 2030 Indenture, the Indentures). The 2026 Notes do not bear regular cash interest.

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The 2026 Notes are convertible at an initial conversion rate of 5.2263 shares of the Company's Class A common stock per $1,000 principal amount of the 2026 Notes, which is equivalent to an initial conversion price of approximately $191.34 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2026 Indenture. The 2026 Notes may be converted at any time on or after May 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date.

Holders of the 2026 Notes may convert all or any portion of their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2026, only under the following circumstances:

(1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

(2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day;

(3) if the Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

(4) upon the occurrence of specified corporate events.

None of the circumstances described in the paragraphs above were met during the quarter ended September 30, 2025.

Based on the closing price of the Company's Class A common stock of $191.34 on September 30, 2025, the if-converted value of the 2026 Notes exceeded its principal amount by approximately $157.2 million. As of September 30, 2025, the Company classified the net carrying value of the 2026 Notes of $1,290.3 million as current portion of convertible senior notes, net.

Refer to Note 7 to the consolidated financial statements in Part II, Item 8 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for further information on the 2026 Notes.

2026 Capped Call Transactions

In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call option transactions (the 2026 Capped Calls) with certain financial institution counterparties. The 2026 Capped Calls each have an initial strike price of approximately $191.34 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The 2026 Capped Calls each have an initial cap price of approximately $250.94 per share, subject to certain adjustments. As of September 30, 2025, the terms of the 2026 Capped Calls have not been adjusted.

The 2026 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2026 Capped Calls of $86.3 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets.

2025 Convertible Senior Notes

In May 2020, the Company issued $575.0 million aggregate principal amount of 0.75% Convertible Senior Notes due 2025 (the 2025 Notes). The 2025 Notes were senior unsecured obligations of the Company, with interest payable semi-annually in arrears, at a rate of 0.75% per year.

The 2025 Notes were convertible at an initial conversion rate of 26.7187 shares of the Company's Class A common stock per $1,000 principal amount of the 2025 Notes, which was equivalent to an initial conversion price of approximately $37.43 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the Indenture dated May 15, 2020.

During the fiscal year ended December 31, 2023, the Company repurchased $123.0 million principal amount of the 2025 Notes for approximately $172.7 million in cash, which resulted in a $50.3 million loss on extinguishment of debt. During the same fiscal year, the Company also settled conversions of approximately $35.4 million aggregate

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principal amount of the 2025 Notes with a combination of cash equal to the aggregate principal amount of the converted 2025 Notes and the issuance of approximately 0.5 million shares of the Company's Class A common stock for the remainder of the conversion value in excess of the aggregate principal amount converted.

There are no 2025 Notes currently outstanding as a result of these transactions above and past transactions which are not presented herein. Refer to Note 7 to the consolidated financial statements in Part II, Item 8 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for further information on the 2025 Notes.

2025 Capped Call Transactions

In connection with the offering of the 2025 Notes, the Company entered into privately-negotiated capped call option transactions (the 2025 Capped Calls) with certain financial institution counterparties. The 2025 Capped Calls each had an initial strike price of approximately $37.43 per share of the Company's Class A common stock, subject to certain adjustments, which corresponded to the initial conversion price of the 2025 Notes. The 2025 Capped Calls each had an initial cap price of $57.58 per share, subject to certain adjustments. The 2025 Capped Calls expired between March and May 2025 and were settled in accordance with their terms in May 2025.

In March 2025, the Company elected cash settlement for the 2025 Capped Calls. Upon the cash settlement elections, the 2025 Capped Calls no longer met the criteria for equity classification and were reclassified from additional paid-in capital to derivative asset of $308.3 million on the Company's condensed consolidated balance sheet as of March 31, 2025. The derivative asset was included in prepaid expenses and other current assets. The Company used the Black-Scholes option-pricing model to determine the fair value of the derivative asset, with significant inputs being the expected term, risk free rate, volatility and the Company’s share price as of the valuation dates. Upon the last 2025 Capped Calls expiration in May 2025, the Company received $309.6 million in cash in connection with the settlements and recognized a gain of $1.3 million in other income (expense), net on the Company's condensed consolidated statement of operations.

The net carrying amounts of the Notes were as follows:


	September 30, 2025				December 31, 2024
	2030 Notes		2026 Notes		2030 Notes		2026 Notes
	(in thousands)
Principal	$	2,000,000	$	1,293,750	$	—	$	1,293,750
Unamortized debt issuance costs	(27,293)		(3,459)		—		(6,429)
Carrying amount, net	$	1,972,707	$	1,290,291	$	—	$	1,287,321

The following tables set forth total interest expense recognized related to the Notes:


	Three Months Ended September 30,
	2025				2024
	2030 Notes		2026 Notes		2030 Notes		2026 Notes
	(in thousands)

Amortization of debt issuance costs	$	1,451	$	990	$	—	$	990
Total	$	1,451	$	990	$	—	$	990


	Nine Months Ended September 30,
	2025				2024
	2030 Notes		2026 Notes		2030 Notes		2026 Notes
	(in thousands)

Amortization of debt issuance costs	$	1,660	$	2,970	$	—	$	2,970
Total	$	1,660	$	2,970	$	—	$	2,970

Revolving Credit Facility

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In May 2024, the Company entered into a credit agreement with a syndicated group of lenders, that provides for a senior secured $400.0 million revolving credit facility (the Revolving Credit Facility), with a sublimit of $30.0 million available for the issuance of letters of credit and $30.0 million available for swingline borrowings. The credit agreement permits the Company to increase the commitments under the Revolving Credit Facility by an aggregate principal amount of up to $150.0 million, subject to the satisfaction of certain conditions. The proceeds of the loans under the Revolving Credit Facility may be used for working capital and general corporate purposes.

The Company is required to pay a commitment fee on the daily unused amount of Revolving Credit Facility commitments ranging from 0.25% to 0.40% per annum, depending upon the Company’s total net leverage ratio. Borrowings under the credit agreement will bear interest, at the Company’s option, at either: (a) the alternate base rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.50% per annum, and (iii) an adjusted term SOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus a margin of between 0.75% and 1.50%; or (b) an adjusted term SOFR rate (based on one, three or six month interest periods, or, with the consent of each lender, twelve months or less than one month), plus a margin of between 1.75% and 2.50%. The applicable margin in each case is determined based on the Company’s total net leverage ratio. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate.

The obligations under the Revolving Credit Facility are required to be guaranteed and secured by the Company's assets. The credit agreement contains customary affirmative and negative covenants, including financial covenants requiring the Company to maintain compliance with a maximum consolidated net leverage ratio, in each case, calculated in accordance with the terms of the credit agreement. During the three months ended June 30, 2025, the Company entered into an amendment to the credit agreement to amend the financial covenants.

The Revolving Credit Facility commitments terminate, and all outstanding loans are due and payable on May 17, 2029. However, the maturity date will automatically be accelerated to the date that is 91 days prior to the scheduled maturity date of the 2026 Notes or certain types of other convertible notes that may be issued in the future to refinance, exchange or replace the 2026 Notes, if (a) all or any portion of the 2026 Notes or such other convertible notes is outstanding with a maturity date within the date that is 91 days after May 17, 2029, and (b) the Company’s unrestricted cash plus borrowing availability under the revolving credit facility, as defined by the credit agreement, is less than 125% of the aggregate principal amount of the 2026 Notes or such other convertible notes then outstanding.

As of September 30, 2025, the Company was in compliance with all covenants under the credit agreement.

As of September 30, 2025, no loans were outstanding under the Revolving Credit Facility. Letters of credit issued under the credit agreement were not material as of September 30, 2025.

Note 8. Commitments and Contingencies

Non-cancelable Purchase Commitments

The Company enters into long-term non-cancelable agreements for the purchase of goods and services, including to purchase capacity, such as bandwidth and co-location space, for the Company’s global network. For the lease components of co-location agreements, refer to Note 6 to these condensed consolidated financial statements. As of September 30, 2025, there were no material changes outside the ordinary course of business to the Company’s non-cancelable purchase commitments, including bandwidth and co-location commitments, disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Legal Matters

From time to time the Company is a party to various legal proceedings that arise in the ordinary course of business. In addition, third parties may from time to time assert claims against the Company in the form of letters and other communications. Management currently believes that there is no pending or threatened legal proceeding to which the Company is a party that is likely to have a material adverse effect on the Company’s condensed consolidated financial statements. However, the results of legal proceedings are inherently unpredictable and if an unfavorable ruling were to occur in any of the legal proceedings there exists the possibility of a material adverse effect on the Company’s financial position, results of operations, and cash flows. The Company accrues for legal proceedings that it considers probable and for which the loss can be reasonably estimated. The Company also discloses

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material contingencies when it believes a loss is not probable but reasonably possible. Legal costs incurred and expected to be incurred related to litigation matters are expensed as incurred.

The Company’s network and associated products are subject to various restrictions under U.S. export control and sanctions laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations (EAR) and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls (OFAC). The U.S. export control laws and U.S. economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and also require authorization for the export of certain encryption items. In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements and have enacted or could enact laws that could limit the Company’s ability to distribute its products through its network.

Although the Company takes precautions to prevent its network and associated products from being accessed or used in violation of such laws, the Company may have inadvertently allowed its network and associated products to be accessed or used by some customers in apparent violation of U.S. economic sanctions laws, including by users in embargoed or sanctioned countries, and the Company may have exported or allowed the download of certain software prior to making required filings with the U.S. Department of Commerce’s Bureau of Industry and Security. As a result, the Company has submitted to OFAC and to the Bureau of Industry and Security a voluntary self-disclosure concerning potential violations, and the Company has submitted a voluntary self-disclosure to the Census Bureau regarding potential violations of the Foreign Trade Regulations related to some incorrect electronic export information statements to the U.S. government for certain hardware exports, which were authorized. The voluntary self-disclosure to the Census Bureau was completed with no penalties in November 2019, and the voluntary self-disclosure to the Bureau of Industry and Security was completed with no penalties in June 2020. The voluntary self-disclosure to OFAC remains under review. If the Company is found to be in violation of U.S. economic sanctions or export control laws, it could result in substantial fines and penalties for the Company and for the individuals working for the Company. The Company may also be adversely affected through other penalties, reputational harm, loss of access to certain markets or otherwise. No loss has been recognized in the condensed consolidated financial statements for this loss contingency as it is not probable a loss has been incurred and the range of a possible loss is not yet estimable.

Guarantees and Indemnifications

If the Company's services do not meet certain service level commitments, its contracted customers and certain of its pay-as-you-go customers are entitled to receive service credits, and in certain cases, refunds, each representing a form of variable consideration. To date, the Company has not incurred any material costs as a result of such commitments.

The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.

The Company has also agreed to indemnify its directors, executive officers, and certain other employees for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

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Note 9. Common Stock

The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. The holder of each share of Class A common stock is entitled to one vote per share, while the holder of each share of Class B common stock is entitled to 10 votes per share.

Holders of the Company’s Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. Any dividends paid to the holders of the Class A common stock and Class B common stock will be paid on a pro rata basis. As of September 30, 2025 and December 31, 2024, the Company had not declared any dividends. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of the Company's Class A common stock and generally convert into shares of the Company's Class A common stock upon cessation of employment or transfer, except for certain transfers described in the Company's amended and restated certificate of incorporation. Class A common stock and Class B common stock are referred to, collectively, as common stock throughout the notes to these condensed consolidated financial statements, unless otherwise indicated.

Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance, on an as-if converted basis, are as follows:


	September 30, 2025	December 31, 2024

	(in thousands)

2026 Notes	10,311	10,311
2030 Notes	11,709	—
Stock options issued and outstanding	6,348	8,847
Remaining shares available for issuance under the 2019 Plan	84,290	69,012

Outstanding and unsettled RSUs and PSUs	11,194	11,879
Shares available for issuance under the Employee Stock Purchase Plan (ESPP)	20,176	16,893
Total shares of common stock reserved	144,028	116,942

Note 10. Stock-based Compensation

Equity Incentive Plans

The 2019 Equity Incentive Plan (2019 Plan) provides for the granting of stock options, restricted stock, RSUs, stock appreciation rights, performance shares, PSUs, and performance awards for the Company's Class A common stock to the Company's employees, directors, and consultants. Certain outstanding equity awards were granted under the Company’s 2010 Equity Incentive Plan that is no longer active, but continues to govern the outstanding equity awards granted thereunder.

Stock Options

The Company has granted to certain executive officers and other key employees 10-year stock options with market conditions that vest and become exercisable to purchase shares of the Company's Class A common stock if the Company achieves certain stock price milestones and the employee continues to provide services to the Company through the applicable vesting dates (the Performance Options). The exercise price per share and the number of tranches and corresponding stock price milestones for the tranches of the Performance Options outstanding at such time were amended in the fiscal year ended December 31, 2023. As of September 30, 2025, there were approximately 2.9 million outstanding Performance Options.

The Company recognizes stock-based compensation expense for the Performance Options based on the grant date fair value and using a graded attribution method over the weighted-average requisite service period. The Company recorded a reversal of stock-based compensation of $12.7 million during the three months ended September 30, 2025 due to forfeitures of the Performance Options upon key employee departures. The total stock-based compensation expense for the Performance Options for the three months ended September 30, 2025 and 2024 were $(1.6) million and $9.4 million, respectively, and for the nine months ended September 30, 2025 and 2024

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were $12.5 million and $21.9 million, respectively. As of September 30, 2025, there was $89.2 million of unrecognized stock-based compensation expense related to the Performance Options that is expected to be recognized over a weighted-average period of 3.3 years.

Restricted Stock Units and Performance Stock Units

During the three months ended March 31, 2025, the Company’s Board of Directors granted to the Company’s CEO and President (each, a Co-Founder) an aggregate of 350,220 PSUs with market conditions that vest if the Company achieves certain stock price milestones and the Co-Founders, individually, continue to provide services to the Company through the applicable vesting dates.

The weighted average assumptions used to determine the fair value of the PSUs with market conditions were as follows:


	2025
Expected term (in years)	7.0
Expected volatility	64.7	%
Risk-free interest rate	4.3	%
Dividend yield	—

The total stock-based compensation expense for RSUs and PSUs for the three months ended September 30, 2025 and 2024 was $112.0 million and $78.8 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $315.7 million and $217.1 million, respectively. As of September 30, 2025, the total unrecognized stock-based compensation expense related to unvested RSUs and PSUs was $936.2 million that is expected to be recognized over a weighted-average period of 3.0 years. The stock-based compensation expense associated with PSUs, with market or financial performance conditions, were not material during the three and nine months ended September 30, 2025. As of September 30, 2025, the total unrecognized stock-based compensation related to PSUs with market conditions was $29.0 million and is expected to be recognized over a weighted-average period of 2.3 years.

2019 Employee Stock Purchase Plan

In September 2019, the Company's Board of Directors adopted and stockholders approved the ESPP, which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the Company’s initial public offering. 164,778 shares of Class A common stock were purchased under the ESPP during the nine months ended September 30, 2025. As of September 30, 2025, the total unrecognized stock-based compensation expense related to the ESPP was not material and will be recognized through the year ended December 31, 2025.

Stock-based Compensation Expense

The following table sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(in thousands)
Cost of revenue	$	3,423	$	2,820	$	9,368	$	8,202
Sales and marketing	31,863		23,668		94,124		67,646
Research and development	34,309		38,990		112,958		99,974
General and administrative	40,322		22,777		111,379		68,147
Total stock-based compensation expense	$	109,917	$	88,255	$	327,829	$	243,969

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Note 11. Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B

	(in thousands, except per share data)
Net loss attributable to common stockholders	$	(1,159)	$	(131)	$	(13,632)	$	(1,699)	$	(80,836)	$	(9,354)	$	(58,489)	$	(7,463)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	313,950		35,362		304,415		37,941		311,476		36,043		302,007		38,532
Net loss per share attributable to common stockholders, basic and diluted	$	(0.00)	$	(0.00)	$	(0.04)	$	(0.04)	$	(0.26)	$	(0.26)	$	(0.19)	$	(0.19)

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive. The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows:


	September 30,
	2025	2024

	(in thousands)
2026 Notes	6,762	6,762
2030 Notes	8,075	—
Unexercised stock options	6,348	9,652
Unvested RSUs and PSUs	11,194	10,462
Shares issuable pursuant to the ESPP	113	169
Total	32,492	27,045

Note 12. Income Taxes

The computation of the provision for income taxes for interim periods is determined by applying the estimated annual effective tax rate to year-to-date earnings from recurring operations and adjusting for discrete tax items recorded in the period. The Company's ability to estimate the geographic mix of earnings is impacted by the relatively high-growth nature of the business, fluctuations of business operations by country, and implementation of tax planning strategies.

The Company recorded an income tax expense of $3.1 million and $2.5 million for the three months ended September 30, 2025 and 2024, respectively, and an income tax expense of $8.0 million and $5.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The income tax expense of $3.1 million for the three months ended September 30, 2025 and $8.0 million for the nine months ended September 30, 2025 was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions.

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The income tax expense of $2.5 million for the three months ended September 30, 2024 was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions. The income tax expense of $5.9 million for the nine months ended September 30, 2024 was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions, offset by the partial release of the U.S. and U.K. valuation allowances in connection with acquisitions.

In determining the need for a valuation allowance, the Company weighs both positive and negative evidence in the various jurisdictions in which it operates to determine whether it is more likely than not that its deferred tax assets are realizable. A full valuation allowance has been established in the United States and United Kingdom and no deferred tax assets and related tax benefits have been recognized in the condensed consolidated financial statements. There is no valuation allowance associated with any other foreign jurisdictions.

On July 4, 2025, the United States signed into law the One Big Beautiful Bill Act (OBBBA), which, among other provisions, makes permanent the immediate expensing of domestic research and development expenditures, reinstates 100% bonus depreciation for certain qualified property, and modifies the international tax framework. The enactment of OBBBA resulted in an immaterial impact on the income tax provision due to the Company’s full valuation allowance in the United States.

Note 13. Business Combinations

Kivera

On October 7, 2024, the Company acquired all of the outstanding shares of Kivera, a company that has developed cloud security, data protection, and compliance technology, for a total purchase consideration of $28.0 million. The total purchase consideration included (i) acquisition-date cash payments of $23.1 million, (ii) a cash holdback of $4.5 million, of which the Company is retaining 50% for up to 12 months and the remaining 50% for up to 24 months and will be payable to the previous owners of Kivera, subject to offset by the Company for any of the previous owners’ indemnification obligations in connection with the acquisition, and (iii) an adjustment holdback of $0.5 million, which the Company is retaining for up to four months and will be payable to the previous owners of Kivera, subject to the final purchase price adjustment.

The transaction-related costs for the acquisition were not material and are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2024.

The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands):


Developed technology	$	5,700
Goodwill	23,864
Total assets acquired	29,564
Other noncurrent liabilities	(1,588)
Total purchase price	$	27,976

The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Kivera's technology with the Company's technology.

This acquisition did not have a material impact on the Company’s consolidated financial statements; therefore, historical and pro forma disclosures have not been presented.

Note 14. Segment and Geographic Information

The Company’s chief operating decision maker (CODM) is its CEO, President, and CFO, collectively. The Company has no segment managers who are held accountable by the CODM for operations, operating results, and planning

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for levels or components below the consolidated unit level. Accordingly, the Company has determined it has a single operating segment.

The CODM uses consolidated net loss for purposes of allocating resources and evaluating financial performance, including monitoring actual results versus historical periods. Adjusted cost of revenue, adjusted sales and marketing, adjusted research and development and adjusted general and administrative expenses are considered significant segment expenses that are regularly provided to the CODM and included within consolidated net loss. The measure of segment assets is the total assets on the Company’s condensed consolidated balance sheets. Capital expenditures are reported on a consolidated basis on the Company’s condensed consolidated statements of cash flows. The following table includes the Company's segment revenue, significant segment expenses, and other segment items to reconcile to net loss:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(in thousands)
Revenue	$	562,027	$	430,082	$	1,553,430	$	1,209,680
Less:
Adjusted cost of revenue(1)	(138,948)		(90,970)		(370,420)		(252,876)
Adjusted sales and marketing expense(1)	(201,160)		(160,181)		(566,702)		(466,442)
Adjusted research and development expense(1)	(82,506)		(70,452)		(242,927)		(194,616)
Adjusted general and administrative expense(1)	(53,475)		(45,011)		(159,127)		(132,882)
Other segment items(2)	(87,228)		(78,799)		(304,444)		(228,816)
Net loss	$	(1,290)	$	(15,331)	$	(90,190)	$	(65,952)

(1) Cost of revenue, sales and marketing expense, research and development expense and general and administrative expense in the condensed consolidated statements of operations are adjusted to exclude stock-based compensation and related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, and lease impairment charges during the three and nine months ended months ended September 30, 2025 and 2024, and a one-time compensation charge during three months ended March 31, 2024.

(2) Other segment items include the adjustments described in the notes above, as well as interest income, interest expense, other income (expense), net and provision for income taxes in the condensed consolidated statements of operations.

Refer to Note 3 to these condensed consolidated financial statements for revenue by geography.

The Company’s property and equipment, net, by geographic area were as follows:


	September 30, 2025		December 31, 2024

	(in thousands)
United States	$	282,358	$	233,818
Rest of the world	306,003		233,602
Total property and equipment, net	$	588,361	$	467,420

No single country other than the United States accounted for more than 10% of total property and equipment, net as of September 30, 2025 and December 31, 2024.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations, and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those factors discussed in the section titled “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q. Our fiscal year end is December 31.

Overview

Cloudflare’s mission is to help build a better Internet. We have built a global network that delivers a broad range of services to businesses of all sizes and in all geographies—making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Our network serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across their on-premises, hybrid, cloud, and software-as-a-service (SaaS) applications. In addition, the distributed and programmable nature of our network increasingly is resulting in our customers building their applications on top of our network, too — including both traditional applications and those that are enhanced with artificial intelligence (AI).

Our Business Model

Our business model benefits from our ability to serve the needs of all customers ranging from individual developers to the largest enterprises, in a cost-effective manner. Our products generally are easy to deploy and allow for rapid and efficient onboarding of new customers and expansion of our relationships with our existing customers over time. Given the large customer base we have and the immense amount of Internet traffic that we manage, we are able to negotiate mutually beneficial agreements with Internet service providers (ISPs) that allow us to place our equipment directly in their data centers, which drives down our bandwidth and co-location expenses. This symbiotic relationship that we have with ISPs and the efficiency of our serverless network architecture allows us to introduce new products on our network at low marginal cost.

We generate revenue primarily from sales to our customers of subscriptions to access our network and products. We offer a variety of plans to our free and paying customers depending on their required features and functionality.

•Contracted customers. Our contracted customers, which consist of customers that enter into contracts for our Enterprise subscription plan, have contracts that typically range from one to three years and are typically billed on a monthly or annual basis. Our agreements with contracted customers are tailored and priced to meet their varying needs and requirements. Enterprise subscription plan agreements for our contracted customers generally include a base subscription and, in some cases, a portion based on variable usage. Agreements with certain of our larger enterprise customers may be structured as a "pool of funds" in which the customer commits to spend at least a specified amount on our products during the subscription period. These “pool of funds” arrangements do not require the customer to subscribe for specific products or spend any specific amounts during any month, quarter or, if applicable, year of the subscription period, but the funds must be utilized during the subscription period under the terms of these subscription agreements.

•Pay-as-you-go customers. For our pay-as-you-go customers, we offer the ability to purchase our products through our website. We make our pay-as-you-go product solutions available in several configurations. For customers securing and accelerating their Internet properties using our website and application services, we offer Pro and Business subscription plans through our website per registered domain, and it is common for customers to purchase subscriptions to cover multiple Internet properties (e.g., domains, websites, application programming interfaces (APIs), and mobile applications). Pay-as-you-go customers can subscribe to more than one solution and purchase add-on products and network functionality we offer to meet their more advanced needs. For pay-as-you-go or contracted customers who need a scalable Zero Trust security solution to secure users and internal resources using our Zero Trust and network services solutions, we make these products available on a per seat basis. In addition, for developers building serverless applications, we offer our Cloudflare Developer Platform products to these customers on a usage-based plan that is metered by requests and execution time. Our pay-as-you-go customers typically

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pay with a credit card on a monthly or annual basis for our Pro and Business subscription plans and on a monthly basis for our other pay-as-you-go plans and add-on products.

Key elements of our business model include:

•Significant investment in ongoing product development. We invest significantly in research and development. Our focus on research and development allows us to continually enhance the capabilities and functionality of our global network with new products and product features that are innovative and powerful and can be quickly adopted by our customers and helps us grow our customer base, which allows us to serve a greater portion of the world's Internet traffic. That in turn provides us with greater knowledge and insight into the challenges that Internet users face every day.

•Investments in our network for growth. We believe that the size, sophistication, and distributed nature of our global network provide us with a significant competitive advantage. We intend to continue to make substantial investments in our global network infrastructure to support the growth of our business, including the addition of servers with storage capabilities to support our storage and database products and servers with graphics processing units (GPUs) to support our AI-related developer platform products. As we invest in our network, we believe the service that we can provide our customers and the insight and knowledge that we can gain will continue to grow.

•Efficient go-to-market model. We have built an efficient go-to market model that reflects the flexibility and ease of use our products offer to our customers around the world. This has enabled us to acquire new customers as well as to expand within our existing customer base in a rapid, cost-effective manner. In particular, we have invested heavily in our contracted customer sales efforts.

◦New customer acquisition. We believe that anyone that relies on the Internet to deliver products, services, or content or to operate its business can be a Cloudflare customer. As such, we are focused on driving an increased number of customers onto our network and products to support our long-term growth. We continue to invest to build our direct sales force, increase brand awareness, leverage and expand channel partners, and improve the sophistication of our sales operations for contracted customers, particularly large customers. Additionally, through our pay-as-you-go offering, a customer can subscribe to one of our many plans and begin using our network quickly, with minimal technical skill and no professional services. This has allowed us to acquire a large portion of our paying customers very rapidly and at significantly lower customer acquisition costs than our other product offerings.

◦Expansion of our existing customers. We believe that our network enables a large opportunity for growth within our existing customer base given the breadth of products we offer on our infrastructure platform. Our relationships with customers often start with servicing a portion of their overall needs and expand over time as they realize the significant value we deliver. Once a customer has adopted one product on our network, it can easily add additional products. As we add more products and functionality to our network, we see opportunities to drive upsell as customers seek to consolidate onto one infrastructure platform to meet all of their security, performance, and reliability network requirements. We also intend to continue to invest in market awareness of our new products to improve growth within our existing customers.

◦International reach. Our global network, with a presence in more than 330 cities and over 125 countries worldwide, has helped to foster our strong international growth. International markets represented 50% and 50% of our revenue in the three months ended September 30, 2025 and 2024, respectively, and we intend to continue to invest in our international growth as a strategy to expand our customer base around the world.

•Free customer base. Free customers are an important part of our business. These customers are typically individual developers, early-stage startups, hobbyists, and other users and, like our pay-as-you-go customers, sign up for our service through our website. Our free customers create scale, serve as efficient brand marketing, and help us attract developers, customers, and potential employees. These free customers expose us to diverse traffic, threats, and problems, often allowing us to see potential security, performance, and reliability issues at the earliest stage. This knowledge allows us to improve our products and deliver more effective solutions to our paying customers. In addition, the added scale and diversity of this traffic makes us valuable to a diverse set of global ISPs, improving the breadth and economic terms of our interconnections, bandwidth costs, and co-location expenses. Finally, the enthusiastic engagement of our free customer base represents a "virtual quality assurance" function that allows us to maintain a high

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rate of product innovation, while ensuring our products are extensively tested in real world environments before they are deployed to our paying customers.

Opportunities, Challenges, and Risks

We believe that the growth of our business and our future success are dependent upon many factors, including growing our paying customer base, particularly large customers, expanding our relationships with existing paying customers, developing and successfully launching new products and features, expanding into additional market segments, expanding our base of free customers, and developing and maintaining favorable peering and co-location relationships. Each of these factors presents significant opportunities for us, but also poses material challenges and risks that we must successfully address in order to grow our business and improve our operating results. We expect that addressing these challenges and risks will increase our operating expenses significantly over the next several years. The timing of our future profitability, if we achieve profitability at all, will depend upon many variables, including the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control. In addition, we must comply with complex, uncertain, and evolving laws, rules, and regulatory requirements across federal, state, and international jurisdictions. If we fail to successfully address these challenges, risks, and variables, our business, operating results, financial condition, and prospects may be adversely affected.

Impact of Macroeconomic Developments

The United States government has implemented, or threatened to implement, tariffs on some or all of the goods imported into the United States from a number of other countries around the world. We purchase a portion of the equipment that we use to operate our network from suppliers located outside the United States and we also purchase this equipment from United States suppliers that themselves purchase components from suppliers located outside the United States. As a result of these actual and potential U.S. tariffs, we are working with our suppliers to assess the potential impact of tariffs on our equipment purchases and taking actions when practical to adjust where we source the equipment we use to operate our network in the United States and in locations outside of the United States. At the time of the filing of this Quarterly Report on Form 10-Q, we are continuing to assess the expected financial impact of the U.S. tariffs on our capital expenditures related to the operation of our global network.

In addition, in response to the tariffs implemented or threatened by the United States, many of the countries subject to these tariffs have themselves implemented or threatened to implement tariffs, taxes, or other retaliatory measures on U.S. goods or services or U.S. companies, or have restricted or threatened to restrict the operations of certain U.S. companies in those countries. The implementation, or threatened implementation, of tariffs, taxes, and other restrictions on goods, services, or businesses by the United States and other countries and the resulting additional costs and uncertainties may cause the costs of our products to increase. Additionally, future tariffs could cause the costs of the equipment we use to operate our global network to increase, corporate spending to become delayed or curtailed, increase rates of inflation, reduce economic growth rates, create an economic downturn or recession, or result in other similar or unexpected adverse effects on our business, financial condition, or results of operations.

We are closely monitoring macroeconomic developments and global events, such as the tariffs described above and conflicts in the Middle East and Ukraine and the potential worsening or expansion of those conflicts and other areas of geopolitical tension around the world, and other geopolitical events such as elections and other governmental changes, and, in each case, how they may adversely impact our and our customers’ businesses. Weak economic conditions or uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, threats of tariffs and other impediments to cross-border trade, trade agreements or governmental fiscal, monetary and tax policies, among others, also could adversely impact our and our customers’ business, financial condition and operating results. In addition, general tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers’ purchasing decisions. Potentially as a result of these various macroeconomic impacts on our customers, we periodically have experienced lengthening of the average sales cycle for certain types of customers and sales (including sales to new customers and expansion sales to existing customers), slowdowns in our pipeline of potential new customers and in the rate of converting sales pipeline opportunities into new sales, increases in average days sales outstanding, higher levels of churn in our paying customer base (which is when any of our paying customers cease to be a paying customer for any reason, including any pay-as-you-go customer converting to a free subscription plan), and lengthening of the timing of payment from some of our customers, all of which may have contributed to a slowdown in our revenue growth from prior periods (including with respect to new customers). We believe macroeconomic uncertainty could persist through 2026. As a

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result, we expect that some or all of the negative trends described in this paragraph may emerge or recur during future quarters.

To the extent challenging macroeconomic conditions persist, we may experience additional adverse effects on our business, financial condition, or results of operations in future periods. These effects could include, among others, reduction or increased delays in purchasing decisions by existing and potential new paying customers, additional lengthening of the sales cycle for some of our existing and potential new paying customers, potential customer requests for concessions (including in terms of payment amounts and/or timing and earlier or additional termination rights), potential losses of paying customers as a result of economic distress or bankruptcy (particularly among our small and medium paying customer base), potential reductions in new non-U.S. customers and expansion of sales to existing non-U.S. paying customers as a result of our products, which are substantially all sold in U.S. dollars, becoming relatively more expensive for such customers due to the higher value of the U.S. dollar relative to certain other currencies, and increased costs for employee compensation and equipment purchases resulting from continued inflationary cost pressures.

For further discussion of the challenges and risks we confront related to macroeconomic conditions and geopolitical tension around the world, please refer to Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

Financial Measures and Key Business Metrics

We review a number of financial and operating metrics, including the following non-GAAP financial measures and key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

	(dollars in thousands)						(dollars in thousands)
Gross profit	$	415,711		$	334,115		$	1,162,861		$	939,664
Gross margin	74		%	78		%	75		%	78		%
Loss from operations	$	(37,460)		$	(30,794)		$	(157,971)		$	(120,042)
Non-GAAP income from operations	$	85,938		$	63,468		$	214,254		$	162,864
Operating margin	(7)		%	(7)		%	(10)		%	(10)		%
Non-GAAP operating margin	15		%	15		%	14		%	13		%
Net cash provided by operating activities	$	167,123		$	104,727		$	412,703		$	253,121
Net cash used in investing activities	$	(629,518)		$	(76,400)		$	(1,514,981)		$	(163,192)
Net cash provided by (used in) financing activities	$	(3,569)		$	(2,411)		$	2,007,556		$	4,753
Free cash flow	$	74,971		$	45,279		$	161,118		$	119,161
Net cash provided by operating activities (as a percentage of revenue)	30		%	24		%	27		%	21		%
Free cash flow margin	13		%	11		%	10		%	10		%
Paying customers(1)	295,552			221,540
Paying customers (> $100,000 Annualized Revenue)(1)	4,009			3,265

(1)Key business metrics are derived on a quarterly basis. Refer to Key Business Metrics section below for further detail.

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The following table summarizes the revenue by region based on the billing address of customers who use the Company’s products:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024

	(dollars in thousands)								(dollars in thousands)
	Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue
United States	$	282,604	50	%	$	214,955	50	%	$	769,385	49	%	$	618,426	51	%
Europe, Middle East, and Africa	153,298		27	%	121,802		28	%	430,589		28	%	338,154		28	%
Asia Pacific	84,667		15	%	59,103		14	%	233,206		15	%	158,880		13	%
Other	41,458		8	%	34,222		8	%	120,250		8	%	94,220		8	%
Total	$	562,027	100	%	$	430,082	100	%	$	1,553,430	100	%	$	1,209,680	100	%

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States (U.S. GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Non-GAAP Income from Operations and Non-GAAP Operating Margin

We define non-GAAP income from operations and non-GAAP operating margin as U.S. GAAP loss from operations and U.S. GAAP operating margin, respectively, excluding stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, and lease impairment charges. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. We exclude employer payroll tax expenses related to stock-based compensation, which is a cash expense, from certain of our non-GAAP financial measures, because such expenses are dependent upon the price of our Class A common stock and other factors that are beyond our control and do not correlate to the operation of our business. We exclude amortization of acquired intangible assets, which is a non-cash expense, related to business combinations from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. We exclude acquisition-related and other expenses from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. Acquisition-related and other expenses can be cash or non-cash expenses incurred in connection with the acquisition, and include third-party transaction costs and compensation expense for key acquired personnel. We exclude lease impairment charges related to real estate leases, which is a non-cash expense, from certain of our non-GAAP financial measures because they are not indicative of the Company’s ongoing cost structure and core business performance. We also excluded the one-time cash compensation charge incurred during the three months ended March 31, 2024 from certain of our non-GAAP financial measures because it was not attributable to services provided and did not correlate to the ongoing operation of our business.

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

	(dollars in thousands)						(dollars in thousands)
Loss from operations	$	(37,460)		$	(30,794)		$	(157,971)		$	(120,042)
Add:
Stock-based compensation expense and related employer payroll taxes	119,699			91,767			357,587			258,001
Amortization of acquired intangible assets	3,699			2,417			10,686			9,665
Acquisition-related and other expenses	—			78			112			240
One-time compensation charge	—			—			—			15,000
Lease impairment charges	—			—			3,840			—
Non-GAAP income from operations	$	85,938		$	63,468		$	214,254		$	162,864
Operating margin	(7)		%	(7)		%	(10)		%	(10)		%
Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue)	15		%	15		%	14		%	13		%

Free Cash Flow and Free Cash Flow Margin

Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. Free cash flow margin is calculated as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property and equipment and capitalized internal-use software, can be used for strategic initiatives, including investing in our business, and strengthening our financial position. We believe that historical and future trends in free cash flow and free cash flow margin, even if negative, provide useful information about the amount of cash generated by our operating activities that is available (or not available) to be used for strategic initiatives. For example, if free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. One limitation of free cash flow and free cash flow margin is that they do not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

	(dollars in thousands)						(dollars in thousands)
Net cash provided by operating activities	$	167,123		$	104,727		$	412,703		$	253,121
Less: Purchases of property and equipment	(84,641)			(50,203)			(230,427)			(111,884)
Less: Capitalized internal-use software	(7,511)			(9,245)			(21,158)			(22,076)
Free cash flow	$	74,971		$	45,279		$	161,118		$	119,161
Net cash used in investing activities	$	(629,518)		$	(76,400)		$	(1,514,981)		$	(163,192)
Net cash provided by (used in) financing activities	$	(3,569)		$	(2,411)		$	2,007,556		$	4,753
Net cash provided by operating activities (as a percentage of revenue)	30		%	24		%	27		%	21		%
Less: Purchases of property and equipment (as a percentage of revenue)	(15)		%	(11)		%	(15)		%	(9)		%
Less: Capitalized internal-use software (as a percentage of revenue)	(2)		%	(2)		%	(2)		%	(2)		%
Free cash flow margin	13		%	11		%	10		%	10		%

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Key Business Metrics

In addition to our results determined in accordance with U.S. GAAP and the non-GAAP measures discussed above, we also review the key business metrics discussed below to assist us in evaluating our business, measuring performance, identifying trends, formulating business plans, and making strategic decisions. There are a number of limitations associated with the use of key business metrics as analytical tools, however, and we do not rely upon any single key business metric to evaluate our business. In addition, other companies, including companies in our industry, may calculate similarly-titled business metrics differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of these business metrics as tools for comparison to such companies.

Paying Customers

We believe our ability to grow the number of paying customers on our network provides a key indicator of growth of our business and our future business opportunities. We define a paying customer at the end of the quarter as a person or entity who has generated revenue and has an active contract with us or one of our partners during such quarter, excluding (i) customers that were not acquired through ordinary sales channels, (ii) customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and WARP, which agreements and customers together represent an insignificant amount of our revenue. An entity is defined as a company, a government institution, a non-profit organization, or a distinct business unit of a large company. An active contract is defined as a customer relationship for which we have provided services during the quarter. The number of paying customers was 295,552 and 221,540 as of September 30, 2025 and September 30, 2024, respectively.

Paying Customers (> $100,000 Annualized Revenue)

While we continue to grow customers across all sizes, over time, our large customers have contributed an increasing share of our revenue. We view the number of customers with Annualized Revenue greater than $100,000 as indicative of our penetration within large enterprise accounts. To measure Annualized Revenue at the end of a quarter, we take the sum of revenue for each customer in the quarter and multiply that amount by four. For example, if we signed a new customer that generated $1,800 of revenue in a quarter, that customer would account for $7,200 of Annualized Revenue for that year. Our Annualized Revenue calculation excludes (i) agreements that were not entered into through ordinary sales channels, (ii) revenue generated from customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and WARP, which agreements and customers together represent an insignificant amount of our revenue. Our Annualized Revenue metric also includes any usage charges by a customer during a period, which represents a small portion of our total revenue and may not be recurring. As a result, Annualized Revenue may be higher than actual revenue over the course of the year. The number of paying customers with Annualized Revenue greater than $100,000 was 4,009 and 3,265 as of September 30, 2025 and September 30, 2024, respectively.

Dollar-Based Net Retention Rate

Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue generated from our existing paying customers. We believe that we will achieve these objectives by continuing to focus on customer loyalty and adding additional products and functionality to our network. Our dollar-based net retention rate is a key way we measure our performance in these areas. Dollar-based net retention rate measures our ability to retain and expand recurring revenue from existing customers. To calculate dollar-based net retention rate for a quarter, we compare the Annualized Revenue from paying customers four quarters prior to the Annualized Revenue from the same set of customers in the most recent quarter. Our dollar-based net retention rate includes expansion and is net of contraction and attrition, but excludes Annualized Revenue from new customers in the current period. Our dollar-based net retention rate excludes professional services and the benefit of free customers that upgrade to a paid subscription between the prior and current periods, even though this is an important source of incremental growth. We believe this provides a more meaningful representation of our ability to add incremental business from existing paying customers as they renew and expand their contracts. Our dollar-based net retention rates were 119% and 110% for the three months ended September 30, 2025 and September 30, 2024, respectively.

Components of Our Results of Operations

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Revenue

We generate revenue primarily from sales to our customers of subscriptions to access our network and products, together with related support services. Arrangements with customers generally do not provide the customer with the right to take possession at any time of our software operating our global network. Instead, customers are granted continuous access to our network and products over the contractual period. A time-elapsed output method is used to measure progress because we transfer control evenly over the contractual period. Accordingly, the fixed consideration related to subscription and support revenue is generally recognized on a straight-line basis over the contract term beginning on the date that the service is made available to the customer. Usage-based consideration is primarily related to fees charged for our customer’s use of excess bandwidth when accessing our network in a given period and is recognized as revenue in the period in which the usage occurs.

The subscription and support term contracts for our contracted customers typically range from one to three years. Most of our contracts with contracted customers are non-cancelable over the contractual term. Customers may have the right to terminate their contracts for cause if we fail to perform in accordance with the contractual terms. For our pay-as-you-go customers, subscription and support term contracts are typically monthly.

Cost of Revenue

Cost of revenue consists primarily of expenses that are directly related to providing our service to our paying customers. These expenses include expenses related to operating in co-location facilities, network and bandwidth costs, depreciation of our equipment located in co-location facilities, certificate authority services costs for paying customers, related overhead costs, the amortization of our capitalized internal-use software, and the amortization of acquired developed technologies. Cost of revenue also includes employee-related costs, including salaries, benefits, and stock-based compensation for employees whose primary responsibilities relate to supporting our paying customers. Other costs included in cost of revenue include credit card fees related to processing customer transactions and allocated overhead costs.

As our customers expand and increase the use of our global network and products driven by additional applications and connected devices, we expect that our cost of revenue will continue to increase due to higher network and bandwidth costs and expenses related to operating in additional co-location facilities. However, we expect to continue to benefit from economies of scale as our customers increase the use of our global network and products. We intend to continue to invest additional resources in our global network and products and our customer support organizations as we grow our business. The level and timing of investment in these areas could affect our cost of revenue in the future.

Gross Profit and Gross Margin

Gross profit is revenue less cost of revenue and gross margin is gross profit as a percentage of revenue. Our gross profit and gross margin have and are expected to continue to fluctuate from period to period due to the timing of acquisition of new customers, our renewals with existing customers and expenses that are directly related to providing our service to our paying customers. We expect our gross profit to increase in absolute dollars and our gross margin to remain consistent over the long term, although our gross margin could fluctuate from period to period depending on the interplay of all of these factors.

Operating Expenses

Sales and Marketing

Sales and marketing expenses consist primarily of employee-related costs, including salaries, a one-time cash compensation charge incurred during the three months ended March 31, 2024, benefits and stock-based compensation expense, sales commissions that are recognized as expenses over the period of benefit, marketing programs, certificate authority services costs for free customers, travel-related expenses, bandwidth and co-location costs for free customers, and allocated overhead costs. Sales commissions earned by our sales force and the associated payroll taxes that are direct and incremental to the acquisition of channel partner and direct customer contracts are deferred and amortized over an estimated period of benefit of three years for the initial acquisition of a contract and over the contractual term of the renewals for renewal contracts. We plan to continue to invest in sales and marketing to grow our customer base and increase our brand awareness, including marketing efforts to continue to drive our pay-as-you-go business model. As a result, we expect our sales and marketing expenses to

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increase in absolute dollars for the foreseeable future. However, we expect our sales and marketing expenses to decrease as a percentage of our revenue over the long term, although our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Research and Development

Research and development costs consist primarily of employee-related costs, including salaries, benefits, and stock-based compensation expense, consulting costs, depreciation of equipment used in research and development, and allocated overhead costs. Research and development costs support our efforts to add new features to our existing offerings and to ensure the security, performance, and reliability of our global network. We expect our research and development expenses to increase in absolute dollars for the foreseeable future as we continue to invest in research and development efforts to enhance the functionality of our global network and products. We expect our research and development expenses to decrease as a percentage of our revenue over the long term, although our research and development expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

General and Administrative

General and administrative expenses consist primarily of employee-related costs, including salaries, benefits, and stock-based compensation expense for our finance, legal, human resources, and other administrative personnel, professional fees for external legal services, accounting, and other consulting services, bad debt expense, allocated overhead costs, and lease impairment charges. We expect our general and administrative expenses to continue to increase in absolute dollars for the foreseeable future to support our growth as well as due to additional costs associated with legal, accounting, compliance, insurance, investor relations, and other costs as a result of operating as a public company. However, we expect our general and administrative expenses to decrease as a percentage of our revenue over the long term, although our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Non-Operating Income (Expense)

Interest Income

Interest income consists primarily of interest earned on our cash, cash equivalents, and our investment holdings.

Interest Expense

Interest expense consists primarily of contractual interest expense and amortization of the debt issuance costs on our 0% Convertible Senior Notes due 2026 (the 2026 Notes) and our 0% Convertible Senior Notes due 2030 (the 2030 Notes, and together with the 2026 Notes, the Notes).

Other Income (Expense), Net

Other income (expense), net consists primarily of gain on sale of property and equipment and foreign currency transaction gains and losses.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business, as well as state income taxes in the United States. We have a full valuation allowance on our U.S. federal, U.S. state, and U.K. deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.

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Results of Operations

The following tables set forth our condensed consolidated results of operations for the periods presented in dollars and as a percentage of our revenue for those periods:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(dollars in thousands)				(dollars in thousands)
Revenue	$	562,027	$	430,082	$	1,553,430	$	1,209,680
Cost of revenue	146,316		95,967		390,569		270,016
Gross profit	415,711		334,115		1,162,861		939,664
Operating expenses:
Sales and marketing	236,309		185,221		669,679		553,824
Research and development	120,956		110,911		370,602		301,161
General and administrative	95,906		68,777		280,551		204,721
Total operating expenses	453,171		364,909		1,320,832		1,059,706
Loss from operations	(37,460)		(30,794)		(157,971)		(120,042)
Non-operating income (expense):
Interest income	42,529		22,471		89,334		65,438
Interest expense	(2,912)		(1,433)		(5,879)		(3,751)

Other income (expense), net	(307)		(3,066)		(7,682)		(1,673)
Total non-operating income, net	39,310		17,972		75,773		60,014
Income (loss) before income taxes	1,850		(12,822)		(82,198)		(60,028)
Provision for income taxes	3,140		2,509		7,992		5,924
Net loss	$	(1,290)	$	(15,331)	$	(90,190)	$	(65,952)

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

Percentage of Revenue Data:
Revenue	100	%	100	%	100	%	100	%
Cost of revenue	26		22		25		22
Gross margin	74		78		75		78
Operating expenses:
Sales and marketing	42		43		43		46
Research and development	22		26		24		25
General and administrative	17		16		18		17
Total operating expenses	81		85		85		88
Loss from operations	(7)		(7)		(10)		(10)
Non-operating income (expense):
Interest income	8		5		6		5
Interest expense	(1)		—		—		—

Other income (expense), net	—		(1)		(1)		—
Total non-operating income, net	7		4		5		5
Income (loss) before income taxes	—		(3)		(5)		(5)
Provision for income taxes	—		1		1		—
Net loss	—	%	(4)	%	(6)	%	(5)	%

Comparison of Three and Nine Months Ended September 30, 2025 and 2024

Revenue


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Revenue	$	562,027	$	430,082	$	131,945	31	%	$	1,553,430	$	1,209,680	$	343,750	28	%

Revenue increased by $131.9 million and $343.8 million, or 31% and 28%, for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. The increase in revenue was primarily due to the addition of new paying customers, as our number of paying customers increased by 33% as of September 30, 2025 compared to the prior period ended September 30, 2024, as well as the expansion within our existing paying customers, which was reflected by our dollar-based net retention rate of 119% for the three months ended September 30, 2025.

Cost of Revenue and Gross Margin


	Three Months Ended September 30,						Change				Nine Months Ended September 30,						Change
	2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)										(dollars in thousands)
Cost of revenue	$	146,316		$	95,967		$	50,349	52	%	$	390,569		$	270,016		$	120,553	45	%
Gross margin	74		%	78		%					75		%	78		%

Cost of revenue increased by $50.3 million, or 52%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in the cost of revenue was primarily due to an increase

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of $16.7 million of third-party technology services costs, an increase of $16.0 million in expenses related to operating in co-location facilities and network and bandwidth costs for operating our global network for our expanded customer base, as well as increased capacity to support our growth, and an increase of $12.4 million in depreciation expense due to an increase in server acquisitions and deployments.

Cost of revenue increased by $120.6 million, or 45%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in the cost of revenue was primarily due to an increase of $38.5 million in third-party technology services costs, an increase of $38.4 million in expenses related to operating in co-location facilities and network and bandwidth costs for operating our global network for our expanded customer base, as well as increased capacity to support our growth, an increase of $32.1 million in depreciation expense due to increase in server acquisitions and deployments, and an increase of $6.6 million related to the amortization of acquired developed technology and capitalized internal-use software costs.

Gross margin decreased to 74% from 78%, and 75% from 78%, respectively, for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. The decrease in gross margin was primarily due to the increases in costs mentioned above.

Operating Expenses

Sales and Marketing


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Sales and marketing	$	236,309	$	185,221	$	51,088	28	%	$	669,679	$	553,824	$	115,855	21	%

Sales and marketing expenses increased by $51.1 million, or 28%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by $35.8 million in increased employee-related costs due to a 22% increase in headcount in our sales and marketing organization, including an increase of $8.3 million in stock-based compensation expense. The remainder of the increase was primarily due to an increase of $3.8 million in expenses for marketing programs, investments in brand awareness advertising, third-party industry events, and digital performance marketing, an increase of $3.2 million in co-location and bandwidth expenses for free customers, and an increase of $1.9 million in allocated overhead costs.

Sales and marketing expenses increased by $115.9 million, or 21%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by $77.7 million in increased employee-related costs due to a 22% increase in headcount in our sales and marketing organization, including an increase of $26.2 million in stock-based compensation expense. The remainder of the increase was primarily due to an increase of $8.0 million in co-location and bandwidth expenses for free customers, an increase of $6.1 million in expenses for marketing programs, investments in brand awareness advertising, third-party industry events, and digital performance marketing, an increase of $6.0 million in travel-related expenses, an increase of $5.2 million in consulting expenses, an increase of $3.5 million in allocated overhead costs, and an increase of $3.4 million in subscription expenses.

Research and Development


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Research and development	$	120,956	$	110,911	$	10,045	9	%	$	370,602	$	301,161	$	69,441	23	%

Research and development expenses increased by $10.0 million, or 9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by $8.0 million

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in increased employee-related costs due to a 14% increase in headcount in our research and development organization. The increase in employee-related cost was net of a $5.5 million decrease in stock-based compensation expense. The Company recorded a reversal of stock-based compensation of $10.0 million during the three months ended September 30, 2025 due to forfeitures of the Performance Options upon a key employee departure.

Research and development expenses increased by $69.4 million, or 23%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by $63.4 million in increased employee-related costs due to a 14% increase in headcount in our research and development organization, including an increase of $12.1 million in stock-based compensation expense, net of a $10.0 million decrease due to forfeitures of the Performance Options upon a key employee departure.

General and Administrative


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
General and administrative	$	95,906	$	68,777	$	27,129	39	%	$	280,551	$	204,721	$	75,830	37	%

General and administrative expenses increased by $27.1 million, or 39%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by $23.6 million in increased employee-related costs due to a 9% increase in headcount in our general and administrative organization, including an increase of $18.5 million in stock-based compensation expense. This increase was partially offset by $1.9 million of decreased allocated overhead costs.

General and administrative expenses increased by $75.8 million, or 37%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by $62.4 million in increased employee-related costs due to a 9% increase in headcount in our general and administrative organization, including an increase of $46.5 million in stock-based compensation expense. The remainder of the increase was primarily due to an increase of $6.0 million in bad debt expense, an increase of $5.6 million in travel-related expenses, and an increase of $4.0 million in third-party technology services costs. These increases were partially offset by $6.2 million of decreased allocated overhead costs.

Non-Operating Income (Expense)

Interest Income


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Interest income	$	42,529	$	22,471	$	20,058	89	%	$	89,334	$	65,438	$	23,896	37	%

Interest income increased by $20.1 million and $23.9 million, or 89% and 37%, respectively, during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024. The increase in interest income was primarily driven by the increase in investment balance.

Interest Expense


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Interest expense	$	(2,912)	$	(1,433)	$	(1,479)	103	%	$	(5,879)	$	(3,751)	$	(2,128)	57	%

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Interest expense did not significantly fluctuate during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.

Other Income (Expense), net


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Other income (expense), net	$	(307)	$	(3,066)	$	2,759	(90)	%	$	(7,682)	$	(1,673)	$	(6,009)	*

______________

* Not meaningful

Other income (expense), net did not significantly fluctuate during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.

Provision for Income Taxes


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2025		2024		$		%		2025		2024		$		%

	(dollars in thousands)								(dollars in thousands)
Provision for income taxes	$	3,140	$	2,509	$	631	25	%	$	7,992	$	5,924	$	2,068	35	%

The net change in income taxes for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 is $0.6 million. The income tax expense of $3.1 million and $2.5 million for the three months ended September 30, 2025 and September 30, 2024, respectively, was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions.

The net change in income taxes for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is $2.1 million. The income tax expense of $8.0 million for the nine months ended September 30, 2025 was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions. The income tax expense of $5.9 million for the nine months ended September 30, 2024 was primarily related to withholding taxes in the United States and income tax expense from foreign jurisdictions, offset by the partial release of the U.S. and U.K. valuation allowances in connection with acquisitions.

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Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through net proceeds from the sale of our equity and debt securities, as well as cash flow from our operating activities, and we expect to continue to finance our operations using the same sources for the foreseeable future. In May 2020, we issued $575.0 million aggregate principal amount of the 0.75% Convertible Senior Notes due 2025 (the 2025 Notes), which are no longer outstanding as of September 30, 2025 due to subsequent repurchases and conversions. In August 2021, we issued $1,293.8 million aggregate principal amount of the 2026 Notes, from which we received net proceeds of $1,274.0 million. In May 2024, we entered into a credit agreement with a syndicated group of lenders, which provides for a senior secured $400.0 million revolving credit facility (the Revolving Credit Facility), with a sublimit of $30.0 million available for the issuance of letters of credit and $30.0 million available for swingline borrowings. The credit agreement permits us to increase the commitments under the Revolving Credit Facility by an aggregate principal amount of up to $150.0 million, subject to the satisfaction of certain conditions. The proceeds of the loans under the Revolving Credit Facility may be used for working capital and general corporate purposes. As of September 30, 2025, no loans were outstanding under the Revolving Credit Facility. Letters of credit issued under the credit agreement were not material as of September 30, 2025. In connection with the offering of the 2025 Notes, we entered into privately-negotiated capped call option transactions (the 2025 Capped Calls) with certain financial institution counterparties. In March 2025, we elected cash settlement for the 2025 Capped Calls, which resulted in recognition of the derivative asset for $308.3 million. In May 2025, the Company received $309.6 million in cash in connection with the 2025 Capped Calls settlement, and recognized a gain of $1.3 million in other income (expense), net on the Company's condensed consolidated statement of operations. In June 2025, we issued $2,000.0 million aggregate principal amount of the 2030 Notes, from which we received net proceeds of $1,971.0 million. In connection with the offering of the 2030 Notes, we entered into additional privately-negotiated capped call option transactions with certain financial institution counterparties.

As of September 30, 2025, we had cash and cash equivalents of $1,052.6 million, including $21.1 million held by our foreign subsidiaries. Our cash and cash equivalents consist of cash, highly liquid money market funds, time deposits, U.S. treasury securities, and commercial paper. We also had available-for-sale securities of $2,990.9 million consisting of corporate bonds, U.S. treasury securities, U.S. government agency securities, and commercial paper. As of September 30, 2025, our investment portfolio consisted of investment grade securities with an average credit rating of AA. We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1,192.8 million as of September 30, 2025. We expect to continue to incur operating losses and cash flow that may fluctuate between positive and negative for the foreseeable future due to the investments we intend to make in our business, and as a result we may require additional capital resources to execute on our strategic initiatives to grow our business.

We believe that our existing cash, cash equivalents, available-for-sale securities, and available capacity under the Revolving Credit Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. For the period beyond the next 12 months, we believe we will be able to meet our working capital and capital expenditure needs from our existing cash, cash equivalents, available-for-sale-securities, available borrowings under the Revolving Credit Facility, the cash flows from our operating activities and, if necessary, proceeds from other potential equity or debt financings. Our assessments of the period of time through which our existing financial resources will be adequate to support our operations and our expected sources of capital for the future operation of our business after such period of time are forward-looking statements and involve risks and uncertainties. Our actual results could vary as a result of, and our near- and long-term future capital requirements will depend on, many factors, including our growth rate, subscription renewal activity, the timing and extent of spending to support our infrastructure and research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of products or features, the continuing market adoption of our global network and products, and the impact of macroeconomic conditions to our and our customers', vendors', and partners' businesses. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights, and such acquisitions and investments could increase our need for additional capital. We have based our estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Additionally, some of the factors that may influence our operations are not within our control, such as general economic conditions. We may seek, or be required to seek, additional equity or debt financing from time to time in the future. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results, and financial condition would be adversely affected.

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As of September 30, 2025, our material cash requirements include contractual obligations from the Notes, purchase commitments and lease obligations. Refer to Notes 6, 7, and 8 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding these material cash requirements.

In addition to the contractual obligations described above, as of September 30, 2025, we had $6.8 million recognized as total restricted cash on our condensed consolidated balance sheets mainly related to indemnity holdback consideration associated with asset acquisitions and business combinations.

Cash Flows

The following table summarizes our cash flows for the periods presented:


	Nine Months Ended September 30,
	2025		2024

	(in thousands)
Net cash provided by operating activities	$	412,703	$	253,121
Net cash used in investing activities	$	(1,514,981)	$	(163,192)
Net cash provided by financing activities	$	2,007,556	$	4,753

Operating Activities

Net cash provided by operating activities during the nine months ended September 30, 2025 was $412.7 million, which resulted from a net loss of $90.2 million, adjusted for non-cash charges of $584.3 million and net cash outflow of $81.4 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $327.8 million for stock-based compensation expense, $137.2 million for depreciation and amortization expense, $73.7 million for amortization of deferred contract acquisition costs, $47.2 million for non-cash operating lease costs, $12.8 million for provision of bad debt, and $4.6 million for amortization of debt issuance costs, which were partially offset by $21.5 million for net accretion of discounts. The net cash outflow from changes in operating assets and liabilities were primarily the result of a $95.5 million increase in deferred contract acquisition costs due to the addition of new customers, a $62.3 million increase in prepaid expenses and other current assets, a $47.9 million increase in accounts receivable, net, related to operating activities, which increased due to our growing customer base and timing of collections from our customers, an increase of $41.9 million in payments related to operating lease liabilities, and a $6.1 million increase in contract assets, and a $4.3 million decrease in accounts payable, which were partially offset by a $145.0 million increase in deferred revenue, a $17.6 million increase in accrued expenses and other current liabilities, a $9.3 million increase in accrued compensation, and a $4.4 million decrease in other noncurrent assets related to operating activities.

Net cash provided by operating activities during the nine months ended September 30, 2024 was $253.1 million, which resulted from a net loss of $66.0 million, adjusted for non-cash charges of $403.1 million and net cash outflow of $84.1 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $244.0 million for stock-based compensation expense, $91.5 million for depreciation and amortization expense, $56.7 million for amortization of deferred contract acquisition costs, $35.6 million for non-cash operating lease costs, $7.4 million for provision of bad debt, and $3.0 million for amortization of convertible note issuance costs, which were partially offset by $34.0 million for net accretion of discounts. The net cash outflow from changes in operating assets and liabilities were primarily the result of a $75.9 million increase in deferred contract acquisition costs due to increased headcount of commission eligible employees, $36.0 million in payments related to operating lease liabilities, a $25.3 million increase in prepaid expenses and other current assets, a $12.0 million increase in accounts receivable, net, which increased due to our growing customer base and timing of collections from our customers, and a $2.4 million increase in contract assets, which were partially offset by a $46.9 million increase in deferred revenue, a $7.8 million increase in accounts payable related to operating activities, a $7.6 million increase in accrued expenses and other current liabilities, and a $3.7 million increase in accrued compensation.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2025 of $1,515.0 million resulted primarily from the purchases of available-for-sale securities of $2,586.6 million, capital expenditures of $230.4 million, capitalization of internal-use software development costs of $21.2 million, and cash paid for asset

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acquisitions and business combinations, net of cash acquired of $6.5 million, which were partially offset by the maturities of available-for-sale securities of $1,329.0 million.

Net cash used in investing activities during the nine months ended September 30, 2024 of $163.2 million resulted primarily from the purchases of available-for-sale securities of $1,187.3 million, capital expenditures of $111.9 million, capitalization of internal-use software development costs of $22.1 million, and cash paid for asset acquisitions and business combinations, net of cash acquired of $15.0 million, which were partially offset by the maturities of available-for-sale securities of $1,173.0 million.

Financing Activities

Net cash provided by financing activities of $2,007.6 million during the nine months ended September 30, 2025 was primarily due to $2,000.0 million gross proceeds from the issuance of the 2030 Notes, $309.6 million proceeds from the settlement of the 2025 Capped Calls, $29.5 million of proceeds from the exercise of vested stock options, and $13.1 million proceeds from the issuance of Class A common stock pursuant to the 2019 Employee Stock Purchase Plan (ESPP), which were partially offset by $283.4 million from the purchases of capped calls related to the 2030 Notes (the 2030 Capped Calls), $32.2 million of payments of tax withholding on RSU settlements, and $29.0 million cash paid for issuance costs related to the 2030 Notes.

Net cash provided by financing activities of $4.8 million during the nine months ended September 30, 2024 was primarily due to $10.5 million proceeds from the issuance of Class A common pursuant to the ESPP, and $9.0 million of proceeds from the exercise of vested stock options, which were partially offset by $12.6 million of payments of tax withholding on RSU settlements and $2.1 million cash paid for issuance costs on revolving credit facility.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. Such estimates include, but are not limited to, allowance for doubtful accounts, deferred contract acquisitions costs, the period of benefit generated from the deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, valuation of acquired intangible assets, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation and recognition of stock-based compensation awards, the assessment of uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. None of these estimates are critical accounting estimates for the preparation of our consolidated financial statements. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates and assumptions on an ongoing basis. Due in part to the conflicts in the Middle East and Ukraine, and the potential worsening and expansion of such conflicts, and other geopolitical and macroeconomic conditions, there is ongoing uncertainty and significant disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to our estimates or assumptions or a revision of the carrying value of assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates and assumptions may change in the future, however, as new events occur and additional information is obtained. Our actual results could differ from these estimates.

Our significant accounting policies are discussed in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no changes to these policies for the nine months ended September 30, 2025.

Recent Accounting Pronouncements

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Refer to Note 2 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recently adopted accounting pronouncements.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity, on an annual basis, to disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU is effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact of the new standard.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The ASU requires a public business entity to disclose additional information about specific expense categories in the notes to the financial statements for interim and annual reporting periods. The ASU does not change or remove current expense disclosure requirements. The ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of the new standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other - Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software. The ASU is intended to make targeted improvements to the accounting and application of guidance related to capitalized software development costs. The ASU is effective for annual reporting periods beginning after December 15, 2027, and for interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of the new standard.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations in the United States and internationally, and we are exposed to market risk in the ordinary course of our business.

Interest Rate Risk

In August 2021 and June 2025, we issued $1,293.8 million and $2,000.0 million in aggregate principal amounts of the 2026 Notes and 2030 Notes, respectively. The Notes do not have regularly scheduled interest payments; therefore, we do not have economic interest rate exposure on the Notes. We carry the Notes at face value less the unamortized issuance costs on our condensed consolidated balance sheets. Generally, the fair market value of the Notes will increase as interest rates decline and decrease as interest rates rise. In addition, the fair market value of the Notes fluctuates when the market price of our Class A common stock fluctuates.

We are exposed to the impact of changes in interest rates in connection with borrowings under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility will bear interest, at the Company's option, at either the alternate base rate or an adjusted term SOFR rate (each as determined from time to time in accordance with the credit agreement), plus a margin of between 1.75% and 2.50%. Consequently, our interest expense would fluctuate if we were to borrow any amounts under the Revolving Credit Facility as a result of the floating interest rates applicable to such borrowings and potential changes in the applicable margin resulting from changes to our total net leverage ratio. As of September 30, 2025, no loans were outstanding under the Revolving Credit Facility. Letters of credit issued under the credit agreement were not material as of September 30, 2025.

As of September 30, 2025, we had cash and cash equivalents of $1,052.6 million and available-for-sale securities of $2,990.9 million. The carrying amount of our cash equivalents approximates fair value, due to the short maturities of these instruments. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash and investments. Our available-for-sale securities are held for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

Our cash equivalents and our investment portfolio are subject to market risk due to fluctuations in interest rates. Our future investment income may fall short of our expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However,

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because we classify our securities as “available-for-sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or declines in fair value are determined to be other-than-temporary.

A sensitivity analysis performed on our investment portfolio indicated that a hypothetical 1% increase or decrease in interest rates would have resulted in an increase of $22.4 million or decrease of $21.9 million in the market value of our investments in available-for-sale securities as of September 30, 2025.

Foreign Currency Risk

The functional currency of our foreign subsidiaries is the U.S. dollar and our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates relative to the U.S. dollar. The majority of our revenue is denominated in U.S. dollars. Our expenses are generally denominated in the currencies of the countries in which our operations are located and are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound, Euro, and Singapore Dollar.

As exchange rates may fluctuate significantly between periods, revenue and operating expenses, when converted into U.S. dollars, may also experience significant fluctuations between periods. During the nine months ended September 30, 2025 and 2024, a hypothetical 10% strengthening or weakening of the U.S. dollar applicable to our business would not have had a material impact on our condensed consolidated financial statements.

We have a cash flow hedging program in place and enter into derivative transactions to manage certain foreign currency exchange risks that arise in our ordinary business operations. We do not enter into foreign currency exchange contracts for speculative or trading purposes. All of our foreign currency exchange contracts have a maturity of 12 months or less. We enter into master netting agreements with select financial institutions to reduce our credit risk, and we trade with several counterparties to reduce our concentration risk with any single counterparty. We do not have significant exposure to counterparty credit risk at this time. We do not require nor are we required to post collateral of any kind related to our foreign currency derivatives. These derivatives are designated as cash flow hedges under accounting guidance for derivatives and hedging.

Inflation Risk

We do not believe that inflation has had a material effect on our business, results of operations, or financial condition. Nonetheless, if our costs in connection with the operation of our business were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the Exchange Act) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this

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Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time we are subject to legal proceedings and claims arising in the ordinary course of business. We are not presently a party to any legal proceeding that we believe is likely to have a material impact on our business, results of operations, or financial condition.

Future litigation may be necessary, among other things, to defend ourselves or our customers by determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights. The results of any litigation cannot be predicted with certainty, particularly in the areas of unsettled and evolving law in which we operate, and an unfavorable resolution in any legal proceedings could materially affect our future business, results of operations, or financial condition. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. For additional information, see "Risk Factors - Activities of our paying and free customers or the content of their websites and other Internet properties may violate applicable laws and/or our terms of service and could subject us to lawsuits, regulatory enforcement actions, and/or liability in various jurisdictions" and "We are currently, and may be in the future, party to intellectual property rights claims and other litigation matters that, if resolved adversely, could have a material impact on our business, results of operations, or financial condition" and Note 8 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Item 1A. RISK FACTORS

Our business involves significant risks, some of which are described below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes. Any of the following risks could have an adverse effect on our business, results of operations, financial condition, or prospects, and could cause the trading price of our Class A common stock to decline. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

Risks Related to Our Business and Our Industry

We have a history of net losses and may not be able to achieve or sustain profitability in the future.

We have incurred net losses in all periods since we began operations and we may not achieve or maintain profitability in the future. We experienced net losses of $1.3 million and $15.3 million for the three months ended September 30, 2025 and 2024, respectively, and $90.2 million and $66.0 million for the nine months ended September 30, 2025 and 2024, respectively, and as of September 30, 2025, we had an accumulated deficit of $1,192.8 million. Because the markets for our products are rapidly evolving, it is difficult for us to predict our future results of operations. We expect our operating expenses to increase over the next several years as we continue to hire additional personnel, expand our operations and infrastructure both domestically and internationally, and continue to develop our products. If we fail to increase our revenue to offset the increases in our operating expenses, we may not achieve or sustain profitability in the future.

We have experienced rapid revenue growth, which may not be indicative of our future performance.

We have experienced rapid revenue growth in recent periods, with revenue of $562.0 million and $430.1 million for the three months ended September 30, 2025 and 2024, respectively, and $1,553.4 million and $1,209.7 million for the nine months ended September 30, 2025 and 2024, respectively. However, our rate of revenue growth has slowed in recent periods and may continue to slow in future periods. You should not consider our historical growth in revenue as indicative of our future performance. In particular, our revenue growth rates may continue to slow or

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decline in the future and may not be sufficient to achieve and sustain profitability, as we also expect our costs to increase in future periods. We believe that historical comparisons of our revenue may not be meaningful and should not be relied upon as an indication of future performance. Accordingly, you should not rely on our revenue and other growth for any prior quarter or year as an indication of our future revenue or revenue growth.

Our historical rapid growth and fluctuations in our growth rate more recently may also make it difficult to evaluate our future prospects. Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth. If we fail to achieve the necessary level of efficiency in our organization as it grows, or if we are not able to accurately forecast future growth, our business, results of operations, and financial condition could be harmed.

Adverse economic conditions, including reduced spending on products and solutions for network security, performance, and reliability, may adversely impact our revenue and profitability.

Our operations and financial performance depend in part on worldwide economic conditions and the impact these conditions have on levels of spending on products and solutions for network security, performance, and reliability. Our business depends on the overall demand for these products and on the economic health and general willingness of our current and prospective customers to purchase our products.

The United States, Europe, and the United Kingdom have recently experienced historically high levels of inflation. Although inflation levels have decreased from such high levels in the United States, the United Kingdom, and Eurozone, the U.S. Federal Reserve, the European Central Bank, and the Bank of England have in the past raised, and may in the future raise or maintain, high interest rates and may implement fiscal policy interventions. Even if these interventions lower inflation, they may also reduce economic growth rates, create an economic downturn or recession, and result in other similar or unexpected effects.

The United States government has implemented, or threatened to implement, tariffs on some or all of the goods imported into the United States from a number of other countries around the world. In response, many of the countries subject to these tariffs have themselves implemented or threatened to implement tariffs, taxes, or other retaliatory measures on U.S. goods or services or U.S. companies, or have restricted or threatened to restrict the operations of certain U.S. companies in those countries. The implementation, or threatened implementation, of tariffs, taxes, and other restrictions on goods, services, or businesses by the United States and other countries and the resulting additional costs and uncertainties may cause the costs of our products to increase. Additionally, future tariffs could cause the costs of the equipment we use to operate our global network to increase, corporate spending to become delayed or curtailed, increase rates of inflation, reduce economic growth rates, create an economic downturn or recession, or result in other similar or unexpected adverse effects on our business, financial condition, or results of operations.

Downturns in economic conditions and recessions — including potential stagflation, inflation, rising interest rates, reductions in business confidence and activity, the curtailment of government or corporate spending, volatile financial markets, the actual or perceived failure or financial difficulties of financial institutions, supply chain disruptions or increased equipment costs due to current or potential future tariffs, and reduced demand for products and services across a variety of industries — have in the past and may in the future affect our business and our current and prospective customers and their industries adversely. For example, during an economic downturn, our current and prospective customers may suffer from reduced operating budgets. Some of our paying customers may view a subscription to our products as a discretionary purchase and may reduce their discretionary spending on our products or reduce or cut their budget to otherwise expand their subscriptions to our products. Moreover, our competitors may respond to market conditions by lowering prices and attempting to lure away our customers.

Further, the sales cycle for new and existing customers of our technology and services could lengthen in the future as a result of challenging macroeconomic conditions, resulting in a potentially longer delay between increasing operating expenses and the generation of corresponding revenue, if any. For example, potentially as a result of these various macroeconomic impacts on our customers, we periodically have experienced lengthening of the average sales cycles for certain types of customers and sales, slowdowns in our pipeline of potential new customers and in the rate of converting sales pipeline opportunities into new sales, increases in average days sales outstanding, higher levels of churn in our paying customer base (which is when any of our paying customers cease to be a paying customer for any reason, including any pay-as-you-go customer converting to a free subscription plan), and lengthening of the timing of payment from some of our customers, all of which may have contributed to a

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slowdown in our revenue growth from prior periods (including with respect to new customers). We may also experience increases in new and existing customers requesting concessions in terms of payment amounts and/or timing and earlier or additional termination rights in the future as the challenging macroeconomic conditions continue or worsen.

We continue to monitor economic conditions to assess possible implications to our business and to take appropriate actions in an effort to mitigate the adverse consequences of uncertainty or negative trends. However, there can be no assurances that initiatives we undertake will be sufficient or successful. If there is an economic downturn that affects our current and prospective customers, or if we are unable to address and mitigate the risks associated with any of the foregoing, our business, results of operations and financial condition could be adversely affected.

The conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world or any worsening or expansion of those conflicts or tensions, other geopolitical events such as elections and other governmental changes, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations, financial condition, and cash flows remain uncertain.

The conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world or any worsening or expansion of those conflicts or geopolitical tensions, other geopolitical events such as elections and other governmental changes, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate, could decrease the spending of our existing and potential new customers, adversely affect demand for our products, cause one or more of our customers, vendors, and partners to file for bankruptcy protection or go out of business, cause one or more of our customers to fail to renew, terminate, or seek to renegotiate their contracts with us, cause one or more of our suppliers to increase prices as a result of current or potential future tariffs or other factors, affect the ability of our sales team to travel to potential customers, impact expected spending from existing and potential new customers, and negatively impact collections of accounts receivable, all of which could adversely affect our business, results of operations, and financial condition.

Any of the negative impacts of the conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world or any worsening or expansion of those conflicts or geopolitical tensions, other geopolitical events such as elections and other governmental changes, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate, may have a material adverse effect on our business and operations, results of operations, financial condition, and cash flows. Any of these negative impacts, alone or in combination with others, also could exacerbate many of the other risk factors discussed in this Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, including volatility in the trading prices of our Class A common stock. The full extent to which these factors will negatively affect our business and operations, results of operations, financial condition, and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope, severity, and duration of the conflicts in the Middle East and Ukraine, other areas of geopolitical tension around the world, and any economic downturns and the actions taken by governmental authorities and other third parties in response.

If we are unable to attract new paying and free customers, our future results of operations could be harmed.

The success of our business principally depends on our ability to attract new paying and free customers. To do so, we must persuade decision makers at potential customers that our products offer significant advantages over those of our competitors. Other factors, many of which are out of our control, may now or in the future impact our ability to add new paying and free customers, including:

•potential customers’ commitments to existing equipment or vendors;

•potential customers’ greater familiarity and/or comfort with on-premises, appliance-based products and concerns about potential risks associated with using cloud-based solutions;

•actual or perceived switching costs;

•the potential implementation of tariffs or retaliatory measures due to tariffs on the sales of our products in countries where our potential paying customers are located;

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•our failure to develop new products and features, and to adapt to technological developments, that our potential customers' demand, including potential large customers;

•the failure of our new or existing products and features to perform in the manner demanded or expected by potential customers and our existing customers, particularly large customers;

•delays in the general availability release of products and features after we have announced their development or beta availability;

•our failure to generate demand for our products through effective marketing efforts related to our business and products;

•our failure to obtain additional, or maintain existing, government or industry security certifications for our network and products, such as Federal Risk and Authorization Management Program (FedRAMP) moderate authorization that we achieved in 2022;

•negative media, industry, or financial analyst commentary regarding our products and our network and the identities and activities of some of our paying and free customers;

•the adoption of new, or amendment of existing, laws, rules, or regulations that negatively impact the utility of, or increase the risk of using, cloud-based solutions generally or our network and products specifically, including changes in new or modified laws and regulations relating to privacy, data protection, and information security;

•our failure to effectively recruit, expand, develop, retain, and motivate our sales and marketing personnel;

•our failure to develop or expand relationships with existing channel partners or to attract new channel partners;

•our failure to help or provide support to our customers, particularly large customers, in order to successfully deploy and use our products in a manner required by them, their industry, or applicable regulators;

•our failure to educate our customers about our network and products;

•the perceived risk, commencement, or outcome of litigation;

•deteriorating general economic conditions, including inflation, rising interest rates, and the actual or perceived failure or financial difficulties of financial institutions; and

•impacts of the conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world or any worsening or expansion of those conflicts or geopolitical tensions and impacts of geopolitical events such as elections and other governmental changes.

We believe that the importance of brand recognition for attracting new customers will increase as we introduce new products and continue to expand into new markets. However, the promotion of our brand may require substantial expenditures. We have invested, and expect to continue to invest, substantial resources to increase our brand awareness, both generally and in specific geographies and to specific customer groups. There can be no assurance that our brand development strategies and investment of resources will enhance recognition of our brand or lead to an increased customer base.

If our efforts to attract new paying customers are not successful, our revenue and rate of revenue growth may decline, we may not achieve profitability, and our future results of operations could be materially harmed. If our efforts to attract new free customers are not successful, the benefits to our network and product development cycles from our strategy of providing a free subscription plan will be diminished.

Our business depends on our ability to retain and upgrade paying customers, expand the number of products we sell to paying customers, and, to a lesser extent, convert free customers to paying customers, and any decline in renewals, upgrades, expansions, or conversions could adversely affect our future results of operations.

Our business is subscription-based and it is important for our business and financial results that our paying customers renew their subscriptions for our products when existing contract terms expire. Our pay-as-you-go customers pay with a credit card on a monthly or annual basis and can terminate their subscriptions, or switch to less expensive subscription plans, at will with little advance notice. Because pay-as-you-go customers that

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subscribe to our basic subscription plans are an important source of revenue, this ease of termination could cause our results of operations to fluctuate significantly from quarter to quarter. Our contracted customers, which consist of customers that sign up for our Enterprise plan, enter into longer term agreements typically ranging from one to three years, and they generally have no obligation to renew their subscriptions for our products after the expiration of their contractual period and are allowed to cancel their subscriptions in the case of our uncured material breach of the agreement. Some contracted customers also have agreements that allow them to terminate the agreement without cause upon little or no advance written notice, or upon our failure to meet certain service level commitments, or to obtain and maintain industry security certifications within a specified time frame. Should certain of our contracted customers, especially our large customers, terminate their agreements, or reduce their expenditures, with us, our financial condition and results of operations may materially suffer. In addition, as we continue to increase our number of large customers, and the amount of revenue we receive from large customers, this risk may increase.

Due to our varied customer base and short average subscription periods, it is difficult to accurately predict our long-term customer retention rate. Our customer retention may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with the security, performance, and reliability of our products and our global network, our development and general availability release of new products and features and adaptation to technological developments, our prices and subscription plans, our ability to provide adequate customer support or otherwise address customer concerns with our products, our customers’ budgetary restrictions (including reductions in spending as a result of uncertain economic conditions or overall industry uncertainty), mergers, acquisitions, joint ventures, and business partnerships and relationships involving our customers, failure or bankruptcy of our customers, the perception that competitive products provide better or less expensive options, negative public perception of us or our free and paying customers, concerns about new or amended laws, rules, or regulations that increase the risk of using cloud-based solutions or our network and products specifically, and deteriorating general economic conditions.

Our future financial performance also depends in part on our ability to continue to upgrade paying customers to higher-tier subscriptions, expand the number of products we sell to paying customers, and, to a lesser extent, to convert free customers into paying customers. Conversely, our paying customers may convert to lower-cost or free plans or reduce the number of products they purchase from us if they do not see the marginal value in paying for our higher-cost plans or for our specific products, or due to challenging macroeconomic conditions and/or reduced operating budgets, thereby impacting our ability to increase revenue. For example, we periodically have experienced a higher level of churn in our paying customer base (which is when any of our paying customers cease to be a paying customer for any reason, including any pay-as-you-go customer converting to a free subscription plan). Moreover, our free customers have no obligation to transition to paying customers at any point. In order to expand our commercial relationship with our customers, existing paying and free customers must decide that the incremental cost associated with such an upgrade in their subscription plans, the purchase of additional, or the expanded use of their currently used, products is justified by the additional functionality they would gain. For example, some of our paying customers may decide that our Enterprise plan offerings do not provide sufficient incremental value to upgrade from our pay-as-you-go offering or to continue any such previously chosen upgrade. Our customers’ decisions whether to upgrade their subscription, purchase additional, or expand current usage, of our products or to continue any such previously chosen upgrade or purchased products are driven by a number of factors, including customer satisfaction with the security, performance, and reliability of our network and products, customer security and networking issues and requirements, general economic conditions, the potential future applicability of tariffs or retaliatory measures due to tariffs on our products in certain countries, and customer reaction to the price for additional products. If our efforts to expand our relationship with our existing paying and free customers are not successful, our financial condition and results of operations may materially suffer.

If we are unable to effectively attract, expand, and retain sales to large customers, or we fail to mitigate the additional risks associated with serving large customers, our business, results of operation, and financial condition may suffer.

Our growth strategy is dependent, in large part, upon attracting, expanding, and retaining sales to large customers. For our definition of “large customers,” see Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Attracting, expanding, and retaining sales to large customers involve risks that may not be present, or that are present to a lesser extent, with sales to smaller customers, including:

•competition from companies that traditionally target larger enterprises and that may have pre-existing relationships or purchase commitments from such larger enterprise customers, including companies that seek to bundle sales of their new or existing products that are competitive to our products, or that may have

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more experienced sales personnel or greater budgetary resources available or committed to such larger enterprise customers;

•longer evaluation periods, more detailed evaluations, and more cumbersome contract negotiation and approval processes, including potential requirements for such purchasing decisions to be approved by senior executives of such companies;

•increased purchasing power and leverage in negotiating pricing terms and other contractual arrangements with us, which may result in us being subject to additional, or greater levels of, contractual risks than our sales to smaller customers;

•requirements for more technically complex configurations, integrations, deployments, or features;

•greater customer support or assistance with migrating their systems from another vendor to our network and products;

•more stringent requirements in terms of the security, performance, and reliability of our products and our network and our support and compliance obligations related to our products;

•increased usage of our global network that may require us to incur greater network infrastructure expenditures; and

•longer sales cycles and the associated risk that substantial time and resources may be spent on a potential customer that elects not to purchase, expand, or continue to purchase our products.

Historically, the implementation period to start using, or expanding the use of, our products has been short, with most customers under our pay-as-you-go plans implementing usage of our products within a short period of time and our sales cycle for customers under our Enterprise plan lasted less than one quarter. Since the first half of 2022, however, we have experienced periodic lengthening of our average sales cycle for our new and existing large customers, and the lengthening of our sales cycle to our large customers could continue in the future. In addition, as our sales force continues to target an increasing number of large customers for new and expanded product sales, these larger enterprises often undertake a more significant evaluation and negotiation processes than we have experienced in the past, which could further lengthen our sales cycle materially.

In addition, our sales efforts typically involve educating our prospective large customers about the uses, benefits, and value proposition of our network and products. Our sales force develops relationships directly with our customers and our channel partners through account penetration, account coordination, sales, and overall market development. Potential large customers often view the subscription to our products, including any expansion of those subscriptions, as a significant strategic decision and, as a result, in some cases require considerable time to evaluate, test, and qualify our network and products prior to entering into or expanding a relationship with us. As a result, we spend substantial time and resources on our sales efforts without any assurance that our efforts will produce a sale. Subscriptions to our products, including expanded subscriptions, often are subject to budget constraints, multiple approvals, and unanticipated administrative, processing, and other delays. In addition, some of our subscription agreements with our large customers may have more customer favorable early termination rights, less favorable limitations on liability, indemnification and other legal provisions for us, greater usage-based pricing than is the case with our customary subscription-based agreements with our contracted customers and our pay-as-you-go customers, or generate lower margins than other contracted customers. For example, subscription agreements with certain of our largest customers are structured on a "pool of funds" model in which the customer commits to spend at least a specified amount on our products during the subscription period. These "pool of funds" arrangements do not require the customer to subscribe for specific products or spend any specific amounts during any month, quarter or, if applicable, year of the subscription period, but the funds must be utilized during the subscription period under the terms of these subscription agreements. As a result of the foregoing, it is difficult to predict whether or when a sale to a prospective large customer will be completed, how much incremental revenue or gross profit will result from such sales over the duration of the agreement, and when revenue from a subscription will be recognized or will cease.

Further, our ability to improve our sales of products to large customers is dependent on us continuing to attract and retain sales personnel with experience in selling to larger enterprises. Also, because security breaches or a network outage with respect to larger, high-profile enterprises are likely to be heavily publicized, there is increased liability and reputational risks associated with serving these customers if we experience a security breach or network outage. We also believe that large customers may be more likely than our smaller customers to terminate or reduce their usage of our products in such circumstances.

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Once we begin selling to a large customer or expand our sales to a large customer, if we fail to retain the large customer or to retain the same amount of sales to the large customer, then the adverse impact on our result of operations and financial conditions could be significant during any specific quarter and could also result in potentially greater and unexpected variability in our results of operations and financial condition from quarter to quarter.

Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others.

Activities of our paying and free customers or the content of their websites and other Internet properties could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and other third parties. Even if we comply with legal obligations to remove or disable customer content, we may maintain relationships with customers that others find hostile, offensive, or inappropriate. For example, we experienced significant negative publicity in connection with the use of our network by The Daily Stormer, a neo-Nazi, white supremacist website, around the time of the 2017 protests in Charlottesville, Virginia. We also received negative publicity in connection with the use of our network by 8chan, a forum website that served as inspiration for the 2019 attacks in El Paso, Texas and Christchurch, New Zealand. In 2022, we received negative publicity in connection with the use of our network by Kiwi Farms, a forum website tied to harassment campaigns and direct threats toward individuals. We are aware of some potential customers that have indicated their decision to not subscribe to our products was impacted, at least in part, by the actions or potential actions of certain of our paying and free customers. We may also experience other adverse political, business and reputational consequences with prospective and current customers, employees, suppliers, and others related to the activities of our paying and free customers, especially if such hostile, offensive, or inappropriate use is highly publicized.

Conversely, actions we take in response to the activities of our paying and free customers, up to and including banning them from using our products, may harm our brand and reputation. Following the events in Charlottesville, Virginia, we terminated the account of The Daily Stormer. Similarly, following the events in El Paso, Texas, we terminated the account of 8chan, and following escalating, direct threats towards individuals in September 2022, we blocked access to Kiwi Farms content through our infrastructure. We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our network and products, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this.

Although offering a free plan for certain of our products is an important part of our business strategy, we may not be able to realize all of the expected benefits of this strategy and the costs and other detriments associated with our free plan could outweigh the benefits we receive from our free customers.

We have historically offered a free plan for certain of our products. We believe that this strategy is valuable to us and it is an important part of our overall business strategy. However, to the extent that we do not achieve the expected benefits of this strategy, our business may be adversely affected by the costs and detriments of making certain of our products available on a free basis. While we do not receive any revenue from our free customers, we bear incremental expenses and other liabilities and contingent liabilities, including litigation, as a result of our free customers’ continuing free use of our network and certain of our products. Adverse political, business, and reputational consequences associated with Internet properties we serve that are perceived as hostile, offensive, or inappropriate may also be disproportionately common among our free customers. The vast majority of our customers do not pay for our products. In addition, a substantial majority of our free customers historically have not converted to paying customers and we expect this will continue in the future.

We face intense and increasing competition, which could adversely affect our business, financial condition, and results of operations.

The markets for our network and products are intensely competitive and characterized by rapid changes in technology, customer requirements, industry standards, and frequent introductions of new, and improvements of, existing products. Our broad portfolio of products exposes us to competition from a large number of competitors in a number of different markets, including companies and their product and services offerings in, among others, virtual

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private networks, internal and external firewalls, web security (including web application firewalls and content filtering), distributed denial-of-service (DDoS) prevention, intrusion detection and prevention, application delivery controls, content delivery networks, domain name systems, email security vendors, advanced threat prevention, and wide area network (WAN) technology.

Our competitors provide both on-premises, appliance-based solutions, and cloud-based services that have functionality similar to our network and products. We expect competition to increase as other established and emerging companies and start-ups enter the markets for products and solutions for security, performance, and reliability, in particular with respect to cloud-based solutions, as customer requirements evolve and as new products, services, and technologies, including those that leverage artificial intelligence (AI) and machine learning, are introduced. If we are unable to anticipate or effectively react to these competitive challenges, our competitive position could weaken, and we could experience a decline in revenue or our growth rate that could materially and adversely affect our business and results of operations.

Our potential competitors include large companies with substantial infrastructure, such as global telecommunications services provider partners and public cloud providers. These companies could choose to enter the markets for products and solutions for security, performance, and reliability, including by acquiring existing companies, developing their own internal solutions, or establishing cooperative relationships with businesses that may allow them to offer more comprehensive solutions or to offer solutions for lower prices or to adapt more quickly than us to new technologies and customer needs. As our business continues to grow and we increase our market share for various products and services, these larger companies may increase their focus on us as a competitor and the actions they undertake to compete with our business and products. Additionally, if an increasing portion of web content is housed on another company’s network or portions of the Internet are otherwise privatized, it could reduce the demand for our products and increase competitive pressure on us. These competitive pressures in our markets or our failure to compete effectively may result in price reductions, fewer subscriptions, reduced revenue and gross margin, increased net losses, and loss of market share.

Our current competitors include a number of different types of companies, including:

•on-premises network hardware vendors;

•point solution vendors, which provide cloud-based products and services to address a single use case or challenge, in various categories including cloud security vendors, content delivery network (CDN) vendors, domain name system (DNS) services vendors, email security vendors, and cloud SD-WAN vendors; and

•traditional public cloud vendors.

Many of our existing and potential competitors have or could have substantial competitive advantages including, among others:

•greater name recognition;

•longer operating histories;

•larger customer bases;

•larger sales and marketing budgets and capital resources;

•broader distribution and established relationships with channel partners and customers;

•greater customer support resources;

•greater resources to make acquisitions and enter into strategic partnerships;

•lower labor and research and development costs;

•more mature products and services developed for large customers;

•larger and more mature intellectual property rights portfolios;

•control of significant technologies, standards, or networks, including operating systems, with which our products must interoperate;

•higher or more difficult to obtain security certifications than we possess; and

•substantially greater financial, technical, and other resources.

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In addition, some of our larger competitors have substantially broader and more diverse product and services offerings, which may allow them to leverage existing commercial relationships, incorporate functionality into existing products, sell products and services with which we compete at zero or negative margins, offer fee waivers and reductions or other economic and non-economic concessions, bundle products and solutions, maintain closed technology platforms, or render our products unable to interoperate with such platforms. If they were to engage in predatory competitive practices, it could harm our existing product offerings or prevent us from creating viable products in other segments of the markets in which we participate. If our competitors are able to exploit their advantages or are able to persuade our customers or potential customers that their products are superior to ours, we may not be able to compete effectively and our business, financial condition, and results of operations may be materially affected.

If we do not effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features, we may be unable to add new contracted customers, or increase sales to our existing customers and our business would be adversely affected.

A substantial majority of our revenue in the nine months ended September 30, 2025 was from contracted customers that were acquired through our inside and field sales teams, and we expect our sales teams to continue generating the majority of our revenue for the foreseeable future. As a result, our financial condition and results of operations are dependent to a significant degree on our ability to effectively attract, train, and retain qualified sales personnel, including senior sales leaders, and the ability of our dedicated sales personnel to acquire new contracted customers and expand our relationships with our existing contracted customers. Our sales representatives typically engage in direct interaction with our prospective contracted customers. Increasing our customer base and achieving broader market acceptance of our network and products will depend, to a significant extent, on our ability to expand and further invest in our sales and marketing operations and activities. There is significant competition for sales personnel with the advanced sales skills and technical knowledge we need. We believe that selling subscriptions to our products requires particularly talented sales personnel that understand a very wide array of highly technical topics, including significant portions of global networking, Internet, enterprise and identity security, and application development for both on-premises and cloud requirements. Changes in the senior leadership of our sales team could negatively impact our ability to retain current members of our sales team or attract new talent. In addition, as we continue to develop and sell newer types of products and product features, such as our suite of Zero Trust and network services solutions and our Cloudflare Developer Platform products, we will need our sales personnel to be proficient in selling both these newer products and features and our overall broader suite of products to our existing and potential customers. If we are unable to effectively attract, train, and retain qualified sales personnel, particularly as our lines of products and product features expand, our business, results of operations, and financial condition will be adversely impacted.

Our ability to achieve significant growth in revenue in the future also will depend, in large part, on our success in recruiting, training, and retaining sufficient numbers of these talented sales personnel in both the United States and international markets. In addition, our ability to effectively recruit and retain qualified sales personnel outside the United States is reduced if we do not have a local subsidiary and office in that country or, if we do have such a subsidiary and office, we will experience increased costs in operating in that country.

Furthermore, hiring sales personnel in new countries, or expanding our existing presence in the countries in which we currently operate, requires upfront and ongoing expenditures that we may not recover if the sales personnel fail to achieve full productivity or that may be recovered on a more delayed basis than expected.

As we continue to focus on revenue growth, we are seeking to increase our rate of hiring sales personnel and any delays in making these incremental sales hires could have an adverse impact on our ability to increase revenue, particularly with respect to our sales to contracted customers. In addition, if we fail to effectively train and integrate new hires, it could negatively impact the existing sales and marketing personnel and their productivity, relationships with our customers, our ability to generate a pipeline of new customers, and our ability to increase revenue.

New sales hires require significant training and may take significant time before they achieve full productivity. As a result, our new sales hires and planned sales hires may not become as productive as we would like or as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals. In addition, due to our rapid growth, a large percentage of our sales team is new to our company and inexperienced in selling subscriptions to our products, and therefore these personnel may be less effective than our more seasoned employees. For example, since late 2022, we periodically have experienced a reduction in average productivity

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among our sales personnel, which we believe was due in part to new sales hires not becoming as productive as we expected and exacerbated by worsening or uncertain macroeconomic conditions. While we continue to address productivity and focus on hiring, training, and retaining successful sales personnel, these efforts may take longer than anticipated, which may negatively impact our ability to achieve our targeted revenue growth.

In addition, experienced sales personnel are particularly sought after in our industry and we believe our company's recent growth and increased profile may result in increased efforts by other companies to hire our sales personnel. As a result, we may have to expend significant resources to retain our most productive sales employees. Even with considerable effort, we may be unsuccessful at retaining our experienced sales employees, which would adversely impact our business, results of operations, and financial condition.

We cannot predict whether, or when or to what extent, our sales will increase as we expand our sales force or how long it will take for sales personnel to become productive. If we are unable to hire, train, and retain a sufficient number of effective sales personnel, or the sales personnel we hire are not successful in obtaining new customers or increasing sales to our existing customer base, our business and future growth prospects will be materially and adversely affected.

If we fail to effectively manage our growth, we may be unable to execute our business plan, maintain high-quality levels of customer support, ensure the reliability and security of our network, adequately address competitive challenges, or maintain our corporate culture, and our business, financial condition, and results of operations would be harmed.

We have experienced, and may in the future experience, periods of rapid growth. For example, our headcount grew from 4,160 employees as of September 30, 2024 to 4,838 employees as of September 30, 2025. We also have expanded the locations where we have employees to a number of new locations around the world during the past several years. The number of customers, users, and requests on our network also has increased rapidly in recent years. While we expect to continue to expand our operations, network, and products significantly in the future, both domestically and internationally, our growth may not be sustainable. Our growth has placed, and future growth will continue to place, a significant strain on our management and our administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively, which will require that we continue to improve our administrative, operational, financial, and management systems and controls by, among other things:

•effectively attracting, training, and integrating a large number of new employees, particularly members of our sales, marketing, engineering, and management teams;

•effectively managing a rapidly increasing number of employees in a growing number of countries around the world, particularly in circumstances when employees are working completely remotely;

•ensuring the integrity and security of our network and IT infrastructure throughout the world;

•maintaining our corporate culture, which we believe fosters innovation, teamwork, and an emphasis on customer-focused results and contributes to our cost-effective business model;

•successfully acquiring and integrating companies and assets to improve, expand, and diversify our business and products through strategic acquisitions, investments, and partnerships;

•further improving our key business applications, processes, and IT infrastructure, including our network co-location facilities, to support our current and anticipated business needs;

•enhancing our information and communication systems to ensure that our employees and offices around the world are well coordinated and can effectively communicate with each other and our growing base of channel partners, customers, and users;

•maintaining high levels of customer support; and

•appropriately documenting and testing our IT systems and business processes.

Managing our growth will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to manage our expected growth, the uninterrupted and secure operation of our network and products and key business systems, our corporate culture, our compliance with the rules and regulations applicable to our operations, the quality of our products, and our ability to compete could suffer. Any

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failure to preserve our culture also could further harm our ability to retain and recruit personnel, innovate and create new products, operate effectively, and execute on our business strategy.

Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly results of operations, including our revenue, gross margin, operating margin, profitability, cash flow from operations, deferred revenue, and backlog, may vary significantly in the future and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly results of operations may fluctuate as a result of a variety of factors, many of which are outside of our control, and as a result, may not fully reflect the underlying performance of our business. Fluctuation in quarterly results may negatively impact the trading price of our Class A common stock. Factors that may cause fluctuations in our quarterly results of operations include:

•our ability to attract new paying customers, especially large customers, and, to a lesser extent, convert free customers to paying customers;

•our ability to retain and upgrade paying customers and expand the number of products sold to paying customers, especially our large customers;

•the timing of expenses and recognition of revenue;

•the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure, as well as entry into operating and capital leases and co-location, interconnection, and similar agreements related to the expansion of our network;

•the timing of expenses related to acquisitions;

•any large indemnification payments to our customers or other third parties;

•changes in our pricing policies or those of our competitors;

Cloudflare, Inc. 10-Q