- \n
- First quarter revenue totaled $290.2 million, representing an increase of 37% year-over-year<\/i><\/li>\n
- Delivered GAAP loss from operations of $47.3 million, or 16% of total revenue, and non-GAAP income from operations of $19.4 million, or 7%<\/i>of total revenue<\/i><\/li>\n
- Achieved operating cash flow of $36.4 million, or 13% of total revenue, and free cash flow of $13.9 million, or 5% of total revenue<\/i><\/li>\n<\/ul>\n
SAN FRANCISCO–(BUSINESS WIRE<\/a>)–
\nCloudflare, Inc. (NYSE: NET), the security, performance, and reliability company helping to build a better Internet, today announced financial results for its first quarter ended March 31, 2023.<\/p>\n\n\u201cIn the first quarter, we grew revenue 37% year-over-year to $290.2 million, delivered the third consecutive quarter of record operating profit and margin, and significantly outperformed on free cash flow,\u201d said Matthew Prince, co-founder & CEO of Cloudflare. \u201cOur world-class innovation engine remains laser focused on continuing to build mission-critical products that customers need, and we are committed to making the necessary operational changes to become world-class in sales productivity\u2014both of which create durable competitive advantages.\u201d<\/p>\n
First Quarter Fiscal 2023 Financial Highlights<\/b><\/p>\n
- \n
- Revenue<\/b>: Total revenue of $290.2 million, representing an increase of 37% year-over-year.\n<\/li>\n
- Gross Profit<\/b>: GAAP gross profit was $219.7 million, or 75.7% gross margin, compared to $165.1 million, or 77.8%, in the first quarter of 2022. Non-GAAP gross profit was $225.9 million, or 77.8% gross margin, compared to $166.9 million, or 78.7%, in the first quarter of 2022.\n<\/li>\n
- Operating Income (Loss)<\/b>: GAAP loss from operations was $47.3 million, or 16.3% of total revenue, compared to $40.0 million, or 18.9% of total revenue, in the first quarter of 2022. Non-GAAP income from operations was $19.4 million, or 6.7% of total revenue, compared to $4.9 million, or 2.3% of total revenue, in the first quarter of 2022.\n<\/li>\n
- Net Income (Loss)<\/b>: GAAP net loss was $38.1 million, compared to $41.4 million in the first quarter of 2022. GAAP net loss per basic and diluted share was $0.12, compared to $0.13 in the first quarter of 2022. Non-GAAP net income was $27.2 million, compared to $3.5 million in the first quarter of 2022. Non-GAAP net income per diluted share was $0.08, compared to $0.01 in the first quarter of 2022.\n<\/li>\n
- Cash Flow<\/b>: Net cash flow from operating activities was $36.4 million, compared to negative $35.5 million for the first quarter of 2022. Free cash flow was $13.9 million, or 5% of total revenue, compared to negative $64.4 million, or 30% of total revenue, in the first quarter of 2022.\n<\/li>\n
- Cash, cash equivalents, and available-for-sale securities<\/b> were $1,715.6 million as of March 31, 2023.\n<\/li>\n<\/ul>\n
\nThe section titled “Non-GAAP Financial Information” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.<\/p>\n
Financial Outlook<\/b><\/p>\n
\n\u201cIncreasing macroeconomic uncertainty over the course of the first quarter resulted in a material lengthening of sales cycles and a significant backend-weighting of linearity,\u201d said Thomas Seifert, CFO of Cloudflare. \u201cDespite the continued reacceleration of our new pipeline generation and our sustained high win rates and renewal rates during the first quarter, our guidance assumes these external headwinds will persist through the end of the fiscal year.\u201d<\/p>\n
\nFor the second quarter of fiscal 2023, we expect:<\/p>\n
- \n
- \nTotal revenue of $305.0 to $306.0 million<\/p>\n<\/li>\n
- \nNon-GAAP income from operations of $14.0 to $15.0 million<\/p>\n<\/li>\n
- \nNon-GAAP net income per share of $0.07 to $0.08, utilizing weighted average common shares outstanding of approximately 345 million<\/p>\n<\/li>\n<\/ul>\n
\nFor the full year fiscal 2023, we expect:<\/p>\n
- \n
- \nTotal revenue of $1,280.0 to $1,284.0 million<\/p>\n<\/li>\n
- \nNon-GAAP income from operations of $73.0 to $77.0 million<\/p>\n<\/li>\n
- \nNon-GAAP net income per share of $0.34 to $0.35, utilizing weighted average common shares outstanding of approximately 345 million<\/p>\n<\/li>\n<\/ul>\n
\nThese statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.<\/p>\n
Conference Call Information<\/b><\/p>\n
\nCloudflare will host an investor conference call to discuss its first quarter ended March 31, 2023 earnings results today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). Interested parties can access the call by dialing (877) 400-4517 from the United States or (332) 251-2620 internationally with conference ID 3723782. A live webcast of the conference call will be accessible from the investor relations website at https:\/\/cloudflare.NET<\/a>. A replay will be available approximately two hours after the conclusion of the live event and will remain available for approximately one year.<\/p>\n
Supplemental Financial and Other Information<\/b><\/p>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands, except per share data)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n Three Months Ended
\n<\/b>
March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n 2023<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nRevenue<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n290,175<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n212,167<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCost of revenue(1)(2)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n70,432<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n47,051<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGross profit<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n219,743<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n165,116<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOperating expenses:<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSales and marketing(1)(2)(3)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n137,001<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n100,057<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nResearch and development(1)(3)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n81,539<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n67,054<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGeneral and administrative(1)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n48,475<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n38,029<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal operating expenses<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n267,015<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n205,140<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLoss from operations<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(47,272<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(40,024<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-operating income (expense):<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nInterest income<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n13,487<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,061<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nInterest expense(4)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(2,126<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1,557<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther income (expense), net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(857<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(487<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal non-operating income (expense), net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n10,504<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(983<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLoss before income taxes<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(36,768<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(41,007<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProvision for income taxes<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,314<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n374<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet loss<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n(38,082<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(41,381<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet loss per share attributable to common stockholders, basic and diluted<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n(0.12<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(0.13<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nWeighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n330,389<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n323,334<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
____________<\/i><\/p>\n
\n
\n \n \n(1) Includes stock-based compensation and related employer payroll taxes as follows:<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCost of revenue<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n1,803<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n1,323<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSales and marketing<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n15,868<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n10,379<\/p>\n<\/td>\n<\/tr>\n
\n \n \nResearch and development<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n30,216<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n24,079<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGeneral and administrative<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n13,863<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n6,018<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n61,750<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n41,799<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n \n(2) Includes amortization of acquired intangible assets as follows:<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCost of revenue<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n4,311<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n507<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSales and marketing<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n576<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal amortization of acquired intangible assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n4,887<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n507<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n \n(3) Includes acquisition-related and other expenses as follows:<\/p>\n<\/td>\n<\/tr>\n
\n \n \nResearch and development<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n2,639<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal acquisition-related and other expenses<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n2,639<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n \n(4) Includes amortization of debt issuance costs as follows:<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization of debt issuance costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n1,163<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n1,170<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal amortization of debt issuance costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n1,163<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n1,170<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n CONDENSED CONSOLIDATED BALANCE SHEETS<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands, except par value)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \u00a0<\/td>\n \n March 31,
\n<\/b>
2023<\/b><\/p>\n<\/td>\n\n \n\u00a0<\/p>\n<\/td>\n
\n December 31,
\n<\/b>
2022<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n Assets<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent assets:<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash and cash equivalents<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n256,363<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n204,178<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAvailable-for-sale securities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,459,229<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,445,759<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccounts receivable, net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n179,749<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n148,544<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nContract assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n8,023<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n8,292<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestricted cash short-term<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n10,505<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n10,555<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPrepaid expenses and other current assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n40,531<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n70,556<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal current assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,954,400<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,887,884<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProperty and equipment, net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n298,188<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n286,600<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGoodwill<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n148,047<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n148,047<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAcquired intangible assets, net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n27,596<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n32,483<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOperating lease right-of-use assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n130,908<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n132,360<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred contract acquisition costs, noncurrent<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n98,427<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n93,145<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRestricted cash<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,564<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n471<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther noncurrent assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n8,434<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n6,918<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n2,667,564<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n2,587,908<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Liabilities and Stockholders\u2019 Equity<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCurrent liabilities:<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccounts payable<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n54,563<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n35,607<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccrued expenses and other current liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n69,374<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n66,425<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccrued compensation<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n45,669<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n42,014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOperating lease liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n34,796<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n33,275<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLiability for early exercise of unvested stock options<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,308<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,902<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred revenue<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n238,795<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n218,647<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal current liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n444,505<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n397,870<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nConvertible senior notes, net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,437,355<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,436,192<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOperating lease liabilities, noncurrent<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n108,804<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n107,624<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred revenue, noncurrent<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n13,465<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n11,732<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther noncurrent liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n10,849<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n10,526<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n2,014,978<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,963,944<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Stockholders\u2019 Equity<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nClass A common stock; $0.001 par value; 2,250,000 shares authorized as of March 31, 2023 and December 31, 2022; 289,372 and 286,561 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n289<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n286<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nClass B common stock; $0.001 par value; 315,000 shares authorized as of March 31, 2023 and December 31, 2022; 42,395 and 43,525 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n41<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n42<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdditional paid-in capital<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,536,367<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,475,423<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccumulated deficit<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(877,973<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(839,891<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccumulated other comprehensive loss<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(6,138<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(11,896<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal stockholders\u2019 equity<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n652,586<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n623,964<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nTotal liabilities and stockholders\u2019 equity<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n2,667,564<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n2,587,908<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n Three Months Ended March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n 2023<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Cash Flows From Operating Activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet loss<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n(38,082<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(41,381<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdjustments to reconcile net loss to cash provided by (used in) operating activities:<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDepreciation and amortization expense<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n31,509<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n20,014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-cash operating lease costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n11,061<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n8,610<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization of deferred contract acquisition costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n14,109<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n9,662<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nStock-based compensation expense<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n57,401<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n33,965<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAmortization of debt issuance costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,163<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,170<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet accretion of discounts and amortization of premiums on available-for-sale securities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(8,228<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2,195<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred income taxes<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(120<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n6<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProvision for bad debt<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n1,576<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n968<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(14<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n113<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nChanges in operating assets and liabilities, net of effect of acquisitions:<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccounts receivable, net<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(32,781<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(30,775<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nContract assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n269<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(250<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred contract acquisition costs<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(19,391<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(15,608<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPrepaid expenses and other current assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(8,934<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(6,775<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther noncurrent assets<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(811<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(85<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccounts payable<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n11,634<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,862<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAccrued expenses and other current liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n650<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(25,427<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOperating lease liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(6,908<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(9,455<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nDeferred revenue<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n21,881<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n16,001<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther noncurrent liabilities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n430<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(277<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Net cash provided by (used in) operating activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n 36,414<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n (35,467<\/b><\/p>\n<\/td>\n
\n )<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Cash Flows From Investing Activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPurchases of property and equipment<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(17,541<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(24,481<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCapitalized internal-use software<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,970<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,453<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash paid for acquisitions, net of cash acquired<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,380<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPurchases of available-for-sale securities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(476,206<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(264,541<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nSales of available-for-sale securities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n20,248<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nMaturities of available-for-sale securities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n493,988<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n187,048<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nOther investing activities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n48<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Net cash provided by (used in) investing activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n 15,567<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n (110,805<\/b><\/p>\n<\/td>\n
\n )<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Cash Flows From Financing Activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRepayments of convertible senior notes<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(16,571<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProceeds from the exercise of stock options<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n3,305<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n3,006<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nProceeds from the early exercise of stock options<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n62<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nRepurchases of unvested common stock<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(3<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nPayment of tax withholding obligation on RSU settlement<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(2,058<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(748<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Net cash provided by (used in) financing activities<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n 1,247<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n (14,254<\/b><\/p>\n<\/td>\n
\n )<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet increase (decrease) in cash, cash equivalents, and restricted cash<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n53,228<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(160,526<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nCash, cash equivalents, and restricted cash, beginning of period<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n215,204<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n320,958<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Cash, cash equivalents, and restricted cash, end of period<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n $<\/b><\/p>\n<\/td>\n
\n 268,432<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n $<\/b><\/p>\n<\/td>\n
\n 160,432<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands, except per share amounts)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n Three Months Ended
\n<\/b>
March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2023<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of cost of revenue:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP cost of revenue<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n70,432<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n47,051<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1,803<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1,323<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,311<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(507<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP cost of revenue<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n64,318<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n45,221<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of gross profit:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP gross profit<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n219,743<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n165,116<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,803<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,323<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4,311<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n507<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP gross profit<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n225,857<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n166,946<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP gross margin<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n75.7<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n77.8<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP gross margin<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n77.8<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n78.7<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of operating expenses:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP sales and marketing<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n137,001<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n100,057<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(15,868<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(10,379<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(576<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP sales and marketing<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n120,557<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n89,678<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP research and development<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n81,539<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n67,054<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(30,216<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(24,079<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Acquisition-related and other expenses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(2,639<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP research and development<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n51,323<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n40,336<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP general and administrative<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n48,475<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n38,029<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(13,863<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(6,018<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP general and administrative<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n34,612<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n32,011<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of income (loss) from operations:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP loss from operations<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(47,272<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(40,024<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n61,750<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n41,799<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4,887<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n507<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Acquisition-related and other expenses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2,639<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP income from operations<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n19,365<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n4,921<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP operating margin<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(16.3<\/p>\n<\/td>\n
\n \n)%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(18.9<\/p>\n<\/td>\n
\n \n)%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP operating margin<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n6.7<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2.3<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands, except per share amounts)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n Three Months Ended
\n<\/b>
March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2023<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of interest expense:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP interest expense<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(2,126<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(1,557<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of debt issuance costs<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,163<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,170<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP interest expense<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(963<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(387<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of provision for income taxes:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP provision for income taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n1,314<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n374<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome tax effect of non-GAAP adjustments<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2,537<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,284<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP provision for income taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n3,851<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n1,658<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n Reconciliation of net income (loss) and net income (loss) per share:<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP net loss attributable to common stockholders<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(38,082<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(41,381<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n61,750<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n41,799<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n4,887<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n507<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Acquisition-related and other expenses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n2,639<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of debt issuance costs<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,163<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n1,170<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome tax effect of non-GAAP adjustments<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(2,537<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(1,284<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP net income<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n27,181<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n3,450<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP net loss per share, basic<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(0.12<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(0.13<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nGAAP net loss per share, diluted<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(0.12<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(0.13<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Stock-based compensation and related employer payroll taxes<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.19<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.13<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of acquired intangible assets<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.01<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Acquisition-related and other expenses<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.01<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nAdd: Amortization of debt issuance costs<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nIncome tax effect of non-GAAP adjustment<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(0.01<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nEffect of dilutive shares<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n0.01<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u2014<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNon-GAAP net income per share, diluted(1)(2)<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n0.08<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n0.01<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nWeighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n330,389<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n323,334<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nWeighted-average shares used in computing non-GAAP net income (loss) per share attributable to common stockholders, diluted(2)<\/sup><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n342,005<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n341,589<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
____________<\/i><\/p>\n
\n
\n \n \n(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(2) For the period in which we had non-GAAP net income, diluted non-GAAP net income per share is calculated using weighted-average shares, adjusted for dilutive potential shares that were assumed outstanding during period.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
\n
\n \n CLOUDFLARE, INC.<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n \n(in thousands, except per share amounts)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n(unaudited)<\/p>\n<\/td>\n<\/tr>\n
\n \n \n\u00a0<\/p>\n<\/td>\n
\u00a0<\/td>\n \n Three Months Ended
\n<\/b>
March 31,<\/b><\/p>\n<\/td>\n<\/tr>\n\n \u00a0<\/td>\n \n 2023<\/b><\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n 2022<\/b><\/p>\n<\/td>\n<\/tr>\n
\n \n Free cash flow<\/b><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet cash provided by (used in) operating activities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n36,414<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(35,467<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Purchases of property and equipment<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(17,541<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(24,481<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Capitalized internal-use software<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,970<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(4,453<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nFree cash flow<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n13,903<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(64,401<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet cash provided by (used) in investing activities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n15,567<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(110,805<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet cash provided by (used in) financing activities<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n$<\/p>\n<\/td>\n
\n \n1,247<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n$<\/p>\n<\/td>\n
\n \n(14,254<\/p>\n<\/td>\n
\n \n)<\/p>\n<\/td>\n<\/tr>\n
\n \n \nNet cash provided by (used in) operating activities (percentage of revenue)<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n13<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(17<\/p>\n<\/td>\n
\n \n)%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Purchases of property and equipment (percentage of revenue)<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(6)<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(11<\/p>\n<\/td>\n
\n \n)%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nLess: Capitalized internal-use software (percentage of revenue)<\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n(2)<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(2)<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n<\/tr>\n
\n \n \nFree cash flow margin(1)<\/sup><\/p>\n<\/td>\n
\u00a0<\/td>\n \n \n\u00a0<\/p>\n<\/td>\n
\n \n5<\/p>\n<\/td>\n
\n \n%<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n\u00a0<\/p>\n<\/td>\n
\n \n(30<\/p>\n<\/td>\n
\n \n)%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
____________<\/i><\/p>\n
\n
\n \n \n(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n
Explanation of Non-GAAP Financial Measures<\/b><\/p>\n
\nIn 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 (used in) 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 above 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.<\/p>\n
Expenses Excluded from Non-GAAP Measures. <\/b>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 on the price of our 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 and include third-party transaction costs and compensation expense for key acquired personnel. We exclude amortization of issuance costs, which is a non-cash expense, from certain of our non-GAAP financial measures because such expenses have no direct correlation to the operation of our business.<\/p>\n
Non-GAAP Gross Profit and Non-GAAP Gross Margin. <\/b>We define non-GAAP gross profit and non-GAAP gross margin as U.S. GAAP gross profit and U.S. GAAP gross margin, respectively, excluding stock-based compensation and related employer payroll taxes and amortization of acquired intangible assets.<\/p>\n
Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin<\/b>. We define non-GAAP income (loss) 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 and related employer payroll taxes, amortization of acquired intangible assets, and acquisition-related and other expenses.<\/p>\n
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share, Diluted<\/b>. We define non-GAAP net income (loss) as GAAP net income (loss) adjusted for stock-based compensation and related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, amortization of issuance costs, loss on extinguishment of debt, and a non-GAAP provision for (benefit from) income taxes. Generally, the difference between our GAAP and non-GAAP income tax expense (benefit) is primarily due to adjustments in stock-based compensation and related employer payroll taxes, amortization of acquired intangibles associated with business combinations, acquisition-related and other expenses, and amortization of issuance costs. We define non-GAAP net loss per share, diluted, as non-GAAP net loss divided by the weighted-average common shares outstanding. Calculation of non-GAAP net loss per share, diluted excludes all potentially dilutive securities as their effect is antidilutive. We define non-GAAP net income per share, diluted, as non-GAAP net income divided by the weighted-average common shares outstanding, adjusted for dilutive potential shares that were assumed outstanding during period. Currently, potential dilutive effect mainly consists of employee equity incentive plans and convertible senior notes. We believe that excluding these items from non-GAAP net income (loss) per share, diluted, provides management and investors with greater visibility into the underlying performance of our core business operating results.<\/p>\n
Free Cash Flow and Free Cash Flow Margin<\/b>. Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) 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 (or consumed) 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.<\/p>\n
<\/p>\n
View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230427005383\/en\/<\/a><\/span><\/p>\n
Investor Relations Information
\n<\/b>
Phil Winslow
\n
ir@cloudflare.com<\/a><\/p>\nPress Contact Information
\n<\/b>
Daniella Vallurupalli
\n
press@cloudflare.com
\n<\/a>
Source: Cloudflare, Inc.<\/p>\nKEYWORDS:<\/b> California United States North America<\/p>\n
INDUSTRY KEYWORDS:<\/b> Technology Internet Security<\/p>\n
- Gross Profit<\/b>: GAAP gross profit was $219.7 million, or 75.7% gross margin, compared to $165.1 million, or 77.8%, in the first quarter of 2022. Non-GAAP gross profit was $225.9 million, or 77.8% gross margin, compared to $166.9 million, or 78.7%, in the first quarter of 2022.\n<\/li>\n
- Delivered GAAP loss from operations of $47.3 million, or 16% of total revenue, and non-GAAP income from operations of $19.4 million, or 7%<\/i>of total revenue<\/i><\/li>\n
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<\/td>\n<\/tr>\n