Highlights

  • Cloudflare shares were trading at $325.73 on October 23, 2026, up 7.29%.
  • Second-quarter revenue rose 36% year over year to $696.1 million, from $512.3 million a year earlier.
  • Net loss widened to $170.0 million, or $0.48 per share, from $50.4 million a year earlier.
  • The quarter included $150.7 million of restructuring and other charges tied to a plan that reduced approximately 20% of the company’s workforce.

Cloudflare (NYSE: NET) shares were trading at USD 325.73 on October 23, 2026, up 7.29%. The cloud services provider grew revenue sharply in its second quarter, reported on August 6, while absorbing the bulk of the costs from a previously announced restructuring tied to its shift toward what the company calls an agentic AI-first operating model.

Incorporated in Delaware in July 2009 and headquartered in San Francisco, California, Cloudflare delivers security, performance and reliability services across a global network that functions as a unified control plane for businesses operating on-premises, in hybrid environments, in the cloud, or on software-as-a-service applications. The results discussed here cover the three months ended June 30, 2026.

Revenue Growth Accelerates While a Large Restructuring Charge Widens the Loss

Total revenue for the second quarter was $696.1 million, up 36% from $512.3 million a year earlier, continuing a multi-year pattern of accelerating growth. Gross profit rose to $499.5 million from $383.6 million. However, total operating expenses climbed to $705.2 million from $450.9 million, driven in large part by $150.7 million of restructuring and other charges recorded in the quarter, compared with none in the prior-year period. As a result, loss from operations widened to $205.7 million from $67.3 million, and net loss widened to $170.0 million, or $0.48 per share, from $50.4 million, or $0.15 per share, a year earlier. Interest income of $39.9 million, up from $25.4 million, partially offset the operating loss.

For the first six months of 2026, revenue totaled $1,335.8 million, up from $991.4 million in the same period of 2025.

Restructuring Tied to a Strategic Shift Toward Agentic AI

On May 7, 2026, Cloudflare announced a plan designed to further accelerate its evolution toward an agentic AI-first operating model, reducing approximately 20% of its workforce. The company estimated total restructuring charges under the plan at up to $165 million, consisting of $125 million in cash severance and employee benefits, $35 million in stock-based compensation, and $5 million in other costs. Cloudflare said it recognized the majority of these charges during the second quarter and expected to recognize the remaining charges in the third quarter of 2026 as it substantially completes the plan. As of June 30, 2026, the liability associated with the plan was mostly reflected in accrued compensation on the company’s balance sheet.

Contracted Revenue Continues to Build

As of June 30, 2026, the aggregate transaction price allocated to remaining performance obligations was $2,732.0 million, with the company expecting to recognize 64% of that amount as revenue over the following 12 months and the remainder thereafter. Cloudflare continues to finance its operations primarily through cash on hand, cash flow from operations, and its outstanding 0% Convertible Senior Notes due 2026 and 2030, supplemented by a $400 million revolving credit facility entered into in May 2024. The company said it believes its existing cash, available-for-sale securities, and available borrowing capacity will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months.

Management has said the company continues to monitor macroeconomic conditions, including tariffs and geopolitical tensions, which it believes could continue to affect customer purchasing behavior, sales cycles and churn through 2026.