Cloudflare Revenue Rises 39% in Third Quarter, Fastest Growth in Nearly 4 Years
Key Facts
Cloudflare said third-quarter 2026 revenue rose 39% year over year to $782.5 million, the fastest revenue growth in nearly 4 years, according to the company’s statement. CEO Matthew Prince said the quarter was the best in the company’s history and that annualized revenue exceeded $3 billion. Results topped analysts’ estimates, with expected revenue at $736.8 million, according to Investing.com. The company also reported adjusted earnings of $0.38 per share, compared with expectations of $0.34 and $0.27 in the same period last year. After the results were announced, NET shares rose more than 17% in extended trading on Thursday, according to Investing.com.
Growth extended to current remaining performance obligations, which rose 37% year over year in the third quarter, an indicator of revenue tied to contracted business. Revenue had reached $696.1 million in the second quarter of 2026, up 36% year over year, according to the prior earnings statement filed with the U.S. Securities and Exchange Commission. Annual revenue growth therefore accelerated from 36% to 39% between the two quarters. The company had forecast third-quarter revenue of between $736 million and $737 million and non-GAAP diluted earnings of $0.34 per share. Actual revenue came in above that range, while adjusted earnings per share also exceeded the forecast in the prior quarter’s guidance.
On a GAAP basis, gross profit was $557.2 million, but its margin fell to 71.2% from 74.0% in the third quarter of 2025. The operating loss widened to $67.9 million, compared with $37.5 million a year earlier, and the operating loss as a share of revenue rose to 8.7% from 6.7%. By contrast, non-GAAP operating income was $137.1 million, versus $85.9 million in the same period, and its share of revenue rose to 17.5% from 15.3%. The GAAP net loss was $34.1 million, after a loss of $1.3 million in the third quarter of 2025. Non-GAAP net income increased to $143.7 million from $102.6 million.
Free cash flow was $82.1 million in the third quarter, compared with $75.0 million a year earlier. Its margin on revenue, however, declined to 10% from 13%, despite the increase in free cash flow. The figures put revenue growth alongside mixed profitability indicators: operating income and net income improved on non-GAAP measures, while operating and net losses widened under GAAP. NET closed at $266.58 on November 4, according to EL7 data. Investing.com reported that the stock rose more than 17% in extended trading on November 5 following the results, a move separate from the closing price recorded the previous day.
For the following period, Cloudflare forecast fourth-quarter 2026 revenue of between $845 million and $846 million and non-GAAP diluted earnings of $0.43 per share, according to its statement. The revenue outlook was above analysts’ average estimate of $798.2 million, while the adjusted earnings-per-share forecast topped an estimate of $0.38, according to Investing.com. For the full 2026 fiscal year, the company forecast revenue of between $2.963 billion and $2.964 billion and adjusted earnings of $1.35 per share. Cloudflare had announced before the results that it would release them after the U.S. market close on November 5, with an investor conference call the same day at 2:00 p.m. Pacific time. The announcement followed a quarter the company said put annualized revenue above $3 billion, alongside growth in current remaining performance obligations.