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Cloudflare (NET) Q3 2026 Earnings Report

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NET Q3 2026 EPS Results

Actual EPS
$0.38
Consensus EPS
$0.34
Beat/Miss
Beat by +$0.04
One Year Ago EPS
$0.27

NET Q3 2026 Revenue Results

Actual Revenue
$782.51M
Expected Revenue
$737.16M
Beat/Miss
Beat by +$45.35M
YoY Revenue Growth
+39.23%

Earnings Announcement Details

Quarter
Q3 2026
Date
11/05/2026
Time
After Close
Conference Call
Thursday, November 5, 2026
NET Upcoming Earnings

Cloudflare's next earnings date is estimated for February 11, 2027, based on past reporting schedules.

Q3 2026 Earnings Call Audio

NET Q3 2026 Earnings Call
0:00 / 0:00

Q3 2026 Earnings Slide Deck

Q3 2026 Earnings Call Summary

Q3 2026
Earnings Call Date:Nov 05, 2026|% Change Since:30.26%|
Earnings Call Sentiment|Positive

The call was strongly positive. Management reported record revenue growth, profitability, customer additions, developer adoption, enterprise expansion, retention and operating leverage, while raising expectations for near-term profitability. The main challenges were gross-margin and free-cash-flow-margin declines, a difficult cybersecurity environment, organizational restructuring and uncertainty around the timing of significant Act 4 monetization. The highlights significantly outweighed the lowlights.

Company Guidance

For the fourth quarter, Cloudflare expects revenue in the range of $845 million-$846 million, representing an increase of 38% year-over-year, operating income in the range of $156 million-$157 million, an effective tax rate of 20%, diluted net income per share of $0.43, assuming approximately 379 million shares outstanding, and GAAP profitability in the fourth quarter, significantly earlier as compared to the outlook from this year's Investor Day to reach this milestone at the latest by 2028. For the full year 2026, it expects revenue in the range of $2.963 billion–$2.964 billion, representing an increase of 37% year-over-year, operating income in the range of $462 million-$463 million, an effective tax rate of 20%, diluted net income per share of $1.35, and approximately 376 million shares outstanding; network CapEx is expected to be 14%-15% of revenue for full year 2026.

  • Record Quarterly Revenue and ProfitabilityThird-quarter revenue was $782 million, or $782.5 million according to the CFO, up 39% year-over-year and described as the fastest revenue growth in nearly four years. Operating income was $137.1 million, up 60% year-over-year, with a record operating margin of 17.5%, up 220 basis points year-over-year and 370 basis points sequentially.
  • Strong Free Cash Flow and Balance SheetCloudflare generated $82.1 million of free cash flow in the quarter and ended the period with $5.1 billion in cash equivalents and available-for-sale securities.
  • Large-Customer Growth and RetentionThe company ended the quarter with approximately 5,000 large customers, added 308 large customers during the quarter and nearly 1,000 year-over-year, both records. Customers paying more than $100,000 annually increased 25% year-over-year, and revenue from large customers represented 75% of total revenue versus 73% in the prior-year quarter.
  • Improved Net RetentionDollar-based net retention increased to 122%, up from 120% in the prior quarter and 119% in the same quarter last year. Management said expansion was broad-based across the portfolio, particularly among large customers and pool of funds customers.
  • Record Sales Productivity and BookingsSales productivity reached a new record and increased year-over-year for the 11th consecutive quarter. The company reported its highest ACV growth ever, its highest quota attainment in more than five years, and new-customer bookings that exceeded the prior quarter's five-year high.
  • Record Paying-Customer AdditionsCloudflare added more than 158,000 paying customers in the quarter, representing 110% year-over-year growth and nearly double the previous record of more than 80,000 additions in the second quarter.
  • Rapid Developer-Platform AdoptionThe platform surpassed 10 million active developers, more than doubling the number at the start of 2026 and increasing from 7 million to 10 million in one quarter. Management said developer adoption is translating into new paying customers, greater Workers consumption, faster pool of funds usage and earlier renewals.
  • Workers and Agentic Workload MomentumRevenue growth was driven in particular by rapid growth in the Workers Developer Platform and agentic workloads across the network. Management said Workers is increasingly included in pool of funds deals and is being adopted by both small and large customers across industries.
  • Broad-Based Geographic and Vertical GrowthU.S. revenue represented 52% of total revenue and increased 44% year-over-year. EMEA represented 26% of revenue and increased 32%, while APAC represented 14% and increased 32%. Management described demand as diversified across financial services, government, manufacturing, healthcare, e-commerce and AI companies.
  • Strong Remaining Performance ObligationsRemaining performance obligations were $2.877 billion, up 5% sequentially and 34% year-over-year. Current RPO, representing 65% of total RPO, increased 37% year-over-year.
  • Operating-Leverage ImprovementOperating expenses as a percentage of revenue decreased 510 basis points year-over-year to 55%. Sales and marketing declined to 35% of revenue from 36%, R&D declined to 13% from 15%, and G&A declined to 7% from 10%.
  • Act 4 Monetization BeganCloudflare recorded its first revenue from Act 4 products in the third quarter. Management said the company is already recognizing revenue from efforts to make agentic internet activity more efficient and expects additional business models such as micropayments to develop.
  • Major Enterprise and Government Contract WinsThe company highlighted several expansions: an $11 million one-year Workers Developer Platform contract with a rapidly growing AI company; a $15.5 million 13-month Magic Transit contract with a Fortune 100 cloud infrastructure provider; a five-year $10.3 million SASE contract with a cabinet-level U.S. federal department; a three-year pool of funds agreement with a neobank and fintech company averaging more than $3 million in annual contract value; a 39-month $9.5 million application services and Workers contract with a technology company; a more than $7 million three-year Zero Trust and Workers contract with a global consulting firm; and an $8.1 million five-year application services and Workers contract with a European media company.
  • Customer Performance ImprovementsA neobank customer moved its entire workforce to Cloudflare in a single quarter, after which performance tickets per user dropped 74%. The consulting customer is consolidating vendors onto Cloudflare, and the media customer selected Cloudflare Bot Management to identify modern AI crawlers and support future Pay Per Crawl and pay-per-use monetization.
  • Network Expansion and Competitive PositioningBased on third-party data, Cloudflare added approximately 5% of the entire web to its network between July 1 and the call date, which management said was more than the total market of all reverse-proxy competitors combined added in a little over a quarter.
  • Security Demand and Zero Trust MomentumManagement said security is playing a heavier role in net-retention expansion and that Cloudflare's win rates and the number of deals it enters have improved. Customers are increasingly buying the broader Cloudflare platform rather than individual Zero Trust, WAF, DDoS or developer-platform products.
  • Variable Revenue and Pool of Funds StrengthVariable revenue was the primary contributor to the quarter's upside. Strength came from many customers joining pool of funds arrangements or consuming commitments faster than expected and renewing earlier with larger commitments.
  • Fourth-Quarter and Full-Year GuidanceFor the fourth quarter, Cloudflare expects revenue of $845 million-$846 million, representing 38% year-over-year growth, operating income of $156 million-$157 million and diluted net income per share of $0.43. For full-year 2026, it expects revenue of $2.963 billion-$2.964 billion, representing 37% year-over-year growth, operating income of $462 million-$463 million and diluted net income per share of $1.35.
  • Earlier GAAP Profitability TargetManagement expects to achieve GAAP profitability in the fourth quarter, significantly earlier than the Investor Day outlook that called for reaching the milestone by 2028 at the latest.
  • Workers Unit-Economics ProgressAlthough Workers has slightly lower gross margins and significantly lower cost to book than some products, management said engineering improvements in compute efficiency are supporting continued gross-margin and unit-economic improvement. The company said it was far ahead of its previous expectation to exit the year with Rule of 40 momentum moving toward Rule of 50%.
  • Capital Investment and Liquidity ActionsNetwork CapEx represented 15% of revenue in the quarter, and the company continues to expect network CapEx of 14%-15% of revenue for full-year 2026. During the quarter, Cloudflare issued $2.5 billion of convertible senior notes and repaid $1.3 billion of convertible senior notes.
  • Go-to-Market Leadership TransitionChristian Smith was appointed President of Revenue to succeed retiring Mark Anderson. Management said Mark will remain as an advisor for at least the next year, while Christian will focus on go-to-market execution, enterprise momentum, partner ecosystems and customer time to value.
  • AI-Enabled Organizational EfficiencyManagement said the organizational restructuring is shifting headcount toward builders and sellers while using AI to improve measurement and administrative work. As an example, an internal agent now prepares investor materials and earnings-supporting data for less than a couple hundred dollars in token costs, with higher quality, more accuracy and fewer errors, according to management.

NET Earnings History

NET earnings history
Report DateFiscal QuarterForecast / EPSLast Year's EPSEPS YoY ChangePress Release
Feb 11, 20272026 (Q4)0.43-0.28――
Nov 05, 20262026 (Q3)0.340.380.2740.74% (+0.11)
Aug 06, 20262026 (Q2)0.270.290.2138.10% (+0.08)
May 07, 20262026 (Q1)0.230.250.1656.25% (+0.09)
Feb 10, 20262025 (Q4)0.270.280.1947.37% (+0.09)
Oct 30, 20252025 (Q3)0.230.270.235.00% (+0.07)
Jul 31, 20252025 (Q2)0.180.210.25.00% (+0.01)
May 08, 20252025 (Q1)0.160.160.160.00% (+0.00)
Feb 06, 20252024 (Q4)0.180.190.1526.67% (+0.04)
Nov 07, 20242024 (Q3)0.180.200.1625.00% (+0.04)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat Missed