NETHIGH SIGNALFINANCIAL10-K

Cloudflare experienced massive balance sheet expansion with cash surging 539% and both assets and liabilities roughly doubling, while operating losses widened despite strong revenue growth.

The dramatic increase in cash and current liabilities suggests a major financing event or acquisition that significantly expanded the company's financial footprint. While revenue growth of 30% and operating cash flow improvement of 59% demonstrate strong underlying business momentum, the widening operating losses amid this expansion warrant close monitoring of capital allocation efficiency.

Comparing 2026-02-26 vs 2025-02-20View on EDGAR →
FINANCIAL ANALYSIS

Cloudflare underwent substantial balance sheet transformation with total assets growing 83% to $6.0B and liabilities doubling to $4.6B, driven by a massive 539% cash increase to $943M suggesting major capital raising or M&A activity. Despite strong top-line growth of 30% and operating cash flow improvement of 59%, operating losses deepened by 34% while capital expenditures increased 71%, indicating significant investment in growth infrastructure. The overall picture suggests an aggressive expansion phase that has strengthened the balance sheet but temporarily pressured profitability metrics.

FINANCIAL STATEMENT CHANGES
Cash & Equivalents
Balance Sheet
+538.9%
$147.7M→$943.5M

Cash position surged 538.9% — strong cash generation or capital raise providing significant financial cushion.

Current Liabilities
Balance Sheet
+196.2%
$793.7M→$2.4B

Current liabilities surged 196.2% — significant near-term obligations; verify ability to meet short-term debt.

Current Assets
Balance Sheet
+104.7%
$2.3B→$4.6B

Current assets grew 104.7% — improving short-term liquidity or inventory/receivables build.

Total Liabilities
Balance Sheet
+103%
$2.3B→$4.6B

Liabilities grew 103% — significant increase in debt or obligations, assess impact on financial flexibility.

Total Assets
Balance Sheet
+82.9%
$3.3B→$6.0B

Asset base grew 82.9% — expansion through organic growth, acquisitions, or capital deployment.

Capital Expenditure
Cash Flow
+70.6%
$185.0M→$315.6M

Capital expenditure jumped 70.6% — major investment cycle underway; assess returns on deployment.

Operating Cash Flow
Cash Flow
+58.5%
$380.4M→$603.1M

Operating cash flow surged 58.5% — exceptional cash generation, highest quality earnings signal.

Stockholders Equity
Balance Sheet
+39.5%
$1.0B→$1.5B

Equity base grew 39.5% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Operating Income
P&L
-33.9%
-$154.8M→-$207.2M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Revenue
P&L
+29.8%
$1.7B→$2.2B

Revenue growing 29.8% — solid top-line momentum, watch margins for quality of growth.

LANGUAGE CHANGES
NEW — 2026-02-26
PRIOR — 2025-02-20
ADDED
As of February 12, 2026, 317,576,096 shares of the registrant's Class A common stock were outstanding and 34,404,202 shares of the registrant's Class B common stock were outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 76 Item 7A.
Conflicts and 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.
Our business depends on our ability to retain and upgrade paying customers, expand the number of products we sell to paying customers, and, for certain of our products, expand our paying customers' usage of such products, and, to a lesser extent, convert free customers to paying customers, and any decline in renewals, upgrades, expansions, usage, or conversions could adversely affect our future results of operations.
Our primary application security product offerings include: Web Application Firewall (WAF) : Protects a customer s Internet properties from common vulnerabilities like SQL injection attacks, cross-site scripting, and cross-site forgery requests, with no changes to the customer s existing infrastructure, and also provides the ability to configure thresholds, define responses, and apply throttling rules across web applications and API endpoints.
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REMOVED
As of February 6, 2025, 308,320,930 shares of the registrant's Class A common stock were outstanding and 36,753,779 shares of the registrant's Class B common stock were outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 75 Item 7A.
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.
This suite of products also includes analytics products to provide a customer with the ability to build customized analytics to provide insights and intelligence to further protect and accelerate their Internet properties, such as monitoring threats, searching for specific search engine crawlers, understanding DNS query traffic, and analyzing real time data traffic.
Our primary website and application security product offerings include: Web Application Firewall (WAF) : Protects a customer s Internet properties from common vulnerabilities like SQL injection attacks, cross-site scripting, and cross-site forgery requests, with no changes to the customer s existing infrastructure.
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