What happened with NET today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Cloudflare helps businesses keep websites, applications and corporate networks secure, fast and available. Customers use its global network to block threats, deliver Internet traffic and control employees’ access to workplace systems. Developers also use Cloudflare Workers to run application code, Workers AI to run AI models and R2 Object Storage to store data on the same network.
Subscriptions generate most revenue. Enterprise customers negotiate contracts that combine access to selected services with usage charges in some cases; smaller customers can buy Pro or Business plans online. Most revenue comes from customers acquired by Cloudflare’s own sales teams. Customers can start with one product and add others, so the business depends on renewals, upgrades and increased usage. Free users generate no revenue and have no obligation to start paying. Paying customers are diversified, without a dominant single customer.
Cloudflare relies on Internet service providers and third-party facilities to host its equipment and connect its network; many important hosting agreements are with one company. Its operations in China depend heavily on JD Cloud, and customers using that network presence must comply with Chinese Internet and content laws. Cross-border data-transfer rules constrain how Cloudflare handles customer information, while sanctions and export controls restrict whom it can serve.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Akamai competes with Cloudflare for customers paying global edge networks to deliver content, protect applications and run distributed computing workloads. Watch Akamai’s cloud infrastructure services, where it directs most of its strategic investment, for competition with Cloudflare’s compute and storage offerings.
Fastly competes with Cloudflare for customers paying to deliver, accelerate and protect websites and APIs, and to run applications at the network edge. Its Network Services and Security revenue offer separate views of the delivery and protection businesses that overlap with Cloudflare.
Zscaler competes with Cloudflare for enterprise subscriptions that replace traditional network security with cloud-delivered access and protection, known as Zero Trust and SASE. Watch adoption of its Zero Trust Exchange, which checks identities and devices before connecting users to authorized applications rather than the corporate network.
F5 competes with Cloudflare for customers paying to deliver applications, protect applications and APIs, and connect multiple clouds through subscription services. Its Distributed Cloud Services are the closest offering to watch for customers choosing cloud-delivered security and multicloud networking.
Netskope, Inc.’s Netskope One competes with Cloudflare’s SASE platform for enterprises paying for cloud-delivered network security and secure access to applications.
Palo Alto Networks competes with Cloudflare through Prisma Access and SASE offerings for enterprises paying to control application access through Zero Trust and consolidate network security with fewer vendors.
Fortinet competes with Cloudflare for enterprise spending on network security and application protection, including cloud-delivered networking and security through SASE. Watch its unified SASE offering within Security Fabric, which combines networking and security in one portfolio.
Radware competes with Cloudflare for customers paying to stop traffic-flooding attacks, filter harmful web requests and manage bots—DDoS protection, web application firewalls and bot management. Its cloud security subscriptions within the Core Business are worth watching alongside its on-premises protection products.
NetScout competes with Cloudflare for enterprise and service-provider spending on protection against traffic-flooding attacks through its Arbor DDoS products. Watch service providers reselling Arbor protection as a managed service to enterprises, another route to the customers Cloudflare serves.
A10 Networks competes with Cloudflare for customers paying to keep enterprise applications available and secure through traffic management, application protection and DDoS defenses. Its application and API security offerings are a concrete area to watch for overlap with Cloudflare’s application services.
Amazon’s AWS competes with Cloudflare for customers paying to protect web applications, deliver content, run code and store data. AWS, rather than Amazon’s retail businesses, is the segment to watch as Cloudflare’s Workers and storage offerings compete for developer workloads.
Microsoft Azure competes with Cloudflare for customers paying to deliver content, secure web applications, and run compute and storage workloads. Microsoft’s stated datacenter scale advantages in computing and storage costs matter as Cloudflare competes for developers using Workers and its storage services.
Alphabet’s Google Cloud competes with Cloudflare for customers paying to deliver content, filter harmful web requests, and run cloud compute and storage workloads. Google Cloud is reported separately from Google Services, making it the relevant segment to follow for this competition.
Fastly, Inc. earningsFSLY
Fastly’s Network Services and Security revenue will show how customer spending is changing on website and API delivery and protection, services where Fastly competes with Cloudflare.
Read Fastly’s Network Services and Security revenue separately. Growth in both would show that customers are still paying for delivery and protection services that overlap with Cloudflare’s, so Cloudflare still has to win those subscriptions. Weakness in both could signal softer spending in the shared markets, but would not prove that Cloudflare gained share. The conclusion is whether demand in these overlapping markets is holding up or cooling, not how Cloudflare’s own sales performed.
Cloudflare, Inc. earningsThis company
Cloudflare grows subscription revenue through new customers and expansion among existing ones, and this report will show whether that growth is still outpacing the cost of running its network.
Read paying-customer growth alongside dollar-based net retention, which tracks subscription revenue from the prior-year customer group after expansions, downgrades, and customer losses. Then compare both with gross margin: stronger customer growth and retention with a steady margin would show that new sales and existing-customer expansion are lifting revenue without network-service costs taking a greater share; weakening retention and margin would show that customer additions are not enough to offset weaker expansion or rising service costs. Together, these figures show whether Cloudflare’s subscription growth has a solid customer base and is keeping service costs in check.
