# Cloudflare (NET) Q2 2026 earnings

Results filed 2026-08-06 for the quarter ended 2026-06-30. Source page: https://earnings.opennash.com/companies/net/2026-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1477333/000147733326000053/0001477333-26-000053-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

Cloudflare reported second quarter revenue of $696.1 million, up 36% year-over-year, with a GAAP loss from operations of $205.7 million and non-GAAP income from operations of $96.1 million.

Cloudflare's second-quarter revenue was $696.1 million, up 36% from a year ago. Current RPO, a measure of contracted future revenue, grew 35%. Non-GAAP income from operations was $96.1 million, or 13.8% of revenue. The GAAP loss from operations widened to $205.7 million, mainly because of $150.7 million of restructuring and other charges. Free cash flow was $56.4 million, or 8% of revenue, and the company held $4,162.8 million of cash and securities.
Management expects third-quarter revenue of $736.0 to $737.0 million and full-year revenue of $2,864.0 to $2,870.0 million. Non-GAAP income from operations is guided to $443.0 to $445.0 million for the year. The main tension is margins: non-GAAP gross margin fell to 73.1% from 76.3% a year ago, and non-GAAP operating margin was 13.8% against 14.1%. That leaves the company betting on an AI-first reorganization and agentic-internet demand to pay off.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Total revenue | $696.1 million | up 36% year-over-year |  |
| GAAP net loss | $170.0 million | compared to $50.4 million in the second quarter of 2025 | GAAP |
| GAAP net loss per basic and diluted share | $0.48 | compared to $0.15 in the second quarter of 2025 | GAAP |
| Non-GAAP net income per diluted share | $0.29 | compared to $0.21 in the second quarter of 2025 | non-GAAP |
| GAAP gross margin | 71.8% | compared to 74.9% in the second quarter of 2025 | GAAP |
| Non-GAAP gross margin | 73.1% | compared to 76.3% in the second quarter of 2025 | non-GAAP |
| GAAP loss from operations | $205.7 million | compared to $67.3 million in the second quarter of 2025 | GAAP |
| Non-GAAP income from operations | $96.1 million | compared to $72.3 million in the second quarter of 2025 | non-GAAP |
| Non-GAAP operating margin | 13.8% | compared to 14.1% in the second quarter of 2025 | non-GAAP |
| Net cash from operating activities | $117.6 million | compared to $99.8 million for the second quarter of 2025 | GAAP |
| Free cash flow | $56.4 million | compared to $33.3 million in the second quarter of 2025 | non-GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| Current RPO year-over-year growth | 35% |  |
| Cash, cash equivalents, and available-for-sale securities | $4,162.8 million |  |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Total revenue | third quarter of fiscal 2026 | $736.0 to $737.0 million |
| Non-GAAP income from operations | third quarter of fiscal 2026 | $129.0 to $130.0 million |
| Non-GAAP net income per share | third quarter of fiscal 2026 | $0.34 |
| Total revenue | full year fiscal 2026 | $2,864.0 to $2,870.0 million |
| Non-GAAP income from operations | full year fiscal 2026 | $443.0 to $445.0 million |
| Non-GAAP net income per share | full year fiscal 2026 | $1.25 to $1.26 |

## Key takeaways

1. **Revenue growth accelerated to 36%** Revenue reached $696.1 million, up 36% year-over-year, compared with $512.3 million in revenue a year earlier. Sequentially, revenue rose from $639.8 million in the first quarter of 2026.
2. **Restructuring drove the wider GAAP loss** GAAP loss from operations was $205.7 million, including $150.7 million of restructuring and other charges tied to a plan to move to an agentic AI-first operating model. Non-GAAP income from operations was $96.1 million.
3. **Gross margin continues to compress** Non-GAAP gross margin was 73.1%, compared to 76.3% a year ago, and GAAP gross margin was 71.8% versus 74.9%. Cost of revenue grew faster than revenue.
4. **Free cash flow improved to 8% of revenue** Free cash flow was $56.4 million, up from $33.3 million a year ago, as purchases of property and equipment fell to $49,961 thousand from $59,897 thousand.
5. **Guidance implies steady revenue growth ahead** Management guided third-quarter revenue to $736.0 to $737.0 million and full-year revenue to $2,864.0 to $2,870.0 million. Full-year non-GAAP income from operations is expected at $443.0 to $445.0 million.

## Questions

**What were Cloudflare's second-quarter 2026 revenue and growth?** Revenue was $696.1 million, up 36% year-over-year. Current RPO grew 35% year-over-year.
**Was Cloudflare profitable in the second quarter?** On a GAAP basis, no: it reported a net loss of $170.0 million, or $0.48 per share, including $150.7 million of restructuring and other charges. On a non-GAAP basis, it earned $107.8 million, or $0.29 per diluted share.
**What is Cloudflare's guidance for the third quarter?** Cloudflare expects third-quarter revenue of $736.0 to $737.0 million, non-GAAP income from operations of $129.0 to $130.0 million, and non-GAAP net income per share of $0.34.
**What is Cloudflare's full-year 2026 outlook?** It expects revenue of $2,864.0 to $2,870.0 million, non-GAAP income from operations of $443.0 to $445.0 million, and non-GAAP net income per share of $1.25 to $1.26.
**How did margins and cash flow trend?** Non-GAAP gross margin fell to 73.1% from 76.3% a year ago, and non-GAAP operating margin was 13.8% versus 14.1%. Free cash flow rose to $56.4 million, or 8% of revenue, from $33.3 million, or 6%.

## Slides and investor documents

- [Earnings Supplemental](https://cloudflare.net/files/doc_financials/2026/q2/Q2-26-Supplemental-Financial-Information.pdf) (Slide deck)
- [Transcript](https://cloudflare.net/files/doc_financials/2026/q2/NET-US-CORRECTED-TRANSCRIPT-Cloudflare-IncNETUS-Q2-2026-Earnings-Call-6August2026-500-ET-PM-07-08-2026-2026-08-07-0.pdf) (Company's official transcript)
- [Earnings Webcast](https://events.q4inc.com/attendee/903092946) (Webcast replay)
- [10-Q](https://d18rn0p25nwr6d.cloudfront.net/CIK-0001477333/5fbf0918-bf12-46f0-bde1-a4453b220af0.pdf) (Document)