NET earnings analysis
What we found in NET's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Cloudflare (NET) reported strong Q1 2026 results with revenue exceeding estimates at $639.8 million, reflecting 34% growth year-over-year. EPS of $0.25 surpassed the expected $0.17 by 47%, supported by improved free cash flow of $84.1 million, although management anticipates restructuring costs of $150 million going forward. Segment performance was driven primarily by robust demand in cybersecurity and network services. Looking ahead, management provided positive guidance for Q2, expecting revenue between $664-665 million and an EPS of $0.27.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Q1 Revenue Beat Expectations
- Cloudflare's actual revenue of $639.8 million exceeded estimates of $622.5 million, marking a 34% year-over-year growth.
- Strong EPS Growth
- EPS for Q1 2026 was reported at $0.25, surpassing the consensus estimate of $0.17 by 47%.
- Positive Free Cash Flow
- The company reported free cash flow of $84.1 million, indicating robust operational efficiency.
- Clear Forward Guidance
- Management expects Q2 2026 revenue between $664 million and $665 million, along with a projected EPS of $0.27.
- Operational Adjustments
- Amid restructuring efforts, Cloudflare anticipates approximately $150 million in related costs.
- Segment Growth in Key Areas
- Significant growth reported in cybersecurity and network services, contributing to overall revenue increases.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Workforce Reductions
- Recent announcements indicate potential layoffs as part of organizational restructuring, which may affect morale and operational efficiency.
- Declining Gross Margins
- Gross margins decreased to 74.5% in Q1 2026, down from 75.9% year-on-year, raising concerns about long-term profitability.
- Increased Operating Losses
- Operating losses of $22.9 million were reported for Q1 2026, compared to $38.5 million for the year-ago period.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.25
- Gross margin
- 74.5%
- Operating margin
- -11.1%
What they said about what is next.
Management provided guidance of expected Q2 2026 revenue between $664 million and $665 million, with EPS projected at $0.27.
The filing reads better than the one before it.
What came before.
- 10-K · April 29, 2026
- Cloudflare (NET) has reported strong revenue growth with Q4 revenue reaching $614.5M, surpassing estimates, and achieving a total of $2,168.0M in annual revenue for 2025. However, profit margins have seen a decline as…
- 10-K · February 26, 2026
- Cloudflare (NET) reported continued top-line acceleration in 2025 with quarterly revenue reaching $614.5M in Q4 and full-year revenue of $2,168.0M (sum of quarterly results). Gross margin compressed through the year…
- 10-Q · October 30, 2025
- Cloudflare reported Q3 revenue of $562.0M (up from $430.1M a year ago, +$131.945M, +30.7%) with gross margin compressing to 74% from 78% a year ago. The company generated strong operating cash flow of $167.123M for the…
- 10-Q · July 31, 2025
- Cloudflare reported quarter revenue of $512,316,000, up from $400,996,000 a year ago, with gross margin compressing to 75% from 78% and a wider GAAP operating loss of $(67,264,000) vs $(34,698,000) in Q2 2024. Operating…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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