Cloudflare Q3 2025 earnings: revenue growth accelerates to 31%, driven by large customers
Cloudflare's Q3 2025 revenue grew 31% year over year to $562 million, with growth accelerating as large-customer spending and cash generation both improved.
| Q3 2025 | Reported |
|---|---|
| EPS | $0.00 |
| Revenue | $562.0M |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Revenue grew 31% from a year earlier to $562 million, and that growth rate actually sped up for a second straight quarter — a sign that demand for Cloudflare’s internet security and network services kept building through the summer rather than cooling off.
- The company posted a small GAAP net loss of about $1.3 million for the quarter, working out to roughly breakeven on a per-share basis — essentially flat profitability rather than a large swing either way.
- A key growth driver was large customers: those paying Cloudflare more than $100,000 a year rose 23% to over 4,000, and this group now accounts for 73% of total revenue, up from 67% a year ago. Management framed this as evidence that its multi-year push to sell to big enterprises, not just smaller self-service customers, is paying off.
- Existing customers are also spending more over time: Cloudflare’s dollar-based net retention rate — a measure of how much more (or less) existing customers spend year over year — rose to 119%, up five points from the prior quarter.
- Cash generation improved alongside the accounting profit picture: free cash flow (cash left after running the business and buying equipment) was $75 million, or 13% of revenue, versus $45 million, or 11% of revenue, a year earlier. The company’s trailing-twelve-month operating and net margins remain negative, reflecting losses built up over prior periods, even as the business generates positive cash and posts a near-breakeven quarterly result.
- Cloudflare raised its outlook for the rest of the year, guiding to roughly $2.14 billion in full-year 2025 revenue and pointing to continued acceleration into the fourth quarter.
- CEO Matthew Prince pointed to a 43% increase in remaining performance obligations — contracted future revenue not yet billed — as a sign of strengthening demand, and highlighted a new partnership making Cloudflare natively available on Oracle’s cloud platform.
- Management said AI-related inference workloads remain a small slice of revenue today, without meaningful customer concentration risk, while noting that many AI companies already rely on Cloudflare’s security products and that expanding AI usage is a focus area going forward.
Q3 2025 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $562M | $430M | +30.7% |
| Net income | -$1M | -$15M | +91.6% |
| Free cash flow | $82M | $55M | +51.3% |
| Diluted EPS | $0.00 | -$0.04 | +100.0% |
| Gross margin | 74.0% | 77.7% | -3.7 pts |
| Operating margin | -6.7% | -7.2% | +0.5 pts |
| Net margin | -0.2% | -3.6% | +3.3 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
How the stock took it
Cloudflare Inc closed at $227.38 on Oct 29, 2025, the last session before the report, and at $253.30 on Oct 31, 2025, the first session after it — +11.4% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call