Cloudflare Q2 2026 Earnings: Revenue Growth Accelerates to 36% as Company Raises Full-Year Guidance
Cloudflare's revenue grew 36% year-over-year to $696 million, but a one-time restructuring charge widened its reported net loss even as underlying profitability metrics improved and full-year guidance was raised.
| Q2 2026 | Reported |
|---|---|
| EPS | -$0.48 |
| Revenue | $696.1M |
Figures as reported by the company to the SEC for the quarter ended June 30, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Revenue growth accelerated to 36% year-over-year, the fastest pace the company has posted in some time, which management tied to rising demand from AI-related products and network traffic.
- The GAAP net loss widened sharply from the prior year, but that was driven mainly by a one-time $150.7 million restructuring and other charges recorded in the quarter, rather than a decline in the underlying business.
- On the company’s adjusted (non-GAAP) basis, which strips out one-time and stock-based compensation costs, per-share profit actually improved from a year earlier, painting a healthier picture of day-to-day operations than the GAAP loss alone suggests.
- CEO Matthew Prince said the quarter included record growth in total paying customers, large customers, and developers on the platform, framing it as evidence that AI answer engines and automated, machine-to-machine web traffic are reshaping demand for Cloudflare’s services.
- Gross margin — the share of revenue left after covering the direct cost of running its network — stood at about 73% over the trailing year, indicating the core service itself remains highly profitable even though the company overall is not yet profitable.
- Operating and net margins stayed negative over the trailing twelve months, reflecting continued heavy spending on growth, sales, and research rather than a shrinking business; revenue over that same period grew nearly 32%.
- Cloudflare raised its outlook, now guiding to roughly $736-737 million in revenue for the third quarter and about $2.86-2.87 billion for full-year 2026, an increase from its prior full-year projection.
- Management pointed to “agentic AI” and a broader shift toward AI-driven, automated internet traffic as an emerging growth driver for the company’s network and security products going forward.
Q2 2026 in context
| Metric | Jun 2026 | Jun 2025 | Change |
|---|---|---|---|
| Revenue | $696M | $512M | +35.9% |
| Net income | -$170M | -$50M | -237.0% |
| Free cash flow | $68M | $40M | +69.4% |
| Diluted EPS | -$0.48 | -$0.15 | -220.0% |
| Gross margin | 71.8% | 74.9% | -3.1 pts |
| Operating margin | -29.6% | -13.1% | -16.4 pts |
| Net margin | -24.4% | -9.8% | -14.6 pts |
Figures for the quarter ended Jun 2026 and the quarter ended Jun 2025, as reported to the SEC.
How the stock took it
Cloudflare Inc closed at $292.96 on Aug 5, 2026, the last session before the report, and at $300.27 on Aug 7, 2026, the first session after it — +2.5% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| May 8, 2026 | $256.79 | $193.52 | -24.6% |
| Oct 30, 2025 | $227.38 | $253.30 | +11.4% |
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.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 73.3% | Trailing 12 months |
| Operating margin | -9.3% | Trailing 12 months |
| Net profit margin | -3.7% | Trailing 12 months |
| Pretax margin | -3.3% | Trailing 12 months |
| EPS | -$0.25 | Trailing 12 months |
| Revenue growth (YoY) | 31.6% | Trailing 12 months |
| Return on equity | -6.2% | Trailing 12 months |
Sources: company report · TradingKey · StockTitan · earnings call