Cloudflare Inc - Ordinary Shares - Class A

Q2 2026 performance: strong acceleration across growth + profitability + cash - Revenue $696.1M, +36% YoY. - 4,698 “large” customers (> $100k/yr), +27% YoY; 986 net additions YoY (record), 282 added in the quarter. - Dollar-based net retention: 120% (+2% QoQ, +6% YoY). - Gross margin: 73.1% (sequential improvement for the first time in 8 quarters). - Operating margin (non-GAAP): 13.8%; operating income $96.1M. - Free cash flow: $56.4M (+69% YoY) (8% of revenue).

Customer/usage “agentic traffic” momentum is translating into monetizable scale - Company claims non-human traffic has now surpassed human traffic (faster than they expected) and could become up to ~1,000x human traffic within ~5 years (framed as trend-based, not audited). - Emphasis: non-human traffic includes both malicious automation and legitimate agent workloads; Cloudflare blocks malicious traffic without extra customer charges (security/edge positioning). - Workers developer platform remains the engine: ~2M developers added in Q2 alone, implying total 7.4M+ developers by quarter end; CEO notes this exceeds developers added during all of 2025.

Next-quarter and full-year guidance: solid growth with higher operating profit but watch the one-off severance - Q3 2026 outlook: revenue $736M–$737M (+31% YoY); operating income $129M–$130M; effective tax rate 20%; diluted EPS $0.34 (assumes ~374M shares). - Full-year 2026 outlook: revenue $2.864B–$2.870B (+32% YoY); operating income $443M–$445M; tax rate 20%; diluted EPS $1.25–$1.26. - Restructuring/severance charges remain a known “noise factor”: for full-year 2026, up to $165M total (up to $130M cash). CFO said FCF guidance excluding this impact is unchanged.