Cloudflare, Inc. (NYSE: NET), a leader in connectivity cloud services, has announced its financial results for the third quarter ended September 30, 2025, showcasing impressive growth and operational performance. The company reported a significant revenue increase, alongside improvements in non-GAAP metrics, signaling its strong position in the ever-evolving internet landscape.

1. Revenue Growth Accelerates

Cloudflare's third quarter results reflect a robust revenue growth of 31% year-over-year, reaching a total of $562.0 million. This marks the second consecutive quarter of accelerating revenue growth, a trend that underscores the company's ability to innovate and execute effectively in a competitive market.

Matthew Prince, co-founder and CEO of Cloudflare, expressed pride in the company's performance, stating, “Our excellent third quarter results clearly demonstrate our increasing momentum... We’re shipping capabilities at an unmatched pace, dramatically increasing the value we deliver, expanding our reach, and building the rails for the next decade of Internet growth.”

2. Financial Highlights

Key Metrics

Gross Profit: The GAAP gross profit stood at $415.7 million, resulting in a gross margin of 74.0%. This is a slight decrease from 77.7% in the same quarter the previous year. Non-GAAP gross profit was reported at $423.1 million, corresponding to a gross margin of 75.3%.

Operating Income: The GAAP loss from operations was $37.5 million, or 6.7% of revenue, an increase from a loss of $30.8 million or 7.2% of revenue in Q3 2024. Conversely, the non-GAAP income from operations was $85.9 million, reflecting 15.3% of revenue, up from $63.5 million or 14.8% in the prior year.

Net Income: The GAAP net loss narrowed to $1.3 million, a significant improvement from a loss of $15.3 million in Q3 2024. The GAAP net loss per share was reported at $0.00, compared to $0.04 the previous year. Non-GAAP net income rose to $102.6 million, up from $72.6 million, with non-GAAP net income per diluted share of $0.27, compared to $0.20 last year.

Cash Flow: Cash flow from operating activities was strong at $167.1 million, compared to $104.7 million in Q3 2024. Free cash flow reached $75.0 million, which is 13% of revenue, up from $45.3 million or 11% of revenue in the same quarter the previous year.

Balance Sheet Strength: Cloudflare reported robust cash reserves of $4,043.5 million in cash, cash equivalents, and available-for-sale securities as of September 30, 2025, providing a solid foundation for future investments.

3. Financial Outlook

Looking forward, Cloudflare anticipates continued growth in the fourth quarter of fiscal 2025, projecting total revenue between $588.5 million and $589.5 million. The company expects a non-GAAP income from operations in the range of $83.0 million to $84.0 million, with a non-GAAP net income per share of $0.27.

For the full fiscal year 2025, Cloudflare forecasts total revenue of $2,142.0 million to $2,143.0 million, a non-GAAP income from operations between $297.0 million and $298.0 million, and a non-GAAP net income per share of $0.91.

4. Leadership Transition

In a notable leadership change, CJ Desai, the President of Product & Engineering, will be stepping down effective November 7, 2025, to accept the CEO role at another publicly-traded company. This transition may signal a pivotal moment for Cloudflare as it continues to navigate the dynamic tech landscape.

5. Conference Call Insights

Cloudflare will host an investor conference call today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss its third-quarter earnings results in more detail. This call will provide an opportunity for investors and analysts to gain further insights into the company's performance and strategic direction.

6. Conclusion

Cloudflare's impressive third-quarter performance, marked by significant revenue growth and improved operational metrics, positions the company well for the future. As it continues to innovate and expand its services, Cloudflare remains a key player in shaping the next phase of internet growth. Investors will be watching closely to see how the company capitalizes on its strengths and addresses the challenges ahead.

Original press release