Key Highlights

  • Cloudflare's second-quarter 2026 Revenue was $696.1 million, up 36% year on year.
  • The GAAP operating loss of $205.7 million included $150.7 million of restructuring and other charges.
  • Third-quarter guidance is for revenue of $736.0 million to $737.0 million and non-GAAP Earnings Per Share of $0.34.

The second-quarter numbers

Cloudflare (NYSE:NET), the network and security services provider, last reported on 6 August 2026. Revenue for the second quarter was $696.1 million, up 36 per cent year on year. Current remaining performance obligations, which measure contracted revenue due within the next twelve months, grew 35 per cent.

Free Cash Flow was $56.4 million, or 8 per cent of revenue. Cash, cash equivalents and available-for-sale securities totalled $4,162.8 million at 30 June 2026. The company described growth in paying customers, large customers and developers, but the release did not give absolute figures for them.

GAAP loss and the restructuring charge

On a GAAP basis, Cloudflare reported an operating loss of $205.7 million, equal to 29.6 per cent of revenue. That figure includes $150.7 million of restructuring and other charges. The GAAP net loss was $170.0 million, or $0.48 per share.

Excluding such items, non-GAAP Operating Income was $96.1 million, a Margin of 13.8 per cent, and non-GAAP Net Income was $107.8 million, or $0.29 per diluted share, compared with $0.21 previously. The gap between the two sets of figures is largely the restructuring cost together with other adjustments, so both measures are worth weighing.

Strategy: an agentic, AI-first model

Chief executive Matthew Prince said the web is shifting towards AI answer engines and agent-driven commerce, and that Cloudflare is positioned to help define what he called the agentic internet. The company plans to accelerate a move to an agentic, AI-first operating model and realign its organisation accordingly.

The forward-looking statements in the release refer to an estimated workforce reduction and related charges. The release does not provide details of the scale of those reductions, so the cost savings, if any, cannot be quantified from the published material. The second-quarter charge is the clearest reported cost so far.

Guidance, which is not a result

The following are management estimates. For the third quarter of 2026, Cloudflare guided to revenue of $736.0 million to $737.0 million, non-GAAP operating income of $129 million to $130 million and non-GAAP earnings per share of $0.34. For the full year, it guided to revenue of $2,864 million to $2,870 million, non-GAAP operating income of $443 million to $445 million and non-GAAP earnings per share of $1.25 to $1.26. Both sets of ranges assume about 374 million weighted average shares.

The ranges are unusually narrow, particularly for the quarter, so the outcome can be measured quite precisely against them. They remain forecasts and could differ from actual results. Third-quarter non-GAAP earnings per share guidance of $0.34 compares with $0.29 reported for the second quarter.

What to watch

Readers may wish to monitor several items over coming quarters. The first is whether revenue growth stays near the 36 per cent reported in the second quarter. The second is how much of the restructuring cost recurs in later periods. The third is whether non-GAAP Operating Margin moves from 13.8 per cent towards the guided third-quarter level. The company has not stated a confirmed date for third-quarter results in the release.