Cloudflare Inc.

"the ongoing evolution of our business to an agentic AI-first operating model, including our use of artificial intelligence (AI) and other automation tools and resources and our related recent workforce reduction"

"We have a history of net losses and may not be able to achieve or sustain profitability in the future"

"Conflicts and geopolitical tension around the world or any worsening or expansion of those conflicts or tensions...may materially adversely affect our customers, vendors, and partners"

"the ongoing evolution of our business to an agentic AI-first operating model, including our use of artificial intelligence (AI) and other automation tools and resources and our related recently announced workforce reduction"

"Adverse economic conditions, including reduced spending on products and solutions for network security, performance, and reliability, may adversely impact our revenue and profitability"

"Conflicts and geopolitical tension around the world or any worsening or expansion of those conflicts or tensions...may materially adversely affect our customers, vendors, and partners"

"For example, deployments of software updates to our global network resulted in widespread service unavailability on our network in November and December 2025 and we also have experienced a limited number of other network outages over the past five years due to a variety of causes."

"In December 2025, an Italian regulator issued an administrative fine of approximately €14.2 million against Cloudflare for alleged failure to comply with its regulatory scheme."

"We expect significant component shortages that may impact our server supply chain during the current year, particularly in memory products such as Dual In-line Memory Modules (DIMMs), as well as enterprise Solid State Drives (SSDs), Central Processing Units (CPUs), and high-capacity Hard Disk Drives (HDDs)."

"The Company's network and associated products are subject to various restrictions under U.S. export control and sanctions laws and regulations, including the U.S. Department of Commerce's Export Administration Regulations (EAR) and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Controls (OFAC)."

"The Company has submitted to OFAC and to the Bureau of Industry and Security a voluntary self-disclosure concerning potential violations, and the Company has submitted a voluntary self-disclosure to the Census Bureau regarding potential violations of the Foreign Trade Regulations related to some incorrect electronic export information statements to the U.S. government for certain hardware exports, which were authorized."

"No loss has been recognized in the condensed consolidated financial statements for this loss contingency as it is not probable a loss has been incurred and the range of a possible loss is not yet estimable."

"For the six months ended June 30, 2025, the Company recognized revenue of $355.0 million, that was included in the corresponding contract liability balance at the beginning of the period presented."

"As of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,976.7 million."

"The Company has submitted to OFAC and to the Bureau of Industry and Security a voluntary self-disclosure concerning potential violations...The voluntary self-disclosure to OFAC remains under review."

"Aggregate amount of transaction price allocated to remaining performance obligations was $1,864.2 million, with 66% expected to be recognized over the next 12 months"

"Recognized revenue of $240.5 million from deferred revenue balances at beginning of period"

"Total unrecognized stock-based compensation expense related to unvested RSUs and PSUs was $944.3 million over weighted-average 3.1 years"

"A substantial majority of our revenue in the year ended December 31, 2024 was from contracted customers that were acquired through our inside and field sales teams, and we expect our sales teams to continue generating the majority of our revenue for the foreseeable future."

"Since the first half of 2022, however, we have experienced periodic lengthening of our average sales cycle for our new and existing large customers, and the lengthening of our sales cycle to our large customers could continue in the future."

"We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability."

"We have a history of net losses and may not be able to achieve or sustain profitability in the future."

"The conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world, or any worsening or expansion of those conflicts or tensions...may materially adversely affect our customers, vendors, and partners."

"Our voluntary self-disclosure to OFAC remains under review. If the Company is found to be in violation of U.S. economic sanctions or export control laws, it could result in substantial fines and penalties."

"As of June 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,421.0 million. As of June 30, 2024, the Company expected to recognize 69% of its remaining performance obligations as revenue over the next 12 months."

"Due in part to the Hamas-Israel and Russia-Ukraine conflicts, the potential worsening and expansion of such conflicts, and other macroeconomic and geopolitical conditions, there is ongoing uncertainty and significant disruption in the global economy and financial markets."

"In January 2024, the Company completed an assessment of the useful lives of our servers-network infrastructure, resulting in a change in the estimated useful lives of our servers-network infrastructure from four years to five years. This change resulted in a reduction of depreciation expense of $11.9 million for the six months ended June 30, 2024."

"The Company generates revenue primarily from sales to our customers of subscriptions to access our network and products."

"Our business model benefits from our ability to serve the needs of all customers ranging from individual developers to the largest enterprises, in a cost-effective manner."

"The Company achieved the stock price milestone for the first tranche of 224,250 Performance Options during the three months ended March 31, 2024."

"Operating lease cost for nine months ended September 30, 2023 was $32.9 million compared to $26.9 million in prior year"

"Deferred revenue increased from $230.4 million at year-end 2022 to $311.5 million as of September 30, 2023, reflecting strong customer prepayments"

"The company recognized $204.1 million of revenue during the nine months ended September 30, 2023 from amounts included in contract liabilities at the beginning of the period"