Cloudflare, Inc. reported revenue of $2.168 billion for the year ended December 31, 2025, a 30% increase compared to $1.670 billion in 2024. The revenue growth was attributed to a 40% increase in paying customers, reaching 332,466, and a dollar-based net retention rate of 120%. Gross profit for 2025 was $1.615 billion, representing a gross margin of 75%, slightly lower than the 77% gross margin in 2024. The company's loss from operations was $207.2 million, while non-GAAP income from operations was $303.9 million, resulting in a non-GAAP operating margin of 14%.
The company's operating expenses increased in 2025, with sales and marketing expenses rising to $920.8 million, research and development expenses to $512.5 million, and general and administrative expenses to $389.3 million. Net cash provided by operating activities was $603.1 million, and free cash flow was $260.6 million, representing a free cash flow margin of 12%. The number of large customers, defined as those with annualized revenue exceeding $100,000, increased to 4,298.
Cloudflare's financial activities in 2025 included net cash used in investing activities of $1.807 billion, primarily due to purchases of available-for-sale securities, capital expenditures, and cash paid for asset acquisitions. Net cash provided by financing activities was $2.004 billion, mainly from the issuance of $2.0 billion in aggregate principal amount of 2030 Notes and proceeds from the settlement of capped call options. As of December 31, 2025, cash and cash equivalents totaled $943.5 million, and available-for-sale securities amounted to $3.158 billion.
Looking ahead, Cloudflare acknowledges potential risks including adverse economic conditions, intense competition, and the need to protect intellectual property. The company also highlights the importance of attracting and retaining customers, managing its global operations, and complying with evolving laws and regulations. Cloudflare's future performance is subject to various factors, including its ability to innovate, maintain network security, and manage its debt obligations.
About Cloudflare, Inc.
Cloudflare is a global provider of internet security, performance, and reliability services. Its core offerings include web application security, content delivery, Zero Trust network solutions, and developer tools for building and deploying serverless applications. Serving businesses, governments, and individual users worldwide, Cloudflare leverages a scalable, programmable, and distributed network to simplify internet infrastructure, enhance security, and optimize digital experiences.
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