Cloudflare 3Q 2026: Revenue $782.51M, EPS ($0.1) — 10-Q Summary

What happened

Cloudflare reported third-quarter 2026 revenue of $782.51M, up 39% year over year, while its net loss widened to $34.07 million from $1.29 million. Gross margin, the share of revenue left after direct costs, fell to 71% from 74% as network and technology costs rose.

Confirmed

Global impact / market context

Revenue growth was supported by more large paying customers and increased spending from existing customers, but rising network, bandwidth and technology costs reduced the share of sales left after direct costs. If those costs keep growing faster than revenue, Cloudflare may find it harder to turn growth into improved profitability.

Analyst inference

Cloudflare’s revenue growth and rising customer use may support future sales, but higher network, bandwidth and technology costs reduced gross margin, which means the share of revenue left after direct costs. If these costs keep rising faster than revenue, less cash may remain to fund operations and improve earnings.

Analyst inference

What to watch

1. Track whether Cloudflare’s gross margin stabilizes or falls further, since continued increases in network, bandwidth and technology costs could absorb more revenue despite customer growth. Analyst inference
2. Watch whether growth in customers generating more than $100,000 in annualized revenue and 122% dollar-based net retention continues; retention measures spending changes among existing customers. Analyst inference
3. The company said its shift toward an agentic AI-first operating model, including an approximately 20% workforce reduction, was substantially completed by September 30. Confirmed

Evidence

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