Cloudflare Q3 Loss Widens

What happened

Cloudflare reported third-quarter revenue up 39% year over year to $782.5 million, while its net loss widened to $34.1 million from $1.3 million. Adjusted net income rose to $143.7 million, but gross margin fell to 71.2% from 74%.

Confirmed

Global impact / market context

Faster revenue growth alongside a wider reported loss and lower gross margin presents investors with competing signals. If the margin decline reflects higher costs relative to sales, continued pressure could limit how much revenue growth adds to earnings; the article does not explain the cause.

Analyst inference

The article reports both standard net results and adjusted earnings, a company-defined measure that excludes certain items. The difference matters because the reported loss widened even as adjusted income increased, so investors may reach different conclusions depending on which measure they emphasize.

Analyst inference

What to watch

1. Compare fourth-quarter revenue with Cloudflare’s $845 million to $846 million forecast; the result will show whether its reported sales growth is continuing near expectations. Confirmed
2. Check whether gross margin stabilizes or declines further in later results; this measure is the share of sales remaining after direct costs, and it fell to 71.2%. Analyst inference
3. Assess whether adjusted earnings progress toward the fiscal 2026 forecast of $1.35 per share while the reported net loss narrows or widens. Confirmed

Evidence

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