Cloudflare, Inc. Q2 2026 Earnings Recap

Cloudflare’s shares rose modestly by 2.5% amid solid customer growth and margin improvement, but the market response suggests the results were in line with expectations rather than a clear beat. While strong customer metrics and margin improvement continued, the moderate market reaction indicates investor caution, potentially awaiting more definitive upside or clearer guidance signals.

Key Takeaways

• Revenue grew 36% year-over-year to $696.1 million.
• Large customers (>$100K/year) increased 27% YoY, reaching 4,698, with record net additions.
• Dollar-based net retention improved to 120%, up 6% YoY.
• Gross margin rose sequentially to 73.1%, the first improvement in eight quarters.
• Operating profit was $96.1 million, yielding a 13.8% non-GAAP operating margin.