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Cloudflare, Inc.
Technology · Software - Infrastructure · United States · Stock
Score Breakdown
Scored for Speculative Opportunities profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 23.2/100 reflects strong revenue growth rewarded in the growth and momentum factors, offset by zero scores on profitability, dividends, and macro theme translation.
- Profitability scored zero because all three key metrics — net margin, operating margin, and return on assets — are negative in FY2025, which significantly weighed on the overall composite.
- The absence of any dividend and the failure of the Cybersecurity and Data Centers & Cloud Infrastructure theme assignments to translate into a positive theme score both contributed to the low total.
Why Not Higher
- Deepening net losses — from -$78,800,000 in FY2024 to -$102,267,000 in FY2025 — and persistently negative operating margins across all four recent quarters prevent a higher profitability or momentum score.
- Zero scores on dividends and macro theme translation, combined with a profitability score of zero, structurally limit how high the composite can reach regardless of revenue growth.
Data Confidence
7 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $1,669,626,000 to FY2025's $2,167,937,000, a gain of +29.8%. However, net income deteriorated from -$78,800,000 in FY2024 to -$102,267,000 in FY2025 (-29.8%), and diluted EPS worsened from -$0.23 in FY2024 to -$0.29 in FY2025 (-26.1%).
The model rewarded the strong top-line expansion but penalized the deepening bottom-line losses, producing a mid-range score that reflects the tension between robust revenue growth and widening net losses.
In FY2025, Cloudflare reported a net margin of -4.7%, an operating margin of -9.6%, and a return on assets of -1.7%, all of which are negative.
The model assigns the lowest possible profitability score because all three key profitability metrics are negative in FY2025, indicating the company is not yet generating profits relative to its revenue or asset base.
Filing evidence currently available does not support a more specific explanation for this factor.
Quarterly revenue has risen consistently across the last four reported quarters: $512,316,000 in 2025Q2, $562,027,000 in 2025Q3, $614,507,000 in 2025Q4, and $639,755,000 in 2026Q1, showing steady sequential acceleration. Net income losses narrowed sharply from -$50,446,000 in 2025Q2 to -$1,290,000 in 2025Q3 before widening again to -$12,077,000 in 2025Q4 and -$22,927,000 in 2026Q1, while operating losses remained elevated throughout the same period.
The model rewarded the clear and consistent upward revenue trajectory across all four quarters, while the persistent operating losses and the re-widening of net losses in the most recent quarters tempered the score below the maximum.
Cloudflare does not currently pay a dividend and has no mapped dividend history, making it a genuine non-payer rather than a case of missing data.
The model assigns a score of zero for this factor because dividend income is entirely absent, which is consistent with many high-growth technology companies that reinvest capital rather than distribute it to shareholders.
Cloudflare is assigned to the macro themes of Cybersecurity and Data Centers & Cloud Infrastructure.
Although the company carries two actively tracked macro theme assignments, this assignment did not translate into a positive score under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Cloudflare delivered strong top-line growth of +29.8% year-over-year, with revenue rising from $1,669,626,000 in FY2024 to $2,167,937,000 in FY2025, and quarterly revenues have continued to accelerate through 2026Q1. However, the company remains deeply unprofitable, with a net margin of -4.7%, an operating margin of -9.6%, and widening net losses from -$78,800,000 in FY2024 to -$102,267,000 in FY2025. The absence of dividends and a zero score on macro theme translation further weigh on the composite, producing a total model score of 23.2/100 with a Very High risk rating. The overall label of Insufficient Data reflects the tension between robust revenue momentum and persistent, deepening losses.
Plain English
Cloudflare is growing its sales fast — nearly 30% last year — but it's still losing more money than before, and it doesn't pay any dividends, so the model rates it as very risky with a low overall score.
Bull Case vs. Bear Case
Bull Case
- Revenue growth has been strong and consistent: annual revenue jumped +29.8% to $2,167,937,000 in FY2025, and quarterly revenues have risen every single quarter from $512,316,000 in 2025Q2 to $639,755,000 in 2026Q1.
- Sequential quarterly revenue acceleration across all four recent quarters demonstrates durable top-line momentum in the Cybersecurity and Data Centers & Cloud Infrastructure sectors.
- Net losses narrowed sharply at one point — from -$50,446,000 in 2025Q2 to -$1,290,000 in 2025Q3 — suggesting the company has some capacity to move toward breakeven, even if losses have since re-widened.
Bear Case
- All three key profitability metrics are negative in FY2025: net margin of -4.7%, operating margin of -9.6%, and return on assets of -1.7%, indicating the company is not yet generating profits relative to its revenue or asset base.
- Net losses deepened year-over-year from -$78,800,000 in FY2024 to -$102,267,000 in FY2025, and operating losses remained elevated across all four recent quarters, reaching -$61,994,000 in 2026Q1.
- Cloudflare pays no dividend and has no mapped dividend history, meaning shareholders receive no income return while the company continues to post losses.
What Could Change the Picture
Bullish Triggers
- A sustained and meaningful narrowing of operating losses over multiple consecutive quarters — beyond the brief improvement seen in 2025Q3 — would signal a credible path toward profitability.
- Continued acceleration of quarterly revenue growth beyond the $639,755,000 recorded in 2026Q1 would reinforce the strength of the top-line trajectory.
Bearish Triggers
- A reversal or deceleration in the consistent quarterly revenue growth trend — which has risen every quarter from 2025Q2 through 2026Q1 — would undermine the primary bull case.
- Further widening of net losses beyond the -$102,267,000 recorded in FY2025 would deepen concerns about the company's ability to reach profitability.
Risk Profile
Very High RiskCloudflare carries a Very High risk rating, reflecting persistent operating losses across all four recent quarters — ranging from -$37,460,000 to -$67,264,000 — and re-widening net losses in 2025Q4 and 2026Q1 despite a brief improvement in 2025Q3. With total assets of $6,036,256,000 in FY2025 and a return on assets of -1.7%, the company's asset base is not yet generating positive returns.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.