Aureus
FRed Flag

Cloudflare, Inc.(NET)

F

Financial data as of Dec 31, 2025Declining · Technology

FCF Margin-8.8%Free Cash Flow / Revenue
Cash Conversion—Operating CF / Net Income
Free Cash Flow$260.6M
Revenue$2.2B
Net Cash-$2.6BNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio1.98Adequate short-term liquidity
YoY FCF Growth-16.2%0 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseF
→
-0.5FCF trend declining (-16.2% YoY)
→
-1Only 0 positive quarters recently
→
+0.5Strong revenue growth (35.9% YoY) offsets compressed FCF margin
→
FinalF

Analysis Summary

Strengths

  • Strong revenue growth (35.9% YoY)

Concerns

  • Negative FCF margin (-8.8%)
  • Net debt position ($2.6B)
  • Only 0 positive FCF quarters recently
Heavy CapEx — Operating cash flow is strong (28% margin) but most is reinvestedCash conversion ratio unavailable or not meaningfulSBC-adjusted FCF used — $0.5B stock-based compensation (173% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin-8.8%
Net Margin-4.7%
Operating CF Margin27.8%
CapEx Ratio15.8%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$2.6BNet debt position
Debt / FCFN/AElevated debt burden
Current Ratio1.98Strong liquidity
Debt / Equity2.41High leverage

Quarterly FCF Trend

-16.2% YoYDeclining (-16.2%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameCloudflare, Inc.
SectorTechnology
Free Cash Flow$260.6M
Revenue$2.2B
Net Income-$102.3M
Operating Cash Flow$603.1M
Capital Expenditure$342.6M
FCF Margin-8.8%
Cash Conversion Rate—
Net Margin-4.7%
Total Debt$3.5B
Total Cash$943.5M
Net Cash-$2.6B
Current Ratio1.98
Debt / Equity2.41
Debt / FCFN/A
YoY FCF Growth-16.2%
Positive Quarters0 of 5
Trend DirectionDeclining
Report DateDec 31, 2025
GradeF
Data SourceYahoo Finance

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