Aug 6, 2026 earnings call — Agentic AI and developer platform driving growth
Cloudflare reported revenue of $696.1 million and record customer additions, with 4,698 customers spending more than $100,000 annually.
Revenue $0.7B (est $0.7B) · EPS $0.29 (est $0.27) · Next-quarter revenue outlook $0.7B
Key quotes
"We're the fastest, we're the most secure and the most cost-effective place to build, deploy and scale agents and the code they generate."
"A leading digital native media company expanded their relationship with Cloudflare, signing a 5-year, $31.8 million contract for Application Services and Zero Trust."
"Second quarter gross margin was 73.1%, representing an increase of 30 basis points sequentially and a decrease of 320 basis points year-over-year."
Analyst Q&A 9
nonhuman internet traffic growth
Q (Saket Kalia · Barclays): How is the rise in nonhuman traffic being monetized? Is it bringing new customers or more business from existing ones, and are large or small customers driving it?
A: Management said nonhuman traffic has already passed human traffic and is growing rapidly. Some of that traffic is malicious and is blocked at no extra charge, while some customers want it and Cloudflare will serve it efficiently and explore tiny per-request fees for agent traffic.
"The first is that for some of that nonhuman traffic, it's malicious." — Matthew Prince (CEO)
developers and Cloudflare OS
Q (Matthew Hedberg · RBC): Why are so many developers choosing Workers now, and how does Cloudflare OS expand usage beyond developers to all employees?
A: Management said Workers is ideal for building agents because it's lightweight, fast, and you pay only when code runs, which attracts many developers. Cloudflare OS was open sourced to let non-developers use secure, auditable tools across teams, leveraging Cloudflare's security DNA to move fast without breaking things.
"Cloudflare Workers is turning out to just be the perfect platform for building agents and agentic workloads." — Matthew Prince (CEO)
securing agents
Q (Sanjit Singh · Morgan Stanley): When will there be security products to secure agents, and how does the shift to pool-of-funds deals affect revenue timing?
A: Management said demand for secure AI is already driving conversations and vendors that ignore agents are losing deals; Cloudflare's agent-first approach has won customers. On revenue mix, they said the business is moving to a mix of ratable SaaS, pool-of-funds, consumption, and T-shirt sizes, which makes quarter-to-quarter forecasting harder but overall trajectory is up.
"I mean the #1 thing that's causing our phone to ring from big companies is them saying, "Listen, we know we have to do AI, but we need to do it more securely."" — Matthew Prince (CEO)
micropayments and scale challenge
Q (Gabriela Borges · Goldman Sachs): Why is the Monetization Gateway, Wallets, and ID triple play hard to build and how will adoption work?
A: Management said microtransactions must scale massively — potentially supporting tens of millions to hundreds of millions of financial transactions per second — far above current payment networks. They see Cloudflare's scale and reach as an advantage and even could make being on Cloudflare financially attractive for free customers.
"To give you some sense, Visa -- and again, these are from memory, but Visa, which is the largest payment network in the world at peak during the holidays, handles about 20,000 transactions per second." — Matthew Prince (CEO)
Workers contribution and sales motion
Q (Fatima Boolani · Citi): How big is the Workers and Workers AI book of business and is Cloudflare shifting back toward product-led growth?
A: Management said they do not break out revenue by product, but Workers drives a lot of new customer adoption and has become a meaningful contributor to revenue. They also said product-led growth is strong while enterprise sales remain important and are becoming more technical and integrated with rapid feature delivery.
"But I can say that the Workers platform continues to be something that really drives an enormous amount of both new customer adoption and real revenue growth." — Matthew Prince (CEO)
GAAP profitability progress
Q (Jonathan Ho · William Blair): Are you on track for GAAP profitability by 2028 and what levers help achieve that? Also, which product families are driving pipeline?
A: Management said they are pacing ahead of their GAAP profitability goal; excluding restructuring charges, GAAP net loss would have been around $18 million. They cited revenue acceleration, operating leverage, and automation as levers, and confirmed Workers products remain the fastest-growing and highest pipeline priority.
"We are pacing ahead of that very clearly without the impact of the restructuring charges, the GAAP net loss would have been around $18 million." — Thomas Seifert (CFO)
partner/channel revenue mix
Q (Adam Borg · Stifel): Will partner-driven revenue keep growing, especially as Act 2 products need more partner touch?
A: Management said there's room for partner mix to rise and they've improved partner enablement, rate cards, and training. Partners win in SASE/Zero Trust and some are implementing Cloudflare OS, so partner revenue share should continue to tick up and could reach north of 50% or even over 60% in time.
"I think I would guess that our partner -- our share of revenues through partners will continue to tick up over time." — Matthew Prince (CEO)
edge inference and agent needs
Q (Ryan MacWilliams · William Blair): As agents make more LLM calls, does edge inference become more important and are companies building for low latency AI?
A: Management said inference is only one part; agents need ephemeral, low-cost compute, network access, storage, and orchestration across locations. Cloudflare offers lightweight sandboxing called isolates and a global platform so the network can act as the computer and scale for agent demands.
"And so what I think that we're seeing is what agents need is the ability to have very ephemeral, low-cost places to create code, do inference, access the network, coalesce information, store some things and pack all of these things together." — Matthew Prince (CEO)
not joining GPU CapEx race
Q (Patrick Edwin Colville · Scotiabank): Why isn't Cloudflare buying lots of GPUs like hyperscalers, and is rising cyber risk affecting the financials in Q2?
A: Management said they avoid selling commodity compute because it's low-quality business and instead focus on squeezing more utilization from each CapEx dollar and offering higher-quality services. They engage deeply with top AI providers but won't just rent servers; the business model is to sell completed work and improve efficiency rather than compete on hardware leasing.
"If you're selling what is just commodity compute, if you're basically letting an AI company use your balance sheet,and your credit rating in order to buy servers that are the same as everybody else's servers." — Matthew Prince (CEO)