Company: NET
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001477333-25-000137
Chunk: 336

Company: Cloudflare, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 336
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 customer:Three Months Ended June 30,Six Months Ended June 30,2025202420252024(dollars in thousands)(dollars in thousands)AmountPercentageof RevenueAmountPercentageof RevenueAmountPercentageof RevenueAmountPercentageof RevenueChannel partners$130,415 25 %$76,686 19 %$242,970 25 %$147,137 19 %Direct customers381,901 75 %324,310 81 %748,433 75 %632,461 81 %Total$512,316 100 %$400,996 100 %$991,403 100 %$779,598 100 %Contract BalancesContract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the six months ended June 30, 2025, the Company recognized revenue of $355.0 million, that was included in the corresponding contract liability balance at the beginning of the period presented.The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. The following table summarizes the activity of the deferred contract acquisition costs:Three Months Ended June 30,Six Months Ended June 30,2025202420252024(in thousands)(in thousands)Beginning balance$174,543 $137,527 $172,217 $133,236 Capitalization of contract acquisition costs33,540 25,687 58,998 48,085 Amortization of deferred contract acquisition costs(24,164)(18,884)(47,296)(36,991)Ending balance$183,919 $144,330 $183,919 $144,330 The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented.Remaining Performance ObligationsAs of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,976.7 million. As of June 30, 2025, the Company expected to recognize 66% of its remaining performance obligations as revenue over the next 12 months with the remainder recognized thereafter.

Note 4. Fair Value Measurements

Fair value is defined