Company: NET
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001477333-25-000137
Chunk: 427

Company: Cloudflare, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 427
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 and future trends in free cash flow and free cash flow margin, even if negative, provide useful information about the amount of cash generated by our operating activities that is available (or not available) to be used for strategic initiatives. For example, if free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. One limitation of free cash flow and free cash flow margin is that they do not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period.

Three Months EndedJune 30,Six Months EndedJune 30,2025202420252024(dollars in thousands)(dollars in thousands)Net cash provided by operating activities$99,796 $74,815 $245,580 $148,394 Less: Purchases of property and equipment(59,897)(29,625)(145,786)(61,681)Less: Capitalized internal-use software(6,619)(6,915)(13,647)(12,831)Free cash flow$33,280 $38,275 $86,147 $73,882 Net cash used in investing activities$(793,025)$(183,742)$(885,463)$(86,792)Net cash provided by financing activities$2,007,603 $7,143 $2,011,125 $7,164 Net cash provided by operating activities (as a percentage of revenue)19 %19 %25 %19 %Less: Purchases of property and equipment (as a percentage of revenue)(12)%(7)%(15)%(8)%Less: Capitalized internal-use software (as a percentage of revenue)(1)%(2)%(1)%(2)%Free cash flow margin6 %10 %9 %9 %

39

Key Business Metrics

In addition to our results determined in accordance with U.S. GAAP and the non-GAAP measures discussed above, we also review the key business metrics discussed below to assist us in evaluating our business, measuring performance, identifying trends, formulating business plans, and making strategic decisions. There are a number of limitations associated with the use of key business metrics as analytical tools, however, and we do not rely upon any single key business metric to evaluate our business. In addition, other companies, including companies in our industry, may calculate similarly-titled business metrics differently