Company: NET
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001477333-25-000082
Chunk: 345

Company: Cloudflare, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 345
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 graded attribution method over the weighted-average requisite service period. The total stock-based compensation expense for the Performance Options for the three months ended March 31, 2025 and 2024 were $2.5 million and $2.6 million, respectively. As of March 31, 2025, there was $105.9 million of unrecognized stock-based compensation expense related to the Performance Options that is expected to be recognized over a weighted-average period of 3.7 years.

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Restricted Stock Units and Performance Stock UnitsDuring the three months ended March 31, 2025, the Company’s Board of Directors granted to the Company’s CEO and President (each, a Co-Founder) an aggregate of 350,220 PSUs with market conditions that vest if the Company achieves certain stock price milestones and the Co-Founders, individually, continue to provide services to the Company through the applicable vesting dates.The weighted average assumptions used to determine the fair value of the PSUs with market conditions during the three months ended March 31, 2025 were as follows: Three Months Ended March 31,2025Expected term (in years)7.0Expected volatility64.7 %Risk-free interest rate4.3 %Dividend yield— The total stock-based compensation expense for RSUs and PSUs for the three months ended March 31, 2025 and 2024 was $92.7 million and $63.9 million, respectively. As of March 31, 2025, the total unrecognized stock-based compensation expense related to unvested RSUs and PSUs was $944.3 million that is expected to be recognized over a weighted-average period of 3.1 years. The stock-based compensation expense associated with PSUs, with market or financial performance conditions, were not material during the three months ended March 31, 2025. As of March 31, 2025, the total unrecognized stock-based compensation related to PSUs with market conditions was $38.6 million and is expected to be recognized over a weighted-average period of 2.6 years.2019 Employee Stock Purchase Plan In September 2019, the Company's Board of Directors adopted and stockholders approved the ESPP, which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the Company’s initial public offering. No shares of Class A common stock were purchased under the ESPP during the three