Company: NET
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001477333-25-000137
Chunk: 377

Company: Cloudflare, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 377
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 and an increase in allocated cost due to higher network traffic volume by our paying customers.

Operating Expenses

Sales and Marketing

Three Months EndedJune 30,ChangeSix Months EndedJune 30,Change20252024$%20252024$%(dollars in thousands)(dollars in thousands)Sales and marketing$219,359 $174,501 $44,858 26 %$433,370 $368,603 $64,767 18 %

Sales and marketing expenses increased by $44.9 million, or 26%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily driven by $33.8 million in increased employee-related costs due to an 24% increase in headcount in our sales and marketing organization, including an increase of $10.6 million in stock-based compensation expense. The remainder of the increase was primarily due to an increase of $3.6 million in colocation and bandwidth expenses for free customers.

Sales and marketing expenses increased by $64.8 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily driven by $41.9 million in increased employee-related costs due to an 24% increase in headcount in our sales and marketing organization, including an increase of $17.8 million in stock-based compensation expense. The remainder of the increase was primarily due to an increase of $4.7 million in colocation and bandwidth expenses for free customers, an increase of $4.3 million in consulting expenses, an increase of $4.2 million in travel-related expenses, and an increase of $2.4 million in expenses for marketing programs due to acquisitions, investments in brand awareness advertising, third-party industry events, and digital performance marketing.

Research and Development

Three Months EndedJune 30,ChangeSix Months EndedJune 30,Change20252024$%20252024$%(dollars in thousands)(dollars in thousands)Research and development$134,557 $102,547 $32,010 31 %$249,646 $190,250 $59,396 31 %

Research and development expenses increased by $32.0 million, or 31%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024