Company: NET
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001477333-25-000082
Chunk: 284

Company: Cloudflare, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part II, Item 1A
Chunk 284
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 no longer exist, the SEC may revoke the exemptive order. If the exemptive order were revoked or we are unable otherwise to rely on the exemptive order or another applicable exemption, we may be required to institute burdensome requirements to comply with the 1940 Act, which may restrict our activities in a way that could adversely affect our business, results of operations, and financial condition.

Risks Related to International Operations

Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business and results of operations.

Historically, we have derived a significant portion of our revenue from outside the United States. We derived 51% and 48% of our revenue from our international customers for the three months ended March 31, 2025 and 2024, respectively. We are continuing to adapt to and develop strategies to address international markets and our growth strategy includes expansion into geographies around the world, but there is no guarantee that such efforts will be successful. In addition, our global network includes co-location facilities located in more than 330 cities and over 125 countries worldwide as of March 31, 2025. We expect that our international sales and network activities will continue to grow in the future, as we continue to pursue opportunities in international markets and further grow our network around the world. These international operations will require significant management attention and financial resources and are subject to substantial risks, including:

•geopolitical, economic, and social uncertainties, including the potential implementation of tariffs or other costs or restrictions on the conduct of business, potential nationalization of key peering partners by foreign governments or political unrest that affects our ability to continue to work with particular peering partners, potential terrorist activities, military conflict or war, trade policies and sanctions, and the unknown impact of regional or global health crises, or epidemic or pandemic diseases;

•changes in a specific country’s or region’s political or economic conditions, including the impact of elections and other changes in governments;

•unexpected costs for the localization of our products, including translation into foreign languages and adaptation for local practices, certifications, and legal and regulatory requirements;

•greater difficulty in enforcing contracts and accounts receivable collection, and longer collection periods;

•reduced or uncertain protection for intellectual property rights in some countries;

•requirements to open local offices or otherwise maintain a local presence in some countries;

•greater risk of unexpected changes in regulatory practices, and tax laws and treaties;

•increased risk to our local employees of government pressure, including potential threats of