Company: NET
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001477333-25-000082
Chunk: 387

Company: Cloudflare, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 387
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 at a rate of 0.75% per year. 

21

The 2025 Notes were convertible at an initial conversion rate of 26.7187 shares of the Company's Class A common stock per $1,000 principal amount of the 2025 Notes, which was equivalent to an initial conversion price of approximately $37.43 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the Indenture dated May 15, 2020 (the 2025 Indenture). During the fiscal year ended December 31, 2023, the Company repurchased $123.0 million principal amount of the 2025 Notes for approximately $172.7 million in cash, which resulted in a $50.3 million loss on extinguishment of debt. During the same fiscal year, the Company also settled conversions of approximately $35.4 million aggregate principal amount of the 2025 Notes with a combination of cash equal to the aggregate principal amount of the converted 2025 Notes and the issuance of approximately 0.5 million shares of the Company's Class A common stock for the remainder of the conversion value in excess of the aggregate principal amount converted. There are no 2025 Notes currently outstanding as a result of these transactions above and past transactions which are not presented herein. Refer to Note 7 to the consolidated financial statements in Part II, Item 8 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for further information on the 2025 Notes. 2025 Capped Call TransactionsIn connection with the offering of the 2025 Notes, the Company entered into privately-negotiated capped call option transactions (the 2025 Capped Calls) with certain financial institution counterparties. The 2025 Capped Calls each have an initial strike price of approximately $37.43 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The 2025 Capped Calls each have an initial cap price of $57.58 per share, subject to certain adjustments. The 2025 Capped Calls expire between March and May 2025 and will be settled in accordance with their terms in May 2025.In March 2025, the Company elected cash settlement for the 2025 Capped Calls. Upon the last 2025 Capped Calls expiration in May 2025, the Company expects to