How Does Cloudflare Make Money in 2027?
Cloudflare makes money by selling subscriptions to access its global network and products. Its 10-Q says it generates revenue primarily from those subscriptions, together with related support services. Customers buy Pro and Business plans online, sign Enterprise contracts that typically run one to three years, pay per seat for Zero Trust, or pay by usage for developer products.
The latest reported quarter is Q2 2026 (ended June 30, 2026), with revenue of $696.1 million, up 36% year over year, per the earnings release. The same quarter had 4,698 paying customers above $100,000 in annualized revenue (3,712 a year earlier) and a dollar-based net retention rate of 120% (114% a year earlier), per the 10-Q. Total paying customers were approximately 332,000 at December 31, 2025, per the 2025 10-K. The 10-Q does not report a total paying-customer count.
The revenue model in Cloudflare's own words
The Q2 2026 10-Q describes three ways customers buy. Each one is a form of recurring revenue, and none is advertising or transaction revenue.
- Contracted customers. These sign for the Enterprise plan. Contracts typically run one to three years, are billed monthly or annually, and generally include a base subscription and, in some cases, a portion based on variable usage.
- Pool of funds deals. Some larger enterprise customers commit to spend at least a set amount during the subscription period without naming specific products, as long as the funds are used within the term.
- Pay-as-you-go customers. They buy through the website, typically by credit card. Pro and Business plans are sold per registered domain, Zero Trust and network services are sold per seat, and developer products are sold on a usage-based plan metered by requests and execution time.
The 2025 10-K adds that a substantial majority of 2025 revenue came from contracted customers acquired through inside and field sales teams, and that no single customer was more than 10% of revenue in 2023, 2024 or 2025.
Plan tiers and list prices
The Cloudflare plans page lists four plans for websites and applications. Prices below are the website list prices read on October 18, 2026, and Enterprise is called Contract on that page.
- Free$0 per month, for personal or hobby projects that are not business-critical
- Pro$20 per month billed annually, or $25 per month billed monthly
- Business$200 per month billed annually, or $250 per month billed monthly
- Enterprise (listed as Contract)Custom pricing, billed annually
These are per-domain list prices. The 10-Q says the Pro and Business plans are the pay-as-you-go entry points sold through the website, while the large contracts that drive most revenue are negotiated individually, so the list prices say little about revenue per customer.
Product lines that carry the revenue
The 2025 10-K groups the products into four families. It does not report revenue for each one, so no revenue split by product is given here.
- Application services. Security, performance and reliability for websites and APIs, including the web application firewall, bot management, DDoS mitigation, content delivery, load balancing and DNS.
- SASE platform. Zero Trust and workplace security services plus network services such as Magic Transit, Magic Firewall, Cloudflare Network Interconnect and Spectrum.
- Developer platform. Cloudflare Workers, Workers AI, R2 Object Storage, D1, Workers KV and Durable Objects. The 10-K says many of these are priced on the contracted customer's amount of usage, with no obligation to continue using them or increase usage.
- Consumer offerings. Products such as WARP+ and Cloudflare Registrar. The 10-Q calls the consumer and registrar-only customers an insignificant amount of revenue.
The 10-K also says customers can join with a single product and expand by adding more, and that the developer products opened a new market in storage and compute.
Revenue, customers and retention
These are the figures Cloudflare reports. Each is tagged with its period and source.
- Q2 2026 revenue (earnings release)$696.1 million, up 36% year over year
- 2025 full-year revenue (10-K)$2,167,937 thousand, up 30%, or $498.3 million, from 2024
- Paying customers, December 31, 2025 (10-K)Approximately 332,000 across more than 190 countries
- Large customers (over $100,000 annualized revenue), June 30, 2026 (10-Q)4,698, against 3,712 on June 30, 2025
- Large customers, year-end (10-K)2,756 in 2023, 3,497 in 2024, 4,298 in 2025
- Dollar-based net retention, Q2 2026 (10-Q)120%, against 114% in Q2 2025
- Dollar-based net retention, Q4 (10-K)115% in 2023, 111% in 2024, 120% in 2025
- Q3 2026 revenue guidance (earnings release)$736.0 to $737.0 million
- Full-year 2026 revenue guidance (earnings release)$2,864.0 to $2,870.0 million
Cloudflare defines dollar-based net retention as annualized revenue from paying customers four quarters ago compared with the same customers in the latest quarter. It includes expansion and is net of contraction and attrition, and it excludes new customers, professional services and free customers that upgrade. The 10-K says the 2025 revenue increase came from new paying customers, which grew 40% in 2025, and from expansion within existing paying customers.
The 10-Q says large customers have contributed an increasing share of revenue over time. Cloudflare's filings do not give that share as a percentage, so this page does not either.
Revenue by geography and by sales channel
The 10-Q reports revenue by the billing address of the customer. For the three months ended June 30, 2026:
- United States$354,447 thousand, 51% of revenue (49% in Q2 2025)
- Europe, Middle East, and Africa$187,039 thousand, 27% of revenue (28% in Q2 2025)
- Asia Pacific$99,444 thousand, 14% of revenue (15% in Q2 2025)
- Other$55,131 thousand, 8% of revenue (8% in Q2 2025)
For full-year 2025 the 10-K shows the United States at 49%, EMEA at 28%, Asia Pacific at 15% and Other at 8%, and says 51% of 2025 revenue came from international customers.
The 10-Q also splits revenue by type of customer. In Q2 2026, channel partners were 31% of revenue and direct customers were 69%, against 25% and 75% in Q2 2025. That shift matters to anyone modeling its go-to-market.
The free-tier funnel as management describes it
The 2025 10-K calls the free plan an important part of the overall business strategy, and says the vast majority of customers do not pay. Management is candid about the economics:
- Free customers bring no revenue and Cloudflare bears incremental expenses and liabilities for their use of the network.
- Conversion is a minor driver. The filing says a substantial majority of free customers historically have not converted, and it expects that to continue. Growth depends mainly on retaining and upgrading paying customers and adding products, and only to a lesser extent on converting free customers.
- The retention metric excludes upgrades. Dollar-based net retention leaves out free customers that upgrade, which the filing calls an important source of incremental growth.
In short, the free tier is a wide top of funnel and a source of network data and brand reach, not a conversion engine. The money comes from paid expansion and large contracts.
What this means for RevOps teams
These points are my reading of the filings above, not statements by Cloudflare.
- Watch net retention and the large-customer count together. Cloudflare's own growth explanation pairs new paying customers with expansion, and its large-customer count rose each year from 2,756 in 2023 to 4,698 in Q2 2026.
- Separate list-price and contract motions. Pro and Business are credit-card plans, while Enterprise is negotiated and may combine a base subscription, variable usage and pool of funds commitments. Forecasting and compensation need to treat them differently.
- Plan for usage revenue. Developer products are metered, so revenue follows consumption rather than a signed seat count.
- Do not credit the free tier with revenue it does not report. The company says conversions are a lesser driver, so a free-to-paid rate is not a safe planning input.
- Track channel mix. Channel partners rising from 25% to 31% of quarterly revenue changes who owns the customer relationship.
Questions people ask
How does Cloudflare make money?
Mainly from subscriptions to its network and products plus related support. Customers pay through Pro and Business plans sold online, Enterprise contracts that typically run one to three years, per-seat Zero Trust plans, and usage-based developer products.
How much revenue does Cloudflare report?
Revenue was $696.1 million in Q2 2026, up 36% year over year, and $2,167,937 thousand for 2025, up 30%. Its full-year 2026 guidance is $2,864.0 to $2,870.0 million.
How many customers does Cloudflare have?
Approximately 332,000 paying customers at December 31, 2025, per the 10-K. The 10-Q for June 30, 2026 reports 4,698 paying customers above $100,000 in annualized revenue, up from 3,712 a year earlier.
What is Cloudflare's net retention rate?
Its dollar-based net retention rate was 120% for the three months ended June 30, 2026, against 114% a year earlier. For the fourth quarter it was 120% in 2025, 111% in 2024 and 115% in 2023.
How much do Cloudflare's plans cost?
The plans page lists Free at $0 per month, Pro at $20 per month billed annually or $25 monthly, and Business at $200 per month billed annually or $250 monthly. Enterprise is custom and billed annually.
Does the free plan make money?
No. The 10-K says Cloudflare receives no revenue from free customers and that a substantial majority of them have not converted to paying customers. It still calls the free plan an important part of its strategy.
Sources
- Cloudflare Form 10-K for 2025 (SEC) · Revenue, paying customers, large customers, net retention, products, geography, free plan strategy
- Cloudflare Form 10-Q for the quarter ended June 30, 2026 (SEC) · Revenue model, large customers, net retention, revenue by region and by customer type
- Cloudflare Q2 2026 earnings release (SEC Form 8-K, Exhibit 99.1) · Q2 2026 revenue and growth, guidance
- Cloudflare plans page · Plan tiers and list prices
Figures were read from the linked filings and plans page on October 18, 2026. The 27% growth in large customers is my own arithmetic on reported counts and is not a Cloudflare metric. List prices change, so check the plans page and the latest filing before you rely on any number.
Top photo: UASA editor / CC BY-SA 4.0 via Wikimedia Commons