Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin-7.9%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin-24.4%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
C
Years to Pay Off Debt-20.8 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt$173M
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$2.2B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Price-to-Book70.03x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
C
Free Cash Flow$56M
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings-$43M
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About Cloudflare, Inc.
Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides a cloud-based security solution to secure a range of combination of platforms, including public and private cloud, on-premises, software-as-a-service applications, and Internet of things (IoT) devices; and application security products comprising web application firewall, bot management, distributed denial of service mitigation, API security, SSL/TLS encryption, client-side security, and security center products. It also offers application performance solutions, such as content delivery, load balancing, DNS, smart shield, video stream delivery, web optimization, cloudfare waiting room, and cloudfare data localization suite; SASE platform that combines network services and Zero Trust and workplace security products that provides a cloud-based network and security-as-a-service; network services, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust security services which include cloudflare zero trust network access, secure web gateway, and one client; and remote browser isolation, cloud access security broker, cloud email security, digital experience monitoring, and data loss prevention products. Further, it provides developer-based solutions comprising workers AI, vectorize, AI gateway, cloudflare workers, cloudflare pages, R2 object storage, workers KV, durable objects, D1, hyperdrive, queues, cloudfare stream, cloudfare images, and cloudflare realtime; and consumer offerings, such as 1.1.1.1 DNS and with WARPm and cloudfare registrar that offers secure registration and management of domain names. The company serves customers in technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. The company was incorporated in 2009 and is headquartered in San Francisco, California.
Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides a cloud-based security solution to secure a range of combination of platforms, including public and private cloud, on-premises, software-as-a-service applications, and Internet of things (IoT) devices; and application security products comprising web application firewall, bot management, distributed denial of service mitigation, API security, SSL/TLS encryption, client-side security, and security center products. It also offers application performance solutions, such as content delivery, load balancing, DNS, smart shield, video stream delivery, web optimization, cloudfare waiting room, and cloudfare data localization suite; SASE platform that combines network services and Zero Trust and workplace security products that provides a cloud-based network and security-as-a-service; network services, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust security services which include cloudflare zero trust network access, secure web gateway, and one client; and remote browser isolation, cloud access security broker, cloud email security, digital experience monitoring, and data loss prevention products. Further, it provides developer-based solutions comprising workers AI, vectorize, AI gateway, cloudflare workers, cloudflare pages, R2 object storage, workers KV, durable objects, D1, hyperdrive, queues, cloudfare stream, cloudfare images, and cloudflare realtime; and consumer offerings, such as 1.1.1.1 DNS and with WARPm and cloudfare registrar that offers secure registration and management of domain names. The company serves customers in technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. The company was incorporated in 2009 and is headquartered in San Francisco, California.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Net Income From Continuing Operation Net Minority Interest
-169,981
-12,077
Reconciled Depreciation
65,356
52,586
Reconciled Cost Of Revenue
196,544
161,956
EBITDA
-99,495
44,965
EBIT
-164,851
-7,621
Net Interest Income
36,843
38,998
Interest Expense
3,089
2,887
Interest Income
39,932
41,885
Normalized Income
-79,565
-12,077
Net Income From Continuing And Discontinued Operation
-169,981
-12,077
Total Expenses
751,064
663,741
Total Operating Income As Reported
-205,696
-49,234
Diluted Average Shares
354,334
351,087
Basic Average Shares
354,334
351,087
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
-169,981
-12,077
Net Income Common Stockholders
-169,981
-12,077
Net Income
-169,981
-12,077
Net Income Including Noncontrolling Interests
-169,981
-12,077
Net Income Continuous Operations
-169,981
-12,077
Tax Provision
2,041
1,569
Pretax Income
-167,940
-10,508
Other Income Expense
-149,780
-272
Other Non Operating Income Expenses
913
-272
Special Income Charges
-150,693
0
Restructuring And Mergern Acquisition
150,693
Net Non Operating Interest Income Expense
36,843
38,998
Interest Expense Non Operating
3,089
2,887
Interest Income Non Operating
39,932
41,885
Operating Income
-55,003
-49,234
Operating Expense
554,520
501,785
Research And Development
159,486
141,887
Selling General And Administration
395,034
359,898
Selling And Marketing Expense
276,122
251,138
General And Administrative Expense
118,912
108,760
Other Gand A
118,912
108,760
Gross Profit
499,517
452,551
Cost Of Revenue
196,544
161,956
Total Revenue
696,061
614,507
Operating Revenue
696,061
614,507
Balance Sheet
2026
2025
Ordinary Shares Number
355,931
351,887
Share Issued
355,931
351,887
Net Debt
1,606,493
2,321,865
Total Debt
3,529,350
3,518,327
Tangible Book Value
1,186,447
1,190,761
Invested Capital
4,890,286
4,724,524
Working Capital
2,150,341
2,294,274
Net Tangible Assets
1,186,447
1,190,761
Capital Lease Obligations
259,084
252,926
Common Stock Equity
1,620,020
1,459,123
Total Capitalization
3,597,026
3,433,243
Total Equity Gross Minority Interest
1,620,020
1,459,123
Stockholders Equity
1,620,020
1,459,123
Gains Losses Not Affecting Retained Earnings
-10,233
12,259
Other Equity Adjustments
-10,233
12,259
Retained Earnings
-1,397,815
-1,204,907
Additional Paid In Capital
3,027,713
2,651,420
Capital Stock
355
351
Common Stock
355
351
Total Liabilities Net Minority Interest
4,854,107
4,577,133
Total Non Current Liabilities Net Minority Interest
2,226,073
2,226,570
Other Non Current Liabilities
27,970
29,337
Non Current Deferred Liabilities
40,252
41,088
Non Current Deferred Revenue
40,252
41,088
Long Term Debt And Capital Lease Obligation
2,157,851
2,156,145
Long Term Capital Lease Obligation
180,845
182,025
Long Term Debt
1,977,006
1,974,120
Current Liabilities
2,628,034
2,350,563
Current Deferred Liabilities
812,187
684,207
Current Deferred Revenue
812,187
684,207
Current Debt And Capital Lease Obligation
1,371,499
1,362,182
Current Capital Lease Obligation
78,239
70,901
Current Debt
1,293,260
1,291,281
Other Current Borrowings
1,293,260
1,291,281
Pensionand Other Post Retirement Benefit Plans Current
151,528
111,005
Payables And Accrued Expenses
292,820
193,169
Current Accrued Expenses
165,788
109,054
Payables
127,032
84,115
Accounts Payable
127,032
84,115
Total Assets
6,474,127
6,036,256
Total Non Current Assets
1,695,752
1,391,419
Other Non Current Assets
70,772
47,221
Non Current Deferred Assets
240,523
219,499
Goodwill And Other Intangible Assets
433,573
268,362
Other Intangible Assets
57,369
41,799
Goodwill
376,204
226,563
Net PPE
950,884
856,337
Accumulated Depreciation
-474,912
-379,445
Gross PPE
1,425,796
1,235,782
Leases
52,719
50,906
Construction In Progress
102,720
58,372
Other Properties
1,070,212
965,235
Machinery Furniture Equipment
200,145
161,269
Current Assets
4,778,375
4,644,837
Other Current Assets
153,282
128,203
Restricted Cash
12,163
9,364
Receivables
450,132
406,019
Other Receivables
27,187
23,531
Accounts Receivable
422,945
382,488
Allowance For Doubtful Accounts Receivable
-7,900
-7,079
Gross Accounts Receivable
430,845
389,567
Cash Cash Equivalents And Short Term Investments
4,162,798
4,101,251
Other Short Term Investments
2,499,025
3,157,715
Cash And Cash Equivalents
1,663,773
943,536
Cash Equivalents
1,607,259
886,060
Cash Financial
56,514
57,476
Cash Flow
2026
2025
2024
Free Cash Flow
56,384
99,444
Capital Expenditure
-61,180
-90,967
Interest Paid Supplemental Data
4
5
Income Tax Paid Supplemental Data
1,811
1,925
End Cash Position
1,675,936
954,357
Beginning Cash Position
944,413
1,059,492
Changes In Cash
731,523
-105,135
Financing Cash Flow
5,785
-3,827
Cash Flow From Continuing Financing Activities
5,785
-3,827
Net Other Financing Charges
-14,402
-19,873
Proceeds From Stock Option Exercised
20,187
16,046
Investing Cash Flow
608,174
-291,719
Cash Flow From Continuing Investing Activities
608,174
-291,719
Net Other Investing Changes
-64,877
-43,273
Net Investment Purchase And Sale
734,231
-157,479
Sale Of Investment
749,047
793,037
Purchase Of Investment
-14,816
-950,516
Net PPE Purchase And Sale
-49,961
-85,190
Purchase Of PPE
-49,961
-85,190
Capital Expenditure Reported
-11,219
-5,777
Operating Cash Flow
117,564
190,411
Cash Flow From Continuing Operating Activities
117,564
190,411
Change In Working Capital
16,703
-15,890
Change In Other Working Capital
9,920
25,410
Change In Other Current Liabilities
-23,661
-23,156
Change In Other Current Assets
749
2,350
Change In Payables And Accrued Expense
105,829
28,333
Change In Accrued Expense
87,326
15,140
Change In Payable
18,503
13,193
Change In Account Payable
18,503
13,193
Change In Prepaid Assets
-26,094
-17,717
Change In Receivables
-50,040
-31,110
Changes In Account Receivables
-47,015
-32,680
Other Non Cash Items
54,044
46,496
Stock Based Compensation
159,872
123,625
Provisionand Write Offof Assets
3,656
2,211
Amortization Of Securities
-5,873
-8,353
Deferred Tax
-6,213
1,813
Deferred Income Tax
-6,213
1,813
Depreciation Amortization Depletion
65,356
52,586
Depreciation And Amortization
65,356
52,586
Net Income From Continuing Operations
-169,981
-12,077
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $512M▲ $696M+35.9%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 74.9%▲ 71.8%-3.1pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: -10.7%▲ -7.9%+2.8pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: -9.8%▼ -24.4%-14.6pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$696M/qtr (≈$2.8B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
1.82x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$56M
vs Positive
Operating Cash Flow
$118M
Latest quarter · Buffett's cash reality check
ROIC
-1.1%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
70.0x
Net Assets: $1.6B
Asset Context — Software - Infrastructure
Software companies store most of their value in code, IP, recurring revenue, and customer relationships — none of which appear on the balance sheet under GAAP. Book value and Net Assets are poor proxies for intrinsic value here. Focus on ROIC, gross margin trajectory, and free cash flow instead.
⚠️Net margin compressed 14.6pp vs same quarter last year. Common causes: one-time charges (restructuring, write-downs, legal settlements), tax rate changes, or rising interest expense. Check the income statement notes before drawing conclusions about operating health.
Peers & Industry
No auto-detected peers for Software - Infrastructure. You can manually compare NET against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.62%
Low — management has little skin in the game
Return on Equity (ROE)
-10.5%
Weak — poor returns on equity
Return on Assets (ROA)
-2.6%
Poor — assets are not generating adequate returns
Debt Trend YoY
+0.1% YoY
Debt is roughly stable
Leadership Team
Matthew Prince
Co-Founder, Co-Chairman & CEO
Age 50
Pay: $2,299,951
Michelle Zatlyn
Co-Founder, President & Co-Chair of the Board
Age 45
Pay: $1,794,059
Thomas Josef Seifert
Chief Financial Officer
Age 62
Pay: $750,000
Philip Alan Winslow Jr., , Jr.
Vice President of Strategic Finance, Treasury and Investor Relations
Mark Anderson
President of Revenue
Age 63
Pay: $7,665
Top Institutional Holders
Institution
% Owned
Shares
Capital World Investors
7.57%
24,325,692
Blackrock Inc.
6.72%
21,598,907
Vanguard Portfolio Management LLC
5.24%
16,819,726
Morgan Stanley
4.75%
15,258,327
BAILLIE GIFFORD & CO
4.55%
14,598,594
Vanguard Capital Management LLC
4.49%
14,430,365
FMR, LLC
3.94%
12,655,471
Capital International Investors
3.42%
10,981,005
Risk Analysis
Beta (Market Risk)
1.66
High volatility — moves more than the market
Short Interest
2.4% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
2.18x
High leverage — significant financial risk
Current Ratio
1.82x
Adequate liquidity
52-Week Price Range
Low: $158.83Current: $351.67High: $352.45
Currently at 100% of 52-week range
Cloudflare, Inc. (NET) fundamental analysis — Overall grade F based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A (negative EPS). Gross profit margin: 71.8%. Operating margin: -7.9%. Net margin: -24.4%. Market cap: $125.2B. Sector: Technology. Industry: Software - Infrastructure. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.