Cloudflare, Inc. NET

36% shingled-prose overlap between the two filings.

2025: 125,289 chars · 2026: 200,000 chars

• Pay Ratio (Item 402(u)):17% overlap (9,904 → 2,482 chars)
• Say-on-Pay proposal:10% overlap (25,000 → 2,513 chars)

• changedThis Compensation Discussion and Analysis provides information regarding the 2025 2024compensation program for our principal executive officer, our principal financial officer, and each of our two other executive officers at fiscal year-end (our named executive officers).
• changedOur named executive officers for the fiscal year ended December 31, 2025 2024were:
• newNamed Executive Officer Title Matthew Prince Chief Executive Officer and Co-Chair of our Board of Directors (our CEO) Michelle Zatlyn(1) President and Co-Chair of our Board of Directors (our President) Thomas Seifert Chief Financial Officer (our CFO) Douglas Kramer(2) Former Chief Legal Officer and Secretary (our Former CLO)
• changed(1) Ms. (1)Ms.Zatlyn was appointed Co-Chair of our Board of Directors on February 5, 2025.
• new(2) Mr. Kramer stepped down from his role as Chief Legal Officer effective March 31, 2026, and Ms. Starzak became our Chief Legal Officer and Secretary commencing April 1, 2026.
• newBecause Ms. Starzak was appointed to this position after the close of the fiscal year ended December 31, 2025, she was not an executive officer or a named executive officer during 2025 and her compensation is not reflected in the Executive Compensation section of this Proxy Statement.
• newThe compensation information presented herein for Mr. Kramer reflects compensation for his service during 2025.
• changedThis Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2025. 2024.
• changedFinally, it analyzes how and why our Board of Directors and the compensation committee arrived at the specific compensation decisions for our named executive officers in 2025 2024and discusses the key factors that were considered in making these decisions.
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• new2025 Business Highlights
• changedOur 2025 2024financial highlights included the following:
• changed• Revenue •Revenue– Total revenue of $2,167.9 $1,669.6million, representing an increase of 29.8% 29%year-over-year.
• changed• Gross •GrossProfit – GAAP gross profit was $1,615.4 $1,290.9million, or 74.5% 77.3%gross margin, compared to $1,290.9 $989.7million, or 77.3%, 76.3%,in fiscal 2024. 2023.
• changedNon-GAAP gross profit was $1,643.2 $1,313.6million, or 75.8% 78.7%gross margin, compared to $1,313.6 $1,015.8million, or 78.7%, 78.3%,in fiscal 2024. 2023.
• changed• Operating •OperatingIncome/Loss – GAAP loss from operations was $207.2 $154.8million, or 9.6% 9.3%of total revenue, compared to $154.8 million aGAAPlossfromoperationsof$185.5million,or 9.3% 14.3%of total revenue, in fiscal 2024. 2023.
• changedNon-GAAP income from operations was $303.9 $230.1million, or 14.0% 13.8%of total revenue, compared to $230.1 non-GAAPincomefromoperationsof$122.0million, or 13.8% 9.4%of total revenue, in fiscal 2024. 2023.
• changed• Net •NetIncome/Loss – GAAP net loss was $102.3 million $78.8million,compared to $78.8 aGAAPnetlossof$183.9million for fiscal 2024. 2023.
• changedGAAP net loss per basic and diluted share was $0.29, $0.23,compared to $0.23 aGAAPnetlossperbasicanddilutedshareof$0.55for fiscal 2024. 2023.
• changedNon-GAAP net income was $342.9 million $269.0million,compared to $269.0 non-GAAPnetincomeof$169.7million for fiscal 2024. 2023.
• changedNon-GAAP net income per diluted share was $0.93, $0.75,compared to $0.75 non-GAAPnetincomeperdilutedshareof$0.49for fiscal 2024. 2023.
• changed• Cash •CashFlow – Net cash flow from operating activities was $603.1 $380.4million, compared to $380.4 $254.4million for fiscal 2024. 2023.
• changedFree cash flow was $260.6 $166.9million, or 12.0% 10%of total revenue, compared to $166.9 $119.5million, or 10.0% 9%of total revenue, for fiscal 2024. 2023.
• changedFor a full reconciliation for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP, please see Exhibit 99.1 to our Current Report on Form 8-K and our 2025 2024Annual Report filed with the SEC on February 10, 2026 6,2025and February 26, 2026, 20,2025,respectively.
• changed2025 2024Executive Compensation Highlights
• changedOur Board of Directors, upon the recommendations of Directorsandthe compensation committee, committeetook the following actions with respect to the compensation of our named executive officers for 2024and2025:
• changed• Base Salary Increases – In February 2025, we increased the annual base salaries of Mr. Prince and Ms. Zatlyn (collectively, eachofour “Co-Founders”) Co-Foundersto $550,000, which reflected the first increase in their base salaries since our initial public offering in 2019.
• newThe base salaries of Messrs.
• newSeifert and Kramer were maintained at their 2024 levels during 2025.
• changed• No •NoAnnual Cash Bonus Program – We did not have a cash bonus program in 2025 2024for our named executive officers and historically have not maintained an annual cash bonus program for our named executive officers.
• changed• Long-Term Incentive Compensation for Co-Founders – In February2025, we granted Mr. Prince and Ms. Zatlyn long-term incentive compensation opportunities awardsin the form of RSU awards and performance-based RSU (“PSU”) (PSU)awards under the 2019 Plan.
• changed• Long-Term •Long-TermIncentive Compensation for Messrs.
• changedSeifert and Kramer – In 2025, January2024,we granted toMessrs.
• newSeifert and Kramer long-term incentive compensation opportunities in the form of RSU awards under the 2019 Plan that vest over approximately one year.
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• changedThe following summarizes our executive compensation and related policies and practices that were in effect in 2025: 2024:
• changedWhat We Do What DoWhatWe Don’t Do ☑ Maintain Do☑Maintainan Independent Compensation Committee.
• changedThe compensation committee consists solely of independent directors who establish our compensation policies and practices. practices.☒LimitedPerquisites.
• new☒ Limited Perquisites.
• changedPerquisites or other personal benefits are not a material part of our compensation program for our named executive officers, and generally are only provided when they serve a legitimate business purpose (such as the security or health of our Co-Founders). Co-Founders).☑RetainanIndependentCompensationAdvisor.
• new☑ Retain an Independent Compensation Advisor.
• new☒ Limited Tax Reimbursements.
• changedWe do not provide any tax reimbursement payments (including “gross-ups”) on any perquisites or other personal benefits, except in limited circumstances to achieve specific business objectives. objectives.☑AnnualExecutiveCompensationReview.
• new☑ Annual Executive Compensation Review.
• changed☒ No ☒NoExcise Tax Payments on Future Post-Employment Compensation Arrangements.
• new☑ Use a “Pay-for-Performance” Philosophy.
• new☒ No Special Retirement or Welfare Benefits.
• changedWe do not provide our named executive officers with any retirement retirement,health,or welfare benefit programs, other than participation in our broad-based employee plans and programs on the same basis as our other full-time, salaried employees.
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• newWhat We Do What We Don’t Do ☑ Stock Ownership Guidelines.
• changedWe maintain a stock ownership policy that requires minimum ownership of shares of our common stock by our CEO, President, all Senior Vice Presidents who report to our Co-Founders andabove(which includes all executive officers who are subject to Section 16 of the Exchange Act), and the non-employee members of our Board of Directors. Directors.☒NoHedgingorPledgingofourSecurities.
• new☒ No Hedging or Pledging of our Securities.
• changedWe prohibit, absent a waiver from our CLO or our CFO, our named executive officers and the non-employee members of our Board of Directors from hedging or pledging our securities. securities.☑CompensationRecovery(“Clawback”)Policy.
• new☑ Compensation Recovery (“Clawback”) Policy.
• changedWe have adopted a compensation recovery (“clawback”) policy that complies with Exchange Act Rule 10D-1 and the applicable listing standards of the NYSE and permits us thecompanyto recover annual and long-term incentives from our current and former executive officers.
• changed☒ No ☒No“Single Trigger” Change in Control Severance Payments or Benefits.
• changedAt the 2025 2024Annual Meeting, we conducted a “Say-on-Pay” vote.
• changedApproximately 88.9% 81.2%of the shares represented and entitled to vote on the matter (excluding broker non-votes) voted to approve, on an advisory basis, the compensation of our named executive officers.
• changedAccordingly, following the Annual Meeting, our next Say-on-Pay vote will be conducted at our 2027 2026annual meeting of stockholders.
• changed• attract, •attract,motivate, incentivize, and retain employees at the executive level who contribute to our long-term success;
• changed• provide •providecompensation packages to our executives that are fair, easy to understand, and competitive; provide high retention value; and reward high performance and the achievement of our business objectives; and
• changed• effectively •effectivelyalign our executives’ interests with those of our stockholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders.
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• changedInstead, in making its determinations, the compensation committee reviews information summarizing the compensation paid at a representative group of peer companies and more broad-based compensation surveys to gain a general understanding of competitive market compensation levels.
• changedOur Co-Founders make their recommendations regarding annual base salaries and long-term incentive compensation opportunities for our other named executive officers based on such factors as our Co-Founders deem relevant, such as our thecompany’soverall performance and expected trajectory, the contributions toward these results, and anticipated future contributions, the named executive officer’s role and performance of his or her duties and his or her achievement of individual goals, retention considerations, and internal equity considerations.
• changedIn 2025, 2024,the compensation committee continued to engage Compensia, a national compensation consulting firm, to serve as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for our named executive officers and the data analysis and selection of our compensation peer group.
• changedDuring 2025, 2024,Compensia attended the meetings of the compensation committee (both with and without management present) as requested and provided various services, including the following:
• changed• reviewed, •reviewed,researched, and updated our compensation peer group;
• changed• analyzed •analyzedcompetitive market data based on our compensation peer group and broad-based compensation survey data for our executive officer positions, including our named executive officers’ positions, and conducted an evaluation of how the compensation we pay our executive officers compares both to our performance performanceand to how the companies in our compensation peer group compensate their executives;
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• changed• reviewed •reviewedand analyzed the base salary levels and long-term incentive compensation opportunities of our named executive officers, including as compared to our compensation peer group’s practices and broad-based compensation survey data for our executive officer positions;
• changed• reviewed •reviewedand analyzed the annual cash retainers and long-term incentive compensation opportunities for our non-employee directors under our outside director compensation program;
• changed• analyzed •analyzedthe adequacy of outstanding executive equity awards and consideration of the need for and appropriateness of future senior executive equity awards, including consideration of our compensation peer group’s practices, retention and motivation considerations, and corporate governance considerations;
• changed• reviewed •reviewedour equity utilization rates compared to the competitive market and our compensation peer group practices;
• changed• conducted •conducteda risk assessment of our executive compensation program;
• changed• reviewed •reviewedand analyzed the reports on our executive compensation program published by the major proxy advisory firms;
• changed• provided •providedupdates on corporate governance and regulatory issues and developments;
• changed• consulted •consultedwith the compensation committee chair, other committee members, and the other advisors to the compensation committee between compensation committee meetings; and
• changed• provided •providedsupport on other ad hoc matters throughout the year.

More changes truncated for legibility. Open the filings on SEC for full prose.