🐂 NET — Company Profile (Educational)¶
Educational site, not investment advice. Market cap / stock price / quarterly numbers change quickly, so we don't write them. Use SEC + Yahoo Finance links below to check current data.
📌 Basic Info¶
| Field | Value | Source |
|---|---|---|
| Primary business | Global CDN + edge cloud + Zero Trust security + Workers (edge compute) + Cloudflare AI (Workers AI inference) | 10-K FY25 |
| Founded / HQ | 2009 / San Francisco, California, USA | wiki |
| CEO | Matthew Prince (co-founder CEO) | company announcement |
| Primary listing | NYSE: NET (IPO 2019/09) | — |
| Fiscal year | Calendar year (Jan 1 - Dec 31) | SEC EDGAR |
💡 Real-time market cap / share price / Workers AI adoption / Zero Trust customer count: see SEC primary + IR links below
🏭 Industry Chain Coordinates (Part 1-C6 framework)¶
Upstream (Who NET depends on)¶
| Supplier | What flows | Key dependency |
|---|---|---|
| Data centers + network ISPs (across 320+ cities) | Physical PoP facilities | mix of owned + leased |
NVDA / AMD |
GPUs (Workers AI inference backend) | hardware procurement similar to hyperscalers |
| Telco + network operators | Access bandwidth (peering) | global network partnerships |
INTC / AMD |
General-purpose CPUs (CDN + Workers compute nodes) | commodity hardware |
Downstream (Who depends on NET)¶
| Customer | What flows | Concentration |
|---|---|---|
| Website + app developers (free + Pro tier) | CDN + DNS + basic DDoS protection | long-tail; free users as traffic base |
| Large enterprises (Fortune 500 + carrier networks) | Magic WAN + Magic Transit + Zero Trust + Workers | top-customer ARR share rising |
| Government + national security agencies | Government cloud + Zero Trust access | high-margin vertical |
| AI / developer startups | Workers AI inference (competing with hyperscalers for inference workloads) | new growth |
Competitors¶
- CDN (legacy): Akamai (
AKAM) · Fastly (FSLY, weak) · hyperscaler in-house CDN (AMZNCloudFront /MSFTAzure CDN /GOOGLCloud CDN) - Zero Trust / SASE: Zscaler (
ZS) · CrowdStrike (CRWD) ·MSFTDefender · Cisco Umbrella (CSCO) - DDoS protection: Akamai · Imperva · hyperscalers
- Edge compute / Workers AI:
AMZNLambda@Edge ·MSFTAzure Functions · Fastly Compute · Vercel - AI inference at edge:
NVDAecosystem ·GOOGLCloud Run · specialized AI inference startups
💼 Business Model + Value Capture (Part 1-C7 lens)¶
- Revenue mix: Subscription ~99% (by paid customer + module count); by region: NA ~55% / EMEA / APAC; by customer type: large customers ($100K+ ARR) share is rising
- Gross margin: GAAP ~78%; non-GAAP operating margin 10%+ (lower than SaaS peers due to heavy R&D + capex)
- Pricing power: Per paid feature + traffic + Workers compute unit; unit-based model similar to hyperscalers — medium-strong
- Replacement difficulty: Network + security + Workers triple-stack integration; 1-2 year switch; but hyperscaler in-house CDN + security competition
(For large customer ($100K+ ARR) count / NRR / Workers AI growth, see latest SEC 10-Q)
🏰 Moat Assessment (Part 3-C2 Buffett 5-step lens)¶
| Type | Strength (0-1) | Reasoning |
|---|---|---|
| Brand | 0.7 | High recognition among developers + security engineers; "Cloudflare" is one of the CDN/DDoS benchmarks |
| Switching cost | 0.6 | DNS + WAF + Workers cross-stack integration, medium switching difficulty |
| Network effect | 0.7 | 320+ PoP edge network (more customers → more ISP peering → faster) |
| Scale + cost | 0.6 | In-house network scale advantage + single-vendor multi-product cross-sell |
Total: 2.6 / 4 → medium-strong moat (network scale + cross-product integration is the core), but hyperscaler in-house competition is long-term pressure
⚠️ Key Invalidation Triggers (Part 3-C5 anti-thesis lens)¶
Monitor; if triggered, re-evaluate thesis:
- Trigger 1 (quarterly): Large customer ($100K+ ARR) growth YoY < 30%
- Trigger 2 (medium probability): Hyperscaler (
AMZN/MSFT) heavily bundles CDN + security, customers consolidate back to hyperscaler - Trigger 3 (quarterly): NRR < 110% (historical ~115%+)
- Trigger 4 (low probability): Major Cloudflare network outage (historical 2019 global outage case)
- Trigger 5 (annual): Workers AI inference growth below expectations — NET fails to capture AI inference at edge
🔗 Cross-Chapter Teaching Links¶
- Part 1-C5 · Hardware Stack — Edge compute vs centralized cloud
- Part 1-C7 · Value Capture — Network-scale platform model
- Part 1-C8 · AI Applications — Workers AI cross-edge inference path
- Patterns — #2 incumbent moat · #6 SaaS subscription · #16 platform aggregation
📚 SEC Primary Public Filings (DYOR)¶
- SEC EDGAR NET all filings — complete filing history (10-K / 10-Q / 8-K / DEF 14A)
- Investor Relations — earnings calendar + Investor Day + Connect investor events
Live quote: Yahoo Finance NET
Educational · Numbers change, the method does not · Make investment decisions based on your own research + risk tolerance