FALSE0001477333Q32023--12-31http://fasb.org/us-gaap/2023#AccountingStandardsUpdate201602Member0.02671870.02859130.0052263137500014773332023-01-012023-09-300001477333us-gaap:CommonClassAMember2023-10-19xbrli:shares0001477333us-gaap:CommonClassBMember2023-10-1900014773332023-09-30iso4217:USD00014773332022-12-310001477333us-gaap:CommonClassAMember2022-12-31iso4217:USDxbrli:shares0001477333us-gaap:CommonClassAMember2023-09-300001477333us-gaap:CommonClassBMember2022-12-310001477333us-gaap:CommonClassBMember2023-09-3000014773332023-07-012023-09-3000014773332022-07-012022-09-3000014773332022-01-012022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-06-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-06-300001477333us-gaap:AdditionalPaidInCapitalMember2023-06-300001477333us-gaap:RetainedEarningsMember2023-06-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000014773332023-06-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-07-012023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-07-012023-09-300001477333us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001477333us-gaap:RetainedEarningsMember2023-07-012023-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-09-300001477333us-gaap:AdditionalPaidInCapitalMember2023-09-300001477333us-gaap:RetainedEarningsMember2023-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-06-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-06-300001477333us-gaap:AdditionalPaidInCapitalMember2022-06-300001477333us-gaap:RetainedEarningsMember2022-06-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000014773332022-06-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-07-012022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-07-012022-09-300001477333us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001477333us-gaap:RetainedEarningsMember2022-07-012022-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-09-300001477333us-gaap:AdditionalPaidInCapitalMember2022-09-300001477333us-gaap:RetainedEarningsMember2022-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-3000014773332022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001477333us-gaap:AdditionalPaidInCapitalMember2022-12-310001477333us-gaap:RetainedEarningsMember2022-12-310001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-012023-09-300001477333us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001477333us-gaap:RetainedEarningsMember2023-01-012023-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-12-310001477333us-gaap:AdditionalPaidInCapitalMember2021-12-310001477333us-gaap:RetainedEarningsMember2021-12-310001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100014773332021-12-3100014773332021-01-012021-12-310001477333us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001477333srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2021-12-310001477333srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001477333us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-09-300001477333us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001477333us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-01-012022-09-300001477333us-gaap:RetainedEarningsMember2022-01-012022-09-300001477333us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001477333country:US2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercountry:USus-gaap:GeographicConcentrationRiskMember2023-07-012023-09-30xbrli:pure0001477333country:US2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercountry:USus-gaap:GeographicConcentrationRiskMember2022-07-012022-09-300001477333country:US2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercountry:USus-gaap:GeographicConcentrationRiskMember2023-01-012023-09-300001477333country:US2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercountry:USus-gaap:GeographicConcentrationRiskMember2022-01-012022-09-300001477333us-gaap:EMEAMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:EMEAMemberus-gaap:GeographicConcentrationRiskMember2023-07-012023-09-300001477333us-gaap:EMEAMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:EMEAMemberus-gaap:GeographicConcentrationRiskMember2022-07-012022-09-300001477333us-gaap:EMEAMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:EMEAMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-09-300001477333us-gaap:EMEAMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:EMEAMemberus-gaap:GeographicConcentrationRiskMember2022-01-012022-09-300001477333srt:AsiaPacificMember2023-07-012023-09-300001477333srt:AsiaPacificMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2023-07-012023-09-300001477333srt:AsiaPacificMember2022-07-012022-09-300001477333srt:AsiaPacificMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2022-07-012022-09-300001477333srt:AsiaPacificMember2023-01-012023-09-300001477333srt:AsiaPacificMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-09-300001477333srt:AsiaPacificMember2022-01-012022-09-300001477333srt:AsiaPacificMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2022-01-012022-09-300001477333cloud:OtherGeographicalRegionsMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:OtherGeographicalRegionsMemberus-gaap:GeographicConcentrationRiskMember2023-07-012023-09-300001477333cloud:OtherGeographicalRegionsMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:OtherGeographicalRegionsMemberus-gaap:GeographicConcentrationRiskMember2022-07-012022-09-300001477333cloud:OtherGeographicalRegionsMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:OtherGeographicalRegionsMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-09-300001477333cloud:OtherGeographicalRegionsMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:OtherGeographicalRegionsMemberus-gaap:GeographicConcentrationRiskMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2022-01-012022-09-300001477333us-gaap:SalesChannelThroughIntermediaryMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:SalesChannelThroughIntermediaryMembercloud:SalesChannelConcentrationRiskMember2023-07-012023-09-300001477333us-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:SalesChannelThroughIntermediaryMembercloud:SalesChannelConcentrationRiskMember2022-07-012022-09-300001477333us-gaap:SalesChannelThroughIntermediaryMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:SalesChannelThroughIntermediaryMembercloud:SalesChannelConcentrationRiskMember2023-01-012023-09-300001477333us-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMemberus-gaap:SalesChannelThroughIntermediaryMembercloud:SalesChannelConcentrationRiskMember2022-01-012022-09-300001477333us-gaap:SalesChannelDirectlyToConsumerMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMember2023-07-012023-09-300001477333us-gaap:SalesChannelDirectlyToConsumerMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMember2022-07-012022-09-300001477333us-gaap:SalesChannelDirectlyToConsumerMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMember2023-01-012023-09-300001477333us-gaap:SalesChannelDirectlyToConsumerMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMemberus-gaap:SalesChannelDirectlyToConsumerMember2022-01-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMember2023-07-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMember2022-07-012022-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMember2023-01-012023-09-300001477333us-gaap:RevenueFromContractWithCustomerMembercloud:SalesChannelConcentrationRiskMember2022-01-012022-09-3000014773332023-10-012023-09-300001477333us-gaap:CashMember2023-09-300001477333us-gaap:CashAndCashEquivalentsMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:RestrictedCashMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-09-300001477333us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-09-300001477333us-gaap:MoneyMarketFundsMembercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-09-300001477333cloud:RestrictedCashMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-09-300001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2023-09-300001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-09-300001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-09-300001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-09-300001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-09-300001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:USTreasurySecuritiesMembercloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-09-300001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2023-09-300001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:CommercialPaperMembercloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:FairValueInputsLevel2Member2023-09-300001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333cloud:RestrictedCashMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001477333us-gaap:CashMember2022-12-310001477333us-gaap:CashAndCashEquivalentsMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:RestrictedCashMemberus-gaap:CashMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-12-310001477333us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001477333us-gaap:MoneyMarketFundsMembercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001477333cloud:RestrictedCashMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2022-12-310001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2022-12-310001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2022-12-310001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2022-12-310001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:USTreasurySecuritiesMembercloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2022-12-310001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:CommercialPaperMembercloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:FairValueInputsLevel2Member2022-12-310001477333us-gaap:FairValueInputsLevel2Memberus-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:FairValueInputsLevel2Membercloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:RestrictedCashMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:CashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:DebtSecuritiesAvailableForSaleCurrentMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333cloud:RestrictedCashMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001477333us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001477333us-gaap:MoneyMarketFundsMember2023-09-300001477333us-gaap:MoneyMarketFundsMember2022-12-310001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2023-09-300001477333us-gaap:TechnologyEquipmentMember2023-09-300001477333us-gaap:TechnologyEquipmentMember2022-12-310001477333us-gaap:ConstructionInProgressMember2023-09-300001477333us-gaap:ConstructionInProgressMember2022-12-310001477333us-gaap:SoftwareDevelopmentMember2023-09-300001477333us-gaap:SoftwareDevelopmentMember2022-12-310001477333us-gaap:OfficeEquipmentMember2023-09-300001477333us-gaap:OfficeEquipmentMember2022-12-310001477333us-gaap:FurnitureAndFixturesMember2023-09-300001477333us-gaap:FurnitureAndFixturesMember2022-12-310001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-09-300001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-12-310001477333us-gaap:LeaseholdImprovementsMember2023-09-300001477333us-gaap:LeaseholdImprovementsMember2022-12-310001477333us-gaap:RemediationPropertyForSaleAbandonmentOrDisposalMember2023-09-300001477333us-gaap:RemediationPropertyForSaleAbandonmentOrDisposalMember2022-12-310001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-07-012023-09-300001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-07-012022-09-300001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-01-012023-09-300001477333us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-01-012022-09-300001477333us-gaap:DevelopedTechnologyRightsMember2023-09-300001477333us-gaap:CustomerRelationshipsMember2023-09-300001477333us-gaap:TradeNamesMember2023-09-300001477333us-gaap:DevelopedTechnologyRightsMember2022-12-310001477333us-gaap:CustomerRelationshipsMember2022-12-310001477333us-gaap:TradeNamesMember2022-12-310001477333cloud:CoLocationAssetLeaseMember2023-09-300001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2021-08-310001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2021-08-012021-08-310001477333cloud:CappedCallsMemberus-gaap:ConvertibleDebtMemberus-gaap:LongMembercloud:SeniorConvertibleNotesDue2026Memberus-gaap:CommonClassAMember2021-08-012021-08-310001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Membercloud:ScenarioOneMember2021-08-012021-08-31cloud:day0001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Membercloud:ScenarioTwoMember2021-08-012021-08-310001477333cloud:CappedCallsMemberus-gaap:ConvertibleDebtMemberus-gaap:LongMembercloud:SeniorConvertibleNotesDue2026Memberus-gaap:CommonClassAMember2021-08-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2020-05-310001477333cloud:SeniorConvertibleNotesDue2025Membercloud:CappedCallsMemberus-gaap:ConvertibleDebtMemberus-gaap:LongMemberus-gaap:CommonClassAMember2020-05-012020-05-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2023-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2021-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2021-01-012021-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2021-01-012021-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMembercloud:CertainHoldersConversionMember2022-01-012022-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2022-01-012022-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2023-06-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2023-04-012023-06-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMembercloud:CertainHoldersConversionMember2023-07-012023-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMemberus-gaap:CommonClassAMember2023-07-012023-09-300001477333cloud:SeniorConvertibleNotesDue2025Membercloud:CappedCallsMemberus-gaap:ConvertibleDebtMemberus-gaap:LongMemberus-gaap:CommonClassAMember2020-12-012020-12-310001477333cloud:SeniorConvertibleNotesDue2025Membercloud:CappedCallsMemberus-gaap:ConvertibleDebtMemberus-gaap:LongMemberus-gaap:CommonClassAMember2020-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2020-12-012020-12-310001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2022-12-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2022-12-310001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2023-07-012023-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2023-07-012023-09-300001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2022-07-012022-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2022-07-012022-09-300001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2023-01-012023-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2023-01-012023-09-300001477333us-gaap:ConvertibleDebtMembercloud:SeniorConvertibleNotesDue2026Member2022-01-012022-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2022-01-012022-09-300001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMember2020-05-012020-05-310001477333cloud:SeniorConvertibleNotesDue2025Memberus-gaap:ConvertibleDebtMembercloud:CertainHoldersConversionMember2020-05-012020-05-31cloud:vote0001477333us-gaap:EmployeeStockOptionMember2023-09-300001477333us-gaap:EmployeeStockOptionMember2022-12-310001477333cloud:EquityIncentivePlan2019Member2023-09-300001477333cloud:EquityIncentivePlan2019Member2022-12-310001477333us-gaap:RestrictedStockUnitsRSUMember2023-09-300001477333us-gaap:RestrictedStockUnitsRSUMember2022-12-310001477333us-gaap:EmployeeStockMember2023-09-300001477333us-gaap:EmployeeStockMember2022-12-310001477333us-gaap:CommonStockMembercloud:TwoThousandAndTenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2023-01-012023-09-300001477333us-gaap:CommonClassAMembercloud:TwoThousandAndNineteenEquityIncentivePlanMember2023-09-300001477333cloud:ClassAAndClassBCommonStockMembercloud:TwoThousandAndNineteenEquityIncentivePlanMember2023-01-012023-09-300001477333us-gaap:CommonClassAMembercloud:TwoThousandAndTenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2023-09-300001477333cloud:TwoThousandAndTenEquityIncentivePlanMemberus-gaap:CommonClassBMemberus-gaap:EmployeeStockOptionMember2023-09-300001477333us-gaap:CommonClassAMembercloud:TwoThousandAndNineteenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2023-09-300001477333us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001477333cloud:A2010PlanAnd2019PlanMemberus-gaap:EmployeeStockOptionMember2023-09-300001477333cloud:A2010PlanAnd2019PlanMemberus-gaap:EmployeeStockOptionMember2023-01-012023-09-300001477333cloud:OtherPerformanceAwardsMembercloud:OtherKeyEmployeesMember2022-01-012022-12-310001477333srt:ExecutiveOfficerMembercloud:OtherPerformanceAwardsMember2022-01-012022-12-310001477333srt:ExecutiveOfficerMembercloud:OtherPerformanceAwardsMember2022-02-142022-02-140001477333cloud:OtherPerformanceAwardsMembercloud:OtherKeyEmployeesMember2022-02-142022-02-140001477333us-gaap:CommonClassAMembercloud:OtherPerformanceAwardsMember2022-02-142022-02-140001477333us-gaap:CommonClassAMembercloud:OtherPerformanceAwardsMember2022-02-140001477333us-gaap:CommonClassAMembercloud:OtherPerformanceAwardsMember2023-05-012023-05-01cloud:tranche0001477333us-gaap:CommonClassAMembercloud:OtherPerformanceAwardsMembercloud:OtherKeyEmployeesMember2023-01-012023-09-300001477333cloud:OtherPerformanceAwardsMember2023-07-012023-09-300001477333cloud:OtherPerformanceAwardsMember2022-07-012022-09-300001477333cloud:OtherPerformanceAwardsMember2023-01-012023-09-300001477333cloud:OtherPerformanceAwardsMember2022-01-012022-09-300001477333cloud:OtherPerformanceAwardsMember2023-09-300001477333cloud:Area1SecurityIncMemberus-gaap:CommonClassAMemberus-gaap:EmployeeStockOptionMember2022-04-010001477333cloud:Area1SecurityIncMemberus-gaap:EmployeeStockOptionMember2022-04-012022-04-010001477333cloud:Area1SecurityIncMemberus-gaap:EmployeeStockOptionMember2023-01-012023-09-300001477333cloud:Area1SecurityIncMemberus-gaap:EmployeeStockOptionMember2023-07-012023-09-300001477333us-gaap:EmployeeStockOptionMember2022-01-012022-12-310001477333us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001477333us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001477333us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001477333us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2019-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMembercloud:ClassAAndClassBCommonStockMember2019-09-012019-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMember2019-09-012019-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2019-09-012019-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2023-01-012023-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2023-07-012023-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2022-07-012022-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMemberus-gaap:CommonClassAMember2022-01-012022-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMember2023-09-300001477333us-gaap:EmployeeStockMembercloud:TwoThousandAndNineteenEmployeeStockPurchasePlanMember2023-01-012023-09-300001477333us-gaap:CostOfSalesMember2023-07-012023-09-300001477333us-gaap:CostOfSalesMember2022-07-012022-09-300001477333us-gaap:CostOfSalesMember2023-01-012023-09-300001477333us-gaap:CostOfSalesMember2022-01-012022-09-300001477333us-gaap:SellingAndMarketingExpenseMember2023-07-012023-09-300001477333us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001477333us-gaap:SellingAndMarketingExpenseMember2023-01-012023-09-300001477333us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001477333us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001477333us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001477333us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001477333us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001477333us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001477333us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001477333us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001477333us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001477333cloud:SeniorConvertibleNotesDue2025Member2023-01-012023-09-300001477333cloud:SeniorConvertibleNotesDue2025Member2022-01-012022-09-300001477333cloud:SeniorConvertibleNotesDue2026Member2023-01-012023-09-300001477333cloud:SeniorConvertibleNotesDue2026Member2022-01-012022-09-300001477333cloud:ShareBasedPaymentArrangementSharesSubjectToRepurchaseMember2023-01-012023-09-300001477333cloud:ShareBasedPaymentArrangementSharesSubjectToRepurchaseMember2022-01-012022-09-300001477333us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001477333us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001477333cloud:RestrictedStockAwardAndRestrictedStockUnitRSUsAwardMember2023-01-012023-09-300001477333cloud:RestrictedStockAwardAndRestrictedStockUnitRSUsAwardMember2022-01-012022-09-300001477333us-gaap:EmployeeStockMember2023-01-012023-09-300001477333us-gaap:EmployeeStockMember2022-01-012022-09-300001477333cloud:Area1SecurityIncMember2022-04-012022-04-010001477333cloud:Area1SecurityIncMembercloud:BusinessCombinationLiabilityPaymentScenarioOneMember2022-04-010001477333cloud:Area1SecurityIncMembercloud:BusinessCombinationLiabilityPaymentScenarioOneMember2022-04-012022-04-010001477333cloud:Area1SecurityIncMembercloud:BusinessCombinationLiabilityPaymentScenarioTwoMember2022-04-010001477333cloud:Area1SecurityIncMember2022-04-010001477333cloud:Area1SecurityIncMemberus-gaap:DevelopedTechnologyRightsMember2022-04-010001477333cloud:Area1SecurityIncMember2022-01-010001477333cloud:Area1SecurityIncMember2022-01-012022-12-310001477333cloud:VectrixIncMember2022-01-142022-01-140001477333cloud:VectrixIncMember2022-01-140001477333us-gaap:DevelopedTechnologyRightsMembercloud:VectrixIncMember2022-01-140001477333cloud:VectrixIncMember2022-01-012022-12-310001477333cloud:ZarazMember2021-10-152021-10-150001477333cloud:ZarazMember2021-01-012021-12-310001477333cloud:ZarazMemberus-gaap:DevelopedTechnologyRightsMember2021-10-150001477333cloud:ZarazMember2021-10-150001477333cloud:ZarazMember2022-01-012022-12-310001477333country:US2023-09-300001477333country:US2022-12-310001477333us-gaap:NonUsMember2023-09-300001477333us-gaap:NonUsMember2022-12-31cloud:segment0001477333cloud:ScottSandellMember2023-07-012023-09-300001477333cloud:ScottSandellMember2023-09-30

(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of October 19, 2023, 295,899,712 shares of the registrant's Class A common stock were outstanding and 39,872,115 shares of the registrant's Class B common stock were outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our ability to retain and upgrade paying customers;

•our ability to attract new paying customers, including large customers, or convert free customers to paying customers;

•our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying customers, and free cash flow;

•our ability to achieve or maintain profitability and positive cash flow;

•the impact of adverse economic conditions on our customers’ spending ability and the overall demand for our products;

•the consequences we may face resulting from the activities of our customers and the actions we take in response, including associated theories of liability;

•the demand, and our ability to generate demand, for our products or for solutions for security, performance, and reliability in general;

•possible harm caused by significant disruption of service, loss or unauthorized access to customers’ content, or the actual or perceived failure of our products to prevent security incidents;

•our ability to compete successfully in competitive markets;

•our ability to respond to rapid technological changes;

•our ability to continue to innovate and develop new products;

•our expectations and management of future growth;

•the impact of the Hamas-Israel and Russia-Ukraine conflicts, other areas of geopolitical tension around the world, or the worsening of those conflicts or geopolitical tensions, and the related challenging macroeconomic conditions globally, including on our and our customers', vendors', and partners' respective businesses and the markets in which we and our customers, vendors, and partners operate;

•our ability to maintain favorable co-location relationships, Internet service provider (ISP) partnerships, and other interconnection arrangements around the world;

•our ability to offer high-quality customer support;

•our ability to manage our global operations;

•our expectations of and ability to comply with applicable laws around the world;

•our ability to correctly estimate our tax obligations around the world;

•our ability to repay our convertible senior notes when due;

•our ability to attract, integrate, and retain key personnel and other highly qualified personnel;

•our ability to maintain our brand;

•our ability to prevent serious errors or defects across, and to otherwise maintain the uninterrupted operation of, our network;

•our ability to maintain, protect, and enhance our intellectual property; and

•our ability to successfully identify, acquire, and integrate companies and assets.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report on Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission (SEC) that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Investing in our Class A common stock involves numerous risks, including those set forth below. This summary does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth in Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Below are summaries of some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

•We have a history of net losses and may not be able to achieve or sustain profitability in the future.

•We have experienced rapid revenue growth, which may not be indicative of our future performance.

•Adverse economic conditions, including reduced spending on products and solutions for network security, performance, and reliability, may adversely impact our revenue and profitability.

•The Hamas-Israel and Russia-Ukraine conflicts, other areas of geopolitical tension around the world, or the worsening of those conflicts or tensions, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations, financial condition, and cash flows remain uncertain.

•If we are unable to attract new paying and free customers, our future results of operations could be harmed.

•Our business depends on our ability to retain and upgrade paying customers, expand the numbers of products we sell to paying customers, and, to a lesser extent, convert free customers to paying customers, and any decline in renewals, upgrades, expansions, or conversions could adversely affect our future results of operations.

•If we are unable to effectively attract, expand, and retain sales to large customers, or we fail to mitigate the additional risks associated with serving large customers, our business, results of operation, and financial condition may suffer.

•Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others.

•We face intense and increasing competition, which could adversely affect our business, financial condition, and results of operations.

•If we do not effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features, we may be unable to add new contracted customers, or increase sales to our existing customers and our business would be adversely affected.

•We rely on our co-founders and other key technical, sales, and management personnel to grow our business, and the loss of one or more key employees or the inability to successfully attract, integrate, and retain qualified senior management and other personnel, or the failure of new members of our management team to successfully lead and scale our business, could harm our business.

•Problems with our internal systems, networks, or data, including actual or perceived breaches or failures, could cause our network or products to be perceived as insecure, underperforming, or unreliable, our customers to lose trust in our network and products, our reputation to be damaged, and our financial results to be negatively impacted.

•If our global network that delivers our products or the core co-location facilities we use to operate our network are damaged, interfered with, or otherwise fail to meet the requirements of our business or local regulations, our ability to provide access to our network and products to our customers and maintain the performance of our network could be negatively impacted, which could cause our business, results of operations and financial condition to suffer.

•Detrimental changes in, or the termination of, any of our co-location relationships, ISP partnerships, or our other interconnection relationships with ISPs could adversely impact our business, results of operations, and financial condition.

•The actual or perceived failure of our products to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, results of operations, and financial condition.

•Activities of our paying and free customers or the content of their websites and other Internet properties may violate applicable laws and/or our terms of service and could subject us to lawsuits, regulatory enforcement actions, and/or liability in various jurisdictions.

•Our actual or perceived failure to comply with privacy, data protection, information security, and other applicable laws, regulations, and obligations could harm our business.

•Our network presence within China is dependent upon our commercial relationship with JD Cloud, and any detrimental changes in, or the termination of, that relationship could jeopardize our ability to offer an integrated global network that includes China.

•The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.

•The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our initial public offering, and it may depress the trading price of our Class A common stock.

•Repaying and servicing our existing and future debt, including our 2026 Notes (as defined below), may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.

Cloudflare, Inc. (the Company, Cloudflare, we, us, or our) is a global cloud services provider that delivers a broad range of services to businesses of all sizes and in all geographies, making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Cloudflare’s network serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premises, hybrid, cloud, and software-as-a-service (SaaS) applications. The Company was incorporated in Delaware in July 2009. The Company is headquartered in San Francisco, California.

The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31.

Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The accompanying interim condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations and of comprehensive loss for the three and nine months ended September 30, 2023 and 2022, the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments necessary to state fairly the Company’s financial position as of September 30, 2023, its results of operations for the three and nine months ended September 30, 2023 and 2022, and its cash flows for the nine months ended September 30, 2023 and 2022. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023 or any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, allowance for doubtful accounts, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, valuation of acquired intangible assets, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation and recognition of stock-based compensation awards, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and assumptions on historical experience and on various other assumptions that are believed to be reasonable.

Due in part to the Russia-Ukraine conflict and other macroeconomic and geopolitical conditions, there is ongoing uncertainty and significant disruption in the global economy and financial markets. The Company is not aware of any specific event or circumstance that would require an update to its estimates or assumptions or a revision of the carrying value of its assets or liabilities as of November 2, 2023, the date of issuance of this Quarterly Report on Form 10-Q. These estimates and assumptions may change in the future, however, as new events occur and additional information is obtained. Actual results could differ materially from these estimates.

The Company's significant accounting policies are discussed in the "Notes to Consolidated Financial Statements, Note 2. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There have been no significant changes to these policies that have had a material impact on the Company's condensed consolidated financial statements and related notes, except as noted below.

There have been no recently adopted accounting pronouncements since the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 that may have a material impact on the Company's condensed consolidated financial statements.

Subscription and support revenue is recognized over time and accounted for substantially all of the Company’s revenue for the three and nine months ended September 30, 2023 and 2022.

The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global network and products:

The following table summarizes the revenue from contracts by type of customer:

			Three Months Ended September 30,																								Nine Months Ended September 30,
			2023												2022												2023												2022
			(dollars in thousands)
			Amount						Percentage of Revenue						Amount						Percentage of Revenue						Amount						Percentage of Revenue						Amount						Percentage of Revenue
Channel partners			$	52,340					16		%				$	32,634					13		%				$	140,491					15		%				$	85,923					12		%
Direct customers			283,263						84		%				221,223						87		%				793,781						85		%				614,618						88		%
Total			$	335,603					100		%				$	253,857					100		%				$	934,272					100		%				$	700,541					100		%

Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the nine months ended September 30, 2023 and 2022, the Company recognized revenue of $204.1 million and $110.4 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented.

The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced.

The following table summarizes the activity of the deferred contract acquisition costs:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in thousands)
Beginning balance			$	107,482					$	80,706					$	93,145					$	70,320
Capitalization of contract acquisition costs			23,418						18,377						66,766						48,981
Amortization of deferred contract acquisition costs			(15,746)						(11,801)						(44,757)						(32,019)
Ending balance			$	115,154					$	87,282					$	115,154					$	87,282

The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented.

As of September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,083.0 million. As of September 30, 2023, the Company expected to recognize 75% of its remaining performance obligations as revenue over the next 12 months with the remainder recognized thereafter.

Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Assets and liabilities measured at fair value are classified into the following categories:

•Level I: Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities;

•Level II: Observable inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments; and

•Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

The Company's cash equivalents and restricted cash are comprised of highly liquid money market funds. The Company classifies money market funds within Level I of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its investments, which are comprised of U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds, within Level II of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented.

The following table summarizes the Company’s cash and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash short-term, restricted cash, or available-for-sale securities as of September 30, 2023 and December 31, 2022.