NET

NET

Cloudflare

Recurring SaaS

★ Quality 16/100
Overvalued

Price today

$278.92

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charlieapp.co

What this business is made of

16qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

The bodyguard and fast lane for half the internet, by subscription.

Cloudflare runs a global edge computing network that speeds up and protects websites, APIs, and apps. It charges via tiered SaaS subscriptions, from free plans to six-figure enterprise contracts. 2024 revenue near $1.67B, growing ~27% annually.

Its network of 330+ cities and scale effects in security give it an edge in latency and threat data. Not a deep moat: edge and CDN are becoming commoditized, and AWS, Akamai, and Fastly compete on the same turf. The real bet is Workers as a distributed compute platform.

Revenue history

$0.4B
2020
$0.7B
2021
$1.0B
2022
$1.3B
2023
$1.7B
2024
CAGR 5 años: +43%

From $0.4B to $1.7B in 4 years — nearly 4.3x its size. Selling more and more is the base of everything else.

Catalysts and risks

Workers AI and R2 monetizing edge inference during 2025.

Enterprise expansion: customers >$100K growing ~28% year-over-year.

Non-GAAP operating margin heading toward 14%+ with scale leverage.

⚠️

P/FCF of 144x prices in a decade of flawless execution.

⚠️

CDN commoditization pressures pricing in the core.

⚠️

Hyperscalers (AWS, Azure, GCP) can replicate edge compute at scale.

Charlie's note

Good business, ridiculous price. Paying 144 times cash flow for something that competes with Amazon takes a faith I don't have.

Analysis · May 2026

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