RestructuringMay 7, 2026, 04:34 PM
Cloudflare Cuts 20% Workforce, Q1 Revenue +34% to $639.8M
AI Summary
Cloudflare announced a plan to reduce its workforce by approximately 20% (1,100 people) to transition to an agentic AI-first operating model, expecting to incur $140 million to $150 million in charges. Concurrently, the company reported strong first-quarter 2026 financial results, with revenue increasing 34% year-over-year to $639.8 million. Non-GAAP net income per diluted share rose to $0.25, up from $0.16 in the prior year.
Key Highlights
- Workforce to be reduced by approximately 20% (1,100 people) for an AI-first operating model.
- Expects $140 million to $150 million in restructuring charges, mostly in Q2 2026.
- Q1 2026 revenue increased 34% year-over-year to $639.8 million.
- Non-GAAP net income per diluted share was $0.25, up from $0.16 in Q1 2025.
- Non-GAAP income from operations was $73.1 million, or 11.4% of revenue.
- Free cash flow grew to $84.1 million, or 13% of revenue, from $52.9 million.
- Q2 2026 revenue guidance is $664.0 million to $665.0 million.
- Full year 2026 revenue guidance is $2,805.0 million to $2,813.0 million.