Cloudflare vs Palo Alto Networks: Revenue, Profit and Business Model
Cloudflare reported $2.2B of revenue in FY2025 and — of net income. Palo Alto Networks reported $11.5B of revenue in FY2026 and $307M of net income.
Latest financial snapshot
Cloudflare
- Latest revenue
- $2.2B (FY2025)
- Net income
- —
- Net margin
- 0.0%
- Revenue growth
- +38.1% a year, FY2020–FY2025
Palo Alto Networks
- Latest revenue
- $11.5B (FY2026)
- Net income
- $307M
- Net margin
- 2.7%
- Revenue growth
- +23.2% a year, FY2017–FY2026
Financial summary
Cloudflare
Cloudflare's revenue has compounded from $431.1 million in 2020 to $2.17 billion in 2025. In 2025 it posted 29.8% growth, 75.8% non-GAAP gross margin, $303.9 million of non-GAAP operating income (14.0% of revenue), $603.1 million of operating cash flow, and $260.6 million of free cash flow, while still reporting a $102.3 million GAAP net loss driven by stock-based compensation. Growth accelerated in 2026: Q2 2026 revenue was $696.1 million (+36% year over year), with a $170.0 million GAAP net loss and $107.8 million of non-GAAP net income. Cash and securities stood at $4.16 billion on June 30, 2026. Management raised full-year 2026 revenue guidance to $2.864-$2.870 billion in August 2026.
Palo Alto Networks
Revenue grew from $1.76 billion in fiscal 2017 to $11.48 billion in fiscal 2026 as the company moved from firewall boxes to subscriptions. GAAP profit has been uneven. The company lost money through fiscal 2022, then earned $440 million in fiscal 2023 and $2.58 billion in fiscal 2024 (a figure lifted by a one-time tax benefit). It earned $1.13 billion in fiscal 2025 and $307 million in fiscal 2026, when CyberArk and Chronosphere acquisition costs produced GAAP net losses of $177 million in Q3 and $282 million in Q4. Cash generation is stronger: fiscal 2026 adjusted free cash flow margin was 38.4%, and management targets 40% by fiscal 2028.
Revenue and profit by year
Cloudflare
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $2.2B | — | 0.0% | +29.8% | Source |
| FY2024 | $1.7B | — | 0.0% | +28.8% | Source |
| FY2023 | $1.3B | — | 0.0% | +33.0% | Source |
| FY2022 | $975.2M | — | 0.0% | +48.6% | Source |
| FY2021 | $656.4M | — | 0.0% | +52.3% | Source |
| FY2020 | $431.1M | — | 0.0% | — | Source |
Palo Alto Networks
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $11.5B | $307M | 2.7% | +24.5% | Source |
| FY2025 | $9.2B | $1.1B | 12.3% | +14.9% | Source |
| FY2024 | $8B | $2.6B | 32.1% | +16.5% | Source |
| FY2023 | $6.9B | $439.7M | 6.4% | +25.3% | Source |
| FY2022 | $5.5B | -$267M | -4.9% | +29.3% | Source |
| FY2021 | $4.3B | -$498.9M | -11.7% | +24.9% | Source |
| FY2020 | $3.4B | -$267M | -7.8% | +17.5% | Source |
| FY2019 | $2.9B | -$81.9M | -2.8% | +27.6% | Source |
| FY2018 | $2.3B | -$122.2M | -5.4% | +29.0% | Source |
| FY2017 | $1.8B | -$203M | -11.5% | — | Source |
Where the revenue comes from
Cloudflare
- Enterprise and large-customer contracts
Majority of revenue (exact split not stated here)
Annual and multi-year contracts with large organizations covering application security, Cloudflare One Zero Trust, email security, and network services.
- Self-serve and developer usage
Not separately disclosed
Monthly Pro and Business subscriptions plus usage-based billing for Workers, R2, D1, and Workers AI.
Palo Alto Networks
- Subscriptions and SupportLargest
Recurring security subscriptions, support, SASE, cloud security, and Cortex products.
- Product RevenueMaterial
Physical and virtual firewall products and related hardware/software sales.
- ServicesEmbedded
Incident response, advisory, and other security services.
Business model and strategy
Cloudflare
How it makes money
Cloudflare makes money by selling subscriptions and usage-based services that run on a single global network. Millions of websites use a free plan; paying customers move up to Pro, Business, and Enterprise plans for advanced DDoS mitigation, web application firewall, bot management, and support.
Growth strategy
Cloudflare grows by landing customers with free or low-cost plans and expanding into more products per account. Its main growth vectors are larger enterprise contracts (it signed its largest-ever deal in Q4 2025, averaging $42.5 million per year in annual contract value), Cloudflare One Zero Trust, and the developer platform.
Competitive advantage
Cloudflare's advantage is its network: data centers in more than 330 cities that run every product on every server, combined with a free tier that brings an enormous volume of diverse traffic onto the platform. That traffic gives Cloudflare broad visibility into attacks, and the shared architecture lets it launch new security, AI, and developer products to its whole customer base at low marginal cost.
Palo Alto Networks
How it makes money
Palo Alto Networks makes most of its money from recurring subscriptions and support, with the rest from firewall products. Customers buy hardware and virtual next-generation firewalls and then pay yearly for threat prevention, URL filtering, DNS security and SD-WAN services.
Growth strategy
Since early 2024, Palo Alto has pursued 'platformization'. It offers customers free or discounted periods so they can move off rival tools before their contracts expire, in exchange for long-term commitments to its platforms.
Competitive advantage
Palo Alto's edge is breadth combined with a large installed firewall base. Few vendors can sell network security, SASE, cloud security, SOC automation and identity security under one contract, and the PAN-OS policies that enterprises have built up over years make firewall replacement slow and risky. Telemetry from that base feeds Unit 42 threat research and the AI models in Cortex.
Questions about Cloudflare vs Palo Alto Networks
Which company has higher revenue — Cloudflare, Inc. or Palo Alto Networks, Inc.?
Cloudflare, Inc. reported $2.2B (FY2025), while Palo Alto Networks, Inc. reported $11.5B (FY2026). By last reported revenue, Palo Alto Networks, Inc. is the larger business, with Cloudflare, Inc. reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Cloudflare, Inc. vs Palo Alto Networks, Inc.?
Cloudflare, Inc.'s market capitalisation stands at $122.5B, while Palo Alto Networks, Inc.'s is $306.5B. Palo Alto Networks, Inc. carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Cloudflare, Inc..
Which is more financially efficient — Cloudflare, Inc. or Palo Alto Networks, Inc.?
Cloudflare, Inc. generates $420k / employee in revenue per employee, while Palo Alto Networks, Inc. generates $714k / employee. Palo Alto Networks, Inc. shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Cloudflare, Inc. and Palo Alto Networks, Inc. make money?
Cloudflare, Inc. and Palo Alto Networks, Inc. generate revenue in fundamentally different ways. Cloudflare, Inc.: Cloudflare makes money by selling subscriptions and usage-based services that run on a single global network. Palo Alto Networks, Inc.: Palo Alto Networks makes most of its money from recurring subscriptions and support, with the rest from firewall products.
Which company is valued higher relative to revenue — Cloudflare, Inc. or Palo Alto Networks, Inc.?
On a price-to-sales (P/S) basis, Cloudflare, Inc. trades at 56.5x P/S and Palo Alto Networks, Inc. at 26.7x P/S. Cloudflare, Inc. commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Palo Alto Networks, Inc.. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Cloudflare, Inc. bigger than Palo Alto Networks, Inc.?
By last reported revenue, Palo Alto Networks, Inc. ($11.5B (FY2026)) is the larger company compared to Cloudflare, Inc. ($2.2B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Cloudflare vs Palo Alto Networks overview