Cloudflare, Inc.NET

Cloudflare, Inc. Leases Disclosure

10-KFiled Feb 26, 20262 min read
Leases
The Company's lease portfolio consists of real estate and co-location agreements in the United States and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 8.8 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 9.8 years. All of the Company's leases are classified as operating leases.
The components of lease cost related to the Company's operating leases included in the consolidated statements of operations were as follows:
Year Ended December 31,
202520242023
(in thousands)
Operating lease cost$66,427 $49,476 $44,792 
Total lease cost$66,427 $49,476 $44,792 
Variable lease cost, short-term lease cost, and sublease income for the years ended December 31, 2025, 2024, and 2023, were not material.
As of December 31, 2025, the Company had $59.1 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the consolidated balance sheet. These operating leases will commence between January 2026 and July 2027 and have an average lease term of 4.3 years.
As of December 31, 2025 and 2024, the weighted-average remaining term of the Company’s operating leases was 4.7 years and 4.3 years, respectively, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.8% and 4.9%, respectively.
Maturities of the operating lease liabilities as of December 31, 2025 are as follows:
December 31, 2025
(in thousands)
2026$80,473 
202768,637 
202845,047 
202932,265 
203023,280 
Thereafter32,333 
Total lease payments$282,035 
Less: Imputed interest$(29,109)
Total operating lease liabilities$252,926 

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 20, 2025
2023Feb 21, 2024
2022Feb 24, 2023
2021Mar 1, 2022
2020Feb 25, 2021

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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