Investor Presentaiton

2019 2020 2021 GAAP Cost of Revenue Less: Stock-based Compensation Expense & Related Payroll Taxes $63,423 -$716 Less: Amortization of Acquired Intangible Assets Non-GAAP Cost of Revenue -$125 $62,582 GAAP Gross Profit Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets $223,599 $716 $125 Non-GAAP Gross Profit GAAP Gross Margin Non-GAAP Gross Margin $224,440 $101,055 -$1,466 -$3,081 $96,508 $330,004 $1,466 $3,081 $334,551 $147,134 -$3,703 -$2,946 $140,485 $509,292 $3,703 $2,946 $515,941 78% 78% 77% 78% 78% 79% GAAP to Non-GAAP Reconciliation (Annual) Less: Stock-based Compensation & Related Payroll Taxes Non-GAAP Sales and Marketing GAAP Sales and Marketing $159,298 -$8,709 $150,589 $217,875 -$17,678 $200,197 $328,065 -$32,869 $295,196 GAAP S&M Expense as a % of Revenue 56% Non-GAAP S&M Expense as a % of Revenue 52% 51% 46% 50% 45% GAAP Research and Development $90,669 $127,144 Less: Stock-based Compensation & Related Payroll Taxes -$13,037 -$30,497 $189,408 -$61,056 Less: Acquisition-related and other expenses -$5,725 Non-GAAP Research and Development $77,632 $90,922 $128,352 GAAP R&D Expense as a % of Revenue 32% 29% 29% Non-GAAP R&D Expense as a % of Revenue GAAP General and Administrative 27% 21% 20% $81,578 Less: Stock-based Compensation & Related Payroll Taxes -$14,165 Less: Acquisition-related and other expenses Non-GAAP General and Administrative Expense GAAP G&A Expense as a % of Revenue Non-GAAP G&A Expense as a % of Revenue GAAP Loss from Operations $67,413 28% 23% $91,753 -$13,875 -$554 $77,324 $119,503 -$19,706 -$380 $99,417 21% 18% 18% 15% -$107,946 Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets Add: Acquisition-related and other expenses Non-GAAP Loss from Operations GAAP Operating Margin $36,627 $125 -$71,194 -38% -$106,768 $63,516 $3,081 $6,279 -$33,892 -25% -$127,684 $117,334 $2,946 $380 -$7,024 -19% Non-GAAP Operating Margin -25% -8% -1% CLOUDFLARE © Copyright Cloudflare, Inc.

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