Episode Details

Cloudflare's Q1 2026 delivered massive 34% revenue growth, yet the company still fired 20% of its workforce as AI effectively replaces its internal support and engineering review workflows.

In ~10 minutes:

• Why an "agentic" restructuring instantly slashed 1,100 human jobs.

• Why non-GAAP gross margins tanked to 72.8% this quarter.

• How 1 million new developers are drastically altering unit economics.

• SASE network build-outs and the rise of flat pool-of-funds pricing.

• The sudden 16% extended-hours sell-off following the print.

Management is aggressively asking Wall Street to pivot from tracking gross margins to focusing on operating margins as they try to build the default routing layer for the AI web. With AI agents now reviewing 100% of production code, Cloudflare is betting internal automation will drive scale—but investors clearly need more proof before buying the structural remodeling narrative.

Cloudflare, Inc. (NET) | Q1 FY2026

AI-assisted production. Feedback/ticker requests: https://x.com/EarnUnscripted.