Cloudflare, Inc. Announces Pricing of Offering of $1.75 Billion of 0% Convertible Senior Notes Due 2030

Cloudflare, Inc. (“Cloudflare”) (NYSE: NET) today announced the pricing of $1.75 billion aggregate principal amount of Convertible Senior Notes due 2030 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Cloudflare also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $250 million aggregate principal amount of the notes solely to cover over-allotments. The sale of the notes to the initial purchasers is expected to settle on June 17, 2025, subject to customary closing conditions, and is expected to result in approximately $1.72 billion in net proceeds to Cloudflare after deducting the initial purchasers’ discount and estimated offering expenses payable by Cloudflare (assuming no exercise of the initial purchasers’ option to purchase additional notes).

The notes will be senior, unsecured obligations of Cloudflare. The notes will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on June 15, 2030, unless earlier redeemed, repurchased, or converted in accordance with their terms. Cloudflare may not redeem the notes prior to June 20, 2028. Cloudflare may redeem for cash all or any portion of the notes, at its option, on or after June 20, 2028, if the last reported sale price of Cloudflare’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day preceding the date on which Cloudflare provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. No sinking fund is provided for the notes, which means that Cloudflare is not required to redeem or retire the notes periodically. Holders of the notes will have the right to require Cloudflare to repurchase for cash all or a portion of their notes upon the occurrence of a fundamental change (as defined in the indenture governing the notes) at a purchase price of 100% of their principal amount plus any accrued and unpaid special interest.