Cloudflare pulls ahead in edge hosting revenue

Speeding past the old guard

Cloudflare reported $696.1 million in revenue for the second quarter of 2026. This amount grew 36% year-over-year. I compare this to Akamai. Akamai reported $4.208 billion in revenue for the full year of 2025, but its growth only reached 5%. Fastly reported $624 million for the same 2025 period, showing 15% growth. Cloudflare grows much faster.

Cloudflare’s current RPO grew 35% year-over-year. The company’s gross margin was 73.1% for the second quarter. This is a small improvement from the previous quarter but remains below the 74.9% reported in the second quarter of 2025.

Cloudflare grows fast.

Cloudflare holds $4.1628 billion in cash, cash equivalents, and available-for-sale securities. Akamai carries $4.2 billion in net debt. This massive debt burden places Akamai at a disadvantage.

The edge and AI

The market for edge services shifts toward AI. Non-human traffic surpassed human traffic on the Cloudflare network for the first time in the second quarter. This change supports the idea that the internet moves toward machine-to-machine traffic. Cloudflare holds an 84.1% market share among sites where a provider is identifiable. Akamai holds only 2.3% in that category. Fastly holds 3.2%.

Customer concentration increases. Large customers, defined as those spending over $100,000 a year, reached 4,698 in the second quarter. These specific accounts generated 73% of total revenue. This is an increase from the 71% reported a year ago. These large customers grew 27% year-over-year. Cloudflare also added 80,000 paying customers in this quarter. The total number of paying customers now exceeds 7.4 million. The developer platform reached 7.4 million users. Two million new developers joined the platform in the second quarter alone.

You know the drill.

The growth engine relies on developers. Cloudflare’s Workers platform remains the fastest-growing product segment. It receives significant revenue from pool of funds contracts and consumption-based structures. Cloudflare also saw a 358% jump in global DDoS events in Q1 2025. More than half of the traffic on Cloudflare’s network was non-human in the second quarter.

Will the heavy investment in AI infrastructure eventually erode these margins?

The hard data

The financial details confirm the divergence. Cloudflare reported $696.1 million in revenue for the second quarter of 2026, which is a 36% increase compared to the same period last year and beat most financial forecasts for the quarter. This is up from the $639.8 million reported in the first quarter of 2026. The company reported non-GAAP income from operations of $96.1 million. This is 13.8% of total revenue. Cloudflare also reported a GAAP net loss of $170 million. This loss follows $151 million in severance and restructuring charges. The loss is quite large.

I analyzed the specific metrics for both companies.

Cloudflare’s free cash flow hit $56.4 million. This is 8% of total revenue. This figure grew 69% from the $33.3 million reported in the second quarter of 2025. The dollar-based net retention rate reached 120%. This is a 6% increase from the previous year. Cloudflare’s remaining performance obligations reached $2.732 billion. This is up 38% year-over-year. Akamai’s 2025 revenue came from security, which brought in $2.243 billion. Its delivery revenue was $1.257 billion, which fell 5%. Fastly’s 2025 revenue included $477.8 million from network services. Cloudflare’s shares closed the regular session at $284.17, but they jumped 17.41% in after-hours trading to $333.95. This move lifted the shares above the 52-week high of $305. Cloudflare is the clear leader for growth.