Form 4: Cloudflare President Sells Shares Under 10b5-1 Plan

Cloudflare President Michelle Zatlyn executed sales of Class A Common Stock totaling 76,923 shares across three days in late September 2025, pursuant to a pre-arranged 10b5-1 trading plan.

Summary

• Michelle Zatlyn, President and Board Co-Chair of Cloudflare, Inc. (NET), reported transactions involving the company's Class A Common Stock and Employee Stock Options.
• On September 23, 24, and 25, 2025, Ms. Zatlyn exercised 25,641 employee stock options each day, converting Class B Common Stock into Class A Common Stock.
• Immediately following each conversion, 25,641 shares of Class A Common Stock were sold on the open market, totaling 76,923 shares sold over the three days.
• The sales were executed under a Rule 10b5-1 trading plan adopted on February 14, 2025.
• Weighted average sale prices for Class A Common Stock ranged from $220.7084 to $227.0073 on September 23, $218.7188 to $226.2152 on September 24, and $211.4269 to $214.02 on September 25.
• Following these transactions, Ms. Zatlyn directly holds 367,251 shares of Class A Common Stock and indirectly holds various amounts of Class A and Class B Common Stock through several trusts.
• The remaining number of unexercised employee stock options with a $2.04 exercise price and an August 7, 2027 expiration date is 1,979,479.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While insider selling can sometimes be viewed negatively, the execution under a pre-arranged 10b5-1 plan suggests a planned liquidity event rather than a reaction to adverse company-specific news. It's a routine part of executive compensation and financial planning.

Positives

• The sales were conducted under a pre-arranged Rule 10b5-1 trading plan, indicating a planned and orderly disposition of shares rather than a reactive decision based on immediate company performance.

Negatives

• Insider selling, even when pre-planned, can sometimes be perceived negatively by the market, potentially signaling a lack of conviction or a personal liquidity event rather than a strategic move.

Risks

• No specific risks were mentioned in the filing beyond the general market perception associated with insider stock sales.

Future Outlook

This filing, a Form 4, reports changes in beneficial ownership by an insider and does not contain forward-looking statements or guidance regarding the company's future financial performance or strategic outlook.

Industry Context

This insider transaction report is specific to Cloudflare and its executive, Michelle Zatlyn. It does not provide broader industry trends or competitive analysis.

Related Party Transactions

• Michelle Zatlyn holds indirect beneficial ownership of Class A and Class B Common Stock through various family trusts, including The Sutherland/Zatlyn Revocable Trust (co-trustee), The SZ 2021 Irrevocable Trust (appointer), The SZ 2020 Irrevocable Trust (investment advisor), and several Sutherland/Zatlyn Annuity Trusts (2023, 2024, and 2025 series), for which she serves in roles such as co-trustee or trustee.

Stakeholder Impact

• Shareholders may interpret the insider sales as a personal liquidity event for the executive, which is common for long-tenured executives, especially given the pre-planned nature under a 10b5-1 plan. However, some investors might view any insider selling as a potential signal, regardless of the plan.

Key Dates

Recommendation

The insider sales by Michelle Zatlyn were executed under a Rule 10b5-1 trading plan, indicating a pre-scheduled disposition of shares, likely for personal financial planning or diversification. This type of transaction is common for executives and does not necessarily reflect a change in the company's fundamental outlook or the executive's confidence in its long-term prospects. Therefore, it does not warrant a 'buy' or 'sell' recommendation based solely on this filing, suggesting a 'hold' position for existing investors.

Keywords

Cloudflare, NET, Michelle Zatlyn, Form 4, insider trading, stock sale, 10b5-1 plan, equity compensation, executive compensation