Cloudflare (NET) Stock Jumps 16% After Earnings Beat Wall Street Estimates

TLDR

• Cloudflare stock jumped 16% in premarket trading after Q4 2025 revenue hit $614.5 million, beating the $591.3 million estimate by 34% year-over-year growth
• The company posted earnings of $0.28 per share, topping the $0.27 forecast, with gross margin reaching 74.9% and operating income of $89.6 million
• Cloudflare guided Q1 2026 revenue between $620-$621 million versus $614 million consensus, but adjusted earnings of $0.23 per share came in below the $0.25 estimate
• Full-year 2026 revenue guidance of $2.785-$2.795 billion exceeded Wall Street’s $2.74 billion expectation, driven by AI integration demand
• The company now serves 4,298 customers paying over $100,000 annually, representing 23% growth as AI agents increase demand for cloud services

Cloudflare shares surged nearly 16% in premarket trading Wednesday following strong Q4 2025 results that topped analyst expectations. The stock rose 3.55% in aftermarket trading to $179.50.

Revenue for the quarter ended December 31 jumped 34% year-over-year to $614.5 million. That beat Wall Street’s estimate of $591.3 million by 3.9%.

The company posted earnings of $0.28 per share, edging past the forecasted $0.27. That marked a 3.7% surprise on the bottom line.

Cloudflare, Inc., NET

Cloudflare achieved a gross margin of 74.9% for the quarter. Operating income reached $89.6 million, representing a 14.6% margin.

Free cash flow came in at $99.4 million, or 16% of revenue. The results showed strength across key metrics as the company benefits from AI-driven demand.

AI Integration Drives Growth

The push to integrate AI across industries is creating higher demand for cloud services. Cloudflare’s global network helps businesses run AI applications faster and more securely.

CEO Matthew Prince said the rise of AI and automated agents marks a major shift in how the internet is built. This is creating stronger demand for Cloudflare’s services.

The company is benefiting from the growing use of AI agents like “OpenClaw.” These tools use Cloudflare’s technology to securely direct traffic to users’ private computers.

Cloudflare now serves 4,298 customers paying over $100,000 annually. That customer base grew 23% year-over-year.

Forward Guidance Beats Expectations

Cloudflare projects Q1 2026 revenue between $620 million and $621 million. That’s ahead of the $614 million consensus forecast, indicating 29-30% growth.

The company guided adjusted earnings of $0.23 per share for Q1. That came in slightly below analyst estimates of $0.25 per share.

For full-year 2026, Cloudflare expects revenue of $2.785 billion to $2.795 billion. The midpoint of $2.79 billion tops Wall Street’s estimate of $2.74 billion.

Operating income for 2026 is forecasted at $378-$382 million. The guidance reflects confidence in the company’s strategic position.

Analyst Outlook

TipRanks consensus shows NET stock carries a Moderate Buy rating. That’s based on 12 Buy ratings, five Hold ratings, and one Sell rating from analysts.

The average price target sits at $225.67. That implies 25.4% upside potential from current levels.

Analysts see continued growth from AI integration demand. The company’s expanding customer base and strong margins support the bullish outlook.

Cloudflare’s Q4 results demonstrated execution on its AI and developer platform strategy. Revenue growth of 34% shows the company is capturing market share as businesses increase cloud spending.

The post Cloudflare (NET) Stock Jumps 16% After Earnings Beat Wall Street Estimates appeared first on CoinCentral.