Cloudflare (NYSE:NET) Posts Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Cloudflare (NYSE:NET) announced its quarterly earnings data on Tuesday. The company reported $0.28 EPS for the quarter, beating analysts’ consensus estimates of $0.27 by $0.01, FiscalAI reports. The company had revenue of $614.51 million during the quarter, compared to the consensus estimate of $591.67 million. Cloudflare had a negative net margin of 5.12% and a negative return on equity of 6.54%. The company’s quarterly revenue was up 33.6% on a year-over-year basis. During the same quarter last year, the firm posted $0.19 EPS.

Here are the key takeaways from Cloudflare’s conference call:

• Cloudflare reported a strong quarter with $614.5M revenue (+34% YoY), beat expectations on free cash flow ($99.4M), and guided 2026 revenue to $2.785–$2.795B (+28–29% YoY), signaling continued top-line acceleration.
• Enterprise momentum accelerated: record new ACV growth (~50% YoY), 4,298 customers paying >$100k (+23% YoY), 269 customers >$1M (up 55% YoY), and dollar-based net retention of 120%, driven by several multi?year, multi?million dollar deals.
• Management sees a durable AI tailwind—Cloudflare emphasized adoption of Workers (4.5M+ active developers), rising agent-driven traffic (weekly requests more than doubled in January), and positioning as the neutral platform for the “Agentic Internet.”
• Margins and revenue mix create near-term risks: gross margin dipped to 74.9% (just below the 75–77% target) as paid traffic raised network COGS, and rising usage?oriented “pool of funds” revenue increases variability and seasonal forecasting volatility.

Cloudflare Stock Performance

NYSE NET opened at $180.44 on Wednesday. The firm has a 50-day moving average price of $191.02 and a two-hundred day moving average price of $205.03. Cloudflare has a 12-month low of $89.42 and a 12-month high of $260.00. The company has a market capitalization of $63.20 billion, a P/E ratio of -601.47, a P/E/G ratio of 150.60 and a beta of 1.97. The company has a quick ratio of 2.04, a current ratio of 2.04 and a debt-to-equity ratio of 1.46.

Insider Buying and Selling

In other Cloudflare news, Director Carl Ledbetter sold 15,000 shares of the firm’s stock in a transaction on Tuesday, January 27th. The stock was sold at an average price of $211.16, for a total transaction of $3,167,400.00. Following the transaction, the director owned 953,073 shares in the company, valued at $201,250,894.68. This trade represents a 1.55% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Matthew Prince sold 52,384 shares of the company’s stock in a transaction on Thursday, January 8th. The shares were sold at an average price of $189.47, for a total value of $9,925,196.48. The SEC filing for this sale provides additional information. Insiders sold 630,827 shares of company stock valued at $124,436,992 in the last quarter. Corporate insiders own 10.89% of the company’s stock.

Institutional Investors Weigh In On Cloudflare

A number of large investors have recently modified their holdings of the business. Woodline Partners LP raised its holdings in shares of Cloudflare by 1,000.1% during the 3rd quarter. Woodline Partners LP now owns 183,206 shares of the company’s stock worth $39,314,000 after buying an additional 166,552 shares in the last quarter. National Bank of Canada FI grew its position in Cloudflare by 1,552.7% in the third quarter. National Bank of Canada FI now owns 144,218 shares of the company’s stock valued at $30,948,000 after acquiring an additional 135,492 shares during the last quarter. AQR Capital Management LLC raised its stake in Cloudflare by 34.5% during the second quarter. AQR Capital Management LLC now owns 461,051 shares of the company’s stock worth $89,951,000 after acquiring an additional 118,234 shares in the last quarter. Sei Investments Co. lifted its holdings in shares of Cloudflare by 40.1% in the second quarter. Sei Investments Co. now owns 329,036 shares of the company’s stock worth $64,432,000 after acquiring an additional 94,112 shares during the last quarter. Finally, Marshall Wace LLP boosted its stake in shares of Cloudflare by 21.6% in the 3rd quarter. Marshall Wace LLP now owns 526,781 shares of the company’s stock valued at $113,042,000 after purchasing an additional 93,729 shares in the last quarter. Institutional investors and hedge funds own 82.68% of the company’s stock.

Key Cloudflare News

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Quarterly beats — Cloudflare reported Q4 revenue of $614.5M and EPS $0.28, topping consensus and showing ~34% YoY revenue growth; management framed the quarter as a very strong finish. Read More.
• Positive Sentiment: Large enterprise traction — management disclosed the largest annual contract ever (avg. $42.5M/year) and ~50% growth in new ACV, signaling stronger enterprise sales and sticky recurring revenue. Read More.
• Positive Sentiment: Raised outlook and AI-driven demand — Cloudflare outlined a $2.795B 2026 revenue target and said AI adoption is accelerating demand for its connectivity/cloud services, with management forecasting FY and Q1 sales above Street estimates. Read More. Read More.
• Neutral Sentiment: Conference materials and call available — investors can review the full earnings slide deck and transcript for detail on margins, unit economics and ACV cadence. Read More. Read More.
• Neutral Sentiment: Analyst/coverage notes — coverage pieces highlight Cloudflare’s resilience in an AI-driven software market and its streak of EPS beats, which supports a growth narrative but valuation and profitability remain focal points for investors. Read More.
• Negative Sentiment: Institutional selling — Alfreton Capital cut its Cloudflare stake by ~55% during the period, reducing a previously large holding, which could signal some profit-taking or portfolio reshuffling by an investor. Read More.

Wall Street Analysts Forecast Growth

NET has been the topic of a number of recent analyst reports. Stifel Nicolaus boosted their target price on Cloudflare from $230.00 to $275.00 and gave the stock a “buy” rating in a report on Friday, October 31st. Citizens Jmp increased their price objective on shares of Cloudflare from $250.00 to $270.00 and gave the company a “market outperform” rating in a research report on Friday, October 31st. Barclays started coverage on shares of Cloudflare in a research note on Tuesday, December 2nd. They set an “overweight” rating and a $235.00 target price for the company. Wall Street Zen upgraded shares of Cloudflare from a “hold” rating to a “buy” rating in a research note on Saturday, November 8th. Finally, Citigroup lowered their price target on shares of Cloudflare from $318.00 to $260.00 and set a “buy” rating on the stock in a report on Friday, January 16th. One equities research analyst has rated the stock with a Strong Buy rating, nineteen have given a Buy rating, eight have given a Hold rating and two have given a Sell rating to the company’s stock. Based on data from MarketBeat, Cloudflare presently has a consensus rating of “Moderate Buy” and an average target price of $235.93.

About Cloudflare

Cloudflare, Inc is a global web infrastructure and security company that provides a suite of services designed to improve the performance, reliability and security of internet properties. Its core offerings include a content delivery network (CDN), distributed denial-of-service (DDoS) protection, managed DNS, and a web application firewall (WAF). Cloudflare also provides tools for bot management, SSL/TLS, load balancing and rate limiting to help organizations maintain uptime and protect web applications from attack.

In addition to traditional edge and security services, Cloudflare has expanded into edge computing and developer platforms.