Cloudflare (NYSE:NET) shares jumped almost 11% to just shy of $200 in early trade following the company’s fourth quarter report which topped revenue expectations.
For the quarter, Cloudflare reported revenue of $614.5 million, up 34% year over year, above the consensus estimate of $591.3 million.
Adjusted earnings came in at $0.28 per share, slightly above the Wall Street estimate of $0.27.
The company also reported strong contract momentum, with remaining performance obligations up 48% year over year and current RPO up 34%.
For the full fiscal year 2025, Cloudflare reported revenue of $2.17 billion, up 29.8% from 2024. Adjusted net income increased to $342.9 million, or $0.93 per share.
Looking ahead, Cloudflare expects first quarter revenue of $620 million to $621 million, above the consensus estimate of $611.8 million. The company projects adjusted operating income of $70 million to $71 million and adjusted EPS of $0.23.
Jefferies analysts described the results as “gold-medal-worthy,” noting that fourth quarter revenue beat the guidance midpoint by 4.3%, the largest such beat in four years, with growth accelerating to 34% year-over-year.
They highlighted strength from large customer deals and Cloudflare Workers, saying this “validates NET as a clear AI winner amidst souring software sentiment.” New ACV bookings rose nearly 50% year over year, the fastest growth in four years, and RPO growth reflected both a larger volume and size of deals.
The analysts also highlighted Cloudflare’s AI strategy, noting that “NET benefits from agents driving more code to Cloudflare Workers, which in turn leads to demand for NET's performance, security, and networking services,” with early revenue coming from AI offerings such as AI Crawl Control.
On outlook, Jefferies called the first-quarter guide “very prudent,” noting that while operating margin guidance for fiscal 2026 is slightly below consensus, the company’s investments in AI and developer-focused offerings support a clear path to sustained growth.
They added that despite a premium valuation, Cloudflare’s track record of innovation and expansion positions it well for the evolving cybersecurity and cloud market.
The firm has a 'Hold' rating on Cloudflare, but upped its price target to $225 from $185.