Shares in Cloudflare Inc. rose more than 5% in late trading today after the content delivery network company impressed investors with earnings and revenue beats in its fiscal second quarter and offered forecasts higher than expected.
For the quarter that ended on June 30, Cloudflare reported adjusted earnings per share of 21 cents, up from 20 cents per share in the same quarter of 2024, on revenue of $512.3 million, up 28% year-over-year. Analysts had been expecting 18 cents per share and revenue of $501.21 million.
Cloudflare’s solid figures were driven by customer growth, with the company reporting 265,929 paying customers as of the end of June, up 27% year-over-year. Large customers — those spending $100,000 or more in annual recurring revenue — were also up 22% to 3,712. Cloudflare’s customers are also sticking around, with the company reporting a very healthy retention rate of 114%, up from 112% in the second quarter of 2024.
Net cash flow in the quarter from operating activities came in at $99.8 million, up from $74.8 million in the same quarter of 2024 and Cloudflare ended the quarter with $3.96 billion in cash, cash equivalents and available-for-sale on hand.
Business highlights in the quarter included an announcement on April 7 that Cloudflare had acquired Outerbase Inc., a startup focused on improving the developer experience for working with databases. The acquisition was pitched as supporting Cloudflare’s aim to simplify backend development across its Workers ecosystem and expand its full-stack capabilities.
April also saw the company unveil Workers VPC and VPC Private Link, major additions to its developer platform. The features enable secure, private connectivity between Cloudflare Workers and other cloud environments or on-premise infrastructure. Cloudflare also introduced its Remote MCP Server to support scalable artificial intelligence agent development at the edge.
While announced just after the end of the quarter, on July 1, Cloudflare also launched an initiative to reshape how AI web crawlers interact with websites. The company introduced a pay-per-crawl model for AI bots, allowing content creators to monetize or block unauthorized scraping.
“While we’ve continued to sign even bigger and longer deals, some of our most strategic wins have been centered around our work to help invent the new business model for content creators on the AI-driven internet,” co-founder and Chief Executive Matthew Prince said in the company’s earnings release. “Sitting in front of more than 20% of all websites — with more than half of our dynamic traffic flowing through APIs — Cloudflare is uniquely positioned to enable the agentic web of the future. We are firing on all cylinders, with the right technology, strategy and team to accelerate the next phase of growth for Cloudflare and for the internet at-large.”
For its fiscal third quarter, Cloudflare expects adjusted earnings per share of 23 cents on revenue of $543.5 million to $544.5 million. Both were ahead of the 21 cents per share and revenue of $538.6 million expected by analysts.
For the full year, the company expects adjusted earnings per share of 85 to 86 cents on revenue of $2.1135 billion to $2.1155 billion. The revenue outlook was ahead of an expected $2.1 billion.
Photo: Wikimedia Commons
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