Cloudflare reported Q4 2025 revenue of $614.5 million, up 34% year‑over‑year, and adjusted earnings per share of $0.28, beating consensus of $0.27. The beat reflects a mix of high‑margin enterprise contracts and continued expansion of its AI‑enabled Workers platform.
Gross margin stood at 74.9%, slightly below the company’s long‑term target range of 75‑77%. Operating income rose to $89.6 million, a 14.6% margin, driven by higher revenue and disciplined cost management despite modest increases in support and infrastructure expenses.
The quarter’s growth was largely powered by a nearly 50% year‑over‑year increase in new annual contract value (ACV) and the signing of the company’s largest ACV deal ever, averaging $42.5 million per year. Demand for Cloudflare’s edge‑computing and security services continued to accelerate as more enterprises adopt AI workloads.
Management raised its first‑quarter 2026 revenue guidance to $620‑$621 million and full‑year 2026 revenue guidance to $2.79‑$2.80 billion, both above Street estimates. The upward revision signals confidence that AI‑driven demand will sustain momentum and that the company’s pricing power will remain intact.
Investors reacted positively to the results, with the market viewing the earnings beat and guidance raise as confirmation of Cloudflare’s strategic positioning in the emerging agentic‑internet landscape.
CEO Matthew Prince said the quarter was “terrific” and highlighted the company’s ability to capture high‑margin AI contracts, while CFO Thomas Seifert emphasized that the results validate the company’s execution strategy and reinforce its focus on growth and operational excellence.
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