Cloudflare Stock Rises 8% as Q1 Earnings Match Estimates, Revenues Top

Core Viewpoint - Cloudflare, Inc. reported non-GAAP earnings of 16 cents per share for Q1 2025, matching the Zacks Consensus Estimate, with revenues increasing by 27% year-over-year to $479.1 million, driven by strong enterprise customer onboarding and a focus on security [1][2]. Financial Performance - Q1 revenues reached $479.1 million, surpassing the consensus mark by 2.2%, attributed to the onboarding of large enterprise customers and growth in the public sector [2]. - Non-GAAP gross profit increased by 22.7% year-over-year to $369.3 million, although the non-GAAP gross margin contracted by 240 basis points to 77.1% [4]. - Non-GAAP operating income rose to $56 million from $42.4 million in the previous year, with the non-GAAP operating margin expanding by 50 basis points to 11.7% [5]. Customer Metrics - Cloudflare had 250,819 paying customers at the end of Q1, a 27% increase year-over-year, including 30 new customers contributing over $100,000 in annual revenues, totaling 3,527 such customers [4]. Balance Sheet and Cash Flow - As of March 31, 2025, Cloudflare's cash, cash equivalents, and available-for-sale securities amounted to $1.91 billion, up from $1.86 billion at the end of 2024 [6]. - The company generated an operating cash flow of $145.8 million and free cash flow of $52.9 million during Q1 [6]. Guidance - For FY 2025, Cloudflare anticipates revenues between $2.09 billion and $2.094 billion, indicating a year-over-year rise of 25.3% [7]. - The company projects non-GAAP earnings per share between 79 cents and 80 cents, with the Zacks Consensus Estimate at 79 cents, reflecting a 5.3% year-over-year increase [8]. - For Q2, Cloudflare expects revenues in the range of $500 million to $501 million, suggesting a year-over-year rise of 24.9% [9]. - Non-GAAP income from operations for Q2 is expected to be between $62.5 million and $63.5 million, with anticipated earnings of 18 cents per share [10].