Core Insights - Cloudflare (NET) is expected to report fourth-quarter 2025 results on February 10, 2026, with anticipated revenues between $588.5 million and $589.5 million, reflecting a year-over-year growth of 28.3% [1] - The company forecasts non-GAAP earnings of 27 cents per share for the fourth quarter, indicating a growth of 42.1% from the same quarter last year [2] Revenue Expectations - Cloudflare's revenue growth is likely driven by enterprises shifting from traditional cybersecurity solutions to a zero-trust approach, alongside an increase in high-value contracts [3] - The company has seen significant global expansion, generating approximately 50% of its 2024 revenues outside the United States, which has diversified its clientele and contributed to revenue growth [4] Customer Growth - As of the end of the third quarter 2025, Cloudflare had 295,552 paying customers, marking a 33.4% year-over-year increase [4] - The number of large customers contributing $100,000 in annual revenues rose to 4,009, a 23% increase year-over-year, with 297 new large customers added in the third quarter of 2026 [5] AI Contributions - Growth in Cloudflare's Workers AI inference and AI Gateway requests is expected to positively impact revenue, along with the rising adoption of its Model Context Protocol server [6] Challenges - The company faces challenges in closing large deals due to geopolitical and macroeconomic pressures, which may negatively affect revenue recognition and top-line growth [7] - Customer caution in IT spending and vendor onboarding, influenced by recent U.S. policy measures, is also impacting Cloudflare's performance [7] Earnings Prediction - Current analysis indicates that Cloudflare's earnings may not exceed expectations, as it holds a Zacks Rank 3 and an Earnings ESP of -1.62% [8]

Core Insights - Cloudflare (NET) is set to report its third-quarter 2025 results on October 30, 2025, with anticipated revenues between $543.5 million and $544.5 million, reflecting a year-over-year growth of 26.5% [1][10] - The company expects non-GAAP earnings of 23 cents per share for the third quarter, indicating a 15% increase from the same quarter last year [2][10] - Cloudflare's performance is likely to be influenced by the shift towards zero-trust cybersecurity solutions, an increase in high-value contracts, and growth in AI-related services [3][6][10] Revenue Drivers - The anticipated revenue growth is supported by Cloudflare's aggressive global expansion, with approximately 50% of its 2024 revenues generated outside the United States [4] - A diversified customer base has contributed positively, with 265,929 paying customers at the end of the second quarter, marking a 27% year-over-year increase [5] - The rise in high-value clients, particularly those contributing over $100,000 in annual revenues, is expected to continue benefiting the company's top line [5] Challenges - Cloudflare faces challenges in closing large deals due to geopolitical and macroeconomic factors, which may negatively impact revenue recognition [7] - Customer caution in IT spending and vendor onboarding, influenced by recent U.S. policy measures, is also a concern for the company's growth [7] Earnings Outlook - The current model does not predict a definitive earnings beat for Cloudflare, as it holds a Zacks Rank 3 and an Earnings ESP of 0.00% [8]

Core Viewpoint - Cloudflare is expected to report second-quarter 2025 results with anticipated revenues between $500 million and $501 million, reflecting a year-over-year growth of 24.87% [1][8] Revenue Expectations - The Zacks Consensus Estimate for Cloudflare's second-quarter revenues is $500.7 million [1] - The company expects non-GAAP earnings of 18 cents per share, which is a decline of 10% from the same quarter last year [2] Earnings Performance - Cloudflare has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 14.88% [3] Factors Influencing Q2 Results - Transition from traditional cybersecurity solutions to a zero-trust approach is expected to benefit Cloudflare's performance [6] - The company has seen a rise in high-value contracts and aggressive global expansion, with approximately 50% of its 2024 revenues generated outside the United States [7][8] - The addition of around 13,105 new paying customers in Q1 2025 has brought the total to approximately 250,819, contributing to revenue growth [8] Competitive Landscape - Cloudflare faces intense competition from larger players like Akamai Technologies and Amazon Web Services, as well as from Palo Alto Networks in the cybersecurity space [15][16] - The market for web infrastructure and security services is becoming increasingly competitive, with new entrants and niche players emerging [15] Investment Considerations - Cloudflare's delayed revenue recognition due to large funding deals may create near-term headwinds for metrics like Dollar-Based Net Retention, which remained flat at 111% in Q1 2025 [14] - The company has invested heavily in enhancing its sales and marketing capabilities, which has negatively impacted operating margins [18] Stock Performance and Valuation - Year-to-date, Cloudflare's shares have surged 84.2%, outperforming the Zacks Internet - Software industry's growth of 17.4% [11] - The stock is trading at a premium with a forward 12-month P/S of 28.58X compared to the industry's 5.82X, indicating a stretched valuation [12]