Cloudflare Inc. Q4 FY2026 Earnings Call Summary

NET NYSE Technology 📅 2026-02-10 🟢 Bullish

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✍️ EarningsBloom Editorial Team · 📅 Last updated: 2026-04-30 · 📎 Source: SEC EDGAR / Company Press Release

📋 TL;DR — What Happened

Cloudflare concluded fiscal year 2025 with an exceptionally strong fourth quarter, reporting robust revenue growth of 34% year-over-year and significant non-GAAP net income of $106.8 million. This performance was driven by record-breaking large deals and strong demand fueled by the evolving "Agentic Internet" and AI, positioning the company for continued expansion in its core security, performance, and networking services.

📊 Key Financial Metrics

Revenue $614.5M

EPS (Diluted) $0.28

AI Sentiment 🟢 Bullish The company delivered exceptionally strong revenue growth, record-breaking large deal wins, and robust non-GAAP profitability, coupled with an optimistic outlook driven by its strategic positioning in the evolving AI landscape.

✅ What Went Well

✅ Cloudflare achieved a 34% year-over-year revenue growth, reaching $614.5 million in Q4 2025, significantly outpacing many peers in the tech sector and demonstrating robust demand for its comprehensive suite of security, performance, and reliability solutions. This strong top-line growth underscores the company's expanding market penetration and the increasing reliance of businesses on its connectivity cloud platform.

✅ The company secured its largest annual contract value (ACV) deal in history, valued at an average of $42.5 million per year, which is a testament to its ability to attract and serve major enterprise clients. Furthermore, total new ACV grew by nearly 50% year-over-year, marking its fastest growth rate since 2021, indicating strong sales execution and a compelling value proposition for large organizations.

✅ Cloudflare reported a non-GAAP net income of $106.8 million, or $0.28 per diluted share, showcasing enhanced operational leverage. This was complemented by strong cash flow generation, with net cash from operating activities at $190.4 million and free cash flow at $99.4 million (16.2% of revenue), providing ample liquidity for strategic investments and demonstrating financial discipline.

⚠️ Concerns & Risks

⚠️ Despite strong non-GAAP profitability, Cloudflare reported a GAAP net loss of $12.1 million for Q4 2025 and a full-year GAAP net loss of $102.3 million. This indicates that significant non-cash expenses, primarily stock-based compensation and amortization of acquired intangibles, continue to impact reported GAAP earnings, which could be a point of scrutiny for investors focused on traditional accounting metrics.

⚠️ While non-GAAP gross margin remained strong at 74.9% in Q4 2025, it slightly decreased from 77.6% in Q4 2024. Similarly, the full-year non-GAAP gross margin declined from 78.7% in fiscal 2024 to 75.8% in fiscal 2025. This modest compression in gross margin could suggest increasing costs of revenue or a shift in product mix, warranting close monitoring for future trends.

⚠️ The company heavily emphasizes non-GAAP financial measures, which exclude substantial expenses like stock-based compensation ($132.35 million in Q4 2025) and amortization of acquired intangibles. While these adjustments are common in the tech industry, a consistent gap between GAAP losses and non-GAAP profits might raise questions about the true underlying profitability and dilution impact from equity compensation.

🔮 CEO / Management Guidance

Cloudflare's management provided an optimistic outlook for the upcoming periods. For the first quarter of 2026, the company expects total revenue to be between $620.0 million and $621.0 million, with non-GAAP net income per share projected at $0.23. Looking further ahead, the full fiscal year 2026 guidance anticipates total revenue in the range of $2,785.0 million to $2,795.0 million, alongside non-GAAP net income per share of $1.11 to $1.12, signaling continued strong growth and profitability.

💬 Key Quote

We had an exceptionally strong end to 2025. In Q4, we closed our largest annual contract value deal ever—averaging $42.5 million per year—and total new ACV grew nearly 50 percent year-over-year, our fastest growth rate since 2021. The shift toward AI and agents represents a fundamental re-platforming of the Internet that's driving demand across Cloudflare's services. If agents are the new users of the web, Cloudflare is the platform they run on and the network they pass through. — Matthew Prince, co-founder & CEO

🏢 About Cloudflare Inc.

Cloudflare Inc. (NET) is a publicly listed company on the NYSE exchange in the Technology sector. EarningsBloom tracks its quarterly earnings calls to provide free AI-generated summaries for investors.

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