Shares of Cloudflare Inc. rose more than 14% in late trading today after the connectivity cloud company beat third-quarter expectations and raised its full-year outlook well above Wall Street forecasts.
The increase more than wiped out an 8% decline in the stock during the regular session.
For the quarter ended Sept. 30, Cloudflare reported adjusted earnings per share of 38 cents, up from 27 cents in the same quarter of 2025, on revenue of $782.5 million, up 39% year over year. Analysts expected earnings of 34 cents per share on revenue of $736.8 million.
Revenue growth reached its fastest pace in nearly four years, at an annual rate of over $3 billion. The current remaining performance obligations increased by 37% compared to the previous year. The adjusted operating margin also improved from 15.3% to 17.5%, after declining year-on-year in each of the previous two quarters.
With stock-based compensation totaling $174.1 million, Cloudflare still lost $34.1 million on an unadjusted basis, compared to a loss of $1.3 million a year ago. Another $11 million went into restructuring the cuts of around 1,100 jobs announced in May. Free cash flow fell to 10% of sales from 13% last year.
On the product side, ephemeral blocking rules that write themselves during a live attack are the core of Adaptive Intelligence, which Cloudflare added to its bot management product in late August. AI agents received their own tools earlier this month via Cloudflare Wallets and cloudflare.pay, which give an agent an identity token and allow them to pay for services from a stablecoin balance. Federal agencies can now move more sensitive workloads to Cloudflare for Government, which achieved FedRAMP High status in August.
Co-founder and CEO Matthew Prince called the period “Cloudflare’s best quarter ever” in the earnings release. Cloudflare built the development platform for the AI-powered internet, and companies of all sizes continue to turn to it for protection as digital threats escalate, he said. Prince added that the company has “found an even higher gear for this next phase of growth.”
Cloudflare today also appointed Christian Smith as President of Revenue, responsible for global sales and revenue operations. He replaces Mark Anderson, who previously announced he would be retiring from his full-time position at the end of the year. Smith previously served as chief revenue officer for sales at Splunk Inc.
For the fourth quarter, Cloudflare expects adjusted earnings of 43 cents per share on revenue of $845 million to $846 million. Analysts had forecast 38 cents per share on revenue of $798.2 million.
Cloudflare now expects revenue of $2.963 billion to $2.964 billion in 2026, about $97 million above the midpoint of the range reported in August. Analysts had expected revenue of $2.87 billion and adjusted earnings per share of $1.26 for the year, and the company is now forecasting $1.35.
Photo: Wikimedia Commons
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