Cloudflare, Inc.

(New York Stock Exchange)
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Very Bullish +85

Cloudflare (NET) Stock Jumps 15% Premarket After Record Q3 and Raised Outlook

Earnings report Guidance raised New AI features AI-generated analysis

📈 Cloudflare stock jumped 15% in premarket trading after reporting third-quarter revenue of $782.5M, beating the $739M estimate.

💰 Adjusted earnings per share reached $0.38, surpassing the consensus estimate of $0.34 by 12%.

🚀 Revenue growth accelerated to 39% year-over-year, marking the fastest pace in nearly four years for the company.

📊 Operating margins hit a record high of 17.5%, described by management as the best quarter since going public.

🔮 The company raised its full-year 2026 revenue guidance to $2.96B-$2.97B, implying roughly 37.5% year-over-year growth.

💻 Agentic activity on the platform surged as developers building agents on Cloudflare Workers rose to 10 million in Q3.

🛡️ Cloudflare booked its first Act IV revenue in the quarter, a segment expected to be its largest business over a 10-year horizon.

🤝 Customers are spending their pool-of-funds commitments faster, leading to earlier renewals and bigger follow-on deals.

🏆 Goldman Sachs reiterated its Buy rating with a $420 price target following the strong Q3 beat and raised guidance.

Bullish Signals
  • Cloudflare reported third-quarter revenue of $782.5M, beating Wall Street estimates by approximately 6%.
  • Adjusted earnings per share of $0.38 exceeded analyst expectations of $0.34, representing a 41% year-over-year increase.
  • The company achieved its fastest revenue growth rate in nearly four years with a 39% year-over-year jump.
  • Operating margins reached a record 17.5%, marking the best financial performance since the company went public.
  • Cloudflare raised its full-year 2026 revenue guidance to $2.96B-$2.97B, significantly above the consensus estimate of $2.87B.
  • The platform saw a surge in agentic activity with developers building agents on Cloudflare Workers rising from 7 million to 10 million in Q3.
  • Management reported that customers are accelerating their spending on pool-of-funds commitments, driving earlier renewals and larger follow-on deals.
  • Goldman Sachs maintained its Buy rating and $420 price target after noting the revenue beat and strong EPS performance.
Full Analysis
Cloudflare (NET) shares surged approximately 15% in premarket trading on Friday following a robust third-quarter earnings report that significantly exceeded Wall Street expectations. The Nasdaq Composite had previously suffered a sharp decline, but Cloudflare's strong performance stood out as the company reported adjusted earnings of $0.38 per share against an estimate of $0.34, alongside revenue of $782.5 million which beat forecasts by roughly 6%. The company achieved its fastest growth rate in nearly four years with a 39% year-over-year revenue increase and hit a record operating margin of 17.5%. Management highlighted that customers are accelerating their spending on pool-of-funds commitments, leading to earlier renewals and larger follow-on deals. Additionally, Cloudflare successfully booked its first Act IV revenue in the quarter, a segment the company projects could become its largest business over the next decade. Looking ahead, Cloudflare raised its full-year 2026 guidance, projecting revenue between $2.96 billion and $2.97 billion, which implies roughly 37.5% year-over-year growth. This outlook sits well above analyst consensus estimates, prompting Goldman Sachs to maintain its Buy rating with a $420 price target. The company also noted a significant rise in agentic activity on its platform, with developers building agents on Cloudflare Workers increasing from 7 million in Q2 to 10 million in Q3.