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Cloudflare Raises Full-Year Outlook Following Second-Quarter Beat

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Cloudflare Raises Full-Year Outlook Following Second-Quarter Beat

Cloudflare (NET) shares jumped early Friday after the cloud and cybersecurity company lifted its full-year outlook following better-than-expected second-quarter results.

Adjusted earnings are now anticipated to come in between $1.25 and $1.26 per share for 2026, the company said late Thursday, up from its previous forecast of $1.19 to $1.20. The consensus on FactSet is for non-GAAP EPS of $1.24.

Revenue is pegged at $2.86 billion to $2.87 billion, compared with prior projections for up to $2.81 billion. The Street is looking for $2.85 billion. The stock climbed 16% in the most recent premarket activity.

The guidance reflects "continued durable growth, improving operating leverage and better visibility" into Cloudflare's long-term framework, Truist Securities said in an emailed client note. "We view the magnitude of developer adoption as a key leading indicator for future consumption growth and broader platform pull-through," analyst Junaid Siddiqui wrote.

For the three months through June, the firm's adjusted EPS increased to $0.29 from $0.21 the year before, topping the average analyst estimate of $0.27. Revenue surged 36% to $696.1 million, ahead of the Street's view for $664.7 million.

The results reinforce Cloudflare's position as a core infrastructure platform for the agentic internet, even though mix and usage-model evolution may create some variability on a quarterly basis, according to Truist. The brokerage reiterated its buy rating on the company's stock.

Revenue in the US advanced 41% to $354.4 million, while Europe, the Middle East and Africa soared 30% to $187 million. The Asia Pacific segment recorded revenue growth of 32% to $99.4 million.

"The strong momentum we've been seeing for some time in our business continued to build in the second quarter," Chief Executive Matthew Prince said during an earnings call, according to a FactSet transcript.

The company added more than 80,000 paying customers in the quarter, "driving 74% year over year paying customer growth," Prince said on the call. Customers paying more than $100,000 in annualized revenue rose 27% to 4,698.

For the ongoing quarter, Cloudflare expects adjusted EPS of $0.34 on a revenue range of $736 million to $737 million. The market's current estimates are for non-GAAP EPS of $0.34 and sales of $732.7 million.

Rival Akamai Technologies (AKAM) recently reported second-quarter results above market expectations, but lowered the top end of its full-year revenue and earnings outlook. Palo Alto Networks (PANW) and Zscaler (ZS) are scheduled to report their latest financial results next month.

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