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Wire

Cloudflare Likely to Execute on Updated Long-Term Profitability Targets, RBC Capital Markets Says

Cloudflare (NET) is expected to deliver on its updated long-term targets, with management saying it remains on track to exceed its $5 billion revenue target ahead of 2028, supported by strength across its security, application, and developer platform businesses, RBC Capital Markets said in a note Tuesday.At its 2026 investor day, the company adopted a Rule of 50 focus and said it now expects gross margins of 70% to 77%, operating margins above 30%, and free cash flow margins of 30% to 35%, with GAAP profitability expected by 2028, supported by AI-driven efficiency gains across sales, engineering, and corporate functions, according to the note.A key theme was Cloudflare's "Act 4" opportunity in the agentic internet, where management sees its isolate-based architecture as a structural advantage for efficiently running AI agent workloads, supported by strong AI traffic growth and increasing developer adoption, RBC said.Underlying momentum remains strong, with Cloudflare One ARR growing 43% year over year and developer platform ARR increasing 137%, alongside rising enterprise adoption and stronger net revenue retention driven by wider product uptake, the brokerage added.RBC Capital Markets maintained its outperform rating on the stock and raised its price target to $260 from $240.Shares of Cloudflare were down 5.8% in Wednesday trading.Price: $222.38, Change: $-13.76, Percent Change: -5.83%

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Wire

UBS Adjusts Price Target on Cloudflare to $250 From $220, Maintains Neutral Rating

Cloudflare Inc (NET) has an average rating of overweight and mean price target of $244, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)Price: $228.61, Change: $-7.52, Percent Change: -3.18%

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Wire

Cloudflare Investor Day Could Support Margin, AI Growth View, Morgan Stanley Says

Cloudflare (NET) could give investors more confidence in its margin recovery, platform growth, Edge AI plans, Agentic Web opportunity, and long-term revenue model at its June 9 investor day, Morgan Stanley said in a note Thursday.The investment firm said it expects management to explain how gross margins can move back toward the 75% to 77% range while operating leverage improves over time, and Cloudflare may also give more details on platform use, Workers growth, Pool of Funds deals, and the share of revenue coming from consumption-based products.Cloudflare's global network could help the company defend its position and expand into newer areas such as Edge AI and agent-based internet tools, though Morgan Stanley said it expects more details on how Cloudflare plans to make money from Workers, AI infrastructure, agent workflows, content monetization, and newer internet business models.Cloudflare's recent workforce reduction, better sales productivity, channel growth, and wider use of AI inside the company could support higher long-term operating margins, according to the note.Morgan Stanley kept its overweight rating for Cloudflare and raised its price target to $305 from $245.Price: $275.10, Change: $+9.77, Percent Change: +3.68%

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US May Layoffs Rise to Highest Since 2020 as AI-Linked Cuts Climb, Challenger Says
US Markets

US May Layoffs Rise to Highest Since 2020 as AI-Linked Cuts Climb, Challenger Says

Job cut announcements in May hit the highest for the month since 2020, Challenger, Gray & Christmas said Thursday, while US weekly applications for unemployment insurance rose unexpectedly.Employers announced 97,006 layoffs last month, up 16% from April and 3% from a year earlier, with the shift toward artificial intelligence still the leading reason for cuts, the outplacement firm said.While monthly job cuts rose for the third straight month, layoffs from January to May were down 43%, totaling 397,755."On top of the headline AI story, we're seeing a sharp rise in cuts tied to acquisitions and mergers and a jump in bankruptcy-related losses, which tells me companies are restructuring aggressively as they reposition for an AI-driven economy," Andy Challenger, the firm's chief revenue officer, said in a statement. "The labor market is being reshaped by technology in real time."Tech companies announced 38,242 job cuts in May, the highest monthly total for the sector since August 2024.Last month, financial software firm Intuit (INTU) said it planned to reduce its workforce by about 17%. Cloud connectivity firm Cloudflare (NET) said it expects to cut about 1,100 roles as part of a restructuring.The Challenger report arrives a day before the May nonfarm payrolls release. Economists surveyed by Bloomberg expect 85,000 new jobs, down from 115,000 in April, with the unemployment rate seen holding at 4.3%.On Wednesday, ADP reported stronger-than-expected private-sector hiring for May.Separately, the Department of Labor said initial jobless claims last week rose to 225,000 from a revised 212,000 the prior week and above the 215,000 consensus. Continuing claims fell by 8,000 to about 1.78 million in the week ended May 23.Price: $314.83, Change: $+3.39, Percent Change: +1.09%

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Wire

Cloudflare Acquires Open-Source Software Firm VoidZero

Cloudflare (NET) has acquired open-source software firm VoidZero, the cloud services provider said Thursday.Financial terms were not disclosed.The acquisition includes VoidZero's Vite build tool, Vitest test runner, Rust-based Rolldown bundler, and tOxc toolchain, Cloudflare said.As part of the deal, VoidZero's team of open source creators and Rust optimization specialists, will join Cloudflare's Emerging Technology and Incubation unit, the company said.Cloudflare also said it is committing $1 million to support community maintainers and contributors who are independent of VoidZero and Cloudflare.Shares of Cloudflare were down nearly 3% in early Thursday trading.Price: $257.44, Change: $-7.89, Percent Change: -2.97%

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Research

William O'Neil Initiates Cloudflare at Buy

Cloudflare Inc (NET) has an average rating of overweight and mean price target of $235.31, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)

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Insider Trading

Cloudflare Insider Sold Shares Worth $18,330,473, According to a Recent SEC Filing

Michelle Zatlyn, Director, President and Board Co-Chair, on May 22, 2026, sold 86,362 shares in Cloudflare (NET) for $18,330,473. Following the Form 4 filing with the SEC, Zatlyn has control over a total of 427,847 Class A common shares of the company, with 360,807 shares held directly and 67,040 controlled indirectly.SEC Filing:https://www.sec.gov/Archives/edgar/data/1477333/000178695126000008/xslF345X05/wk-form4_1779921237.xml

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Wire

Cloudflare is Well-Positioned for AI Agents, RBC Capital Markets Says

Cloudflare (NET) is well-positioned for artificial intelligence agents and is likely ahead of schedule on its $5 billion revenue target by 2028, RBC Capital Markets said in a research report emailed Friday.The company is poised to monetize AI and agentic build out as many of the top frontier models leverage the company's services, according to the note.The company is likely to offer insights at its June 9 analyst day into how agent-driven productivity decouples traditional inputs from output, allowing it to move toward the Rule of 50 and sustaining durable growth and margin expansion, analysts wrote.The brokerage said it reiterated its outperform rating on the stock and price target of $240 per share.Price: $214.93, Change: $+2.28, Percent Change: +1.07%

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Insider Trading

Cloudflare Insider Sold Shares Worth $32,606,962, According to a Recent SEC Filing

Matthew Prince, 10% Owner, Director, Chief Executive Officer & Board Co-Chair, on May 19, 2026, sold 157,152 shares in Cloudflare (NET) for $32,606,962. Following the Form 4 filing with the SEC, Prince has control over a total of 386,357 Class A common shares of the company, with 360,807 shares held directly and 25,550 controlled indirectly.SEC Filing:https://www.sec.gov/Archives/edgar/data/1477333/000178692526000021/xslF345X05/wk-form4_1779403101.xml

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Research

Research Alert: CFRA Maintains Buy Rating On Shares Cloudflare Inc.

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We lower our target price to $235 from $240, based on an EV/S multiple of 23x our 2027 sales projection of $3.57 billion, above its three-year average. We increase our 2026 EPS projection to $1.20 from $1.12 and revise our 2027 EPS view to $1.50 from $1.43. NET reported Q1 revenue of $639.8M, up 34% Y/Y, attributed to strength in large customers. Notably, the company added as many $5M+ customers in Q1 as in all of 2025, while customers spending $100K+ accelerated 25% Y/Y to 4,416. Gross margin compressed to 72.8%, down 210 bps sequentially, though non-GAAP operating margin fell 30 bps by comparison to 11.4%. NET raised its operating margin outlook, signaling continued leverage in the business. The major restructuring program announced during the quarter will help with margin stability as NET increases growth investments, but elevates execution risk, in our view. Still, we believe the firm is executing well against its opportunity, with strong momentum reported in the business.

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Wire

Top Midday Decliners

Cloudflare (NET) said late Thursday it expects to reduce its workforce by about 1,100 people as part of a planned restructuring.The company projects to incur charges of $140 million to $150 million in connection with the plan.Shares sank 22% following a surge in intraday trading volume to over 14.8 million from a daily average of about 4.6 million.CoreWeave (CRWV) shares were down after the company reported overnight a wider-than-expected Q1 net loss.CoreWeave's Q2 revenue guidance was below consensus, which could signal a slowdown in capacity or supply chain-related deployment, Oppenheimer said Friday in a note, adding that revenue can fluctuate at this stage of growth as large capacity additions tend to be lumpy.Shares slumped 12% as intraday trading volume catapulted to more than 38.4 million from a daily average of about 27.4 million.Citigroup adjusted Mettler-Toledo International's (MTD) price target to $1,550 from $1,700 a share, and Evercore ISI lowered its price objective for the company to $1,300 from $1,425 a share, with both cuts following Mettler-Toledo's Q1 results overnight.Shares of Mettler-Toledo were down 14%, with intraday trading volume at more than 351,300, versus the stock's daily average of about 156,000.Price: $198.76, Change: $-58.03, Percent Change: -22.60%

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Wire

Cloudflare's Surprise 20% Workforce Cut Marks AI-First Pivot, RBC Says

Cloudflare's (NET) surprise workforce reduction signals a "position of strength to truly change the operating model to be AI-first," with the company cutting deeply into its middle layers while preserving core sales roles, RBC Capital Markets said Thursday in a report.The 1,100-employee reduction, or 20% of staff, is broad-based across geographies and functions, though quota-carrying and customer-facing roles were largely spared, giving RBC confidence in Cloudflare's growth outlook, according to the report.Cloudflare is rebuilding its operating model around AI and is adding quota-carrying roles, RBC said. Internal AI usage surged sevenfold, driving major productivity gains and enabling the company to run with fewer support and middle-management positions, the report said.RBC maintained its outperform rating on Cloudflare stock and its $240 price target, citing the company's "durable growth with AI efficiencies" and its strategic relevance in the emerging agentic-AI era.Price: $195.41, Change: $-61.38, Percent Change: -23.90%

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Wire

Cloudflare Seen Benefiting From AI-Driven Demand, Oppenheimer Says

Cloudflare (NET) is positioned to benefit from rising AI-related traffic and new deals that may help it outperform conservative revenue guidance, Oppenheimer said Friday in a report.Cloudflare's 30% revenue growth outlook does not include potential gains from new customer usage agreements expected later in the year or from rising AI-driven automated traffic, which the company can charge for as it grows, the report said.Oppenheimer said that Cloudflare has cut about 20% of its staff as AI tools take over more internal work, helping lift margins even as the company continues to invest in its platform.Oppenheimer reiterated its outperform rating on Cloudflare stock and its $300 price target.Price: $196.43, Change: $-60.36, Percent Change: -23.51%

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Sectors

Sector Update: Tech Stocks Rise Premarket Friday

Technology stocks were rising premarket Friday, with the State Street Technology Select Sector SPDR Fund (XLK) 1.2% higher and the State Street SPDR S&P Semiconductor ETF (XSD) up 2.1%.Sony Group (SONY) stock was up more than 2% after the company posted higher fiscal Q4 sales.Cloudflare (NET) shares were down more than 15% after the company said it expects to reduce its workforce by about 1,100 people as part of a planned restructuring.Iren (IREN) secured a five-year AI infrastructure cloud services contract with Nvidia (NVDA) worth $3.4 billion, the company said. Iren shares were up more than 15% premarket.

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Asia Markets

US Equity Futures Gain Pre-Bell as Trump Says Ceasefire Still in Effect Despite Skirmish in Strait of Hormuz

US equity futures were edging higher pre-bell Friday as traders continued to monitor developments in the Middle East conflict, with the US and Iran exchanging fire, while President Donald Trump said the ceasefire was still in effect.Dow Jones Industrial Average futures were 0.4% higher, S&P 500 futures were up 0.6%, and Nasdaq futures were 0.9% higher.The US and Iran traded fire in the Strait of Hormuz, with each side claiming that the other started the attack. In a post on Truth Social, Trump said there was no damage done to three Destroyer vessels, but "great damage" to Iranian boats. "We'll knock them out a lot harder, and a lot more violently, in the future, if they don't get their Deal signed, FAST!" he added.Trump told reporters that the ceasefire was still in effect. The US is still waiting for Iran's response to its proposal to end the war and postpone nuclear talks to a later date.Traders absorbed the latest round of earnings, with Enbridge (ENB) reporting lower Q1 adjusted earnings amid higher revenue and Brookfield Asset Management (BAM) posting increases in Q1 distributable earnings and revenue.Oil prices were largely unchanged, with front-month global benchmark North Sea Brent crude flat at $100.10 per barrel and US West Texas Intermediate crude also flat at $94.79 per barrel.The April national unemployment rate was reported at 4.3%, unchanged from the prior month and meeting estimates compiled by Bloomberg.The University of Michigan consumer sentiment index for May, slated for 10 am ET, is expected at 49.5, down from 49.8 previously.There will be a panel discussion featuring Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Christopher Waller, San Francisco Fed President Mary Daly, and Chicago Fed President Austan Goolsbee at 7:30 pm ET.In other world markets, Japan's Nikkei closed 0.2% lower, Hong Kong's Hang Seng ended 0.9% lower, and China's Shanghai Composite finished flat. Meanwhile, the UK's FTSE 100 was down 0.1%, and Germany's DAX index was 0.9% lower in Europe's early afternoon session.In equities, Cloudflare (NET) shares fell 16% after the company said it expected to reduce its workforce by about 1,100 people as part of a planned restructuring, as well as incurring charges of $140 million to $150 million in connection with the plan. CoreWeave (CRWV) stock was down 6.1% after the company reported a wider-than-expected Q1 net loss. HubSpot (HUBS) shares dropped 24% after the company issued lower-than-expected Q2 revenue guidance.On the winning side, Sony (SONY) stock was up 2.9% after the company's subsidiary Sony Semiconductor Solutions and Taiwan Semiconductor Manufacturing (TSM) said they signed a non-binding memorandum of understanding to create a strategic partnership focused on developing and manufacturing next-generation image sensors. Eni (E) shares rose 2.6% after the company said the first tranche of its new share buyback program will be launched in the coming days. Earlier, Eni also said its Geliga-1 offshore Indonesia discovery delivered strong drill stem test results, confirming robust reservoir productivity.

Dow JonesNasdaq CompositeS&P 500$BAM$CRWV$E$ENB$HUBS$NET$SONY$TSM
Research

Research Alert: Net: Soft Guidance Offsets Q1 Beats; Announces Workforce Restructuring

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:NET delivered strong Q1 2026 results, with revenue of $639.8M (+34% Y/Y), beating consensus by $17.2M, while non-GAAP EPS of $0.25 improved 56% from $0.16 in the prior year, exceeding estimates by $0.02. Non-GAAP gross margins compressed to 72.8% from 77.1% Y/Y due to infrastructure investments for AI workloads, though operating leverage remained strong, with margins of 11.4% declining only 30 bps. Management announced a significant AI-first transformation, planning to reduce its workforce by ~1,100 people, with $140M-$150M in restructuring charges. For Q2 2026, NET expects revenue of $664M-$665M (~30% growth) with non-GAAP EPS of $0.27, while full-year guidance calls for $2,805M-$2,813M in revenue (~29% growth), below the Street's projections of $2,797M after incorporating the beat, and EPS of $1.19-1.20. Free cash flow surged 59% to $84.1M (13% of revenue), reflecting strong fundamentals, while the balance sheet remains robust with $4.16B in cash and securities.

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US Markets

Equities Fall Intraday, Oil Rises as Traders Monitor Middle East Developments

US benchmark equity indexes were lower intraday, while oil prices were moving higher, as investors monitored developments regarding a potential peace deal between Washington and Iran.The Dow Jones Industrial Average was down 0.7% at 49,571 after midday Thursday, while the S&P 500 lost 0.4% to 7,338.3. The Nasdaq Composite shed 0.1% to 25,811.1. The S&P 500 and the Nasdaq hit new peaks in the previous session.Barring technology, all sectors were in the red intraday Thursday, led by energy.West Texas Intermediate crude was up 1.4% at $96.45 a barrel, while Brent rose 0.7% to $102.02. Both benchmarks fell sharply Wednesday amid prospects of a diplomatic breakthrough between the US and Iran."The sell-off partly unwinds the conflict-driven rally in energy prices, but losses were pared as the market remains cautious," ING Bank said in a report Thursday. "Crude inventories in the US continue to tighten, while buyers have become more reliant on US barrels to offset disrupted Middle Eastern supply."The US and Iran are edging toward a temporary pact to halt the war, Reuters reported, citing sources and officials. Iran is reviewing a proposal to stop the fighting, but leave the most contentious issues unresolved, according to the report.Iran is still reviewing "messages" from the US via Pakistani mediation and has yet to finalize its response to a Washington proposal to end the conflict, CNN reported, citing local Iranian media. Tehran has issued a set of new rules for ships looking to cross the crucial Strait of Hormuz, the news outlet reported, citing a document it saw.US Treasury yields were higher intraday, with the 10-year rate up 4.3 basis points at 4.39% and the two-year rate rising 5.2 basis points to 3.92%.In company news, Tapestry (TPR) raised its fiscal 2026 outlook after delivering a third-quarter beat, but provided a subdued fourth-quarter sales guidance for its Kate Spade brand. The luxury fashion company's shares were down 10%, the second-worst performer on the S&P 500.Planet Fitness (PLNT) shares slid 32% after the fitness center operator tempered its full-year expectations amid fewer-than-projected member additions in the first quarter.Shake Shack (SHAK) shares plummeted 29% after the fast food chain operator's first-quarter results fell short of Wall Street's estimates amid weather-related headwinds.Datadog (DDOG) shares surged 26%, the top gainer on the S&P 500. The software maker raised its full-year outlook after posting first-quarter results that topped the Street expectations.Gilead Sciences (GILD), McKesson (MCK), Cloudflare (NET), Airbnb (ABNB), Monster Beverage (MNST), and CoreWeave (CRWV) are expected to report after the closing bell Thursday.Gold was up 0.1% at $4,699.80 per troy ounce, while silver jumped 2.7% to $79.37 per ounce.

Dow JonesNasdaq CompositeS&P 500$ABNB$CRWV$DDOG$GILD$MCK$MNST$NET$PLNT$SHAK$TPR
US Markets

Stocks Rise Pre-Bell as Traders Monitor Developments on Potential US-Iran Peace Deal

US equity markets were moving higher before the opening bell Thursday as investors monitor the latest developments over a potential peace deal between the US and Iran.The S&P 500 and the Dow Jones Industrial Average were up 0.1% each, while the Nasdaq was slightly in the green in premarket activity. The indexes finished Wednesday trading higher, with the S&P 500 and the Nasdaq recording their highest close ever and biggest one-day percentage gains since April 8.President Donald Trump told reporters on Wednesday that the US has had "very good talks" with Iran over the past 24 hours, but said there's no deadline on when he expects Tehran to respond to a US proposal to end the war, according to CNN.American and Iranian officials are closing in on a one-page memorandum of understanding to end the war and establish a framework for nuclear negotiations, Axios reported Wednesday, citing sources.In a separate social media post on Wednesday, Trump said US operations against Iran will be "at an end" if Tehran agrees to US demands. "If they don't agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before," Trump said.Iran is expected to give mediators its response to the proposal on Thursday, a regional source told CNN.West Texas Intermediate crude oil dropped 2.2% to $93.03 a barrel before the open, while Brent decreased 2.1% to $99.14."A deal announcement would move futures further immediately, in fact even the potential of a deal is already triggering a decline in oil prices," Rystad Energy Chief Oil Analyst Paola Rodriguez-Masiu said in remarks emailed to. The physical market's recovery won't be as quick as the futures market predicts, Rodriguez-Masiu said, pointing to a six-to-eight-week lag between the strait reopening and oil flows normalizing.Treasury yields were down in premarket action, with the two-year rate retreating 2.3 basis points to 3.85% and the 10-year rate off 2 basis points to 4.33%.Shares of DoorDash (DASH) jumped 10% pre-bell after the food delivery company reported first-quarter earnings ahead of Wall Street's estimates. Warner Bros. Discovery (WBD) nudged 0.5% lower, while Snap (SNAP) fell 10% following their latest quarterly results.McDonald's (MCD), Sempra (SRE), Vistra (VST), Datadog (DDOG), Becton Dickinson (BDX), Tapestry (TPR) and US Foods (USFD) report their latest financial results before the bell, among others. Gilead Sciences (GILD), McKesson (MCK), Cloudflare (NET), Airbnb (ABNB), Monster Beverage (MNST) and CoreWeave (CRWV) are scheduled to announce their earnings after the markets close.Employers in the US announced 83,387 layoffs last month, up 38% from March, Challenger, Gray & Christmas said Thursday.Thursday's economic calendar also has the weekly jobless claims bulletin at 8:30 am.On Wednesday, ADP data showed that employment in the US private sector grew at its fastest pace in more than a year in April. The government's nonfarm payrolls report is out on Friday.Federal Reserve Bank of Minneapolis President Neel Kashkari is slated to speak at 1 pm, while Cleveland Fed President Beth Hammack speaks at 2:05 pm. New York Fed President John Williams' remarks are due at 3:30 pm.Gold increased 1% to $4,740 per troy ounce, while bitcoin declined 0.7% to $80,844.

Dow JonesNasdaq CompositeS&P 500$ABNB$BDX$CRWV$DASH$DDOG$GILD$MCD$MCK$MNST$NET$SNAP$SRE$TPR$USFD$VST$WBD
Insider Trading

Cloudflare Insider Sold Shares Worth $558,382, According to a Recent SEC Filing

John Graham-Cumming, Director, on May 04, 2026, sold 2,520 shares in Cloudflare (NET) for $558,382. Following the Form 4 filing with the SEC, Graham-Cumming has control over a total of 494,067 Class A common shares of the company, with 494,067 shares held directly.SEC Filing:https://www.sec.gov/Archives/edgar/data/1477333/000206272526000010/xslF345X05/form4-05052026_100503.xml

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Wire

Cloudflare Seen Posting Q1 Beat on Contract Gains, Platform Adoption, Oppenheimer Says

Cloudflare (NET) is expected to report a Q1 earnings beat, supported by stronger contract activity showing larger deal sizes and increased adoption of security and compute modules, Oppenheimer said Friday in a report.Contract values probably grew 10% to 15% in Q1 from a year earlier with bot management, AI gateway and app security also picking up, the report said.More than half of Q1 contracts included Workers modules, up from 45% in the prior quarter and 10% to 15% two years ago, the report said.Oppenheimer models Q1 revenue of $620.7 million and expects management to maintain its 2026 revenue guidance.Oppenheimer maintained its outperform rating on Cloudflare stock with a $300 price target.Q1 results are due May 7.Price: $203.10, Change: $-1.91, Percent Change: -0.93%

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