Cloudflare Raises 2026 Outlook as Revenue Grows 39% to $782.5 Million

The company now expects 2026 revenue of $2.963 billion to $2.964 billion and adjusted earnings of $1.35 a share, against analyst forecasts of $2.87 billion and $1.26, according to Investing.com. Bloomberg reported that it was the third time this year Cloudflare had raised its profit outlook, with AI adoption driving demand for its networking services.

The results are a test of whether companies that carry AI traffic, rather than build the chips and data centres behind it, can keep growing as investors turn against AI infrastructure. The shares rose about 17% in after-hours trading, after falling with other cybersecurity stocks during a session in which the Nasdaq dropped more than 5%.

Prince said the company has "built the development platform for the AI-powered Internet". Revenue growth was the fastest in nearly four years, according to Investing.com.

Adjusted operating income rose to $137.1 million, a margin of 17.5%, from $85.9 million a year earlier. Adjusted earnings were $0.38 a share, against an estimate of $0.34 and $0.27 a year earlier. Current remaining performance obligations, a measure of contracted revenue due within 12 months, rose 37%.

On a GAAP basis the loss widened. The operating loss was $67.9 million, against $37.5 million a year earlier, and the net loss was $34.1 million, or $0.10 a share, against $1.3 million. Stock-based compensation was $174.1 million and restructuring charges were $11.0 million.

Operating cash flow rose to $215.4 million from $167.1 million, but free cash flow was $82.1 million, a 10% margin, as capital spending climbed. Cloudflare ended the quarter with $5.13 billion in cash, cash equivalents and available-for-sale securities.

For the fourth quarter, Cloudflare forecast revenue of $845 million to $846 million and adjusted earnings of $0.43 a share. Analysts had expected $798.2 million and $0.38.