Key Stats for Cloudflare Stock
- 1-day Price Change for Cloudflare stock: 14%
- $NET Share Price as of Oct. 31: $253
- 52-Week High: $254
- $NET Stock Price Target: $228
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What Happened?
Cloudflare (NET) stock surged to a new all-time high on Friday after it reported third-quarter results that blew past expectations and raised its full-year outlook. Shares jumped nearly 14% as investors celebrated the cloud security company’s strongest quarter in years.
The San Francisco-based tech firm posted revenue of $562 million for Q3, up 31% from the same period last year. That marks the second straight quarter of accelerating growth for Cloudflare.
Cloudflare also narrowed its net loss by 91% to just $1.29 million, down from a $15.3 million loss a year ago.
CEO Matthew Prince credited the company’s transformation from a product-led growth business to a true enterprise sales organization. “Great companies innovate and execute,” Prince said on the earnings call. “I think we owe our reacceleration of revenue growth to doing both of these things very well.”
Cloudflare now has 4,009 large customers paying more than $100,000 annually, representing a 23% year-over-year increase. Those large customers now account for 73% of total revenue, up from 67% last year.
The company’s dollar-based net retention rate increased to 119%, a notable improvement that indicates existing customers are spending more.
Based on the strong results, Cloudflare stock got another boost when management raised its full-year guidance.
Revenue in 2025 is forecast between $2.142 billion and $2.143 billion, up from the previous target of $2.113 billion to $2.115 billion. Operating income guidance also increased to $297 million to $298 million from $284 million to $286 million.
For the fourth quarter, Cloudflare expects revenue to be between $588.5 million and $589.5 million, representing 28% year-over-year growth.
CFO Thomas Seifert stated that the company is now on track to achieve a $3 billion revenue run rate by the end of Q4, maintaining its firm position on the path toward its long-term goal of $5 billion in annual revenue.
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What the Market Is Telling Us About NET Stock
The market’s reaction to Cloudflare’s earnings indicates that investors believe the company’s growth story is still in its early innings.
Despite trading at premium valuations, Cloudflare stock continues to surge as the company executes across multiple fronts.
Cloudflare is experiencing particular momentum in its Workers platform, which enables developers to build and deploy applications at the edge of its network.
Prince noted that roughly 80% of leading AI companies already rely on Cloudflare’s infrastructure, positioning the company well for the shift toward AI-powered applications.
Cloudflare is also making gains in the enterprise security market, particularly with its SASE (Secure Access Service Edge) offerings.
It closed several deals worth over $10 million during the quarter, including a $34.3 million five-year contract with a European tech company and a $22.8 million three-year deal with a Global 2000 media platform.
What’s particularly encouraging is that sales productivity has continued to improve for the seventh consecutive quarter.
Close rates are up, pipeline coverage is strong, and the company is successfully transitioning to a partner-led sales model that should drive even more growth in high-margin security products.
Looking ahead, Cloudflare stock appears positioned to benefit from several long-term trends. The company is at the intersection of cloud computing, cybersecurity, and AI infrastructure—three of the most rapidly evolving areas in technology.
Management’s confidence in raising guidance and discussing a clear path to $5 billion in revenue suggests they see plenty of runway ahead.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
