Cloudflare Soars on Strong Q4 Revenue Beat

Cloudflare Inc. shares surged the most in nearly a year on Friday after the company reported fourth-quarter revenue that surpassed analysts' expectations, Bloomberg reports. The San Francisco-based cybersecurity firm's revenue for the quarter ending December 31 increased by 27% to approximately $460 million, exceeding the predicted $452.3 million.

The company's stock price jumped as much as 16% in New York, marking its most significant intraday gain since February 9, 2024. This surge reflects investor confidence in Cloudflare's ability to expand its customer base and penetrate larger markets.

Cloudflare's fourth-quarter earnings per share of 19 cents also beat analyst expectations of 18 cents. This success seems to validate the company's internal efforts to target larger clients.

"We had a very strong end of 2024," said CEO Matthew Prince in a statement. "We saw record growth in our largest customers, those that spend more than $1 million with Cloudflare per year – closing the year with 173. We added 55 of those customers in 2024, and more than half of these new additions came in during fourth quarter alone."

However, the report wasn't entirely positive. Cloudflare's first-quarter sales forecast of $468 million to $469 million fell short of analysts' expectations of $475.2 million. Still, the company's full-year revenue forecast for 2025 of $2.09 billion met expectations.

Despite the mixed results, analysts remain optimistic. Mike Cikos, senior analyst at Needham & Co., noted that while Cloudflare's salesforce expansion has lagged overall hiring, improved efficiency within the team should support further growth this year.

The company's strong fourth-quarter performance, driven by growth in its largest customer segment, underscores its ability to compete effectively in the cybersecurity market. However, the cautious first-quarter forecast suggests that the company still faces challenges in fully capitalizing on its growth potential. Investors will be closely watching to see if Cloudflare can sustain its momentum and meet expectations in the coming quarters.