Cloudflare (NET) Q4 2025 Earnings Call – Feb 10, 2026
- Cloudflare reported strong fourth-quarter and full-year 2025 financial results, demonstrating continued growth in revenue and customer acquisition.
- Despite revenue growth, Cloudflare reported a GAAP loss from operations of $49.2 million, or 8% of total revenue.
- According to Cloudflare co-founder and CEO Matthew Prince, the company closed its largest annual contract value (ACV) deal ever in the fourth quarter, averaging $42.5 million per year.
Cloudflare reported strong fourth-quarter and full-year 2025 financial results, demonstrating continued growth in revenue and customer acquisition. The company, a leading connectivity cloud provider, announced results showing a 34% year-over-year increase in fourth-quarter revenue, reaching $614.5 million. Full-year revenue totaled $2.1679 billion, a 30% increase compared to the previous year.
Despite revenue growth, Cloudflare reported a GAAP loss from operations of $49.2 million, or 8% of total revenue. However, non-GAAP income from operations reached $89.6 million, representing 15% of total revenue. The company also highlighted significant growth in both Remaining Performance Obligation (RPO) – 48% year-over-year – and Current RPO, which increased by 34% year-over-year.
According to Cloudflare co-founder and CEO Matthew Prince, the company closed its largest annual contract value (ACV) deal ever in the fourth quarter, averaging $42.5 million per year. Total new ACV grew nearly 50% year-over-year, marking the fastest growth rate since . Prince attributed this growth to the increasing demand for Cloudflare’s services driven by the shift toward artificial intelligence and “agents” – automated software entities – which are reshaping the internet.
“The shift toward AI and agents represents a fundamental re-platforming of the Internet that’s driving demand across Cloudflare’s services,” Prince stated. “If agents are the new users of the web, Cloudflare is the platform they run on and the network they pass through.”
Financial Highlights and Customer Growth
The fourth quarter saw a GAAP gross profit of $452.6 million, representing a 73.6% gross margin, compared to $351.3 million, or 76.4%, in the same quarter of . Non-GAAP gross profit was $460.2 million, or 74.9% gross margin, compared to $356.8 million, or 77.6%, in the fourth quarter of .
Cloudflare’s customer base continued to expand, with 4,298 customers now paying over $100,000 annually, a 23% increase year-over-year. These large customers contributed 73% of total revenue, up from 69% in the prior-year quarter. The company ended with 269 customers spending over $1 million annually, a 55% increase year-over-year, with a record number of such customers added during the year.
The company’s dollar-based net retention rate stood at 120%, a 1% sequential increase and a 9% year-over-year increase, indicating strong customer loyalty and expansion of existing relationships.
Looking Ahead: 2026 Guidance
Cloudflare expects revenue for the full year to be between $2.785 billion and $2.795 billion, representing a growth rate of 28% to 29%. For the first quarter of , the company anticipates revenue between $620 million and $621 million.
The company also noted that “pool-of-funds” deals, which comprised approximately 20% of fourth-quarter ACV, introduce variability in revenue recognition and could lead to quarter-to-quarter fluctuations. Network Capital Expenditure is projected to be around 12-15% of revenue.
Enterprise Momentum and AI Impact
The earnings call highlighted accelerating enterprise momentum, with new ACV bookings growing nearly 50% year-over-year. This growth is being fueled by increased demand from AI-driven internet traffic and “agentic” workloads. Cloudflare positions itself as a critical infrastructure provider for these emerging technologies, serving as the platform and network through which these agents operate.
The company’s geographic revenue mix showed the United States generating 49% of revenue (up 31% year-over-year), EMEA contributing 27% (up 31%) and APAC accounting for 16% (up 50%). Total paying customers reached approximately 332,000, with a sequential net addition of nearly 37,000, representing a 40% year-over-year increase.
While the GAAP loss from operations remains a point to watch, the strong revenue growth, expanding customer base, and positive outlook for suggest Cloudflare is well-positioned to capitalize on the growing demand for connectivity and security services in an increasingly AI-driven digital landscape.