TLDR
- Cloudflare (NET) stock rose 15% in Friday premarket after falling 8% Thursday
- Q3 revenue grew 39% to $782.5 million, beating the $737.2 million forecast
- Adjusted earnings hit 38 cents per share versus 34 cents expected
- Q4 revenue guidance of $845 million to $846 million topped the $796 million estimate
- Goldman Sachs reiterated its Buy rating and $420 price target
Cloudflare (NET) stock is trying to climb out of a hole on Friday. It was up 15% in premarket trading after the company posted third-quarter results that topped estimates.
The move comes one day after a rough session. The stock fell 8% on Thursday as a selloff hit tech names.
The Nasdaq Composite dropped 5.5%, its worst day since April 2025. The trigger was worry over Democratic efforts to slow data-center development, which rattled AI-linked stocks.
Cloudflare reported after Thursday’s close. Adjusted earnings came in at 38 cents per share, compared with the 34 cents analysts polled by FactSet expected.
Revenue reached $782.5 million against a forecast of $737.2 million. That is a 39% jump from a year ago.
How the Quarter Stacked Up
Growth sped up by about 3.5 percentage points from the prior quarter. It was the fastest pace in nearly four years.
Operating margin hit a record 17.5%. Management called it the best quarter since Cloudflare went public.
William Blair analyst Jonathan Ho called it “another stellar quarter.” He pointed to demand across the board and strong sales productivity.
Customers are using up their pool-of-funds commitments faster. That is leading to earlier renewals and larger follow-up commitments.
Cloudflare also booked its first Act IV revenue. The company believes Act IV could become its biggest business over a 10-year stretch.
Agents and the Fourth-Quarter Outlook
Agent activity is picking up on the platform. Developers building agents on Cloudflare Workers reached 10 million in Q3, up from 7 million in Q2.
The company says it offers security tools built for new attacks on the agentic web.
Cloudflare also raised its full-year guidance. For the fourth quarter, it expects revenue of $845 million to $846 million.
Wall Street had been looking for $796 million. Goldman Sachs says the outlook implies 37.5% growth, 6% above Street estimates.
Goldman also sees earnings per share 13% above consensus. It said Q3 revenue beat by 6% and earnings per share beat by 11%, based on FactSet data.
Before the report, the stock had slid 13% over the past week. Its market value stood at $87 billion.
InvestingPro analysis shows the stock trading above its fair value. Analysts there expect the company to turn profitable this year.
Goldman reiterated its Buy rating and $420 price target on Friday morning. The stock was up 15% in premarket trading.
