Cloudflare Inc. (NET) is having a very good Wednesday morning. The cloud infrastructure company reported fourth-quarter numbers that blew past Wall Street's expectations, and investors are clearly happy about it.
The San Francisco-based company posted Q4 revenue of $614.51 million, comfortably ahead of the $591.28 million analysts were expecting. Adjusted earnings hit 28 cents per share, beating the 27-cent consensus. Not a massive beat on the bottom line, but when you're growing this fast, every penny counts.
And about that growth: Total revenue climbed 34% year-over-year. That's the kind of number that gets attention in today's market, especially when it's being driven by artificial intelligence demand. The company did report an operating loss of $49.2 million, but generated adjusted operating income of $89.6 million and free cash flow of $99.4 million during the quarter. Translation: the underlying business is throwing off real cash.
Looking Ahead: Strong Revenue, Lighter Earnings
Cloudflare's guidance for the first quarter shows revenue of $620 million to $621 million, beating Street estimates of $613.93 million. The catch? Adjusted EPS guidance of 23 cents falls short of the 25-cent consensus. So revenue is tracking ahead, but profitability isn't quite keeping pace.
For the full year 2026, Cloudflare expects revenue between $2.79 billion and $2.80 billion, ahead of analyst expectations of $2.74 billion. Again though, the EPS forecast of $1.11 to $1.12 trails the $1.21 consensus. It seems like the company is investing heavily in growth, which makes sense given the AI opportunity they're chasing.
What the Charts Say
From a technical perspective, Cloudflare shares are trading about 14% above their 20-day simple moving average and just 0.1% below the 100-day SMA. That's strong short-term momentum while holding longer-term support. Over the past year, shares are up 4.31% and sitting closer to 52-week highs than lows.
The RSI stands at 48.92, indicating neutral momentum, while the MACD is above its signal line in bullish territory. It's a mixed picture that suggests room for further upside.
- Key Resistance: $218.50
- Key Support: $191.00
What Analysts Are Thinking
The next earnings report is scheduled for May 7, 2026, with analysts expecting EPS of 17 cents (up from 16 cents year-over-year) and revenue of $590.89 million (up from $479.09 million).
The analyst community has a Buy rating on Cloudflare with an average price target of $217.03. Recent analyst activity includes:
- Needham: Buy rating, lowered price target to $250.00 (Feb. 11)
- BTIG: Buy rating, raised price target to $243.00 (Feb. 11)
- BTIG: Upgraded to Buy with $199.00 target (Feb. 4)
NET Price Action: Cloudflare shares were up 14.38% at $205.86 during premarket trading on Wednesday.
