Live Earnings: Will Cloudflare Rise After Q4 Earnings Tonight?

Cloudflare CEO Matt Prince had a lot to say about massive changes to software and how they impact Cloudflare. Here’s the key section (transcript compliments of S&P Capital IQ):

“In turn, they are reshaping the very economics of software. The industry is transitioning from a business model defined by seat licenses to one where the winners are those providing the compute, connectivity and rails and guardrails for these new digital workers at scale. Cloudflare was built for this moment. We are uniquely architected to capture value on both sides of the Agentic interactions. That means we win when AI applications are built on cloud are workers, but we also win just from the increased usage of all of our products and agenetic Internet drives.

Let me explain. When the cost of generating code drops to near 0, the volume of new applications explode. It’s not a coincidence that most so-called Vibe coating platforms are either built on Cloudflare Workers or have us as their preferred deployment target. We exited 2025 with more than 4.5 million human developers active on our platform. It’s a lot more if we count their agents. Developers are using workers to run autonomous logic across our global network containers for sandboxes and AI gateway to manage influence with cashing rate limiting and observability. AI usage is even driving adoption of our Zero Trust platform to ensure that data is compartmentalized and access granted in limited and controlled ways.

And it’s not just established developers, I’m proud that we’re ranked the #1 cloud platform in the latest stack overflow survey for developers learning to code. But the opportunity extends beyond just the developers building on Workers. We’re seeing agenetic workloads generate an order of magnitude more outbound request to the web than traditional user-driven applications.

Over the month of January alone, the number of weekly requests generated by AI agents more than doubled across the Cloudflare network. This is driving increased demand for our whole platform. This is where Cloudflare scale becomes our moat with more than 20% of the web already sitting behind Cloudflare’s network, we are effectively the global control plane for the genic Internet. That’s creating a number of new growth opportunities, both with our traditional business as well as what we’ve begun calling AT4, helping invent the future business model of the Internet.

If AI agents are the new users of the Internet, Cloudflare is the platform they run on and the network they pass through. This creates a virtuous flywheel more agents drive more code execution on our workers’ development platform, which in turn drives more demand for Cloudflare’s performance, security and networking services at scale this compounds powerfully.”

Cloudflare’s call has ended and shares are now up 15%, we’ll post some notes from the call shortly.

Cloudflare’s conference call starts in 8 minutes. You can join the webcast here.

If you want to receive updates on any quotes that might make shares move during the call, simply leave this page open and make sure to refresh it later to get updates. 

Earlier, we expressed surprise that Cloudflare shares were up 10% given their results. Wall Street might be agreeing right now, as share gains have eased.

Cloudflare is currently up 7% after-hours.

Bull Case: Why Optimists Expect Further Gains

Momentum from the Beat: Q4 revenue of $614.51 million crushed expectations of $591.3 million, extending a seven-quarter beat streak proving management consistently exceeds guidance.

Guidance Surprise: 2026 revenue guidance of $2.785-2.795 billion topped the $2.73 billion consensus, signaling accelerating demand for security and edge computing products.

Technical Room to Run: At an RSI of 48.59, the stock sits in neutral territory with space before hitting overbought levels around 70.

Bear Case: Why Skeptics See Limited Upside

Valuation Stretched: Trading at 30x trailing sales and 143x forward earnings, Cloudflare commands premium multiples leaving little room for missteps.

Insider Selling Intensifies: Heavy executive selling throughout January—including CEO Matthew Prince offloading approximately 400,000 shares—raises questions about confidence at current valuations.

Still Unprofitable: The company remains GAAP unprofitable with negative $0.30 EPS, making it vulnerable if growth expectations aren’t met.

To be honest, we’re a little surprised how much Cloudflare is up after hours. The company did beat on guidance ($2.8B at the midpoint versus expectations of $2.73B).

However, EPS is coming in short at $1.11 to $1.12 is below expectations of $1.18.

Generally, very high multiple stocks have been punished for slightly misses this earnings season, but Cloudflare shares are still up sharply.

The big number is that Q4 sales came in at $614.51 million, significantly above expectations of $591.3 million.

2026 guidance is $2.785 billion to $2.795 billion versus expectations of $2.73 billion.

Shares have initially jumped nearly 10%.

While we wait for Cloudflare’s earnings (expected at about 4:15 p.m. ET), check out our AI Investor Podcast.

Each week we break down the biggest news in the AI investing space and highlight our best ideas in the space. So far, our average recommendation is up 86%. Best of all? It’s free to subscribe and listen to each episode.

Cloudflare is one of our past recommendations, so we’ll be discussing the company’s earnings in more depth during our next episode. The only way to make sure you don’t miss it is to add the podcast to your favorite player!

Cloudflare has beaten EPS estimates for 7 straight quarters, which shows a strong track record of execution. Right now, prediction markets are placing 82% odds the company beats Wall Street expectations of $.27 in adjusted earnings.

As we noted earlier, given negative recent sentiment in the software space, it’s likely Cloudflare will need to beat revenue estimates by a healthy figure if shares are going to rise after hours.