Cloudflare Q3 Revenue Growth Accelerates to 39%, Full-Year Guidance Raised, Shares Surge Over 14% After-Hours
Cloudflare reported Q3 revenue of $782.5 million, up 39% year-over-year, crossing a $3 billion annualized run rate. The company raised its full-year revenue guidance to approximately $2.96 billion, well above Wall Street estimates, driving shares up more than 14% in late trading.
U.S. cloud security and connectivity platform provider Cloudflare Inc. reported third-quarter results for the period ended September 30, showing revenue of $782.5 million, a 39% increase year-over-year and the fastest growth pace in nearly four years. Adjusted earnings per share came in at 38 cents, up from 27 cents in the same quarter last year and beating analyst expectations of 34 cents. Following the announcement, Cloudflare shares surged more than 14% in after-hours trading.
The company's annualized run rate has now crossed the $3 billion mark, while current remaining performance obligations rose 37% from a year earlier. Although high stock-based compensation of $174.1 million resulted in an unadjusted net loss of $34.1 million, the adjusted operating margin improved to 17.5% from 15.3%. Chief Executive Matthew Prince described the period as "Cloudflare's best quarter ever," noting that the business has found "an even higher gear" for its next phase of growth.
Based on these results, Cloudflare raised its full-year 2026 revenue guidance by approximately $97 million to a range of $2.963 billion to $2.964 billion, significantly above the previous Wall Street consensus of $2.87 billion. Fourth-quarter guidance also reflects optimism, with expected revenue of $845 million to $846 million and adjusted EPS of 43 cents. Additionally, the company appointed Christian Smith, formerly Chief Revenue Officer at Splunk, as President of Revenue to oversee global sales operations.