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SAN FRANCISCO - Cloudflare, Inc. (NYSE:NET) shares jumped 7.5% Thursday after the connectivity cloud company reported third-quarter results that exceeded analyst expectations, with revenue growth accelerating for the second consecutive quarter.
The company posted adjusted earnings per share of $0.27, surpassing the analyst consensus of $0.23, while revenue reached $562 million, beating estimates of $544.56 million and representing a 31% increase YoY from $430.1 million in the same quarter last year.
"Our excellent third quarter results clearly demonstrate our increasing momentum, with revenue growth accelerating for the second consecutive quarter to 31 percent year-over-year," said Matthew Prince, co-founder & CEO of Cloudflare. "We’re shipping capabilities at an unmatched pace. This dramatically increases the value we deliver, expands our reach, and builds the rails for the next decade of Internet growth."
Cloudflare’s adjusted operating income was $85.9 million, or 15.3% of revenue, compared to $63.5 million, or 14.8% of revenue, in the third quarter of 2024. Free cash flow reached $75 million, representing 13% of revenue, up from $45.3 million or 11% of revenue a year earlier.
The company also reported strong growth in its remaining performance obligations (RPO), with total RPO increasing 43% YoY and current RPO growing 30% YoY.
Looking ahead, Cloudflare provided upbeat guidance for both the fourth quarter and full year. For Q4, the company expects revenue of $588.5-$589.5 million, above the consensus estimate of $580.7 million, and adjusted EPS of $0.27, slightly above the $0.26 consensus. For fiscal year 2025, Cloudflare forecasts revenue of $2.142-$2.143 billion and adjusted EPS of $0.91, both exceeding analyst expectations.
The company also announced that CJ Desai will step down as President of Product & Engineering effective November 7, 2025, to become CEO at another publicly-traded company.
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