Total Revenue

+27% YoY (from $362.473M to $459.946M)

Improved market demand, customer acquisition, and pricing effects drove the increase in revenue, reflecting strong underlying business momentum compared to Q4 2023. " "

Operating Income

19% improvement (from –$42.829M to –$34.719M)

Enhanced cost management and operating efficiency improved operating income, even though the loss remains, by offsetting expenses relative to higher revenue compared to the prior period. " " " "

Net Income

54% improvement (loss narrowed from –$27.865M to –$12.848M)

Significant reduction in net losses was achieved through better expense control and operational improvements, indicating progress despite ongoing challenges, relative to Q4 2023. " " " "

EPS

50% improvement (from –$0.08 to –$0.04)

EPS improved as a consequence of narrower net losses and a stable share count, demonstrating better profitability metrics even though the company remains in a loss position compared to the previous year. " " " "

Depreciation & Amortization

+254% surge (from $36.18M to $127.722M)

A dramatic increase due to escalated capital investments and changes in asset depreciation estimates led to higher expense recognition this period, reflecting more aggressive investment in infrastructure compared to Q4 2023. " " " "

Cash Flow – Adjustments for Non-Cash Items

600% increase (from $94.017M to $665.344M)

Substantially higher non-cash charges, including increased stock-based compensation, D&A, and amortization of deferred costs, drove the jump in adjustments, highlighting more significant investments and operational changes relative to Q4 2023. " "

Revenue (Quarterly)

Q1 2025

$451M to $452M "

$468M to $469M "

raised

Operating Income (Quarterly)

Q1 2025

$57M to $58M "

$54M to $55M "

lowered

Effective Tax Rate (Quarterly)

Q1 2025

16% "

21% "

raised

Diluted Net Income Per Share (Quarterly)

Q1 2025

$0.18 "

$0.16 "

lowered

Revenue (Annual)

FY 2025

$1.661B to $1.662B "

$2.090B to $2.094B "

raised

Operating Income (Annual)

FY 2025

$220M to $221M "

$272M to $276M "

raised

Effective Tax Rate (Annual)

FY 2025

13% "

21% "

raised

Diluted Net Income Per Share (Annual)

FY 2025

$0.74 "

$0.79 to $0.80 "

raised

Revenue Weighting (Annual)

FY 2025

no prior guidance

Second half of 2025 expected to be 40 to 50 bps higher "

no prior guidance

Network CapEx (Annual)

FY 2025

no prior guidance

Expected to be 12% to 13% of revenue "

no prior guidance

Sales Execution and Go-to-Market Transformation

Q1, Q2 and Q3 discussions highlighted strong productivity improvements, improved close rates, leadership changes (e.g., onboarding of Mark Anderson), and challenges such as flat sales rep capacity and complex enterprise deals " " "

Q4 emphasized a notable uptick in close rates, double-digit year‐over‐year sales productivity improvements, expanded enterprise hires, and ongoing capacity challenges being actively addressed " " " "

Recurring with continued improvements yet persistent capacity challenges

Reliance on Pool of Funds Deals and Their Revenue Recognition Risks

Q1 through Q3 mentioned the complexity, noise in revenue recognition, short-term pressure on metrics like DNR, and challenges with deferred revenue and lumpiness; early cautions were noted " " "

Q4 focused on guardrails, strategic compensation adjustments, and confidence in managing revenue recognition risks over time despite structural challenges " "

Recurring with a shift from short‐term risks to a more managed, strategic approach

AI Adoption and Advanced Platform Innovation

Across Q1 to Q3, there was significant momentum seen in Workers adoption, GPU expansion, enhanced AI inference capabilities, and new products (R2/D1) driving developer growth and performance advantages " " " "

Q4 reinforced AI as a “killer application” for Workers, highlighted improved cost efficiencies (e.g. 10x price performance improvements) and expanded GPU investments, with real-world AI use cases bolstering innovation " "

Recurring with increased strategic emphasis and accelerated platform innovation

Public Sector Business Growth and FedRAMP Compliance Dynamics

Q1 highlighted FedRAMP certification unlocking federal deals, strong government relationships, and initiatives such as the Athenian Project; Q2–Q3 continued to stress FedRAMP as a growth enabler and the importance of federal trust-building " " "

Q4 underscored a growing federal customer base (including international expansion), and a unified compliance strategy that avoids segmenting the network, reinforcing public sector growth opportunities "

Recurring with consistently positive sentiment and sustained growth opportunities

Declining Emphasis on Global Serverless/Low-Latency Market Leadership

Q1 reinforced a unique market position with robust serverless architecture and unmatched low-latency performance; Q2 and Q3 maintained focus on global reach and efficiency "

Q4 explicitly stated there was no declining emphasis—instead, Cloudflare highlighted its continued leadership in serverless and low-latency solutions, especially in AI inference "

Stable with continued market leadership; no decline evident

Emerging Competitive Pressures in SASE and Zero Trust Markets

Q1 and Q2 noted strong differentiation via unified platforms and speed, addressing early pressures against first-generation competitors; Q3 illustrated competitive wins but less focus on pressure per se " "

Q4 discussed evolving competitive pressures in the SASE and Zero Trust markets, emphasizing a pivot from targeting greenfield opportunities to competitive displacements, while leveraging performance and ROI advantages "

Recurring challenge with an evolving competitive landscape and proactive strategic pivots

Macroeconomic and IT Spending Environment Constraints

Q1 featured higher uncertainty and cautious guidance amid geopolitical risks; Q2 detailed a tough IT buying environment with budget cuts countered by security priorities; Q3 saw stabilization and modest regional improvements " " "

Q4 observed continued customer discipline in budgeting but noted encouraging signs of improved confidence, with improved sales cycles and reengagement of deals " "

Recurring constraints with a gradual shift toward improved sentiment and customer confidence

Operational Risks from Leadership Transitions and Accelerated Hiring Initiatives

Q1 mentioned inherent risks with leadership changes and rapid hiring ramp-ups impacting productivity; Q2 discussed accelerated hiring and new leadership as necessary for scale despite potential ramp-up challenges; Q3 portrayed these changes as yielding positive impact despite initial risks " " "

Q4 did not specifically highlight operational risks, instead focusing on continued hiring (e.g., enterprise account executives) with less emphasis on associated risks, suggesting stabilization "

Recurring early-stage risks that have been largely mitigated over time, resulting in a more stable operational outlook