The Cloudflare logo is placed outside the company’s building on the opening day of the 55th World Economic Forum Annual Meeting in Davos, Switzerland, on January 20, 2025.
Eve Herman | Reuters
cloudflare reported first-quarter results Thursday that beat analysts’ expectations, but the stock fell 18% in after-hours trading as the company announced a 20% reduction in its workforce.
The cloud company’s track record and LSEG estimates are as follows:
Earnings per share: 25 cents vs. 23 cents expected Earnings: $640 million vs. $622 million expected
The company announced in a blog post that it would cut more than 1,100 employees, writing that agent-based artificial intelligence has “fundamentally changed” its operations.
“This wasn’t an easy decision, but it was the right one,” Chief Executive Officer Matthew Prince said on an earnings call, adding that the company had some roles that were “not necessary for the future.”
The company highlighted that its use of AI has increased by more than 600% in the past three months as it adopts an “agent-based AI-first operating model.”
Cloudflare’s 1-day stock price chart.
Cloudflare’s first quarter revenue increased 34% year over year. The company expected second-quarter sales to fall to between $664 million and $665 million. Analysts had expected $665 million.
The company’s second-quarter guidance for earnings of 27 cents per share was in line with Wall Street expectations.
In his earnings call, Prince said that growth in AI was the biggest tailwind in the company’s history.
The company expects full-year sales for 2026 to be between $2.805 billion and $2.813 billion, narrowly beating its forecast of $2.8 billion. Cloudflare said it expects full-year earnings to be between $1.19 and $1.20 per share, beating expectations of $1.14 per share.
Cloudflare posted a net loss of $22.93 million, or a loss of 7 cents per share, in the first quarter of 2026. A year ago, the company reported a net loss of $38.45 million, or a loss of 11 cents per share.
