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    NET
    Earnings call· Dec 2025(Q4 FY25)

    Cloudflare Q4 FY25 earnings call NET

    Feb 10, 2026 Source

    Executive summary

    Cloudflare, Inc. Q4 FY25 — Record ACV Growth and AI Tailwinds

    Cloudflare delivered robust Q4 FY25 results, driven by accelerating revenue growth and record new ACV, fueled by a re-tooled go-to-market engine and strong enterprise sales. The company is strategically positioned to capitalize on the emerging "agentic Internet" and AI-driven demand, leveraging its Workers developer platform and network scale to become a critical infrastructure provider. Management expressed strong confidence in continued execution and long-term value creation.

    Highlights

    5

    • Revenue accelerated for the third consecutive quarter to $614.5 million, up 34% year-over-year.

    • New ACV book grew nearly 50% year-over-year, marking a record in absolute dollars and the fastest growth rate since 2021.

    • Dollar-based net retention accelerated to 120%, up 9% year-over-year and 1% quarter-over-quarter.

    • Added a record 96 customers spending over $1 million in 2025, ending the year with 269 such customers, a 55% increase year-over-year.

    • Operating profit increased 33% year-over-year to $89.6 million, with operating margin at 14.6%.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q1 FY26 Revenue
    $620 million to $621 million
    high materiality
    High
    Q1 FY26 Revenue Growth
    29% to 30% year-over-year
    medium materiality
    High
    Q1 FY26 Operating Income
    $70 million to $71 million
    medium materiality
    High
    Q1 FY26 Diluted Net Income Per Share
    $0.23
    medium materiality
    High
    FY26 Revenue
    $2.785 billion to $2.795 billion
    high materiality
    High
    FY26 Revenue Growth
    28% to 29% year-over-year
    medium materiality
    High
    FY26 Operating Income
    $378 million to $382 million
    medium materiality
    High
    FY26 Diluted Net Income Per Share
    $1.11 to $1.12
    medium materiality
    High
    FY26 Effective Tax Rate
    20%
    low materiality
    High
    FY26 Network CapEx as % of Revenue
    12% to 15%
    medium materiality
    High
    FY26 Revenue Weighting
    46% in the first half of the fiscal year
    low materiality
    High
    FY26 Free Cash Flow
    comfortable with consensus free cash flow estimates
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    U.S.
    Represented 49% of total revenue and increased 31% year-over-year.
    		49%31%——
    EMEA
    Represented 27% of total revenue and increased 31% year-over-year.
    		27%31%——
    APAC
    Represented 16% of total revenue and increased 50% year-over-year.
    		16%50%——

    Operational metrics

    28
    Revenue
    $614.5 million34% year-over-year
    Q4 FY25

    Total revenue for the fourth quarter of 2025.

    Customers paying over $100,000 per year
    4,29823% year-over-year
    Q4 FY25

    Number of large customers at the end of Q4 FY25.

    Revenue from large customers
    73%up from 69% in Q4 FY24
    Q4 FY25

    Contribution of large customers to total revenue in Q4 FY25.

    Revenue from large customers
    69%compared with 67% in 2024 and 64% in 2023
    FY25

    Contribution of large customers to total revenue for full year 2025.

    Operating profit (non-GAAP)
    $89.6 million33% year-over-year
    Q4 FY25

    Operating profit for Q4 FY25.

    Operating margin (non-GAAP)
    14.6%consistent year-over-year
    Q4 FY25

    Operating margin for Q4 FY25.

    Free cash flow margin
    16%up from 10% in Q4 FY24
    Q4 FY25

    Free cash flow as a percentage of revenue in Q4 FY25.

    New ACV book growth
    nearly 50%year-over-year
    Q4 FY25

    Growth rate of new Annual Contract Value (ACV) booked in Q4 FY25, fastest since 2021.

    Largest total contract value deal
    $130 million
    FY25

    The largest total contract value deal in Cloudflare's history, signed earlier in FY25.

    Largest annual contract value deal
    $42.5 million
    Q4 FY25

    The largest annual contract value deal in Cloudflare's history, closed in Q4 FY25.

    Paying customers
    approximately 332,00040% year-over-year
    Q4 FY25

    Total number of paying customers at the end of Q4 FY25, including an uptick from free tier to small paid accounts.

    Customers spending over $1 million
    26955% year-over-year
    FY25

    Number of customers spending over $1 million with Cloudflare at the end of FY25, with a record addition of 96 such customers during the year.

    Network CapEx
    13%
    Q4 FY25

    Network capital expenditure as a percentage of revenue in Q4 FY25.

    Operating expenses as percentage of revenue
    60%decreased by 3% year-over-year
    Q4 FY25

    Total operating expenses as a percentage of revenue in Q4 FY25.

    Total headcount
    approximately 5,20021% year-over-year
    Q4 FY25

    Total number of employees at the end of Q4 FY25.

    Sales and marketing expenses
    $214.4 million
    Q4 FY25

    Sales and marketing expenses for Q4 FY25.

    Sales and marketing as percentage of revenue
    35%decreased to 35% from 36% in Q4 FY24
    Q4 FY25

    Sales and marketing expenses as a percentage of revenue in Q4 FY25.

    Research and development expenses
    $94.9 million
    Q4 FY25

    Research and development expenses for Q4 FY25.

    R&D as percentage of revenue
    15%decreased to 15% from 16% in Q4 FY24
    Q4 FY25

    Research and development expenses as a percentage of revenue in Q4 FY25.

    General and administrative expenses
    $61.2 million
    Q4 FY25

    General and administrative expenses for Q4 FY25.

    G&A as percentage of revenue
    10%consistent year-over-year
    Q4 FY25

    General and administrative expenses as a percentage of revenue in Q4 FY25.

    Net income (non-GAAP)
    $106.8 million
    Q4 FY25

    Net income for Q4 FY25.

    Diluted net income per share (non-GAAP)
    $0.28
    Q4 FY25

    Diluted net income per share for Q4 FY25.

    Cash, cash equivalents and available-for-sale securities
    $4.1 billion
    Q4 FY25

    Total cash, cash equivalents and available-for-sale securities at the end of Q4 FY25.

    Pool of funds as percentage of ACV booked
    20%
    Q4 FY25

    Pool of funds as a percentage of Annual Contract Value (ACV) booked in Q4 FY25.

    Pool of funds as percentage of ACV booked
    mid-teens
    FY25

    Pool of funds as a percentage of Annual Contract Value (ACV) booked for full year 2025.

    Developers active on platform
    more than 4.5 million
    Q4 FY25

    Number of human developers active on the Cloudflare platform at the end of 2025.

    Weekly requests generated by AI agents
    more than doubled
    January

    Increase in weekly requests generated by AI agents across the Cloudflare network during January.

    Industry KPIs

    10
    MetricValueDetails
    Headcount dsoapproximately 5,200units
    Rpo current rpo$2.496 billionUSD
    Rule of 40 margins14.6%%
    Customer logo metricsapproximately 332,000units
    Large customer cohorts4,298units
    Bookings tcv book to billnearly 50%%
    Genai ai book of business$85 millionUSD
    Sales capacity productivityincreased
    Net revenue dollar retention120%%
    Ai agentic channel product adoptionmore than doubledunits

    Orderbook & backlog

    2
    Remaining Performance Obligations (RPO)$2.496 billionQ4 FY25

    16% sequentially and 48% year-over-year

    Current RPO63% of total RPOQ4 FY25

    34% year-over-year

    Product announcements

    1
    ProductTypeDetails
    AI Crawl Controlexpansion

    Deals & partnerships

    10
    Leading AI companycustomer contract$85 million2-year

    Expanded relationship with a 2-year $85 million pool of funds contract for Cloudflare's full platform, selecting Cloudflare as their single long-term infrastructure provider with 100% traffic allocation after a rigorous RFP against major hyperscalers.

    Another leading AI companycustomer contract$5.4 million1-year

    Expanded relationship with a 1-year $5.4 million contract for Cloudflare's Workers developer platform and application services, chosen over hyperscalers in a build vs. buy scenario for agility and speed to market.

    Fortune 100 technology companycustomer contract$5.8 million3-year

    Expanded relationship with a 3-year $5.8 million contract, chosen for performance and engineering innovation to meet global resiliency requirements for a multi-vendor architecture.

    Fortune 500 technology companycustomer contract$45 million2-year

    Expanded relationship with a 2-year $45 million pool of funds contract, displacing a longtime incumbent. Chosen for extensibility of Workers and superior application services to manage complex global third-party applications at scale.

    Major international consumer goods companycustomer contract$6.6 million3.5-year

    Expanded relationship with a 3.5-year $6.6 million contract for application services and Workers developer platform, chosen for next-generation architecture and ability to customize edge traffic despite incumbent discounts.

    European Global 2000 technology companycustomer contract$5.8 million3-year

    Expanded relationship with a 3-year $5.8 million pool of funds contract to provide seamless access to the entire platform, moving from a small variable commitment to a deep strategic partnership after realizing the platform's power.

    U.S. government entitycustomer contract$2.2 million2.5-year

    Expanded relationship with a 2.5-year $2.2 million contract for Zero Trust portfolio (Access, Gateway, DLP, CASB, E-mail Security), solving complex compliance requirements and sophisticated use cases that neither hyperscalers nor incumbents could handle.

    U.S. media companycustomer contract$3.1 million3-year

    Signed a 3-year $3.1 million contract for AI Crawl Control, application services, and Workers, addressing massive increases in AI scraping and enabling monetization of unique content.

    Human Nativeacquisition

    Acquisition to help Cloudflare think through the next business model of the Internet, moving away from advertisement and subscriptions.

    Astroacquisition

    Acquisition of a developer platform and framework that underlies a lot of the next generation of the web and powers vibe coding systems.

    Q&A highlights

    8

    How do AI agents impact Cloudflare in the short and long term, and how does Cloudflare provide infrastructure without absorbing hyperscaler-like GPU costs?

    Cloudflare is perfectly positioned for the agentic Internet, as agents drive more demand for its classic services. Unlike hyperscalers, Cloudflare focuses on efficiency, getting up to 10x more work from the same GPU, and charges for actual work done, not machine leasing, making its CapEx much more efficient.

    “Cloudflare is in the business of getting work done. And so what we are constantly doing is having research teams inside of Cloudflare figure out how you can run AI workloads significantly more efficiently.”

    asked by Matt Hedberg · answered by Matthew Prince

    2 min read5 chapters

    Detailed Narrative

    01

    Go-to-Market Engine Firing on All Cylinders

    Cloudflare's go-to-market engine is demonstrating significant strength, with global sales productivity increasing year-over-year for the eighth consecutive quarter and surpassing its all-time high from Q4 2021. Net sales capacity growth was the fastest since 2022, and the sales team achieved its highest quota attainment in four years. This momentum is attributed to two years of effort in retooling the go-to-market team to match the company's engineering and product capabilities.

    02

    AI as a Fundamental Replatforming Tailwind

    The shift to AI and agents is driving substantial demand for Cloudflare's services, representing a fundamental replatforming of the Internet. The number of weekly requests generated by AI agents across the Cloudflare network more than doubled in January alone. This trend is increasing usage across the entire platform, including Workers, Zero Trust, and application services, positioning Cloudflare as the 'global control plane for the agentic Internet'.

    03

    Strategic Neutrality and Developer Platform Advantage

    Cloudflare is increasingly chosen by sophisticated AI companies over major hyperscalers due to its unified stack, rapid innovation, and strategic neutrality. Its Workers developer platform provides agility, speed to market, and cost-effectiveness for AI workloads, enabling customers to manage heavy global traffic with high availability and build AI-assisted tools without blowing their budget, unlike the commitment-based models of hyperscalers.

    04

    Channel Strategy Maturation and Leverage

    The company's channel-first strategy, initiated two years ago, is maturing and gaining significant traction. Cloudflare has focused on making it easier for channel partners, including publishing a price list in the second half of 2025, allowing them to quote deals more efficiently. This approach is expected to provide leverage to the direct sales teams, making Cloudflare faster and more nimble in scaling its enterprise sales efforts.

    05

    Act 4: Inventing the Future Business Model of the Internet

    Cloudflare is actively exploring 'Act 4,' focusing on inventing the future business model of the Internet in an agentic commerce world. This includes developing solutions like AI Crawl Control to help content creators monetize their intellectual property in an AI-driven landscape. The company aims to act as a neutral, honest broker between AI companies and content providers, ensuring a healthy ecosystem where creators are compensated for their work.

    AI-generated summary of the company’s earnings call. Not investment advice.