How is Internet traffic evolving with agents, where is it headed, and how do recent acquisitions like Human Native and Astro fit into this vision?

Human Native helps define future business models beyond advertising and subscriptions. Astro underlies next-gen web development. Cloudflare's role is to invent the future while bringing the existing Internet along, leveraging its network to adapt content for agents and ensuring small businesses are included in the agentic commerce world. “what I think our role is at some level is both to help invent what the future looks like, but then also to take the Internet that we've had, the Internet that we've built over the last 40 years and bring it along with that.”

Can you provide examples of how companies are using Cloudflare Workers for AI projects and why they choose Cloudflare over alternative platforms?

Examples include a Fortune 500 pharma company building an internal vibe coding platform, a publicly traded tech company migrating plugin sandbox infrastructure to Cloudflare Containers, and a financial services company launching an official MCP server for AI agents on Workers. Customers choose Cloudflare for its complete, modern, scalable, and cost-effective toolkit that allows rapid prototyping without blowing budgets. “I think the fact that we've built, again, a complete toolbox which is a modern architecture, how developers want to build applications and then deliver it in an incredibly cost-effective way. That's what is driving so much success from our Workers developer platform.”

How is the pipeline trending for large deals, what engagement across acts is seen, and what are the learnings from recent large deals?

Cloudflare sees an incredibly strong pipeline for large deals, typically originating from existing customers. Success is driven by deep relationships, embedding developers, and demonstrating that Cloudflare offers faster, more scalable, and cost-effective solutions than hyperscalers. The company is confident in the total addressable market for the Workers platform. “I think that the work that we're doing to really embed with customers is driving success there. And again, we're still not to a point where we're going to be doing a $100 million deal a quarter, but we will get to that point.”

NET

Cloudflare (NET) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Feb 10, 2026

Source: earnings call transcript

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

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

Category	Target	Timeline	Confidence
Q1 FY26 Revenue	$620 million to $621 million high materiality	Q1 · FY26	High
Q1 FY26 Revenue Growth	29% to 30% year-over-year medium materiality	Q1 · FY26	High
Q1 FY26 Operating Income	$70 million to $71 million medium materiality	Q1 · FY26	High
Q1 FY26 Diluted Net Income Per Share	$0.23 medium materiality	Q1 · FY26	High
FY26 Revenue	$2.785 billion to $2.795 billion high materiality	FY26	High
FY26 Revenue Growth	28% to 29% year-over-year medium materiality	FY26	High
FY26 Operating Income	$378 million to $382 million medium materiality	FY26	High
FY26 Diluted Net Income Per Share	$1.11 to $1.12 medium materiality	FY26	High
FY26 Effective Tax Rate	20% low materiality	FY26	High
FY26 Network CapEx as % of Revenue	12% to 15% medium materiality	FY26	High
FY26 Revenue Weighting	46% in the first half of the fiscal year low materiality	H1 FY26	High
FY26 Free Cash Flow	comfortable with consensus free cash flow estimates medium materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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%	—	—

NET operating KPIs by quarter

NET operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	This call Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Customers above an annual spend threshold Paying >$100,000 per year	3,497 During the quarter, we added a record number of new large customers those that pay us more than $100,000 per year, and now have 3,497 large customers, also up 27% year-over-year. Source: earnings call transcript	3,712 We now have 3,712 customers paying us more than $100,000 per year, a 22% increase year-over-year. Source: earnings call transcript	4,009 We now have 4,009 large customers, those that pay us more than $100,000 per year, a 23% increase year-over-year. Source: earnings call transcript	4,298 We now have 4,298 customers paying us more than $100,000 per year, up 23% year-over-year. Source: earnings call transcript	4,416 We now have 4,416 customers paying us more than $100,000 per year, a 25% increase year-over-year. Source: earnings call transcript	4,698 We now have 4,698 customers paying us more than $100,000 per year, a 27% increase year-over-year. Source: earnings call transcript	+6.4%
Net revenue retention rate	111% Our dollar-based net retention ticked up 1 percentage point quarter-over-quarter to 111%. Source: earnings call transcript	114% Our dollar-based net retention was 114%, up 3% quarter-over-quarter. Source: earnings call transcript	119% Our dollar-based net retention was 119%, up 5 percentage points quarter-over-quarter. Source: earnings call transcript	120% Our dollar-based net retention was 120%, up 1% quarter-over-quarter and 9% year-over-year. Source: earnings call transcript	118% Our dollar-based net retention was 118%, down 2% quarter-over-quarter and up 7% year-over-year. Source: earnings call transcript	120% Our dollar-based net retention was 120%, up 2% quarter-over-quarter and up 6% year-over-year. Source: earnings call transcript	+2 pt
Customers	~237.7K In the fourth quarter, we had approximately 237,700 paying customers, representing a record addition of nearly 48,000 paying customers in 2024 and an increase of 25% year-over-year. Source: earnings call transcript	~266K In the second quarter, we had approximately 266,000 paying customers, representing an addition of over 15,000 paying customers sequentially and an increase of 27% year-over-year. Source: earnings call transcript	~296K In the third quarter, we had approximately 296,000 paying customers, representing a record net addition of nearly 30,000 paying customers sequentially and an increase of 33% year-over-year, driven by an uptick in customers, including those graduating from the free tier to small paid accounts for developer platform products around our AI Week and birthday week. Source: earnings call transcript	~332K In the fourth quarter, we had approximately 332,000 paying customers, representing a record addition of nearly 37,000 paying customers sequentially and an increase of 40% year-over-year, driven again by an uptick in customers, including those graduating from the free tier to small paid accounts, particularly for our developer platform products. Source: earnings call transcript	—	—	—
Employees	~4,300 Our total number of employees increased 16% year-over-year, bringing our total headcount to about 4,300 at the end of the quarter. Source: earnings call transcript	4,600+ Our total number of employees increased 18% year-over-year, bringing our total headcount to more than 4,600 at the end of the quarter. Source: earnings call transcript	~4,800 Our total number of employees increased 16% year-over-year, bringing our total headcount to roughly 4,800 at the end of the quarter. Source: earnings call transcript	~5,200 Our total number of employees increased 21% year-over-year, bringing our total headcount to approximately 5,200 at the end of the quarter. Source: earnings call transcript	~5,500 Our total headcount ended the quarter at approximately 5,500. Source: earnings call transcript	4,700 Our total head count ended the quarter at 4,700. Source: earnings call transcript	—
Remaining performance obligation (RPO)	$1.687B Remaining performance obligations, or RPO, came in at $1.687 billion, representing an increase of 12% sequentially and 36% year-over-year. Source: earnings call transcript	$1.977B Remaining performance obligations, or RPO, came in at $1.977 billion, representing an increase of 6% sequentially and 39% year-over-year. Source: earnings call transcript	$2.143B Remaining performance obligations, or RPO, came in at $2.143 billion, representing an increase of 8% sequentially and 43% year-over-year. Source: earnings call transcript	$2.496B Remaining performance obligations, or RPO, came in at $2.496 billion, representing an increase of 16% sequentially and 48% year-over-year. Source: earnings call transcript	$2.543B Remaining performance obligations, or RPO, came in at $2.543 billion, representing an increase of 2% sequentially and 36% year-over-year. Source: earnings call transcript	$2.732B Remaining performance obligations, or RPO, came in at $2.732 billion, representing an increase of 7% sequentially and 38% year-over-year. Source: earnings call transcript	+7.4%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining Performance Obligations (RPO) $2.496 billion Q4 FY25

16% sequentially and 48% year-over-year

Current RPO 63% of total RPO Q4 FY25

34% year-over-year

Product announcements

Product	Type	Timeline	Details
AI Crawl Control	expansion	—

Deals & partnerships

Leading AI company customer contract $85 million 2-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 company customer contract $5.4 million 1-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 company customer contract $5.8 million 3-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 company customer contract $45 million 2-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 company customer contract $6.6 million 3.5-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 company customer contract $5.8 million 3-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 entity customer contract $2.2 million 2.5-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 company customer contract $3.1 million 3-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 Native acquisition

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

Astro acquisition

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

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 read 5 chapters

Detailed narrative

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.

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'.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.