Investing.com-- Cloudflare (NYSE:NET) saw its shares leap around 9% in premarket trading Friday after the connectivity cloud company reported better-than-expected fourth-quarter results and provided an optimistic outlook for 2025.
The company posted adjusted earnings per share of $0.19 for the fourth quarter, surpassing analyst estimates of $0.18. Revenue for the period came in at $459.9 million, up 27% YoY and exceeding the consensus forecast of $452.04 million.
Cloudflare’s customer base spending over $1 million annually grew 47% YoY to 173, with more than half of the 55 new additions coming in the fourth quarter alone.
"We had a very strong end of 2024," said Matthew Prince, co-founder & CEO of Cloudflare.
Commenting on the report, RBC Capital Markets analysts said they were "particularly impressed with go-to-market (GTM) execution" in Q4, lifting the price target to $170 from $123.
For the first quarter of 2025, Cloudflare expects revenue between $468 million and $469 million, slightly below the analyst consensus of $474.1 million. The company projects adjusted EPS of $0.16, compared to the $0.18 estimate.
Looking ahead to full-year 2025, Cloudflare forecasts revenue of $2.09 billion to $2.094 billion, just shy of the $2.097 billion consensus. However, the company’s adjusted EPS guidance of $0.79 to $0.80 surpassed analyst expectations of $0.74.
The company’s free cash flow for Q4 was $47.8 million, representing 10% of total revenue.
Cloudflare ended 2024 with $1.86 billion in cash, cash equivalents, and available-for-sale securities on its balance sheet.
Stifel analysts also raised their NET target price to $175 from $136, stressing that the print "ticked many, if not all, of the greenshoots/opportunities we highlighted in our Cloudflare upgrade note from December."
"We believe that shares can continue moving higher as self-help dynamics, and solid technology levered to many secular trends, can help Cloudflare deliver financial/stock outperformance," analysts added. "We continue to believe Cloudflare offers the most upside optionality in our coverage universe in coming years."