Updated Aug 7 at 11:21am ET.
Follow Cloudflare to never miss an important update.
Cloudflare reported a strong quarter with revenue of about 696 million dollars, growing 36 percent compared to last year. This is a step up from previous growth rates and came in higher than the 660 million dollars analysts expected. While the company still loses money on a strict accounting basis, its adjusted profit of 29 cents per share beat the 27 cents predicted by Wall Street.
The company also raised its forecast for the full year, betting that the rise of AI agents and machine-to-machine traffic will keep demand high. Management noted that as the internet shifts toward AI answer engines, Cloudflare is becoming the infrastructure layer for this new type of traffic. This suggests the company is successfully moving beyond simple website security into more complex AI-driven services.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Cloudflare released a new dashboard that gives website owners a view into whether AI assistants, like chatbots or search bots, are recommending their business. This is part of a growing field called Answer Engine Optimization, which is essentially the AI version of traditional search engine rankings.
This is a smart move to keep customers locked into Cloudflare's platform. By providing data that was previously invisible to site owners, Cloudflare makes its service more essential for marketing and sales teams, not just the technical staff who manage website security.
Source: Business Wire
Cloudflare launched Cloudflare OS, an open-source workspace designed to give employees a secure place to use AI tools. The platform connects directly to a company's internal systems using Cloudflare's existing network of servers, which means businesses can set up AI workflows without building their own complex infrastructure from scratch.
This move helps the company expand from being a security layer into a platform where work actually happens. By making it open-source, Cloudflare is trying to become the standard way businesses manage AI at work, which could make its network even more essential to its customers.
Source: Business Wire
Cloudflare released an Identity-Aware AI Gateway that gives IT teams a clear view of how their employees interact with AI models. The tool allows companies to track which specific person is making a request, set spending caps for teams, and automatically block content that might be risky or violate company rules.
As businesses rush to adopt AI, many are worried about costs spiraling out of control or sensitive data leaking. This tool solves both problems by acting as a filter between the company and the AI provider. It is a smart way for Cloudflare to use its position as the "middleman" of internet traffic to sell more high-value security services to its largest customers.
Source: Business Wire
The firm raised its target to $290, which is very close to where the stock currently trades. This adjustment reflects higher expectations for the company's ability to grow its revenue faster in the coming quarters.
While the higher target shows confidence in the business, the fact that it is still slightly below the current market price suggests that much of the expected growth is already priced into the stock.
Source: Jefferies
Analysts rushed to raise their price targets for Cloudflare following strong second-quarter earnings and a boosted revenue forecast. Most analysts, 29 of 40, rate the stock a buy, though the average target of $290 sits slightly below today's price.
The company has beaten profit estimates in seven of the last eight quarters. Management consistently sets a bar that the business is able to outrun as it scales.
