Cloud security and performance company Cloudflare (NYSE:NET) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 33.6% year on year to $614.5 million. Guidance for next quarter’s revenue was better than expected at $620.5 million at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $0.28 per share was in line with analysts’ consensus estimates.
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Cloudflare (NET) Q4 CY2025 Highlights:
- Revenue: $614.5 million vs analyst estimates of $590.6 million (33.6% year-on-year growth, 4.1% beat)
- Adjusted EPS: $0.28 vs analyst estimates of $0.27 (in line)
- Adjusted Operating Income: $89.6 million vs analyst estimates of $83.83 million (14.6% margin, 6.9% beat)
- Revenue Guidance for Q1 CY2026 is $620.5 million at the midpoint, above analyst estimates of $614.1 million
- Adjusted EPS guidance for the upcoming financial year 2026 is $1.12 at the midpoint, missing analyst estimates by 5.7%
- Operating Margin: -8%, in line with the same quarter last year
- Billings: $693.3 million at quarter end, up 26.5% year on year
- Market Capitalization: $60.86 billion
Company Overview
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Cloudflare’s sales grew at an exceptional 38.1% compounded annual growth rate over the last five years. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Cloudflare’s annualized revenue growth of 29.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Cloudflare reported wonderful year-on-year revenue growth of 33.6%, and its $614.5 million of revenue exceeded Wall Street’s estimates by 4.1%. Company management is currently guiding for a 29.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 25.9% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and indicates the market sees success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Cloudflare’s billings punched in at $693.3 million in Q4, and over the last four quarters, its growth was fantastic as it averaged 32.9% year-on-year increases. This alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Cloudflare is very efficient at acquiring new customers, and its CAC payback period checked in at 25.4 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Cloudflare more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments. 
Key Takeaways from Cloudflare’s Q4 Results
We enjoyed seeing Cloudflare beat analysts’ billings expectations this quarter. This led convincing beats on the revenue and adjusted operating profit lines. We were also glad next year’s revenue guidance exceeded expectations. On the other hand, its EPS guidance for next quarter fell short of Wall Street’s estimates. While the quarter wasn't perfect, it was still quite solid, especially amidst fears that AI is a net negative to software stocks. The stock traded up 7.3% to $196.38 immediately after reporting.
So should you invest in Cloudflare right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).