Key facts
- Cloudflare raised its full-year revenue forecast to $2.86 billion-$2.87 billion, exceeding estimates.
- The company reported Q2 revenue of $696.1 million and Q3 revenue forecast of $736 million-$737 million.
- Cloudflare's Q2 adjusted earnings per share were $0.29, surpassing estimates.
- Annual adjusted earnings guidance was raised to $1.25-$1.26 per share.
- Cloudflare's shares rose 18% after the bell following the results and outlook.
- The company is experiencing increased demand for its network services to support AI agents.
Cloudflare raised its full-year revenue forecast above Wall Street expectations, driven by strong quarterly results and the increasing reliance of businesses on its network to safely route traffic and run AI agents. The company's shares surged 18% after the market close.
Cloudflare's annual revenue forecast was lifted to a range of $2.86 billion to $2.87 billion, up from $2.805 billion to $2.813 billion previously, and surpassing analysts' average estimate of $2.81 billion. For the second quarter ended June 30, the company reported revenue of $696.1 million, exceeding the $665.5 million estimated by analysts. The forecast for third-quarter revenue was set between $736 million and $737 million, also higher than the $722.1 million expected.
Adjusted earnings per share for the second quarter came in at $0.29, beating expectations of $0.27. Cloudflare also increased its annual adjusted earnings guidance to $1.25 to $1.26 per share, from $1.19 to $1.20 per share. In May, Cloudflare announced a workforce reduction of approximately 20%, affecting over 1,100 jobs, as part of an AI-led restructuring.
Separately, Microchip Technology forecast upbeat second-quarter revenue and profit, citing strong demand for its chips in AI data centers, as well as industrial, automotive, and aerospace sectors. Peer Onsemi had previously forecast strong third-quarter revenue driven by AI data center chip demand. Despite its positive outlook, Microchip Technology's shares declined 4% after hours.