Cloudflare reported fourth quarter revenue of $614.5 million, up 33.6% year-over-year, and full-year 2025 revenue of $2.17 billion, up 29.8%, as demand for distributed networking, security, and edge compute services continued to expand. The company highlighted record annual contract value (ACV) growth, including its largest deal to date averaging $42.5 million per year, alongside 48% year-over-year growth in remaining performance obligations (RPO). Management tied the momentum to increased adoption of its global network as enterprises re-architect applications for AI inference, automation, and agent-based traffic flows.
Cloudflare’s Q4 GAAP gross margin was 73.6%, compared to 76.4% a year earlier, reflecting continued investment in network capacity and infrastructure. Non-GAAP operating income reached $89.6 million, or 14.6% of revenue, while GAAP operating loss totaled $49.2 million. Operating cash flow rose to $190.4 million and free cash flow nearly doubled year-over-year to $99.4 million. For the full year, free cash flow reached $260.6 million, or 12% of revenue. The company ended 2025 with $4.1 billion in cash and securities, providing capital to expand edge compute nodes, backbone capacity, and security services across its global footprint.
Looking ahead, Cloudflare projected Q1 2026 revenue of $620 million to $621 million and full-year 2026 revenue of $2.79 billion to $2.80 billion. Non-GAAP operating income for 2026 is expected between $378 million and $382 million. The outlook reflects continued enterprise spending on Zero Trust, SASE architectures, application performance, and developer platforms such as Workers that run directly on Cloudflare’s edge network.
- Q4 2025 revenue: $614.5 million (+33.6% YoY)
- FY2025 revenue: $2.17 billion (+29.8% YoY)
- RPO growth: +48% YoY; Current RPO growth: +34% YoY
- Q4 non-GAAP operating income: $89.6 million (14.6% margin)
- FY2025 free cash flow: $260.6 million (12.0% margin)
- Cash and securities: $4.1 billion
- FY2026 revenue outlook: $2.79–$2.80 billion
“We had an exceptionally strong end to 2025. In Q4, we closed our largest annual contract value deal ever—averaging $42.5 million per year—and total new ACV grew nearly 50 percent year-over-year, our fastest growth rate since 2021,” said Matthew Prince, co-founder & CEO, Cloudflare.
🌐 Analysis: Cloudflare’s accelerating RPO growth and rising large-deal activity indicate that enterprises are consolidating networking, security, and application delivery functions onto integrated edge platforms rather than standalone appliances. As AI agents generate more automated API calls and machine-to-machine traffic, network operators must optimize for low-latency, globally distributed inference paths, strengthening the strategic role of edge compute providers competing with hyperscalers and CDN incumbents.
