Cloudflare (NET) reported financial results for the first quarter of 2025, posting stronger-than-expected revenue growth but missing earnings estimates and lowering its full-year guidance for both revenue and EPS.
First Quarter Performance
Cloudflare's revenue for Q1 2025 reached $479.1 million, which represents a 27% increase over the same quarter last year and surpasses consensus analyst estimates.[1][2] The company, however, posted a GAAP net loss of $38.5 million for the period. Earnings per share (EPS) came in at $0.11, missing consensus projections.[3]
Lowered Full-Year Guidance
In its updated outlook, Cloudflare now expects full-year 2025 revenue in the range of $2.09 billion to $2.094 billion, which is below previous analyst forecasts. The company also lowered its full-year EPS guidance to a range of $0.79 to $0.80, beneath the consensus estimate of $0.82.[3] These downward revisions signal management's more cautious expectations for revenue and profitability growth in the remainder of the year.
Market Reaction and Context
Cloudflare's strong revenue expansion in the first quarter was overshadowed by its reduced guidance, which raised concerns among investors about the company's growth trajectory. The lowered outlook suggests that the company anticipates headwinds in converting strong top-line gains into improved earnings or sustained momentum for the rest of 2025.[3]
Analysis
Despite Cloudflare's robust 27% year-over-year revenue growth and outperformance on the top line, the company's profitability remains under pressure, as evidenced by the $38.5 million GAAP net loss and an EPS figure that missed consensus. The revised full-year guidance, both for revenue and EPS, reflects increased caution from management, possibly due to market conditions or execution risks. Expert commentary points to slower anticipated growth rates and potential challenges in maintaining previous earnings momentum.[3]
Outlook
Cloudflare's lowered forecasts for 2025 suggest that management expects a more challenging business environment in the coming quarters. Investors will likely focus on the company's ability to manage costs and improve margins while sustaining revenue expansion. Any signs of stabilization or re-acceleration in growth could influence future performance and restore confidence.
