After-hours surge of 16%! AI-driven growth, Cloudflare’s performance explodes, securing the largest annual contract in its history

Cloud services provider Cloudflare announced better-than-expected results, with surging AI demand driving the company's fastest growth since 2021. Shares jumped nearly 16% after hours. On February 10 after the US market close, **Cloudflare's fourth-quarter results showed revenue grew 33.6% year-over-year to $614.5 million, exceeding analysts’ expectations of $591.3 million.** **The company expects full-year revenue in 2026 to reach $2.79 billion to $2.8 billion, above market expectations of $2.74 billion.** Cloudflare disclosed that it signed its largest-ever annual contract in the fourth quarter, and co-founder and CEO Matthew Prince revealed in the earnings report: > We ended 2025 on a strong note. **In the fourth quarter, we signed the largest annual contract value (ACV) in our history, averaging $42.5 million per year, with new annual contract amounts growing nearly 50% year-over-year. This is our fastest growth since 2021.** Prince added: > **The transition to artificial intelligence and intelligent agents represents a fundamental restructuring of the internet platform, which is driving demand for all Cloudflare services.** **The company reported fourth-quarter earnings per share of $0.28, beating analyst expectations. Net loss narrowed to $12.1 million from $12.8 million year-on-year.** After the financial report, Cloudflare shares soared nearly 16% after hours. So far this year, the stock is down over 8%, after posting an 83% rally in 2025.  ## AI agent ecosystem becomes core growth driver Rapid integration of artificial intelligence across industries is driving surging demand for cloud services, as companies prioritize investing in the digital infrastructure needed to develop this emerging technology. Cloudflare is seen as a direct beneficiary of this trend. Agent AI refers to AI systems that can complete tasks under limited supervision. In late January, an open-source AI agent called "Clawdbot" (later renamed "OpenClaw") sparked investor enthusiasm for the company's edge computing infrastructure, driving its share price higher. **Matthew Prince stated:** > **If intelligent agents are the new users of the internet, then Cloudflare is the platform they run on and the network they traverse.** According to Cloudflare’s official website, the company provides internet services to millions of websites, processing an average of 81 million HTTP requests per second. Its services include accelerating website loading speeds through content delivery networks and providing defense against malicious activities like DDoS attacks. Users can leverage Cloudflare’s technology for secure remote access without compromising home network security. ## Annual guidance beats expectations, AI significance stands out Cloudflare expects first-quarter 2026 revenue of $620 million to $621 million, above market expectations of $613.9 million. Adjusted earnings per share are expected at $0.23, slightly below expectations of $0.25. For the full year, the company expects 2026 revenue between $2.79 billion and $2.8 billion, above analysts' expectations of $2.74 billion. Adjusted earnings per share are forecast to range from $1.11 to $1.12, below the market expectation of $1.19. Jefferies analyst Joseph Gallo pointed out in his earnings preview report last week: > We still see Cloudflare as a beneficiary of increased AI application usage; the company estimates that about 80% of leading AI companies use its solutions, enabling it to benefit from its edge inference network and AI Workers development platform. The analyst team noted that Cloudflare has not been immune to broad sector selloffs in software. The software ETF (IGV) is down 21% so far this year, after posting a 6% gain in the same period last year. Considering Cloudflare’s high valuation multiples, this performance is not surprising. Risk Warning and Disclaimer The market carries risks; investment should be undertaken with caution. This article does not constitute personal investment advice and does not take into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their specific circumstances. Investing based on this is at your own risk.