Cloudflare, Inc., the leading connectivity cloud company, announced its financial results for the first quarter of 2025, ending on March 31. The company reported strong performance, driven by significant new contracts and continued innovation across its platform. Revenue Growth and Gross Profit Total revenue for Q1 2025 reached $479.1 million, marking a 27% year-over-year increase from the $378.6 million recorded in Q1 2024. GAAP gross profit stood at $363.5 million, or 75.9% gross margin, compared to $293.6 million, or 77.5% gross margin, in the same period last year. Non-GAAP gross profit was $369.3 million, or 77.1% gross margin, up from $301.1 million, or 79.5% gross margin, in Q1 2024. Operating and Net Income (Loss) Despite robust revenue growth, GAAP loss from operations was $53.2 million, or 11.1% of revenue, slightly improved from a $54.6 million loss, or 14.4% of revenue, in the previous year. Non-GAAP income from operations was $56.0 million, or 11.7% of revenue, compared to $42.4 million, or 11.2% of revenue, in Q1 2024. GAAP net loss was $38.5 million, or $0.11 per share, compared to $35.5 million, or $0.10 per share, in the prior year. Non-GAAP net income was steady at $58.4 million, or $0.16 per share, consistent with the $58.2 million, or $0.16 per share, reported in Q1 2024. Cash Flow and Financial Position Net cash flow from operating activities surged to $145.8 million, nearly doubling from $73.6 million in Q1 2024. Free cash flow improved to $52.9 million, or 11% of revenue, up from $35.6 million, or 9% of revenue, in the same quarter last year. As of March 31, 2025, Cloudflare had $1.91 billion in cash, cash equivalents, and available-for-sale securities. Key Deal Highlights Matthew Prince, co-founder and CEO of Cloudflare, highlighted significant achievements in the quarter, including landing the largest contract in the company’s history—a more than $100 million deal driven by the Workers developer platform—and signing the longest-term Secure Access Service Edge (SASE) contract to date. These milestones underscore Cloudflare’s growing market presence and customer trust in its innovative solutions. Financial Outlook For the second quarter of fiscal 2025, Cloudflare expects: - Revenue to range between $495 million and $505 million - Non-GAAP income from operations to range between 10% and 11% of revenue - Non-GAAP net income per share to range between $0.15 and $0.17 For the full year fiscal 2025, the company projects: - Revenue between $1.96 billion and $1.98 billion - Non-GAAP income from operations to range between 11% and 12% of revenue - Non-GAAP net income per share to range between $0.62 and $0.66 These projections are forward-looking and subject to various risks, including macroeconomic conditions, geopolitical tensions, and rapid technological advancements in the market, particularly in AI. Conference Call and Supplemental Information To discuss these results, Cloudflare will host an investor conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The call can be accessed by dialing (646) 968-2727 or toll-free at (888) 596-4244 with the conference ID 3723782. A live webcast and replay will be available on the investor relations website at cloudflare.NET. Additional financial and other information can be found on the company's investor relations website. Industry Insights and Evaluation Industry analysts view Cloudflare’s Q1 results positively, noting the significant revenue growth and major contracts as strong indicators of the company’s market leadership and technological edge. Cloudflare’s continued investment in innovation and its expanding suite of cloud services position it well for future growth, especially in rapidly evolving sectors like AI and SASE. However, challenges such as maintaining profitability and navigating global economic uncertainties remain critical. About Cloudflare Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company dedicated to building a better Internet. It offers a unified platform of cloud-native products and developer tools to enhance the speed and security of applications and networks while reducing complexity and cost. Trusted by millions of organizations worldwide, Cloudflare blocks billions of threats daily, ensuring a safer and more efficient online experience. The company's robust network and cutting-edge solutions make it a preferred choice for businesses of all sizes, from startups to Fortune 500 companies. For more information, visit cloudflare.connectivity-cloud and radar.cloudflare.com for the latest Internet trends and insights.