Cloudflare second quarter results boosted by strong AI demand

Cloudflare (NYSE:NET) shares were set to open sharply higher on Friday after the cloud connectivity company reported second quarter results that topped analyst expectations and issued stronger-than-expected guidance for the current quarter. Shares of Cloudflare were indicated to open about 15% higher following the results.

Cloudflare reported adjusted earnings of $0.29 per share for the second quarter, compared with analyst estimates of $0.27, while revenue rose 36% year over year to $696.1 million, ahead of consensus expectations of $665.5 million. The company attributed the growth to continued demand across its platform, including from AI-driven infrastructure needs. Current remaining performance obligations grew 35% year over year, while Cloudflare also reported record growth in total paying customers, large customers and developers on its platform.

Cloudflare posted GAAP gross profit of $499.5 million, compared with $383.6 million a year earlier, while GAAP gross margin declined to 71.8% from 74.9%. GAAP loss from operations widened to $205.7 million, or 29.6% of revenue, from $67.3 million, or 13.1% of revenue, a year earlier. On a non-GAAP basis, operating income increased to $96.1 million from $72.3 million. GAAP net loss was $170 million, compared with a loss of $50.4 million in the second quarter of 2025. Non-GAAP net income rose to...