Cloudflare (NYSE:NET) just dropped a strong Q4 report, smashing expectations with $459.9 million in revenueup 27% year-over-year. Non-GAAP net income climbed 29% to $68.8 million, showing solid cost discipline despite a slight dip in gross margins. CEO Matthew Prince highlighted a key win: the company added 55 new $1 million-plus customers in 2024, with over half of them signing on in Q4 alone. Investors took the hintshares jumped 16.7% at 11.58am as confidence in Cloudflare's AI-driven expansion continues to grow.
Looking ahead, Cloudflare expects 2025 revenue to land between $2.09 billion and $2.094 billion, marking a 25% growth rate. But here's the catchadjusted EPS is projected at $0.79-$0.80, translating to only a modest 5-7% increase. That signals the company is gearing up for major spending, likely doubling down on AI and infrastructure to stay ahead in the cloud game. While those investments could fuel long-term dominance, they might also squeeze margins in the near term, making this a high-stakes bet for investors.
The big question now: Will Cloudflare's aggressive AI push pay off fast enough to justify the spending? Free cash flow dipped in Q4, a sign that the company is pouring resources into staying on the cutting edge. With AI innovation becoming a high-cost battleground, Cloudflare needs to prove that its strategy isn't just about grabbing market share but also delivering real bottom-line results. Investors will be watching closely to see if 2025 brings sustainable momentumor just growing pains.
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