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

Cloud service provider Cloudflare announced better-than-expected results, with a surge in AI demand driving the company to achieve its fastest growth since 2021, with shares soaring nearly 16% in after-hours trading.

On February 10th, after U.S. stock market hours, Cloudflare's fourth-quarter results showed that the company's revenue grew 33.6% year-over-year to $614.5 million, exceeding analysts' expectations of $591.3 million.

The company expects full-year revenue to reach $2.79 billion to $2.8 billion in 2026, higher than the market expectation of $2.74 billion. Cloudflare disclosed that it signed the largest annual contract in its history in the fourth quarter, with co-founder and CEO Matthew Prince stating in the earnings report:

We closed out 2025 strong. In the fourth quarter, we signed the largest annual contract value (ACV) in history, averaging $42.5 million per year, with total new annual contract value growing nearly 50% year-over-year, marking our fastest growth since 2021.

Prince added:

The shift towards artificial intelligence and intelligent agents represents a fundamental restructuring of internet platforms, which is driving demand for all of Cloudflare's services.

The company reported earnings per share of $0.28 in the fourth quarter, exceeding analysts' expectations. The net loss narrowed from $12.8 million in the same period last year to $12.1 million. Following the earnings report, Cloudflare's stock price surged nearly 16% in after-hours trading. The stock has fallen over 8% this year, having previously risen over 83% in 2025.

AI Agent Ecosystem as a Core Driver

The rapid integration of artificial intelligence across industries is driving a surge in cloud service demand, with companies prioritizing investment in the digital infrastructure needed to develop this emerging technology. Cloudflare is seen as a direct beneficiary of this trend.

An AI agent refers to an AI system capable of completing tasks with limited supervision. In late January, an open-source AI agent named "Clawdbot" (later renamed "OpenClaw") sparked investor enthusiasm for the company's edge computing infrastructure, driving a significant increase in stock price.

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 pass through.

According to data from 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 a content delivery network and providing protection against malicious activities such as DDoS attacks. Users can safely utilize Cloudflare's technology for remote control without compromising the security of their home networks

Full-year guidance exceeds expectations, highlighting AI's position

Cloudflare expects revenue for the first quarter of 2026 to be between $620 million and $621 million, exceeding the market expectation of $613.9 million. Adjusted earnings per share are expected to be $0.23, slightly below the expected $0.25.

For the full year, the company expects revenue to be between $2.79 billion and $2.8 billion, surpassing analysts' expectations of $2.74 billion. Adjusted earnings per share are expected to be between $1.11 and $1.12, lower than the market expectation of $1.19.

Jefferies analyst Joseph Gallo noted in last week's earnings preview report:

We continue to view Cloudflare as a beneficiary of the increase in AI applications, with the company estimating that about 80% of leading AI companies use its solutions, allowing it to benefit from its edge computing network and AI Workers development platform.

The analyst team stated that Cloudflare has not been immune to the broad sell-off in the software sector, with the software ETF (IGV) down 21% year-to-date, compared to a 6% increase in the same period last year. Given Cloudflare's high valuation multiples, this performance is not surprising