Cloudflare stock enters new phase after outlook upgrade

Published on 11/13/2026 at 13:36 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Cloudflare stock gains investor attention after 39 percent third-quarter revenue growth. Management raised its 2026 outlook and expects GAAP profit in Q4.

Cloudflare raises growth expectations

Third-quarter revenue reached 782.5 million US dollars, up 39 percent year over year.
Management expects fourth-quarter GAAP profitability, ahead of its previous 2028 target.
Higher infrastructure costs pushed the GAAP gross margin down to 71.2 percent.

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Cloudflare reported a sharp acceleration in its third quarter on November 5, 2026, and raised its full-year outlook. Revenue rose 39 percent year over year to 782.5 million US dollars, while management brought forward its expected return to GAAP profitability.

The results and outlook were covered by Yahoo Finance. The company said quarterly growth was its fastest in nearly four years. Revenue exceeded the midpoint of Cloudflare's previous quarterly guidance by 46 million US dollars.

Revenue growth clears higher bar

Non-GAAP operating income increased to 137.1 million US dollars from 85.9 million US dollars a year earlier. The adjusted operating margin expanded to 17.5 percent from 15.3 percent, while non-GAAP earnings per share rose to 0.38 US dollars from 0.27 US dollars.

The statutory figures were less favorable. GAAP operating loss widened to 67.9 million US dollars from 37.5 million US dollars, and net loss reached 34.1 million US dollars compared with 1.3 million US dollars in the prior-year quarter. Stock-based compensation totaled 174.1 million US dollars and was a major factor behind the difference between the adjusted and GAAP results.

Margins remain the investor test

Cloudflare's growth came with higher delivery costs. Cost of revenue increased 54 percent, and GAAP gross margin declined to 71.2 percent from 74.0 percent. Non-GAAP gross margin fell to 72.4 percent from 75.3 percent. Capital spending on property and equipment rose 44 percent to 121.8 million US dollars, while free cash flow reached 82.1 million US dollars.

Management expects fourth-quarter revenue of 845 million to 846 million US dollars, non-GAAP operating income of 156 million to 157 million US dollars and adjusted earnings of 0.43 US dollars per share. It also expects a GAAP profit in the quarter, well ahead of the previous Investor Day ambition to reach that milestone by 2028 at the latest.

For the full year, Cloudflare now targets revenue of 2.963 billion to 2.964 billion US dollars and adjusted earnings of 1.35 US dollars per share. The higher forecast strengthens the growth case, but investors will likely watch whether operating leverage can offset rising network and infrastructure costs.

Cloudflare stock traded at 288.70 euros on Lang & Schwarz at 16:36 CET on Wednesday, November 11, 2026.