Cloudflare FY 2025 earnings snapshot

Cloudflare (NET) has wrapped up FY 2025 with fourth quarter revenue of US$614.5 million and basic EPS of a US$0.03 loss, alongside a trailing twelve month revenue base of about US$2.2 billion and a net loss of US$102.3 million. Over recent periods the company has seen revenue move from US$430.1 million in Q3 2024 to US$614.5 million in Q4 2025, while quarterly basic EPS has ranged between a loss of US$0.15 and a loss of US$0.00, underscoring an ongoing focus on improving margins as the growth story plays out.

See our full analysis for Cloudflare.

With the headline numbers on the table, the next step is to see how this mix of strong top line and still negative EPS fits with the prevailing growth and profitability narratives around Cloudflare.

TTM revenue at about US$2.2b with 19.6% growth

• Over the trailing twelve months, Cloudflare booked about US$2.2b in revenue, with the dataset pointing to 19.6% annual revenue growth versus an 11.5% US market benchmark.
• Consensus narrative sees this above market growth as tied to rising demand for cloud native security and zero trust, while the current TTM net loss of US$102.3 million and basic EPS of a US$0.29 loss highlight that the push into AI, SASE and edge workloads is still coming with meaningful costs.
  • Supporters of the consensus view point to expanding multi product and pool of funds deals as a way for this US$2.2b revenue base to benefit from cross selling without needing proportionally higher spending every year.
  • At the same time, the fact that the business remains loss making on US$2.2b of revenue underlines the consensus risk that heavier R&D and network investment can pressure margins for longer than expected.

Losses narrow as earnings growth forecasts stay aggressive

• Across FY 2025, quarterly net income excluding extra items moved within a range from a loss of US$50.4 million in Q2 to a loss of US$1.3 million in Q3, while TTM losses are reported at US$102.3 million alongside forecast earnings growth of about 33.97% per year and an expected move to profitability within three years.
• Bulls argue that this combination of shrinking losses and strong forecast earnings growth sets up a clear path to profitability, yet the current TTM EPS loss of US$0.29 means that inflection is still ahead rather than already in the numbers.
  • Supportive of the bullish view, the dataset cites losses narrowing at roughly 13.5% per year over the past five years and expects earnings to eventually break into positive territory, which fits a story of operating leverage starting to show through.
  • What pulls against the bullish optimism is that even with TTM revenue close to US$2.2b, Cloudflare still reported a TTM net loss above US$100 million, so the margin shift that bulls expect has not yet appeared in reported profitability.

On that backdrop, some investors look for a fuller bullish playbook to see how these loss trends could translate into future earnings strength. 🐂 Cloudflare Bull Case

Premium pricing vs DCF fair value and peers

• The stock trades at US$256.79 per share, compared with a DCF fair value estimate of US$159.37 and an analyst consensus price target of US$231.85. The P/S of 41.7x stands well above both the 10.6x peer average and the 2x US IT industry average.
• Bears focus on this gap between price, DCF fair value and peer multiples as their core concern, arguing that current valuation leaves little room if the 19.6% revenue growth and 33.97% earnings growth forecasts do not materialize as expected.
  • The spread between the current price of US$256.79 and the DCF fair value of US$159.37, together with a P/S multiple roughly 4x the peer average and more than 20x the broader US IT industry, lines up closely with the bearish view that the stock is priced for very strong execution.
  • Against that, the same dataset highlighting a forecast move to profitability within three years is what skeptics have to weigh when deciding how much this valuation premium can be justified by the growth profile.

For readers who lean toward the cautious side, it can help to see how bearish analysts frame the trade off between this premium pricing and the company’s growth plans. 🐻 Cloudflare Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Cloudflare on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With all of that in mind, does the balance of optimism and concern around Cloudflare match your own take, or raise fresh questions for you? If you want a clearer view of how risks and potential rewards line up, start by checking the 1 key reward and 1 important warning sign.

See What Else Is Out There

Cloudflare combines a premium valuation with ongoing losses of US$102.3 million on about US$2.2b of revenue, so profitability and price remain key pressure points.

If that mix of losses and a rich P/S of 41.7x feels too intense, it is worth checking out 51 high quality undervalued stocks that may offer more balanced price tags.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.