"Patil characterized the period as a "fine quarter," with Cloudflare beating on both the top and bottom line and continuing to show strong growth, especially with large customers. He also flagged the "more prudent guidance" for Q2 FY2026 as a notable wrinkle. The headline catalyst is the company's significant headcount reduction as it pivots toward an AI-first operating structure. The retained Neutral rating signals patience: operating leverage from the restructuring still needs to prove out before Susquehanna commits more aggressively."
"Cloudflare reported Q1 FY2026 revenue of $639.755 million, up 34% year over year, topping consensus of $622.611 million. Non-GAAP EPS reached $0.25 versus $0.23 expected, while free cash flow climbed to $84.074 million. CEO Matthew Prince announced a reduction of more than 1,100 employees and restructuring charges of $140 to $150 million, primarily in Q2 2026. Prince asserted that AI is "shaping up to be the biggest tailwind we've ever seen in Cloudflare's history.""
"Management guided Cloudflare's full-year 2026 revenue to $2.805 to $2.813 billion and non-GAAP EPS to $1.19 to $1.20. Q2 revenue is forecast at $664 to $665 million. Cloudflare's valuation remains rich, with a P/FCF of 193 and price-to-book of 43. An AI-first operating model, in practice, means agents handling support tick"
Cloudflare received a price-target increase to $200 from $190 while maintaining a Neutral rating. The update followed a Q1 FY2026 beat with revenue of $639.755 million, up 34% year over year, and non-GAAP EPS of $0.25 versus $0.23 expected. Free cash flow rose to $84.074 million. Management announced a reduction of more than 1,100 employees and restructuring charges of $140 to $150 million, primarily in Q2 2026, tied to an “AI-first” operating model. Guidance for Q2 FY2026 revenue was $664 to $665 million, and full-year 2026 revenue was $2.805 to $2.813 billion with non-GAAP EPS of $1.19 to $1.20. The valuation remains high, with a P/FCF of 193 and price-to-book of 43.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]