Cloudflare (NET) Q4 2024 earnings summary

Executive summary

• Achieved Q4 2024 revenue of $459.9M, up 27% year-over-year, and full-year revenue of $1.67B, up 29% year-over-year, with record growth in large customers and strong free cash flow generation.

• Ended 2024 with 237,714 paying customers and 3,497 large customers, with large customers contributing 69% of revenue.

• Saw improved sales productivity, higher close rates, and shorter sales cycles, especially in the enterprise segment.

• Notable customer wins included a $20M five-year contract with a Fortune 100 tech company and significant expansions with AI, retail, and financial firms.

• Platform adoption and AI-related products (Workers, Workers AI) drove developer and enterprise engagement, with the developer ecosystem surpassing 3 million active developers.

Financial highlights

• Q4 revenue: $459.9M (+27% YoY); full-year revenue: $1.67B (+29% YoY).

• Gross margin: 77.6% non-GAAP in Q4; full-year non-GAAP gross margin: 78.7%.

• Operating income: $67.2M in Q4 (14.6% margin); full-year non-GAAP operating income: $230.1M (13.8% margin).

• Net income: $68.8M non-GAAP in Q4; full-year non-GAAP net income: $269.0M.

• Free cash flow: $47.8M in Q4 (10% of revenue); $166.9M for the year.

• Ended Q4 with $1.86B in cash and equivalents.

Outlook and guidance

• Q1 2025 revenue guidance: $468–$469M (+24% YoY); operating income: $54–$55M; EPS: $0.16.

• Full-year 2025 revenue guidance: $2,090–$2,094M (+25% YoY); operating income: $272–$276M; EPS: $0.79–$0.80.

• Network CapEx expected at 12–13% of revenue in 2025, up from 10% in 2024, to support AI inference demand.