Cloudflare shares jumped 15.7% to $329.10 in premarket trading on August 7 after the company reported second-quarter revenue of $696.1 million, a 36% year-over-year increase that topped the $665.5 million consensus by 4.6%.
Adjusted earnings per share came in at $0.29, beating the $0.27 estimate by 7.4%. Free cash flow rose 69% to $56.4 million from $33.3 million a year earlier.
The beat was only part of the story. Management lifted full-year 2026 revenue guidance to a midpoint of $2.865 billion, up $58 million from the prior outlook. Of that increase, $26.4 million flows into the second-half plan, implying a fourth-quarter revenue run rate near $795 million.
CEO Matthew Prince framed the acceleration around a structural shift: more than half of Cloudflare's network traffic was non-human during the quarter, driven by AI agents and machine-to-machine communication. The company added 282 large customers, bringing the total to 4,698, a 27% increase year over year. Dollar-based net retention climbed to 120% from 118% sequentially.
Third-quarter guidance calls for revenue of $736–737 million and adjusted EPS of $0.34, both ahead of Street estimates. Full-year adjusted EPS guidance was raised to $1.25–$1.26 from $1.19–$1.20, well above the $0.96 consensus.
The rally carried Cloudflare past FactSet's highest analyst price target of $330. After-hours trading on August 6 pushed the stock to $335, a 17.8% gain that added roughly $18 billion in implied equity value — nearly 310 times the $58 million revenue guidance increase.