Cloudflare Reports Record Third Quarter Revenue Growth Amid Rising AI-Driven Security Demand
Cloudflare (NET) reported its strongest quarterly performance to date, with revenue reaching $782.5 million, a 39% year-over-year increase that exceeded both company guidance and market consensus. The growth is driven by an escalating digital threat landscape, where AI-enabled bot attacks have surged significantly, increasing the demand for Cloudflare's security and developer platform services. Despite the rapid expansion, the company faces margin pressures as it scales infrastructure to meet demand. However, profitability metrics are improving; non-GAAP operating margins reached a record 17.5%, and the company now expects to achieve GAAP profitability in the fourth quarter, significantly ahead of its original 2028 target. Morgan Stanley maintains an Overweight rating on the stock with a $370 price target.
Topics: AI bot attacks Cloudflare earnings Morgan Stanley analyst rating revenue growth
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