Shares in Cloudflare Inc. rose nearly 8% in late trading today after the content delivery network and security company reported earnings and revenue ahead of expectations in its fiscal third quarter and offered forecasts higher than expected.

For the quarter that ended on Sept. 30, Cloudflare reported adjusted earnings per share of 27 cents, up from 20 cents in the same quarter of 2024, on revenue of $962 million, up 31% year-over-year. Both figures were ahead of the 23 cents per share and revenue of $544.56 million in revenue expected by analysts.

Cloudflare’s strong figures were driven by customer growth. The company had 295,552 paying customers as of the end of September, up 33% over the same time last year, while the number of large customers — those with $100,000 or more in annualized revenue — grew almost 23% year-over-year, to 4,009. Those customers are also sticking around: Cloudflare reported a dollar-based net retention rate of 119%, up from 114% in the previous quarter and 110% in the third quarter of 2024.

Business highlights in the quarter included Cloudflare rolling out new defenses against generative artificial intelligence in August. The features are designed to give Cloudflare customers the ability to understand, analyze and set controls automatically on how generative AI is used throughout their organization while enhancing the productivity of teams without sacrificing security or privacy standards.

Also in August, Cloudflare launched Application Confidence Scores for AI applications, a feature designed to help enterprises evaluate the security, compliance and reliability of third-party software-as-a-service and generative AI tools. Offered as part of Cloudflare One’s AI Security Posture Management suite, the scoring system gives information technology, security, legal and compliance teams a transparent way to assess the rapidly expanding universe of AI software without resorting to blanket bans.

Forward to September and the company revealed its plans to join the cryptocurrency stablecoin community with NET Dollar, a U.S. dollar-backed stablecoin that will enable instant, secure transactions for the agentic web. Cloudflare is aiming to make NET Dollar a core feature of a new business model for the internet that rewards originality, sustains creativity and enables innovation.

“We’re shipping capabilities at an unmatched pace,” co-founder and Chief Executive Matthew Prince said in the company’s earnings release. “This dramatically increases the value we deliver, expands our reach and builds the rails for the next decade of internet growth.”

For its fiscal fourth quarter, Cloudflare expects adjusted earnings of 27 cents per share on revenue of $588.5 million to $589.5 million, jut ahead of the 26 cents per share and $580.7 million expected by analysts. For the full year, the company expects adjusted earnings of 91 cents per share on revenue of $2.142 billion to $2.143 million, both also exceeding analyst expectations.

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