NET stock pops after Q3 beat as Cloudflare lifts outlook and edges toward profitability

Cloudflare’s NET stock ticked higher late Thursday, October 30, 2025, after the company delivered a stronger-than-expected September-quarter update and raised guidance for year-end. Investors were rewarded with faster revenue growth, expanding margins, and a small GAAP loss that continues to narrow—signals that the platform’s scale and product breadth are translating into sturdier earnings power.

NET stock at a glance (Oct. 30, 2025, late session)

• Last trade: around the high-$220s per share, up modestly after hours

• Day range: roughly $222–$231 during regular trading

• Year to date: up sharply, near 52-week highs

• Market mood: constructive; reaction consistent with a clean beat and higher guide

Prices reflect late U.S. trading; after-hours levels may change.

Cloudflare Q3 2025: revenue acceleration and improving profitability

The September quarter showcased durable top-line momentum:

• Revenue: about $562 million, up roughly 31% year over year.

• Non-GAAP EPS: $0.27, above consensus.

• GAAP result: near breakeven, with a small net loss of about $1.3 million, markedly improved from last year.

Under the hood, Cloudflare continued to benefit from multiple growth levers: expanding enterprise adoption of security and performance products, rising multi-product attach rates, and ongoing traction in developer-focused services. High gross margins and disciplined opex growth combined to push non-GAAP profitability higher even as the company invested in network expansion and R&D.

Guidance raised: what it means for NET stock

Management lifted the near-term outlook, signaling confidence into the holiday quarter and fiscal year finish:

• Q4 revenue outlook: roughly $588.5–$589.5 million, above recent street ranges.

• Full-year (fiscal 2025) non-GAAP EPS: raised to around $0.91 at the midpoint.

For NET stock, the raised guide matters in two ways. First, it extends the narrative of re-acceleration at scale—critical for a premium-multiple name. Second, clearer visibility on profitability supports the case that Cloudflare can self-fund growth without sacrificing operating discipline, a key factor for large-cap cloud investors rotating toward durable compounders.

Why the reaction wasn’t louder

With shares already up strongly in 2025, expectations were elevated heading into the print. The update was better, not breathtaking—enough to push the stock higher after hours but not enough to trigger a melt-up. In practice, that’s a healthy outcome: a beat-and-raise that refreshes estimates while keeping valuation in check.

Additional dynamics likely tempered the magnitude of the move:

• Positioning: many funds entered the quarter overweight high-quality cloud names; less room for surprise.

• Macro crosswinds: ongoing index rotation and month-end rebalancing can blunt single-stock pops, even on good news.

• Premium multiple: when a stock trades near highs, investors demand clean, repeatable beats to justify further rerating.

Key themes to watch from here

1) Large-customer expansion. Growth in $100K+ and $1M+ annual spend cohorts is a reliable proxy for platform depth and wallet share. Sustained double-digit expansion in these tiers would bolster confidence that growth is coming from durable enterprise relationships, not just net-new logos.

2) Workers/AI and developer adoption. Serverless compute, edge AI inference, and data localization are becoming bigger parts of the story. Evidence that these newer products contribute meaningfully to revenue—and not just usage metrics—would be an upside catalyst for NET stock.

3) Margin trajectory. High-70s (or better) non-GAAP gross margins paired with steady operating-expense discipline could push operating margins higher through 2026. Any sign of opex leverage exceeding expectations would support multiple resilience.

4) Cash flow and capital allocation. With profitability improving, watch free-cash-flow conversion and any commentary on capital priorities (network investments versus opportunistic M&A). Stronger FCF adds ballast in choppy macro tapes.

Trading levels and risk checks

• Near-term levels: Bulls will aim to hold the $220–$225 area as support and probe for a decisive break above the low-$230s. A sustained move beyond that band would signal appetite for a new range higher.

• Valuation lens: After a strong YTD run, NET stock still assumes robust growth and margin expansion. Upside depends on maintaining 25–30%+ top-line growth while steadily improving GAAP profitability.

• Watch the competitive field: The company executes in crowded categories (security, edge compute, networking). Any slowdown in enterprise expansions or pricing pressure could re-rate shares quickly.

Cloudflare delivered exactly what a premium software name needs at this stage: a clean Q3 beat, higher guidance, and tangible progress toward full GAAP profitability. The reaction in NET stock—positive but measured—reflects a market that already expected strength yet remains willing to reward consistent execution. For investors, the path forward hinges on enterprise upsell, monetization of developer and AI offerings, and continued margin lift. Hold the support band, track large-customer momentum, and let the raised outlook do its work.