Cloudflare · CNBC Technology
Cloudflare stock sinks 18% after earnings as company cuts 1,100 employees due to AI changes
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Cloudflare reported first-quarter earnings Thursday that beat analysts' expectations, but shares fell 18% in extended trading as the company announced a 20% reduction in its workforce.
Key facts
- The company forecasted full-year revenue for 2026 to fall between $2.805 billion and $2.813 billion, narrowly beating estimates of $2.8 billion
- Cloudflare posted a net loss of $22.93 million, a loss of 7 cents per share in Q1 2026
- The company forecasted revenue for the second quarter to fall between $664 million and $665 million
- The company highlighted that its use of AI has increased over 600% in the last three months as it embraces "an agentic AI-first operating model
Summary
The company announced that it is cutting over 1,100 employees, writing that agentic artificial intelligence has "fundamentally changed" the company's work. "This wasn't an easy decision, but it's the right decision," CEO Matthew Prince said on the earnings call, adding that there are roles at the company "that aren't the roles that we need for the future. The company highlighted that its use of AI has increased over 600% in the last three months as it embraces "an agentic AI-first operating model. Cloudflare's first-quarter revenue increased 34% year-over-year.