Cloudflare Inc (NYSE:NET) stock rose 6.22% (As on May 9, 11:30:11 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY25. Revenues from Channel Partners (23% of total revenues) were $112.6 million, up 59.8% year over year. First-quarter revenues from Direct Customers (77% of total revenues) were $366.5 million, up 18.9% year over year. Cloudflare had 250,819 paying customers at the end of the first quarter, up 27% year over year. It added 30 new customers during the quarter who contributed more than $100,000 in annual revenues. The total count of such customers reached 3,527 at the end of the quarter. Cloudflare’s first-quarter non-GAAP gross profit increased 22.7% year over year to $369.3 million. However, the non-GAAP gross margin contracted 240 basis points (bps) year over year to 77.1%. Non-GAAP operating income for the quarter jumped to $56 million from $42.4 million in the year-ago quarter. The non-GAAP operating margin expanded 50 bps year over year to 11.7%. As of March 31, 2025, Cloudflare had cash, cash equivalents and available-for-sale securities of $1.91 billion, up from $1.86 billion as of Dec. 31, 2024. Cloudflare generated an operating cash flow of $145.8 million and a free cash flow of $52.9 million during the first quarter.

NET in the first quarter of FY25 has reported the adjusted earnings per share of 16 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 16 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 27 percent to $479.1 million in the first quarter of FY25, beating the analysts’ estimates for revenue by 2.2%. The year-over-year improvement in revenues can be attributed to the sustained momentum in the onboarding of large new enterprise customers, remarkable progress in the public sector, continued high prioritization of security by its customers and a zero-trust approach.

NET reiterated its guidance for full-year 2025. For 2025, it continues to anticipate revenues between $2.09 billion and $2.094 billion. The consensus mark for revenues is pegged at $2.09 billion, suggesting a year-over-year rise of 25.3%. Non-GAAP income from operations is still projected to be in the range of $272-$276 million. Non-GAAP earnings per share are still anticipated to be between 79 cents and 80 cents. The Zacks Consensus Estimate for earnings is pegged at 79 cents per share, indicating a year-over-year increase of 5.3%.

Additionally, Cloudflare for the second quarter,  expects revenues in the $500-$501 million range for the second quarter. The Zacks Consensus Estimate for revenues is pegged at $500.9 million, suggesting a year-over-year rise of 24.9%. Non-GAAP income from operations in the second quarter is expected to be between $62.5 million and $63.5 million. Non-GAAP earnings are anticipated to be 18 cents per share. The Zacks Consensus Estimate for earnings is pegged at 19 cents per share, indicating a year-over-year decline of 5%.