AI drives demand for network services to accelerate, and cybersecurity company Cloudflare (NET.US) raises full-year profit forecast

The Zhitong Finance App learned that this year's profit forecast released by cybersecurity company Cloudflare (NET.US) exceeds Wall Street estimates, which indicates that demand for network services continues to accelerate in the context of the rapid spread of artificial intelligence. According to financial reports, the company's second-quarter revenue reached $696.1 million, up 35.9% year over year, exceeding expectations of $29.75 million; adjusted earnings per share were $0.29, exceeding expectations of $0.02.

Cloudflare said it currently expects adjusted profit per share for the full year to be 1.25 to 1.26 US dollars, higher than the previous forecast of 1.19 to 1.20 US dollars. The average expectation from analysts was $1.20.

“We handed over an excellent second quarter,” CEO Matthew Prince said in a statement.

Cloudflare said in May that the company would cut one-fifth of its workforce as part of the shift to an “AI agent-first” operating model. Second-quarter results surpassed expectations, indicating that the downsizing of its workforce and strategic transformation did not affect growth.

By Thursday's close, the company's stock price had accumulated a 44% increase this year, surpassing the 12% increase in the Russell 1000 Index.

Investors have shown strong interest in large cybersecurity companies this year, and it is expected that artificial intelligence will expand the demand for digital defense. As enterprises adapt to the widespread application of AI models, data, and software, the performance of many giants in the industry has surpassed the market. These increases also reflect that security vendors are embedding AI into their products to automate threat detection and response—even though AI models uncover numerous computer vulnerabilities that companies are struggling to fix.

Prince said, “As the network shifts to AI answer engines and agent-driven business models, we are witnessing the Internet's fundamental restructuring of machine-to-machine traffic.”

Among other companies in the cybersecurity industry, Fortinet raised its full-year revenue outlook, while Check Point Software Technology Co., Ltd. maintained its original forecast.

TD Cowen said Check Point's performance was mixed as the company was dealing with internal issues. Analyst Mandeep Singh said that Fortinet's strong performance compared to Check Point reflects the growth of its newly defined SASE (Secure Access Service Edge) and firewall business.