Cloudflare has raised its full-year revenue forecast after reporting second-quarter revenue of $696.1 million, up 36% year over year, as demand linked to AI-driven Internet traffic helped fuel growth. The connectivity cloud company now expects full-year revenue of between $2.864 billion and $2.870 billion, above its previous forecast of $2.805 billion to $2.813 billion.
The results sent Cloudflare’s stock up 16.2% to $330.51 ahead of Friday’s open. The company also raised its full-year adjusted EPS outlook to between $1.25 and $1.26, compared with its previous guidance of $1.19 to $1.20, while current remaining performance obligations increased 35% year over year.
Cloudflare’s results underline the growing commercial impact of AI on its business, with the web infrastructure company pointing to increasing demand as the Internet shifts toward AI answer engines, agent-driven commerce and machine-to-machine traffic.
Cloudflare’s AI Business Continues to Accelerate
Cloudflare’s non-GAAP income from operations rose to $96.1 million, or 13.8% of revenue, compared with $72.3 million, or 14.1% of revenue, a year earlier. Free cash flow reached $56.4 million, equal to 8% of revenue.
The company attributed the stronger outlook to continued demand across its platform as businesses adapt to an Internet increasingly shaped by AI. CEO and co-founder Matthew Prince said AI answer engines and agent-driven commerce are creating a fundamental shift toward machine-to-machine traffic.
For the third quarter, Cloudflare expects revenue of between $736 million and $737 million, alongside non-GAAP income from operations of between $129 million and $130 million.
The company also highlighted record growth in total paying customers, large customers and developers using its platform.
Cloudflare’s Workers developer platform remains its fastest-growing area, according to Morgan Stanley analysts. The business is increasingly moving toward a consumption-based model, potentially allowing Cloudflare to capture more revenue as developers and AI applications generate greater demand for its infrastructure.
Cloudflare Is Building for a More Automated Internet
The results take on a different significance when viewed alongside changes Cloudflare has been making internally. The company announced plans to eliminate around 1,100 positions, or approximately 20% of its global workforce, alongside its first-quarter earnings.
At the time, Prince and co-founder Michelle Zatlyn described the move as a realignment around AI-driven operations rather than conventional cost cutting. Cloudflare also said employee adoption of AI tools had increased by more than 600% during the first quarter.
That combination suggests Cloudflare is not simply using AI to make its existing workforce more productive. It is also reconsidering how much work needs to be performed by people in the first place.
That becomes more significant when looking at what Cloudflare launched just days after its earnings announcement. The company introduced Kitesurf, a browser designed for AI agents and built on its Workers platform.
Kitesurf allows agents to navigate websites and complete browser-based tasks without developers having to build their own browser infrastructure. Agents can inspect pages, capture screenshots, create PDFs and extract HTML, while the platform supports the Chrome DevTools Protocol and connections for tools such as MCP clients.
The product reflects the same shift Cloudflare identified in its earnings report. If AI agents become major users of the Internet and can increasingly complete tasks without a human operating the browser, businesses may be able to handle more digital activity without requiring a person to perform every step.
Is Cloudflare’s Earnings a Glimpse of Future Workforces?
If AI agents increasingly perform digital tasks that previously required human intervention, businesses may not simply use AI to make existing employees more productive. They may begin redesigning jobs, teams and processes around the assumption that a growing proportion of digital work can be delegated to software.
Cloudflare is not alone in restructuring its workforce while increasing AI investment. Across the enterprise technology sector, companies have been reassessing headcount, skills and operating models as AI moves from experimentation into day-to-day operations.
The company is effectively betting on two related transformations. Internally, AI can allow employees to accomplish more with fewer manual processes. Externally, Cloudflare is building infrastructure for a world in which AI agents themselves can do more across a wide range of tasks.
If AI allows employees to manage larger workloads while autonomous agents perform tasks that previously required human intervention, businesses may no longer need to increase headcount in proportion to revenue. Cloudflare’s results could therefore offer an early glimpse of a different growth model, where companies scale their operations through software as much as through people.
