US Stocks Movement | Cloudflare drops over 17% after-hours as Q2 revenue guidance misses expectations and restructuring plan announced

Glonghui, May 8 — Cloud service provider Cloudflare (NET.US) dropped more than 17% in after-hours trading, closing at $212.5. According to news reports, Cloudflare announced that its first-quarter revenue surged 34% year-on-year to $639.8 million, surpassing market expectations of $620.8 million. Adjusted earnings per share were $0.25, also exceeding the market expectation of $0.23. However, the non-GAAP gross margin decreased to 72.8% from 77.1% a year earlier. Despite these results, the company issued second-quarter revenue guidance of $664–$665 million, below the broader analyst consensus of $666 million. Furthermore, Cloudflare announced plans to lay off approximately 1,100 employees as part of a transition to an AI-first proxy operating model. The company expects this restructuring to incur associated costs of $140–$150 million, with the majority of expenses to be recognized in the second quarter.