"Cloudflare beat Wall Street's revenue and earnings estimates on Wednesday, announced it would cut 1,100 employees because artificial intelligence agents now do their work, and watched its stock fall 24 per cent on Thursday. The sequence is becoming the template for the technology industry in 2026: record revenue, record layoffs, record doubt about what comes next."
"First-quarter revenue was 639.8 million dollars, up 34 per cent year over year, beating the consensus estimate of 622 million. Adjusted earnings per share were 25 cents against expectations of 23 cents. Free cash flow was 84.1 million dollars. The company added a record number of customers paying more than five million dollars per year and saw a 73 per cent year-over-year increase in deals worth more than a million. By every traditional metric, the quarter was strong."
"CEO Matthew Prince and co-founder Michelle Zatlyn announced in a blog post that Cloudflare is transitioning to what they called an "agentic AI-first operating model." The company said its internal use of AI had increased more than 600 per cent in three months. Staff across engineering, human resources, finance, and marketing are running thousands of AI agent sessions per day. The framing was not that AI would assist employees. It was that AI has made certain categories of employee unnecessary."
"Prince was specific about which roles are disappearing. " A lot of the support roles" behind customer-facing and engineering staff " are not going to be the roles that drive companies going forward," he said. The language distinguished between people who build the product, people who sell the product, and people who supp"
Cloudflare reported first-quarter revenue of 639.8 million dollars, up 34% year over year, and adjusted earnings per share of 25 cents versus 23 cents expected. Free cash flow was 84.1 million dollars. The company added a record number of customers paying more than five million dollars per year and increased deals worth more than a million by 73% year over year. Despite strong traditional performance metrics, Cloudflare announced it would eliminate 1,100 employees, framing the change as an “agentic AI-first operating model.” The company said internal AI use rose more than 600% in three months and that AI agents run thousands of sessions daily across multiple functions. It stated that certain support roles are becoming unnecessary while distinguishing between roles that build, sell, and support products.
Read at TNW | Data-Security
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