Cloudflare’s revenue outlook of $664M-$665M misses estimates of $666.1M and triggers a 20% stock drop alongside 1,100 layoffs.
Cloudflare’s stock tumbled nearly 20% in early trading Friday after the company issued a Q2 revenue forecast of $664 million to $665 million, below Wall Street’s $666.1 million expectation. The cloud security firm also announced plans to cut roughly 1,100 jobs, or 20% of its workforce, citing operational shifts driven by AI adoption.
The company’s guidance fell short of consensus estimates, marking a rare miss for Cloudflare. Earlier this week, Coinbase also announced layoffs, cutting 14% of its staff as tech firms adjust to AI integration and evolving market conditions.
CEO Matthew Prince stated that AI and automation have fundamentally changed Cloudflare’s workforce dynamics, reducing the need for certain roles. The move reflects broader industry trends as companies reallocate resources toward AI-driven efficiencies.