GoKawiilA logo of Cloudflare sits outside the company's house on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, Jan. 20, 2025.
Cloudflare reported first-quarter earnings Thursday that beat analysts' expectations, but the company announced a 20% reduction in its workforce. Shares sank 24% Friday.
Here's how the cloud company did versus LSEG estimates:
Earnings per share: 25 cents vs. 23 cents expected
25 cents vs. 23 cents expected Revenue: $640 million vs. $622 million expected
In a blog post, the company announced that it is cutting over 1,100 employees, writing that agentic artificial intelligence has "fundamentally changed" the company's work.
"This wasn't an easy decision, but it's the right decision," CEO Matthew Prince said on the earnings call, adding that there are roles at the company "that just aren't the roles that we need for the future."
The company highlighted that its use of AI has increased over 600% in the last three months as it embraces "an agentic AI-first operating model."