Cloudflare posted a narrower loss in the fourth quarter after recording a double-digit jump in revenue. The shares surged 14.7% in aftermarket trading.

The connectivity cloud company logged on Tuesday reported a loss of $12.1 million, or 3 cents a share, compared with a loss of $12.8 million, or 4 cents a share, in the same quarter a year earlier.

Adjusted earnings were 28 cents a share. Analysts polled by FactSet forecast 27 cents a share.

Revenue rose 34% to $614.5 million, beating the $591.3 million that Wall Street expected, according to FactSet.

Chief Executive Officer Matthew Prince said the company closed its largest annual contract value deal ever, averaging $42.5 million per year, in the fourth quarter. The shift toward AI and agents, he said, is helping drive demand across Cloudflare's services.

"This creates a virtuous flywheel: more agents drive more code to Cloudflare Workers, which fuels demand for our performance, security, and networking services," Prince said. "We were built for this moment and the rise of the Agentic Internet."

For the first quarter, the company expects adjusted earnings of 23 cents a share on revenue of $620.0 million to $621.0 million. Wall Street predicts adjusted earnings per share of 25 cents and revenue of $614.4 million.

Cloudflare anticipates adjusted earnings of $1.11 to $1.12 a share for 2026, and full-year sales between $2.785 billion and $2.795 billion. Analysts expect adjusted earnings of $1.18 a share and revenue of $2.73 billion.