Shares of Cloudflare, Inc. (NET) surged 10.13% in pre-market trading on Friday, following the release of its impressive first-quarter 2025 financial results and the announcement of a record-breaking contract.

The cloud services provider reported Q1 revenue of $479.1 million, significantly beating analyst expectations of $469.3 million and representing a robust 26.54% increase compared to the same period last year. Despite the strong top-line growth, Cloudflare's adjusted earnings per share came in at $0.16, slightly below the analyst estimate of $0.17.

Investors were particularly encouraged by Cloudflare's announcement of landing the largest contract in the company's history, a deal worth over $100 million driven by their Workers developer platform. CEO Matthew Prince emphasized the significance of this achievement, stating, "We have the scale, the technology, and the team to capture the massive opportunity ahead of us — as evidenced by the size and the length of the deals we're closing and the caliber of customers betting on Cloudflare."

Looking ahead, Cloudflare provided an optimistic outlook for Q2, projecting revenue between $500 million and $501 million, slightly above analyst expectations. The company also reaffirmed its full-year 2025 guidance, with expected revenue ranging from $2.09 billion to $2.094 billion, and adjusted EPS forecasted between $0.79 and $0.80.

While some analysts have adjusted their price targets, such as Scotiabank cutting its target to $135 from $162, the overall market reaction suggests that investors are focusing on Cloudflare's strong growth potential and its ability to secure large, strategic contracts in the competitive cloud services market.