Cloudflare projected its first-quarter revenue and profit to exceed market expectations on Thursday, anticipating robust demand for its cloud and content delivery services. As a result, its shares surged by 24% in after-hours trading.

The increased demand for cloud and cybersecurity services in recent months reflects enterprises’ vigorous efforts to digitize their operations, seeking faster and more streamlined automated workflows.

In the fourth quarter, the company experienced a 32% increase in revenue to $362.5 million, surpassing analysts’ average expectation of $353.1 million, according to LSEG data. Additionally, its adjusted earnings per share stood at 15 cents, exceeding analysts’ projections of 12 cents.

Earlier this month, Cloudflare reported that a sophisticated group of hackers attempted to infiltrate its global network in late 2023 but were ultimately unsuccessful. The company stated that the operational impact of the intrusion was “extremely limited.”

In the fourth quarter, the cybersecurity and software company reported a net loss of $27.9 million, or 8 cents per share, compared to a loss of $45.9 million, or 14 cents per share, in the same period last year.

Adjusted for certain items, Cloudflare earned 15 cents per share, an increase from 6 cents per share a year earlier. Analysts surveyed by FactSet had anticipated earnings of 12 cents per share.

Revenue climbed 32% to $363 million, exceeding analysts’ expectations of $353 million.

According to Chief Executive Matthew Prince, the company witnessed notable enhancements in pipeline close rates, sales-force productivity, and average deal size sequentially. Prince stated in a release, “To conclude the year, our business exhibited strength propelled by robust momentum with large customers, significant strides in the public sector, and expansion in Cloudflare One.”

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