Shares of Cloudflare (NET 1.44%) charged sharply higher Friday, surging by as much as 28.4%. As of 1:01 p.m. ET, the stock was up 21.1%.

The catalyst that sent the edge computing specialist soaring was a remarkably strong fourth-quarter report.

A classic beat and raise

For the quarter, Cloudflare's revenue grew 32% year over year to $362.5 million, resulting in adjusted earnings per share (EPS) of $0.15, up 150%. Analysts' consensus estimates had called for revenue of $353 million and EPS of $0.12, so Cloudflare cleared both hurdles with ease.

The company also generated record operating cash flow of $85.4 million, amounting to 24% of revenue, and record free cash flow of $50.7 million, or 14% of revenue.

Further fueling the results were strong user metrics, as the number of large Cloudflare clients spending over $100,000 per year with the company increased 35% year over year to 2,756. Existing customers spent more as well, as evidenced by the company's dollar-base net retention of 115%.

On the conference call, CEO Matthew Prince noted that the company had also signed a record number of new customers spending $500,000 or more and $1 million or more annually. "We blew away our previous record for new ACV [annual contract value] booked in a quarter," he said. "In Q4, new ACV booked grew nearly 40% year over year, making it not only our record in absolute ACV, but also the fastest percentage growth we've seen since 2021."

Cloudflare is also benefiting from the artificial intelligence (AI) boom: Price noted that it's the most common cloud platform among "the hottest AI start-ups."

The future looks bright

Helping fuel the stock's ascent Friday was Cloudflare's guidance, which was surprisingly robust. For the first quarter, management is expecting revenue to grow roughly 28% at the midpoint of its guidance range to $373 million, resulting in adjusted EPS of about $0.13. Analysts' consensus estimates were for revenue of $372.3 million and EPS of $0.12.

Management also issued strong full-year guidance, forecasting revenue in the range of $1.648 billion and $1.652 billion, in line with analysts' consensus expectation of $1.652 billion.

Lest there be any doubt, Cloudflare stock is a buy.