Cloudflare Sets the Pace as AI-Driven Workloads Lift Growth
Among SaaS earnings in Q1, Cloudflare emerged as one of the clearest winners in AI monetization. Revenue rose 34% year on year to USD 639.8 million (approx. RM2.96 billion), powered by demand for AI and agentic workloads running on its Workers developer platform. Large customers remain the engine: 4,416 clients now generate more than USD 100,000 (approx. RM463,000) in annual revenue, up 25%, and account for 72% of total revenue. Profitability is also improving, with operating income of USD 73.1 million (approx. RM338 million) and an 11.4% margin, supported by a 72.8% gross margin and USD 84.1 million (approx. RM389 million) in free cash flow. Yet Cloudflare is also one of the most aggressive AI restructurers, cutting about 20% of its workforce—more than 1,100 roles—to shift to an “agentic AI-first” operating model that embeds AI into how internal work is done.
RingCentral Turns AI Adoption into Cash and Capital Returns
RingCentral’s Q1 results show how mature cloud infrastructure stocks can translate AI investments into steady AI revenue growth and expanding margins. Revenue reached USD 644 million (approx. RM2.98 billion), up 5.3% year on year, with subscription revenue—97% of the total—growing 5.6% to USD 623 million (approx. RM2.88 billion). Non-GAAP EPS climbed to USD 1.20 (approx. RM5.56), while GAAP operating margin hit a record 7.8%, helped by a sharp drop in stock-based compensation as a share of revenue. Non-GAAP operating margin reached 23%, underpinned by disciplined hiring, offshoring, and vendor consolidation. Crucially, AI products are now a meaningful monetization lever: more than 10% of customers use at least one paid AI offering, with those accounts showing higher average revenue per user and net retention above 100%. With free cash flow of USD 140.65 million (approx. RM650 million), RingCentral is confident enough to raise outlook, launch a dividend, and buy back shares.
Freshworks Balances AI Expansion with Deep Workforce Cuts
Freshworks delivers a more nuanced picture of enterprise software earnings in the AI era. Q1 revenue grew 16% year on year to USD 228.6 million (approx. RM1.06 billion), driven by strong demand for its Employee Experience platform and AI Copilot capabilities. Enterprise traction is rising: 1,646 customers now contribute more than USD 100,000 (approx. RM463,000) in ARR, up 29%, and the company signed its first contract above USD 1 million (approx. RM4.63 million) in annual recurring revenue. Non-GAAP income from operations reached USD 41 million (approx. RM190 million) with a 17.9% margin, while net cash from operations was USD 62.4 million (approx. RM288 million), supported by a cash and securities balance of USD 780.4 million (approx. RM3.61 billion). Yet Freshworks also announced plans to cut roughly 500 employees—11% of its workforce—as it restructures to embed AI more deeply into product and engineering, underscoring the cost pressures behind its AI pivot.
Veritone and Allot Chase AI and Cybersecurity Recurring Revenue
Not all SaaS earnings Q1 stories feature top-line acceleration. Veritone posted first-quarter revenue of USD 20.3 million (approx. RM93.9 million), down USD 2.2 million (approx. RM10.2 million) year on year, primarily due to weakness in managed services. Yet its AI training data business is gaining strategic relevance. Annual recurring revenue rose 9% to USD 64.2 million (approx. RM297 million), with consumption-based ARR growing 50%, supported by new Veritone Data Refinery relationships with Google and NVIDIA and a near-term pipeline of nearly USD 70 million (approx. RM324 million). Allot, by contrast, is a quiet winner in cybersecurity-focused SaaS. Q1 revenue climbed 14% to USD 26.4 million (approx. RM122 million), while Security as a Service revenue jumped 71% to USD 8.7 million (approx. RM40.3 million), now representing a third of sales. With SECaaS ARR at USD 33.7 million (approx. RM156 million) and recurring revenue at 67% of total, Allot is turning AI-enabled cyber protection into profitable, high-visibility growth.
Amadeus Shows How Non-SaaS Verticals Embed AI Profitably
Travel-tech player Amadeus illustrates how AI-driven workloads are reshaping software economics beyond pure-play SaaS. The company reported Q1 group revenue of €1.68 billion, up 3.1% year on year and 7.9% at constant currency, with operating income of €474.9 million and adjusted EBIT of €500 million. Adjusted diluted EPS rose 8.8% at constant currency, while free cash flow increased 4.5% to €273.6 million. This resilience came despite softer booking volumes in March following geopolitical disruptions that triggered cancellations across the travel ecosystem. Management highlighted continued expansion of AI capabilities and biometrics-driven traveller experiences, alongside broader adoption of its solutions across the travel value chain. Amadeus’ results underscore that AI revenue growth is not limited to classic cloud infrastructure stocks: in vertical markets, AI is being monetized through smarter operations, personalized retailing, and frictionless identity experiences, all while maintaining strong profitability and disciplined investment in long-term platforms.