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Is Cloudflare (NET) Likely to Surpass Q1 Earnings Estimates?
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Cloudflare (NET - Free Report) is likely to beat expectations when it reports first-quarter fiscal 2023 results on Apr 27, after market close.
The company projects first-quarter revenues in the band of $290-$291 million. The Zacks Consensus Estimate for the top line is currently pegged at $291 million, indicating an improvement of 37.2% year over year.
Cloudflare expects non-GAAP earnings per share between 3 cents and 4 cents. The consensus mark for the same is pegged at 4 cents per share, implying a robust improvement from the year-ago quarter’s earnings of a penny.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $11.5 million and $12.5 million. Cloudflare’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 75%.
Cloudflare’s first-quarter performance is likely to have benefited from the solid demand for security solutions, which became imperative due to aggravated cyberattacks, hybrid working trend and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have witnessed the impact of the accelerated global footprint expansion outside the United States. It is worth mentioning that the United States, EMEA and APAC represented 52.7%, 26.6% and 13.4% of the total revenues, respectively, in the fourth quarter.
Moreover, a diversified customer base is likely to have contributed to NET’s first-quarter top line. It added around 6,086 new paying customers in the last reported quarter, bringing the total count to approximately 162,086 across more than 170 countries.
Cloudflare added 134 new large customers (annual billings of more than $100,000), taking the total count to 2,042 at the end of the fourth quarter, up from the 1,908 recorded at the end of the third quarter of 2022. This uptrend, which has prevailed for the past several quarters, is likely to have continued in the to-be-reported quarter as well, backed by the elevated demand for its cloud-based solutions amid the ongoing digitalizing trend.
The company's recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. However, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing geopolitical uncertainties worldwide, is likely to have weighed on its performance in the quarter to be reported.
Earnings Whisper
Our proven model predicts an earnings beat for Cloudflare this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +14.29%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: NET carries a Zacks Rank #2 at present.
Other Stocks With the Favorable Combination
Per our model, Meta Platforms (META - Free Report) , Alphabet (GOOGL - Free Report) and TMobile US (TMUS - Free Report) have the right combination of elements to post an earnings beat in upcoming releases.
Meta Platforms has an Earnings ESP of +7.78% and sports a Zacks Rank #1 at present. The company is set to report its first-quarter 2023 results on Apr 26. META’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 8.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for META’s first-quarter earnings is pegged at $1.96 per share, indicating a 27.9% drop from the year-ago quarter’s $2.72. The consensus mark for revenues is pegged at $27.49 billion, suggesting a year-over-year decrease of 1.5%.
Currently, Alaphabet has an Earnings ESP of +7.41% and carries a Zacks Rank #3. The company is scheduled to report its first-quarter 2023 results on Apr 25. GOOGL’s earnings missed the Zacks Consensus Estimate in each of the preceding four quarters, delivering an average negative earnings surprise of 8%.
The Zacks Consensus Estimate for GOOGL’s first-quarter earnings is $1.06 per share, implying a year-over-year decline of 13.8%. The company is estimated to report revenues of $56.95 billion, which suggests a surge of 1.7% from the year-ago quarter.
TMobile US has an Earnings ESP of +5.54% and carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2023 results on Apr 27. TMUS’ earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 67.6%.
The Zacks Consensus Estimate for TMUS’ quarterly earnings is pegged at $1.45 per share, suggesting a year-over-year increase of 154.4%. Its quarterly revenues are estimated to decrease 1.1% year over year to $19.91 billion.
Image: Bigstock
Is Cloudflare (NET) Likely to Surpass Q1 Earnings Estimates?
Cloudflare (NET - Free Report) is likely to beat expectations when it reports first-quarter fiscal 2023 results on Apr 27, after market close.
The company projects first-quarter revenues in the band of $290-$291 million. The Zacks Consensus Estimate for the top line is currently pegged at $291 million, indicating an improvement of 37.2% year over year.
Cloudflare expects non-GAAP earnings per share between 3 cents and 4 cents. The consensus mark for the same is pegged at 4 cents per share, implying a robust improvement from the year-ago quarter’s earnings of a penny.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $11.5 million and $12.5 million. Cloudflare’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 75%.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Note
Cloudflare’s first-quarter performance is likely to have benefited from the solid demand for security solutions, which became imperative due to aggravated cyberattacks, hybrid working trend and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have witnessed the impact of the accelerated global footprint expansion outside the United States. It is worth mentioning that the United States, EMEA and APAC represented 52.7%, 26.6% and 13.4% of the total revenues, respectively, in the fourth quarter.
Moreover, a diversified customer base is likely to have contributed to NET’s first-quarter top line. It added around 6,086 new paying customers in the last reported quarter, bringing the total count to approximately 162,086 across more than 170 countries.
Cloudflare added 134 new large customers (annual billings of more than $100,000), taking the total count to 2,042 at the end of the fourth quarter, up from the 1,908 recorded at the end of the third quarter of 2022. This uptrend, which has prevailed for the past several quarters, is likely to have continued in the to-be-reported quarter as well, backed by the elevated demand for its cloud-based solutions amid the ongoing digitalizing trend.
The company's recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. However, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing geopolitical uncertainties worldwide, is likely to have weighed on its performance in the quarter to be reported.
Earnings Whisper
Our proven model predicts an earnings beat for Cloudflare this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +14.29%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: NET carries a Zacks Rank #2 at present.
Other Stocks With the Favorable Combination
Per our model, Meta Platforms (META - Free Report) , Alphabet (GOOGL - Free Report) and TMobile US (TMUS - Free Report) have the right combination of elements to post an earnings beat in upcoming releases.
Meta Platforms has an Earnings ESP of +7.78% and sports a Zacks Rank #1 at present. The company is set to report its first-quarter 2023 results on Apr 26. META’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 8.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for META’s first-quarter earnings is pegged at $1.96 per share, indicating a 27.9% drop from the year-ago quarter’s $2.72. The consensus mark for revenues is pegged at $27.49 billion, suggesting a year-over-year decrease of 1.5%.
Currently, Alaphabet has an Earnings ESP of +7.41% and carries a Zacks Rank #3. The company is scheduled to report its first-quarter 2023 results on Apr 25. GOOGL’s earnings missed the Zacks Consensus Estimate in each of the preceding four quarters, delivering an average negative earnings surprise of 8%.
The Zacks Consensus Estimate for GOOGL’s first-quarter earnings is $1.06 per share, implying a year-over-year decline of 13.8%. The company is estimated to report revenues of $56.95 billion, which suggests a surge of 1.7% from the year-ago quarter.
TMobile US has an Earnings ESP of +5.54% and carries a Zacks Rank #3 at present. The company is slated to report first-quarter 2023 results on Apr 27. TMUS’ earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 67.6%.
The Zacks Consensus Estimate for TMUS’ quarterly earnings is pegged at $1.45 per share, suggesting a year-over-year increase of 154.4%. Its quarterly revenues are estimated to decrease 1.1% year over year to $19.91 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.