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The company projects fourth-quarter revenues in the band of $352-$353 million. The Zacks Consensus Estimate for the top line is currently pegged at $352.7 million, indicating an improvement of 28.4% year over year.
Cloudflare expects non-GAAP earnings per share of 12 cents for the fourth quarter. The consensus mark is also pegged at 12 cents per share, implying a robust 100% improvement from the year-ago quarter’s earnings of 6 cents.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $28 million and $29 million. NET’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 63.2%.
Let’s see how things are shaping up for this announcement.
Cloudflare’s fourth-quarter performance is likely to have benefited from the robust demand for security solutions amid the rising hybrid working trend and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have gained from accelerated global expansion outside the United States. It is worth mentioning that the company had generated approximately 40% of its third-quarter 2023 revenues outside the United States.
A diversified customer base is likely to have contributed to Cloudflare’s fourth-quarter top line. It added around 7,898 new paying customers in the last reported quarter, bringing the total count to approximately 182,027 across more than 170 countries.
Cloudflare added 206 new large customers (annual billings of more than $100,000), taking the total count to 2,558 at the end of the third quarter, up from 2,352 recorded at the end of the second quarter of 2023. This uptrend, which has prevailed for the past nine quarters, is likely to have continued in the to-be-reported quarter as well, backed by the growing demand for its cloud-based solutions amid the ongoing digitalizing trend.
NET’s recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. Nevertheless, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing global geopolitical uncertainties are likely to have weighed on its performance in the fourth quarter of 2023.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Cloudflare this season. 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. However, that’s not the case here.
NET has an Earnings ESP of -6.61% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, monday.com (MNDY - Free Report) , Airbnb (ABNB - Free Report) and Twilio (TWLO - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
MNDY has an Earnings ESP of +18.36% and a Zacks Rank #3 at present. The company is scheduled to report fourth-quarter fiscal 2023 results on Feb 12. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 200.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MNDY’s fourth-quarter earnings is pegged at 30 cents per share, indicating a year-over-year decline of 31.8%. The consensus mark for revenues is pegged at $198.3 million, suggesting a year-over-year rise of 32.3%.
ABNB has an Earnings ESP of +4.73% and a Zacks Rank #3 at present. The company is set to report fourth-quarter 2023 results on Feb 13. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 50%.
The Zacks Consensus Estimate for ABNB’s fourth-quarter earnings is pinned at 69 cents per share, indicating a year-over-year improvement of 43.8%. It is estimated to report revenues of $2.16 billion, which suggests an increase of approximately 13.5% from the year-ago quarter.
TWLO has an Earnings ESP of +31.37% and a Zacks Rank #2 at present. Twilio is slated to report fourth-quarter fiscal 2023 results on Feb 14. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 157.84%.
The Zacks Consensus Estimate for TWLO’s fourth-quarter earnings is pegged at 57 cents per share, suggesting an increase of 159% from the year-ago quarter’s earnings. Twilio’s quarterly revenues are estimated to increase 1.53% year over year to $1.04 billion.
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Cloudflare (NET) to Report Q4 Earnings: What's in Store?
Cloudflare (NET - Free Report) is scheduled to report its fourth-quarter 2023 results on Feb 8, after market close.
The company projects fourth-quarter revenues in the band of $352-$353 million. The Zacks Consensus Estimate for the top line is currently pegged at $352.7 million, indicating an improvement of 28.4% year over year.
Cloudflare expects non-GAAP earnings per share of 12 cents for the fourth quarter. The consensus mark is also pegged at 12 cents per share, implying a robust 100% improvement from the year-ago quarter’s earnings of 6 cents.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $28 million and $29 million. NET’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 63.2%.
Let’s see how things are shaping up for this announcement.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Note
Cloudflare’s fourth-quarter performance is likely to have benefited from the robust demand for security solutions amid the rising hybrid working trend and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have gained from accelerated global expansion outside the United States. It is worth mentioning that the company had generated approximately 40% of its third-quarter 2023 revenues outside the United States.
A diversified customer base is likely to have contributed to Cloudflare’s fourth-quarter top line. It added around 7,898 new paying customers in the last reported quarter, bringing the total count to approximately 182,027 across more than 170 countries.
Cloudflare added 206 new large customers (annual billings of more than $100,000), taking the total count to 2,558 at the end of the third quarter, up from 2,352 recorded at the end of the second quarter of 2023. This uptrend, which has prevailed for the past nine quarters, is likely to have continued in the to-be-reported quarter as well, backed by the growing demand for its cloud-based solutions amid the ongoing digitalizing trend.
NET’s recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. Nevertheless, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing global geopolitical uncertainties are likely to have weighed on its performance in the fourth quarter of 2023.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Cloudflare this season. 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. However, that’s not the case here.
NET has an Earnings ESP of -6.61% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, monday.com (MNDY - Free Report) , Airbnb (ABNB - Free Report) and Twilio (TWLO - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
MNDY has an Earnings ESP of +18.36% and a Zacks Rank #3 at present. The company is scheduled to report fourth-quarter fiscal 2023 results on Feb 12. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 200.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MNDY’s fourth-quarter earnings is pegged at 30 cents per share, indicating a year-over-year decline of 31.8%. The consensus mark for revenues is pegged at $198.3 million, suggesting a year-over-year rise of 32.3%.
ABNB has an Earnings ESP of +4.73% and a Zacks Rank #3 at present. The company is set to report fourth-quarter 2023 results on Feb 13. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 50%.
The Zacks Consensus Estimate for ABNB’s fourth-quarter earnings is pinned at 69 cents per share, indicating a year-over-year improvement of 43.8%. It is estimated to report revenues of $2.16 billion, which suggests an increase of approximately 13.5% from the year-ago quarter.
TWLO has an Earnings ESP of +31.37% and a Zacks Rank #2 at present. Twilio is slated to report fourth-quarter fiscal 2023 results on Feb 14. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 157.84%.
The Zacks Consensus Estimate for TWLO’s fourth-quarter earnings is pegged at 57 cents per share, suggesting an increase of 159% from the year-ago quarter’s earnings. Twilio’s quarterly revenues are estimated to increase 1.53% year over year to $1.04 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.