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Cloudflare (NET) Q1 Earnings and Revenues Surpass Estimates
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Cloudflare (NET - Free Report) reported first-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate and improved year over year.
Cloudflare reported non-GAAP earnings of 16 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line also witnessed a robust surge of 100% from the year-ago quarter’s level of 8 cents.
NET’s first-quarter revenues of $378.6 million outpaced the consensus estimate of $372.93 million. The top line grew 30.5% from the year-ago reported figure of $290.2 million.
The robust top-line growth was aided by client wins and growing momentum among large enterprise customers, driven by the heightened need for stronger security and a zero-trust approach.
Cloudflare, Inc. Price, Consensus and EPS Surprise
The company’s strong performance reflects its sustained focus on product innovation, a shift in its business model to subscription-based services, product development and continued investments in infrastructure expansion.
Region-wise, the United States accounted for 52% of NET’s total revenues while revenues from outside the United States made up the remaining 48%.
Cloudflare continued to win multiple customers in the first quarter. Its net dollar-based retention rate was 115%.
The company had 197,138 paying customers during the first quarter. The figure, which is the highest so far, rose 17% year over year.
NET added 122 new customers who contributed more than $100,000 in annual revenues. The total count of such customers reached 2,878 at the end of the quarter.
Operating Details
Cloudflare’s non-GAAP gross profit increased 33.3% year over year to $301 million. The non-GAAP gross margin expanded 170 basis points (bps) year over year to 79.5%.
Non-GAAP operating expenses climbed 25.3% year over year to $258.6 million. As a percentage of revenues, non-GAAP operating expenses declined to 68.3% from the year-ago quarter’s 71.2%.
Non-GAAP operating income for the quarter jumped to $42.4 million from $19.4 million in the year-ago quarter. Consequently, the non-GAAP operating margin expanded 470 bps year over year to 11.2%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Cloudflare had cash, cash equivalents and available-for-sale securities of $1.71 billion, up from $1.67 billion as of Dec 31, 2023.
NET generated an operating cash flow of $73.6 million and a free cash flow of $35.6 million. As of Mar 31, 2024, the company had long-term operating lease liabilities of $113 million.
Guidance Update
Cloudflare initiated guidance for the second quarter and full-year 2024. For the second quarter, the company expects its revenues to be in the range of $393.5-$394.5 million. It expects non-GAAP income from operations in the band of $35-$36 million and non-GAAP net income per share of 14 cents.
For 2024, NET still anticipates its top line to be in the range of $1.648-$1.652 billion. The company now expects non-GAAP income from operations in the range of $160-$164 million as compared with the previous guidance range of $154-$158 million. It has also revised its guidance for non-GAAP net income per share to 60-61 cents from the previous projection of 58-59 cents.
Zacks Rank and Stocks to Consider
Cloudflare carries a Zacks Rank #3 (Hold) at present. Shares of the company have risen 119.8% in the past year.
The Zacks Consensus Estimate for ANET's 2024 earnings per share has been revised upward 3 cents to $7.49 in the past 30 days. Shares of the company have rallied 93.5% in the past year.
The consensus estimate for CXDO’s 2024 earnings per share has moved north 6 cents to 23 cents in the past 60 days. Shares of the company have skyrocketed 197.4% in the past year.
The Zacks Consensus Estimate for DELL’s 2024 earnings per share has moved north 17 cents to $7.64 in the past 60 days. Shares of the company have surged 179.3% in the past year.
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Cloudflare (NET) Q1 Earnings and Revenues Surpass Estimates
Cloudflare (NET - Free Report) reported first-quarter 2024 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate and improved year over year.
Cloudflare reported non-GAAP earnings of 16 cents per share, which beat the Zacks Consensus Estimate of 13 cents. The bottom line also witnessed a robust surge of 100% from the year-ago quarter’s level of 8 cents.
NET’s first-quarter revenues of $378.6 million outpaced the consensus estimate of $372.93 million. The top line grew 30.5% from the year-ago reported figure of $290.2 million.
The robust top-line growth was aided by client wins and growing momentum among large enterprise customers, driven by the heightened need for stronger security and a zero-trust approach.
Cloudflare, Inc. Price, Consensus and EPS Surprise
Cloudflare, Inc. price-consensus-eps-surprise-chart | Cloudflare, Inc. Quote
Key Metrics
The company’s strong performance reflects its sustained focus on product innovation, a shift in its business model to subscription-based services, product development and continued investments in infrastructure expansion.
Region-wise, the United States accounted for 52% of NET’s total revenues while revenues from outside the United States made up the remaining 48%.
Cloudflare continued to win multiple customers in the first quarter. Its net dollar-based retention rate was 115%.
The company had 197,138 paying customers during the first quarter. The figure, which is the highest so far, rose 17% year over year.
NET added 122 new customers who contributed more than $100,000 in annual revenues. The total count of such customers reached 2,878 at the end of the quarter.
Operating Details
Cloudflare’s non-GAAP gross profit increased 33.3% year over year to $301 million. The non-GAAP gross margin expanded 170 basis points (bps) year over year to 79.5%.
Non-GAAP operating expenses climbed 25.3% year over year to $258.6 million. As a percentage of revenues, non-GAAP operating expenses declined to 68.3% from the year-ago quarter’s 71.2%.
Non-GAAP operating income for the quarter jumped to $42.4 million from $19.4 million in the year-ago quarter. Consequently, the non-GAAP operating margin expanded 470 bps year over year to 11.2%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Cloudflare had cash, cash equivalents and available-for-sale securities of $1.71 billion, up from $1.67 billion as of Dec 31, 2023.
NET generated an operating cash flow of $73.6 million and a free cash flow of $35.6 million. As of Mar 31, 2024, the company had long-term operating lease liabilities of $113 million.
Guidance Update
Cloudflare initiated guidance for the second quarter and full-year 2024. For the second quarter, the company expects its revenues to be in the range of $393.5-$394.5 million. It expects non-GAAP income from operations in the band of $35-$36 million and non-GAAP net income per share of 14 cents.
For 2024, NET still anticipates its top line to be in the range of $1.648-$1.652 billion. The company now expects non-GAAP income from operations in the range of $160-$164 million as compared with the previous guidance range of $154-$158 million. It has also revised its guidance for non-GAAP net income per share to 60-61 cents from the previous projection of 58-59 cents.
Zacks Rank and Stocks to Consider
Cloudflare carries a Zacks Rank #3 (Hold) at present. Shares of the company have risen 119.8% in the past year.
Some better-ranked stocks from the broader technology sector are Arista Networks (ANET - Free Report) , Crexendo (CXDO - Free Report) and Dell Technologies (DELL - Free Report) . While CXDO sports a Zacks Rank #1 (Strong Buy), DELL and ANET carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANET's 2024 earnings per share has been revised upward 3 cents to $7.49 in the past 30 days. Shares of the company have rallied 93.5% in the past year.
The consensus estimate for CXDO’s 2024 earnings per share has moved north 6 cents to 23 cents in the past 60 days. Shares of the company have skyrocketed 197.4% in the past year.
The Zacks Consensus Estimate for DELL’s 2024 earnings per share has moved north 17 cents to $7.64 in the past 60 days. Shares of the company have surged 179.3% in the past year.