We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cloudflare (NET) Soars 10% on Q2 Earnings Beat, Raised Guidance
Read MoreHide Full Article
Cloudflare, Inc. (NET - Free Report) shares gained more than 10% during Thursday’s extended trading session after the company reported better-than-expected second-quarter results and raised guidance for full-year 2024. The connectivity cloud services provider’s second-quarter revenues and earnings marked significant year-over-year improvement as well.
Cloudflare reported non-GAAP earnings of 20 cents per share, which beat the Zacks Consensus Estimate of 14 cents. The bottom line also witnessed a robust surge of 100% from the year-ago quarter’s level of 10 cents.
NET’s second-quarter revenues of $401 million outpaced the consensus estimate of $394 million. The top line grew 30% from the year-ago reported figure of $308.5 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 51% of NET’s total revenues, while revenues from outside the United States made up the remaining 49%.
Cloudflare continued to win multiple customers in the first quarter. Its net dollar-based retention rate was 112%.
The company had 210,200 paying customers during the first quarter. The figure, which is the highest so far, rose 21% year over year.
NET added 168 new customers who contributed more than $100,000 in annual revenues. The total count of such customers reached 3,050 at the end of the quarter.
Operating Details
Cloudflare’s non-GAAP gross profit increased 32% year over year to $316.6 million. The non-GAAP gross margin expanded 130 basis points (bps) year over year to 79%.
Non-GAAP operating expenses climbed 18.4% year over year to $259.7 million. As a percentage of revenues, non-GAAP operating expenses declined to 64.7% from the year-ago quarter’s 71.1%.
Non-GAAP operating income for the quarter jumped to $57 million from $20.3 million in the year-ago quarter. Consequently, the non-GAAP operating margin expanded 760 bps year over year to 14.2%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Cloudflare had cash, cash equivalents and available-for-sale securities of $1.76 billion, up from $1.71 billion as of Mar 31, 2024.
NET generated an operating cash flow of $74.8 million and a free cash flow of $38.3 million. As of Jun 30, 2024, the company had long-term operating lease liabilities of $112.5 million.
FY24 Guidance Raised
Buoyed by stronger-than-expected second-quarter performance, Cloudflare raised its guidance for full-year 2024. It now anticipates revenues in the range of $1.657-$1.659 billion, up from the previous guidance of $1.648-$1.652 billion. The Zacks Consensus Estimate for 2024 revenues is pegged at $1.65 billion, indicating year-over-year growth of 27.3%.
Cloudflare now expects non-GAAP income from operations in the range of $196-$198 million compared with the previous guidance range of $160-$164 million. It has also revised its non-GAAP net income per share guidance to 70-71 cents from the previous projection of 60-61 cents. The consensus mark for earnings is currently pegged at 62 cents per share, indicating an increase of 26.5% from 2023 earnings of 49 cents.
Additionally, Cloudflare initiated guidance for the third quarter. For the third quarter, the company expects its revenues to be in the range of $423-$424 million. It expects non-GAAP income from operations in the band of $50-$51 million and non-GAAP net income per share of 18 cents. The Zacks Consensus Estimate for third-quarter revenues and earnings currently stands at $423.6 million and 15 cents per share, respectively.
Zacks Rank & Stocks to Consider
Cloudflare currently carries a Zacks Rank #3 (Hold). Shares of NET have declined 10.6% year to date (YTD).
The consensus mark for Twilio’s 2024 earnings has been revised upward by 2 cents to $3.12 per share over the past 30 days, which indicates a 27.4% increase from 2023. The stock has plunged 25.8% YTD.
The Zacks Consensus Estimate for PayPal’s 2024 earnings has been revised upward by 12 cents to $4.28 per share in the past seven days, which suggests a year-over-year decline of 16.1%. The stock has risen 6.4% YTD.
The Zacks Consensus Estimate for AppFolio’s 2024 earnings has been revised upward by 16 cents to $4.14 per share in the past seven days, which implies an increase of 142.1% on a year-over-year basis. Shares of APPF have jumped 24.5% YTD.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Cloudflare (NET) Soars 10% on Q2 Earnings Beat, Raised Guidance
Cloudflare, Inc. (NET - Free Report) shares gained more than 10% during Thursday’s extended trading session after the company reported better-than-expected second-quarter results and raised guidance for full-year 2024. The connectivity cloud services provider’s second-quarter revenues and earnings marked significant year-over-year improvement as well.
Cloudflare reported non-GAAP earnings of 20 cents per share, which beat the Zacks Consensus Estimate of 14 cents. The bottom line also witnessed a robust surge of 100% from the year-ago quarter’s level of 10 cents.
NET’s second-quarter revenues of $401 million outpaced the consensus estimate of $394 million. The top line grew 30% from the year-ago reported figure of $308.5 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 51% of NET’s total revenues, while revenues from outside the United States made up the remaining 49%.
Cloudflare continued to win multiple customers in the first quarter. Its net dollar-based retention rate was 112%.
The company had 210,200 paying customers during the first quarter. The figure, which is the highest so far, rose 21% year over year.
NET added 168 new customers who contributed more than $100,000 in annual revenues. The total count of such customers reached 3,050 at the end of the quarter.
Operating Details
Cloudflare’s non-GAAP gross profit increased 32% year over year to $316.6 million. The non-GAAP gross margin expanded 130 basis points (bps) year over year to 79%.
Non-GAAP operating expenses climbed 18.4% year over year to $259.7 million. As a percentage of revenues, non-GAAP operating expenses declined to 64.7% from the year-ago quarter’s 71.1%.
Non-GAAP operating income for the quarter jumped to $57 million from $20.3 million in the year-ago quarter. Consequently, the non-GAAP operating margin expanded 760 bps year over year to 14.2%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Cloudflare had cash, cash equivalents and available-for-sale securities of $1.76 billion, up from $1.71 billion as of Mar 31, 2024.
NET generated an operating cash flow of $74.8 million and a free cash flow of $38.3 million. As of Jun 30, 2024, the company had long-term operating lease liabilities of $112.5 million.
FY24 Guidance Raised
Buoyed by stronger-than-expected second-quarter performance, Cloudflare raised its guidance for full-year 2024. It now anticipates revenues in the range of $1.657-$1.659 billion, up from the previous guidance of $1.648-$1.652 billion. The Zacks Consensus Estimate for 2024 revenues is pegged at $1.65 billion, indicating year-over-year growth of 27.3%.
Cloudflare now expects non-GAAP income from operations in the range of $196-$198 million compared with the previous guidance range of $160-$164 million. It has also revised its non-GAAP net income per share guidance to 70-71 cents from the previous projection of 60-61 cents. The consensus mark for earnings is currently pegged at 62 cents per share, indicating an increase of 26.5% from 2023 earnings of 49 cents.
Additionally, Cloudflare initiated guidance for the third quarter. For the third quarter, the company expects its revenues to be in the range of $423-$424 million. It expects non-GAAP income from operations in the band of $50-$51 million and non-GAAP net income per share of 18 cents. The Zacks Consensus Estimate for third-quarter revenues and earnings currently stands at $423.6 million and 15 cents per share, respectively.
Zacks Rank & Stocks to Consider
Cloudflare currently carries a Zacks Rank #3 (Hold). Shares of NET have declined 10.6% year to date (YTD).
Some better-ranked stocks worth considering in the broader technology sector are Twilio (TWLO - Free Report) , PayPal (PYPL - Free Report) and AppFolio (APPF - Free Report) . Currently, Twilio and PayPal each sport a Zacks Rank #1 (Strong Buy), while AppFolio carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Twilio’s 2024 earnings has been revised upward by 2 cents to $3.12 per share over the past 30 days, which indicates a 27.4% increase from 2023. The stock has plunged 25.8% YTD.
The Zacks Consensus Estimate for PayPal’s 2024 earnings has been revised upward by 12 cents to $4.28 per share in the past seven days, which suggests a year-over-year decline of 16.1%. The stock has risen 6.4% YTD.
The Zacks Consensus Estimate for AppFolio’s 2024 earnings has been revised upward by 16 cents to $4.14 per share in the past seven days, which implies an increase of 142.1% on a year-over-year basis. Shares of APPF have jumped 24.5% YTD.