Cloudflare Stock Jumps As Large Customer Growth Fuels Beat

Cloudflare stock jumped Friday as June-quarter earnings and revenue topped estimates amid strong large customer growth.


San Francisco-based Cloudflare (NET) reported second-quarter earnings after the market close on Thursday. Cloudflare stock soared 25.2% to 73.23 in morning trading on the stock market today.

Heading into the Cloudflare earnings report, the stock had retreated 55% in 2022.

“NET delivered a strong Q2, highlighted by 54% revenue growth, higher 2022 revenue guidance, and continued expectations for positive free cash flow in the second half of 2022,” Cowen analyst Shaul Eyal said in note to clients.

NET Stock: Seven Quarters Of 50%-Plus Sales Growth

The company said it had zero profit on an adjusted basis vs. a 2-cent loss in the year-earlier period. Revenue for the provider of cloud-based networking and cybersecurity services jumped 54% to $234.5 million.

Analysts expected Cloudflare to report a 1-cent loss on revenue of $227.3 million.

Cloudflare posted 50%-plus revenue growth for the seventh straight quarter, Cloudflare stock analyst Tim Horan of Oppenheimer noted in his report to clients.

“Q2 operating free cash flow was negative $22 million, but management emphasized positive (free cash flow) during second half 2022 and beyond, a major change in tone,” Horan said.

Cloudflare Large Customers Added

Cloudflare added 212 new customers that will spend more than $100,000 annually, up 48% year-over-year, bringing its total to 1,749.

Management raised the 2022 revenue guidance to a range of $968 million to $972 million, up about 48% year-over-year, up from a prior range of $955 million to $959 million.

Started in 2009, Cloudflare speeds up and provides security for web applications routed through its intelligent global network. In addition, the company competes in both corporate and consumer markets.

Cloudflare stock owned a Relative Strength Rating of 8 out of a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


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