Matthew Prince, co-founder and chief executive officer of Cloudflare Inc., during the Fortune Brainstorm AI conference in San Francisco, California, US, on Monday, Dec. 11, 2023. The conference gathers leaders in machine learning and artificial intelligence to assess the industry and examine new business cases for AI. Photographer: David Paul Morris/Bloomberg via Getty Images
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Cloudflare shares rose 21% in extended trading on Thursday after the web security and content distribution network provider issued results and quarterly guidance that proved more robust than analysts had projected.
Here’s how the company did, in comparison with estimates from analysts polled by LSEG, formerly known as Refinitiv:
- Earnings per share: 15 cents, adjusted, vs. 12 cents expected
- Revenue: $362.5 million, vs. $353.1 million expected
Cloudflare’s revenue rose about 32%, consistent with growth in the third quarter, according to a statement. The company’s net loss of $27.9 million, or 8 cents per share, narrowed from $45.9 million in the year-ago quarter.
Matthew Prince, Cloudflare’s co-founder and CEO, said in the statement that Cloudflare signed its largest new customer deal and biggest renewal to date during the quarter, resulting in the highest annual contract value in corporate history. On a conference call with analysts, Prince mentioned business from the U.S. Commerce Department.
Cloudflare is working to supply software developers with graphics processing units that they can use for artificial intelligence. The company had installed GPUs in 120 cities by the end of 2023, higher than an internal target of 100, Prince said.
“By the end of 2024, we plan to have inference to GPUs deployed in nearly every city that makes up Cloudflare’s global network and within milliseconds of nearly every device connected to the Internet worldwide,” Prince said. The network had presence in over 310 cities as of Dec. 31.
The company also wants to grow by selling security services to companies and government agencies. Cyberattacks have become more common since Hamas carried out a terrorist attack in Israel in October, Prince said.
Also on Thursday, Cloudflare said Mark Anderson, a board member who was formerly CEO of Alteryx, has joined Cloudflare as president, replacing Marc Boroditsky. Private equity firms Clearlake Capital Group and Insight Partners announced in December that they would acquire Alteryx for $4.4 billion. Prince said he and co-founder and operating chief Michelle Zatlyn wouldn’t be going anywhere.
With respect to guidance, Cloudflare called for 13 cents in adjusted net earnings per share on $372.5 million to $373.5 million in revenue in the first quarter. Analysts surveyed by LSEG had expected 12 cents per share in adjusted earnings and revenue of $372.3 million.
For all of 2024, Cloudflare’s earnings outlook was higher than consensus, but the middle of the revenue range missed slightly. The company sees 58 cents to 59 cents in adjusted earnings per share and revenue from $1.648 billion to $1.652 billion. Analysts polled by LSEG were looking for 56 cents in adjusted earnings per share and $1.652 billion in revenue.
Excluding the after-hours move, Cloudflare stock is up about 8% so far this year, while the S&P 500 has gained about 5% during the same period.
WATCH: A.I. is a trend that will stick with us for quite some time, says CloudFlare CEO Matthew Prince
