Matthew Prince, co-founder and CEO of Cloudflare Inc., during the Fortune Brainstorm AI conference in San Francisco, California, USA, on Monday, December 11, 2023. The conference brings together leaders in machine learning and artificial intelligence to evaluate the industry and examine new business cases for AI. Photographer: David Paul Morris/Bloomberg via Getty Images
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cloud flare Shares rose 21% in extended trading Thursday after the web security and content delivery network provider issued quarterly results and guidance that came in stronger than analysts had projected.
Here’s how the company fared, compared to estimates from analysts surveyed by LSEG, formerly known as Refinitiv:
- Earnings per share: 15 cents, adjusted, versus 12 cents expected
- Revenue: $362.5 million, compared to the expected $353.1 million
Cloudflare’s revenue increased about 32%, in line with third-quarter growth, 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 same quarter a year earlier.
Matthew Prince, co-founder and CEO of Cloudflare, said in the release that Cloudflare signed its largest new customer deal and largest renewal to date during the quarter, resulting in the highest annual contract value in corporate history. In a conference call with analysts, Prince mentioned business from the U.S. Department of Commerce.
Cloudflare is working to provide 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, more than its internal goal of 100, Prince said.
“By the end of 2024, we plan to have inferences on GPUs deployed in nearly every city that makes up Cloudflare’s global network and within milliseconds of nearly every Internet-connected device around the world,” Prince said. The network had a presence in more than 310 cities as of December 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 previously was CEO of Alterix, 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 chief operating officer Michelle Zatlyn weren’t going anywhere.
Regarding 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 expected 12 cents per share in adjusted earnings and revenue of $372.3 million.
For all of 2024, Cloudflare’s earnings outlook was above consensus, but the middle of the revenue range fell slightly short. The company forecasts between 58 cents and 59 cents in adjusted earnings per share and revenue of $1.648 billion to $1.652 billion. Analysts surveyed by LSEG expected 56 cents in adjusted earnings per share and $1.652 billion in revenue.
Excluding the after-hours move, Cloudflare shares are up about 8% so far this year, while the S&P 500 has gained about 5% over the same period.
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