Cloudflare shares jump after upbeat first-quarter forecasts

By Thomson Reuters Feb 8, 2024 | 4:21 PM

(Reuters) – Cloudflare forecast its first-quarter revenue and profit above market estimates on Thursday, betting on strong demand for its cloud and content delivery services, sending its shares up 24% in extended trading.

Demand for cloud and cybersecurity services has jumped in recent months as enterprises aggressively navigate to digitize their operations for faster and easier automated workflows.

Cloudflare expects its first-quarter revenue to be between $372.5 million and $373.5 million, compared with LSEG estimates of $372.3 million.

It also forecast adjusted earnings at 13 cents per share, versus analysts’ expectations of 12 cents.

The company offers a suite of website and application services products including content delivery network services and relies heavily on client retention to drive its topline growth.

CEO Matthew Prince said Cloudflare signed both its largest new customer win and customer renewal in the fourth quarter.

The company’s fourth-quarter revenue jumped 32% to $362.5 million. Analysts on average expected $353.1 million, according to LSEG data.

Its adjusted earnings per share came at 15 cents, above analysts’ expectations of 12 cents.

Earlier this month, Cloudflare had said an advanced group of hackers tried to burrow deep into its global network late last year, but was thwarted. The operational impact of the intrusion was “extremely limited”, the company had then said.

(Reporting by Yamini Kalia in Bengaluru; Editing by Shilpi Majumdar)