Cloudflare reported third-quarter earnings and revenue that topped Wall Street targets. The company's revenue outlook for NET stock came in below views. Cloudflare stock initially fell, then reversed up on Friday as the company touted its strategy for artificial intelligence-based services.
Released after the market open on Thursday, Cloudflare earnings for the quarter ending Sept. 30 were 16 cents a share, up 166% from 6 cents a year earlier.
Revenue climbed 32% to $335.6 million, the San Francisco-based company said.
Analysts predicted profit of 10 cents a share and revenue of $330.5 million.
NET Stock: Guidance Misses
On the stock market today, Cloudflare stock popped 13.9% to close at 64.42.
In Q3, Cloudflare said it added 206 new large customers that spend more than $100,000 annually. It ended the quarter with 2,558 large customers, up 34% from a year earlier.
For the current quarter ending in December, Cloudflare projected earnings per share of 12 cents at the midpoint of its outlook vs. estimates of 10 cents. But Cloudflare said it expects revenue of $352.5 million at the midpoint of guidance, below estimates of $356.3 million.
"Cloudflare delivered a solid quarter, beating expectations on revenue, billings and pro forma EPS, as the company saw strong productivity from its replacement sales cohort start to take shape," said William Blair analyst Jonathan Ho in a report.
He added: "At the same time, the stock looks to be trading lower, as the company did not raise its outlook above the out-performance this quarter. (It) maintained a conservative view given geopolitical uncertainty and the time required for new pipeline to translate into sales."
Started in 2009, Cloudflare works to speed up and provide security for web applications routed through its intelligent global network.
Heading into the Cloudflare earnings report, the stock had advanced 26% in 2023.
In addition, Cloudflare stock owns a Relative Strength Rating of 78 out of a best-possible 99, according to IBD Stock Checkup.
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