Shares in Cloudflare soared after the company reported fourth quarter earnings and revenue that topped Wall Street targets while 2024 profit guidance for NET stock came in above expectations amid gains in the cybersecurity market.
Cloudflare reported Q4 results after the market close on Thursday.
Started in 2009, Cloudflare works to speed up and provide security for web applications routed through its intelligent global network. The company has added web infrastructure to handle fast emerging generative artificial intelligence apps.
"We believe the company has moved past prior execution issues and is gaining traction more quickly than anticipated in the zero trust and SASE cybersecurity markets," said William Blair analyst Jonathan Ho in a report. "We believe significant trends in cybersecurity, AI, and edge compute could be meaningful drivers for future growth as Cloudflare has positioned itself as a key enabler."
Secure Access Service Edge, or SASE, offers a fast and cost-effective way of securing an organization's branch offices and remote workers.
NET Stock: Q4 Results
For the quarter that ended Dec. 31, Cloudflare earnings were 15 cents a share, up 166% from 6 cents a year earlier. Revenue climbed 32% to $362.5 million, the San Francisco-based company said.
Analysts predicted adjusted profit of 12 cents a share and revenue of $353 million.
"We had an exceptionally strong fourth quarter," said Chief Executive Matthew Prince, in a news release. "We grew revenue by 32% year-over-year to $362.5 million, blew away our previous records for new ACV (annual contract value) — delivering the highest quarterly growth since 2021 — and signed both our largest new customer win and largest customer renewal ever."
On the stock market today, Cloudflare stock soared over 23% to 111.48 in early trading. NET stock had climbed 43% over the past year heading into the Cloudflare earnings report.
Cloudflare Stock: 2024 Profit Guidance
For full-year 2024, Cloudflare projected earnings per share in a range of 58 cents to 59 cents. The company expects revenue of $1.65 billion at the midpoint.
Analysts had projected adjusted earnings of 54 cents on revenue of $1.65 billion.
Cloudflare and rival Akamai Technologies are racing to deploy network gear that supports edge computing — extending cloud services closer to where data is generated. In late September, Cloudflare announced its "Workers AI" platform and partnerships with Microsoft, privately-held Databricks and Hugging Face.
In addition, Cloudflare stock owns a Relative Strength Rating of 93 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
