Cloudflare Inc. underwent an 8% surge in its stock during Thursday’s regular trading session, and the company is set for additional substantial gains after surpassing expectations in its latest financial results.
In the extended session on Thursday, the stock skyrocketed by 24%, driven by what Cloudflare described as “exceptionally strong” results for the December period.
For the fourth quarter, the cybersecurity and software company reported a net loss of $27.9 million, or 8 cents per share, which marks a significant improvement from the year-ago period when it recorded a loss of $45.9 million, or 14 cents per share.
On an adjusted basis, Cloudflare’s earnings reached 15 cents per share, compared to 6 cents per share in the corresponding period a year earlier. Analysts surveyed by FactSet had predicted earnings of 12 cents per share.
The company’s revenue for the quarter increased by 32% to $363 million, surpassing analysts’ expectations of $353 million.
Cloudflare experienced notable enhancements in pipeline close rates, sales-force productivity, and average deal size on a sequential basis, as highlighted by Chief Executive Matthew Prince.
He pointed out that the business’s strength was propelled by momentum with large customers, progress in the public sector, and growth in Cloudflare One.
Despite macroeconomic uncertainties, Prince emphasized that the company’s business operations were efficient, with customers maintaining their spending levels.
Piper Sandler analyst James Fish expressed a positive view of the report, highlighting Cloudflare’s outperformance on remaining performance obligations (RPO) and traction on non-RPO metrics.
Despite acknowledging the favorable aspects of the report and the company’s recent execution, Fish maintained a neutral stance on the stock, preferring to wait for a more attractive entry point.
Cloudflare’s outlook for the current quarter includes revenue projections of $372.5 million to $373.5 million, along with adjusted earnings per share of 13 cents.
This outlook surpassed the FactSet consensus, which had anticipated $372 million in revenue and 12 cents per share. Looking forward to the full year, Cloudflare expects revenue in the range of $1.648 billion to $1.652 billion, with adjusted earnings per share between 58 cents and 59 cents.
Once again, this outlook exceeded the FactSet consensus, which had predicted $1.65 billion in revenue and 54 cents in adjusted earnings per share. The company’s strong performance and optimistic outlook have positioned it for further market success in the upcoming quarters.
