in 2022 Cloudflare’s Q2 income rose sharply

in 2019 December 12 Matthew Prince, founder and CEO of Cloudflare, speaks on stage at TechCrunch Disrupt Berlin in Berlin, Germany.

Noam Galai | Getty Images Entertainment | Getty Images

Cloudflare shares jumped as much as 27% on Friday, after the content distribution network and security provider announced second-quarter results and full-year guidance that beat analysts’ estimates.

Revenues increased by 54% compared to the previous year, to 234.5 million. USD, maintaining the growth rate from three months ago, despite a slowdown in other parts of the tech industry. According to Refinitiv, analysts were expecting 227.3 million.

The company said it had attracted a record number of customers paying more than $100,000 a year, and management raised its forecast for 2022, calling for growth of around 48%.

“In the first quarter, our pipeline generation slowed, sales cycles lengthened and customers took longer to pay their bills,” Cloudflare CEO Matthew Prince told analysts. “We’ve been watching those metrics closely in the second quarter and we’ve seen them all at least stabilize. They’re not where we’re parading yet, but the metrics are trending in the right direction.”

Several analysts raised their price targets on the stock as a result of these results. Analysts at RBC raised their target, writing in a note to clients that while no company is recession-proof, Cloudflare is better prepared than others to withstand economic pressures.

Cloudflare is one of several cloud software companies showing increased appeal to investors who pulled out of the sector in the first half of the year. Together with Cloudflare Paylocity and ZoomInfo in August also increased by more than 25 percent.

Analysts polled by FactSet now have an average price target of about $92 per share. That’s well below Cloudflare’s record high of $217.25 from November, but up from its current price of around $73.

Not all analysts are so bullish. Analysts at Citigroup maintained their hold rating and said the stock was “much more demanding at the valuation level compared to our profitable hyper-growth names.” CrowdStrike, Atlassian and Datadog.

Even with the increase in revenue, Cloudflare’s net loss widened to nearly $64 million. USD compared to USD 35 million. USD a quarter of a year ago. Prince said the company has changed its “go-to-market message” during the downturn and aims to help customers save money and consolidate “the costs of multiple point solution vendors for the broad Cloudflare platform.”

WATCH: Cybersecurity is recession-proof, says Truist’s Joel Fishbein

Leave a Comment