Cloudflare shares rose on Friday after June quarter earnings and revenue beat estimates amid strong customer growth.
Based in San Francisco Cloudflare (NET) reported second-quarter earnings after the market closed Thursday. Cloudflare shares soared 27.1% to close at 74.24 on the stock market today.
In Cloudflare’s earnings report, the stock had retreated 55% in 2022.
“NET delivered a strong 2Q, highlighted by 54% revenue growth, higher revenue guidance for 2022 and continued expectations of positive free cash flow in the second half of 2022,” said Cowen analyst Shaul Eyal in a note to clients.
NET Stock: Seven quarters of over 50% sales growth
The company said it had zero profit on an adjusted basis versus a loss of 2 cents in the year-ago period. Revenue at the provider of cloud-based cybersecurity and networking services rose 54% to $234.5 million.
Analysts had expected Cloudflare to report a loss of 1 cent on revenue of $227.3 million.
Cloudflare reported revenue growth of more than 50% for the seventh consecutive quarter, Cloudflare equity analyst Tim Horan of Oppenheimer noted in his report to clients.
“Second quarter operating free cash flow was negative $22 million, but management emphasized positive (free cash flow) in the second half of 2022 and beyond, a significant change in tone,” Horan said.
Large Cloudflare clients have been added
Cloudflare added 212 new customers who will spend more than $100,000 annually, up 48% from last year, bringing the total to 1,749.
Management raised 2022 revenue guidance to a range of $968 million to $972 million, an increase of 48% year-over-year, from a previous range of $955 million to $959 million .
Started in 2009, Cloudflare accelerates and provides security for web applications routed through its intelligent global network. In addition, the company competes in both the corporate and consumer markets.
Cloudflare’s stock had a relative strength rating of 8 out of 99, based on best possible. IBD Stock Review.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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