Shares of Cloudflare (NET), a firm that provides cybersecurity, performance optimization, and content delivery services, surged in after-hours trading after it reported Q2-2024 earnings. EPS came in at $0.20, which beat analysts’ consensus estimate of $0.14 per share and was 100% higher than last year’s figure of $0.10. Sales increased by 30% year-over-year, with revenue hitting $401 million. This also beat analysts’ expectations of $394.1 million.
It’s a common occurrence for NET to beat EPS estimates, as you can see below, with the company beating estimates almost every time.
The company’s gross profit rose significantly, with a GAAP gross profit of $312.0 million, or a 77.8% gross margin, compared to $233.3 million, or 75.6%, in Q2 2023. On a non-GAAP basis, gross profit reached $316.6 million, reflecting a 79.0% gross margin (up from 77.7%).
Additionally, Cloudflare’s operating income saw impressive progress. GAAP loss from operations narrowed to $34.7 million, and non-GAAP income from operations surged to $57.0 million, representing 14.2% of revenue, up from 6.6% last year. Further, net cash flow from operations increased to $74.8 million, with free cash flow climbing to $38.3 million, or 10% of revenue, from $20.0 million in the previous year.
Cloudflare’s Guidance
The company anticipates next quarter’s revenue to be approximately $423.5 million, aligning with analysts’ projections. For Fiscal 2024, Cloudflare expects total revenue to range between $1.657 billion and $1.659 billion, with non-GAAP net income per share projected at $0.70 to $0.71.
Is NET Stock a Buy, According to Analysts?
On TipRanks, NET stock comes in as a Moderate Buy based on 12 Buys, 13 Holds, and two Sell ratings assigned in the past three months. The average Cloudflare stock price target of $92.96 implies 24.95% upside potential.
