Cloudflare (NET) Reports Earnings Tomorrow. What To Expect

Petr Huřťák /
2023/02/08 4:14 am EST

Internet security and content delivery network Cloudflare (NYSE:NET) will be reporting earnings tomorrow after the bell. Here's what to look for.

Last quarter Cloudflare reported revenues of $253.9 million, up 47.3% year on year, beating analyst revenue expectations by 1.6%. It was a decent quarter for the company, with exceptional revenue growth.

Is Cloudflare buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Cloudflare's revenue to grow 41.6% year on year to $274.2 million, slowing down from the 53.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share.

Cloudflare Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 4.09%.

Looking at Cloudflare's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. F5 Networks delivered top-line growth of 1.93% year on year, missing analyst estimates by 0.05% and New Relic reported revenues up 17.8% year on year, exceeding estimates by 2.94%. F5 Networks traded up 1.46% on the results, and New Relic was flat on the results. Read our full analysis of F5 Networks's results here and New Relic's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 25.4% over the last month. Cloudflare is up 46.4% during the same time, and is heading into the earnings with analyst price target of $59.8, compared to share price of $59.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.