Companies /Technology

Cloudflare Inc - Class A

NYSE: NET Software - Infrastructure
$299.84
▼ $8.39 (−2.72%) today
Markets closed · 8:06pm ET

Q3 2024 Earnings

Reported Nov 7, 2024, 4:17pm ET · SEC source
$0.20
Beat +11.11%
EPS · est. $0.18
$430.1M
Beat +1.41%
Revenue · est. $424.1M
+23.9%
Beating market
NET vs S&P since report
5 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
0+5%+10%+15%Nov 7Nov 8report 4:17pm ETearnings+0.3%+7.2%
0+5%+10%+15%Nov 7Nov 8earnings+0.3%+7.2%
NET +7.2%S&P 500 +0.3%
0+5%+10%+15%Nov 7Nov 8report 4:17pm ETearnings+0.0%+7.2%
0+5%+10%+15%Nov 7Nov 8earnings+0.0%+7.2%
NET +7.2%NASDAQ +0.0%
0+4%+8%+12%Nov 6Nov 15report 4:17pm ETearnings−1.7%+1.7%
0+4%+8%+12%Nov 6Nov 15earnings−1.7%+1.7%
NET +1.7%S&P 500 −1.7%
0+5%+10%Nov 6Nov 15report 4:17pm ETearnings−3.3%+1.7%
0+5%+10%Nov 6Nov 15earnings−3.3%+1.7%
NET +1.7%NASDAQ −3.3%
−4.61%
Day of report
+2.17%
Next session
−1.62%
One week
+25.49%
30 days

S&P 500 over the same 30 days: +1.55%.

Did NET Beat Earnings? Q3 2024 Results

Cloudflare posted a clean beat across the board in Q3 2024, with revenue climbing 28.1% year-over-year to $430.08 million against a consensus estimate of $424.12 million, while non-GAAP EPS of $0.20 topped the $0.18 estimate by 11.11%, underscoring the network security company's ability to scale efficiently even as it invests aggressively in growth. The quarter's standout driver was a record addition of 219 large customers, pushing Fortune 500 penetration among paying clients to 35% and signaling that enterprise adoption of Cloudflare's platform is broadening meaningfully. Non-GAAP operating margin expanded to 14.8% from 12.7% a year earlier, while free cash flow reached $45.28 million, reflecting improving operational leverage. That momentum was tempered somewhat by lengthening sales cycles and constrained capacity in North America, pressures management expects to ease by Q1 2025. Looking ahead, Cloudflare guided Q4 revenue to $451.00 to $452.00 million and full-year 2024 revenue to approximately $1.66 billion, with non-GAAP EPS of $0.74 for the year.

Key Takeaways
  • 28% year-over-year revenue growth
  • Record 219 large customers added in Q3
  • 35% of Fortune 500 are now paying Cloudflare customers
  • Go-to-market organization transformation reaching key inflection point
  • Non-GAAP operating margin expansion to 14.8% from 12.7% year-over-year
  • Operating cash flow increased to 24% of revenue from 20% year-over-year

“I am pleased with our results for the third quarter—exceeding expectations for revenue, operating margin, and free cash flow while also reaching a key inflection point in the transformation of our go-to-market organization. In addition, we added a record 219 large customers and achieved a new milestone—35% of the Fortune 500 are now paying Cloudflare customers.”

Cloudflare CEO, on the earnings call

Forward Guidance & Outlook

For Q4 2024, Cloudflare expects revenue of $451.0–$452.0 million, non-GAAP operating income of $57.0–$58.0 million, and non-GAAP EPS of $0.18 on approximately 360 million diluted shares. For the full year 2024, the company expects revenue of $1,661.0–$1,662.0 million, non-GAAP operating income of $220.0–$221.0 million, and non-GAAP EPS of $0.74 on approximately 357 million diluted shares.

NET YoY Financials

Q3 2024 vs Q3 2023 · SEC filings Q3 2023 Q3 2024
$0$200.0M$400.0M$335.6M$430.1MRevenue$257.5M$334.1MGross Profit$-25,351,116$-30,794,000Operating Income$-11,368,085$-15,331,000Net Income
$0$200.0M$400.0MRevenueGross ProfitOperating IncomeNet Income

Figures from SEC filings and company reports. Not investment advice.