Cloudflare stock plunges more than 20% after revising guidance down

Signage outside the Cloudflare headquarters in San Francisco, California, U.S., on Tuesday, Feb. 8, 2022. Cloudflare Inc. is expected to release earnings figures on Feb. 10.

David Paul Morris | Bloomberg | Getty Images

Cloudflare shares plunged as much as 25% in after-hours trading Thursday after the internet services and security company reported first-quarter results that missed on the top line, and also revised its full-year revenue guidance down.

Here are the key numbers:

  • Earnings: 8 cents per share, adjusted, vs. 3 cents per share expected, according to a Refinitiv survey of analysts
  • Revenue: $290.2 million vs. $290.8 million expected, according to Refinitiv

Cloudflare revised their full-year revenue guidance for 2023 down. The company guided to full-year revenue around $1.28 billion, versus a prior consensus of $1.33 billion. That revision is down significantly from Cloudflare’s prior guidance as well, which was between $1.33 billion and $1.34 billion.

The company also reported a net loss of $38 million for the quarter, compared to a $41 million loss for the year ago quarter.

Despite the bottom-line beat, investors apparently reacted to commentary from Cloudflare chief financial officer Thomas Seifert, who said that “increasing macroeconomic uncertainty over the course of the first quarter resulted in a material lengthening of sales cycles and a significant backend-weighting of linearity.”

Cloudflare’s guidance for the second-quarter of 2023 was also below consensus estimates. Cloudflare guided to revenue between $305 and $306 million, versus a consensus estimate of $319 million.

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