Cloudflare (NYSE:NET), the cloud, cybersecurity, and web infrastructure firm that stands up a huge portion of the internet, saw its stock whipsaw higher in after-hours trading thanks to an impressive set of numbers.
After the earnings release, Cloudflare stock was up $31.49 or 12.8% at $275.51; rebounding from the day's 8.28% decline and $244.51 close.
It comes after a trading session filled with apparent doom as chipmaker and data center plays saw their shares fall for the second day since the midterm elections; in part due to concerns that Democrats will clamp down on data center construction, which would impinge on the AI ramp, as well as earnings reports this week from the likes of Arm and Qualcomm, which failed to inspire.
Now, when it comes to Cloudflare, perhaps there's opportunity to inspire more confidence and positive sentiment.
Growing and beating expectations
The group - which as well as providing cyber security, caching and web services, is a key enabler of a wave of downstream AI users, the 'builder' class, with hosting, workers and web-domain services - on Thursday, after market close, revealed its fastest revenue growth in nearly four years.
At $782.5 million, third-quarter revenue was up 39% from $562 million a year a year ago, and it sees the annualised tally past $3 billion in annualized revenue.
The Q3 revenue number beats analyst consensus of $736.8 million, while earnings per share (adjusted) came in at 38 cents versus a market forecast pitched at 34 cents.
In terms of profitability, Cloudflare's non-GAAP income from operations was up to $137.1 million, from $85.9 million, and compared to expectations of $129.7 million.
“The third quarter was Cloudflare's best quarter ever," said Matthew Prince, co-founder and chief executive.
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"We accelerated growth, delivering our fastest revenue growth in nearly four years, while expanding profitability."
Prince, meanwhile, added that the company has "found an even higher gear for this next phase of growth."
Looking ahead
For the fourth quarter, Cloudflare guided to revenue of $845 million to $846 million, non-GAAP operating income of $156 million to $157 million and non-GAAP net income per share of $0.43.
For the full year, the company guided to revenue of $2.963 billion to $2.964 billion, and non-GAAP net income per share of $1.35.
In its third quarter, Cloudflare reported a GAAP net loss of $34.1 million (and non-GAAP net income rose to $143.7 million from $102.6 million). The gap between GAAP and non-GAAP included restructuring costs, charges and legal reserve.
