Cloudflare Q4 Earnings & Revenues Beat: Will the Stock Move Upward?

Core Insights - Cloudflare (NET) reported a non-GAAP earnings of 19 cents per share for Q4 2024, exceeding the Zacks Consensus Estimate by 5.6% and reflecting a year-over-year increase of 26.7% [1][2] - The company's revenues for Q4 2024 reached $459.9 million, marking a 27% year-over-year growth and surpassing the consensus estimate by 1.8% [2][4] Revenue Performance - The revenue growth was driven by strong onboarding of large enterprises, significant progress in the public sector, and a heightened focus on security and a zero-trust approach by customers [3] - Revenue from Channel Partners constituted 22% of total revenues, amounting to$ 101.4 million, which is a 63.8% increase year-over-year. Direct Customers accounted for 78% of total revenues, generating $358.6 million, up 19.3% year-over-year [5] Customer Metrics - Cloudflare had 237,714 paying customers in Q4 2024, reflecting a 25.3% year-over-year increase. The company added 232 new customers contributing over$ 100,000 in annual revenues, bringing the total to 3,497 [6] Profitability - Non-GAAP gross profit for Q4 2024 increased by 24.7% year-over-year to $356.8 million, although the non-GAAP gross margin contracted by 130 basis points to 77.6% [6] - Non-GAAP operating income rose to$ 67.2 million from $39.8 million in the previous year, with the non-GAAP operating margin expanding by 360 basis points to 14.6% [7] Financial Position - As of December 31, 2024, Cloudflare's cash, cash equivalents, and available-for-sale securities totaled$ 1.86 billion, up from $1.82 billion as of September 30, 2024. The company generated an operating cash flow of$ 127.3 million and a free cash flow of $47.8 million [8] Guidance - For Q1 2025, Cloudflare expects revenues in the range of$ 468- $469 million, with a consensus estimate of$ 471.8 million, indicating a year-over-year rise of 24.6%. Non-GAAP earnings are anticipated to be 16 cents per share [9] - For FY 2025, the company projects revenues between $2.09 billion and$ 2.094 billion, with a consensus estimate of $2.07 billion, suggesting a year-over-year increase of 24.8% [10]