NYSE$NET

Cloudflare · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Cloudflare's revenue increased by 54% year-over-year, reaching $114.2 million. GAAP net loss per share improved to $0.09, and non-GAAP net loss per share improved to $0.02. The company added a record of roughly 100 net large enterprise customers and secured its first $10 million ARR customer.

Cloudflare announced strong third-quarter results, exceeding $100 million in revenue and adding a record number of large enterprise customers. The company also released over a dozen new products and features.

  • Revenue totaled $114.2 million, an increase of 54% year-over-year.
  • GAAP net loss per share improved to $0.09, and non-GAAP net loss per share improved to $0.02.
  • Added roughly 100 net new large enterprise customers.
  • Secured first $10 million ARR customer.

Headline financials

Total Revenue

$114M

Previous: $73.9M+54.4%
EPS (adj)

-$0.02

Previous: -$0.16+87.5%
Gross Margin

76.3%

Previous: 78.3%-2.6%
Free Cash Flow Margin

-16.0%

Previous: -45.0%+64.4%
Capital Expenditures

-$46M

Previous: -$31M-48.4%
Free Cash Flow

-$72.4M

Previous: -$71.8M-0.8%
Net Income

-$26.5M

Previous: -$40.9M+35.2%
Operating Income

-$21.3M

Previous: -$41.1M+48.3%
Gross Profit

$87.2M

Previous: $57.9M+50.5%
Cash & Equivalents

$112M

Previous: $502M-77.7%
Total Assets

$1.37B

Previous: $840M+63.3%
Stock-Based Comp

$14.7M

No prior period

Revenue & EPS history

Cloudflare · Revenue · Quarterly

$114M

Q3 2020+54.4%vs Q3 2019
Beat estimate in 9 of 10 quarters(90%)
ActualEstimate

Forward guidance

Cloudflare provided revenue and earnings guidance for the fourth quarter and full year of fiscal 2020, which is subject to substantial uncertainty as a result of the COVID-19 pandemic.

Tailwinds

  • Total revenue of $117.5 to $118.5 million for Q4 2020
  • Non-GAAP loss from operations of $10 to $9 million for Q4 2020
  • Non-GAAP net loss per share of $0.04 to $0.03 for Q4 2020
  • Total revenue of $422.5 to $423.5 million for full year fiscal 2020
  • Non-GAAP loss from operations of $38 to $37 million for full year fiscal 2020

Headwinds

  • Non-GAAP net loss per share of $0.13 to $0.12 for full year fiscal 2020
  • Guidance is subject to substantial uncertainty due to the COVID-19 pandemic.
  • Guidance reflects estimates as of November 5, 2020, regarding the impact of the pandemic on operations.
  • Guidance is highly dependent on numerous factors that may not be predictable or controllable.
  • Factors include the duration, spread, and severity of the pandemic.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+0.3%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+2.6%

Avg return

30 days after

48%

13 / 27 earnings

Positive

+29.5%

Q4 2023

Best reaction

-27.4%

Q1 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-23.8%-25.0%-2.6%
Q4 2025+5.2%+8.8%+18.0%
Q3 2025+11.6%+2.7%-10.0%
Q2 2025-3.6%+3.8%+0.5%
Q1 2025+6.3%+24.3%+44.5%
Q4 2024+17.8%+22.1%-10.4%
Q3 2024-1.4%-1.7%+22.1%
Q2 2024+2.5%-1.6%+6.0%
Q1 2024-15.5%-15.8%-23.1%
Q4 2023+29.5%+19.8%+17.6%
Q3 2023+17.2%+20.1%+43.4%
Q2 2023+8.4%+3.9%-0.2%
Q1 2023-21.0%-28.0%+2.7%
Q4 2022+3.5%+17.8%-9.2%
Q3 2022-17.7%-19.2%-3.1%
Q2 2022+27.2%+22.7%+0.6%
Q1 2022-27.4%-37.0%-39.7%
Q4 2021-8.6%+0.5%-22.7%
Q3 2021+1.2%+5.0%-18.0%
Q2 2021-1.0%+4.6%+8.7%
Q1 2021-9.4%-9.8%+5.1%
Q4 2020-5.5%-9.7%-16.1%
Q3 2020+14.9%+9.1%+37.8%
Q2 2020-5.7%-11.0%-18.2%
Q1 2020+5.3%+15.4%+16.8%
Q4 2019-0.4%-1.8%+7.0%
Q3 2019-0.6%-0.4%+13.9%
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018

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