What to Expect From Cloudflare’s Upcoming Results

NET stock - What to Expect From Cloudflare’s Upcoming Results

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Tech giant Cloudflare (NYSE:NET) announced the date of its first-quarter earnings call recently. The cybersecurity specialist has been on an incredible run of late, posting earnings surprises in the last two out of three quarters. Its upcoming results are likely to be no different, which should send NET stock on a post-earnings rally.

Cloudflare expects to generate revenue in the $205 million to $206 million range compared with estimates of $196.2 million for the upcoming quarterly results. Moreover, it forecasts $929 million in revenue for the full year compared with the guidance of $891 million.

Hence, it’s clear the company expects another stellar year in 2022. It has performed remarkably over the past several years, with 50% average revenue growth in the past five years. Moreover, its gross margins have averaged a whopping 77% for the same period.

Its most recent quarterly report showed spectacular revenue growth of $193.6 million, up 54% from the prior year. Additionally, it generated $656.4 million, a 54% bump on a year-over-year basis. Cloudflare’s results are driven by strong enterprise momentum and expansion in its large customer base. This group has increased by double digits over the past several quarters.

Though the tech firm built its name in the distributed denial-of-service (DDoS) business, it has rapidly expanded its total addressable market (TAM). The company has spread its tentacles into multiple profitable verticals to further expand its overall market.

Its TAM has increased from $32 billion in 2018 to $100 billion by 2024. Considering its 2021 revenue of $656.4 million, it boasts a massive growth runway ahead. There are concerns about the lofty valuation of NET stock, which limits its attractiveness. However, its underlying business can more than justify its price at this stage.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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