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Cloudflare (NET) to Report Q1 Earnings: What's in Store?

·5 min read

Cloudflare NET is slated to release first-quarter 2022 results on May 5.

The company projects first-quarter revenues to be $205-$206 million. The Zacks Consensus Estimate for the top line is currently pegged at $205.7 million, indicating an improvement of 49% year over year.

Cloudflare expects the bottom line between break-even and a penny earning per share. The consensus mark for the same stands at a break-even, suggesting a whopping improvement of 100% from the year-ago quarter’s loss of 3 cents per share.

Cloudflare, Inc. Price and EPS Surprise

Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. Price and EPS Surprise

Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote

The web infrastructure and website security solution provider projects non-GAAP income from operations between $0.5 million and $1 million.

Cloudflare’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 62.5%.

Factors to Note

Cloudflare’s first-quarter performance might have benefited from solid demand for security solutions, which became imperative due to aggravated cyberattacks, work and learn from home policies and a zero-trust approach.

The company’s to-be-reported quarter top line is likely to reflect the impact of accelerated global footprint expansion outside of the United States. It is worth mentioning that US, EMEA and APAC represented 52%, 27% and 14% of total revenues, respectively, in the fourth quarter.

Besides, diversified customer base might have contributed to Cloudflare’s first-quarter top line. The company had exited the fourth quarter with more than 4.1 million free and paying customers. It had added around 7,706 new paying customers sequentially, bringing the total count to approximately 140,096 across more than 170 countries.

Cloudflare added 156 new large customers (annual billings of more than $100,000) taking the total count to 1,416 at the end of the fourth quarter, up from 1,260 recorded at the end of the third quarter. This uptrend, which has prevailed for the past few quarters, is likely to have continued in the to-be-reported quarter as well backed by elevated demand for its cloud-based solutions amid the pandemic-led remote-working wave.

The company's recurring subscription-based business model has been providing relative stability to its top line amid pandemic-induced disruptions. It expects variability in cash flow margins due to working capital fluctuations, large enterprise business growth and seasonal factors.

However, Cloudflare’s significant exposure to small and medium businesses (SMBs), the worst-hit cohort by the pandemic, might have weighed on its performance in the quarter to be reported.

What Our Model Unveils

Our proven model does not conclusively predict an earnings beat for Cloudflare this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Cloudflare currently has Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With Favorable Combinations

Per our model, ProPhase Labs PRPH, Angion Biomedica ANGN and Analog Devices ADI have the right combination of elements to post an earnings beat in their upcoming releases.

ProPhase Labs has a Zacks Rank #1 and an Earnings ESP of +22.08%. The company is scheduled to report first-quarter 2022 results on May 12. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 170.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PRPH’s first-quarter earnings is pegged at 39 cents per share, suggesting year-over-year growth of 69.6%. The consensus mark for revenues stands at $24.3 million, indicating an increase of 59.2% year over year.

Angion Biomedica is slated to report first-quarter 2022 results on May 16. The stock has a Zacks Rank #1 and an Earnings ESP of +15.7%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 47.5%.

The Zacks Consensus Estimate for ANGN’s quarterly loss is pegged at 44 cents per share, suggesting a year-over-year improvement of 53.2%. Its quarterly revenues are estimated to soar 231.4% year over year to $1.2 million.

Analog Devices has a Zacks Rank #2 and an Earnings ESP of +2.17%. The company is scheduled to report second-quarter fiscal 2022 results on May 18. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6%.

The Zacks Consensus Estimate for Analog Devices’ second-quarter earnings is pegged at $2.12 per share, suggesting year-over-year growth of 37.7%. The consensus mark for revenues stands at $2.86 billion, indicating an improvement of 72.3% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Analog Devices, Inc. (ADI) : Free Stock Analysis Report

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