Cloudflare (NET) to Report Q2 Earnings: What's in the Offing?
Cloudflare NET is scheduled to report its second-quarter 2023 results after market close on Aug 3.
The company projects second-quarter revenues in the band of $305-$306 million. The Zacks Consensus Estimate for the top line is currently pegged at $305.6 million, indicating an improvement of 30.3% year over year.
Cloudflare expects non-GAAP earnings per share between 7 cents and 8 cents. The consensus mark for the same is pegged at 7 cents per share, implying a robust improvement from the year-ago quarter breakeven.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $14 million and $15 million. NET’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 83.3%.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Note
Cloudflare’s second-quarter performance is likely to have benefited from solid demand for security solutions, which became imperative due to aggravated cyberattacks, hybrid working trends and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have witnessed the impact of accelerated global footprint expansion outside the United States. It is worth mentioning that the United States, EMEA and APAC represented 52.7%, 27% and 13.5% of the total revenues, respectively, in the first quarter.
Moreover, a diversified customer base is likely to have contributed to NET’s second-quarter top line. It added around 6,073 new paying customers in the last reported quarter, bringing the total count to approximately 168,159 across more than 170 countries.
Cloudflare added 114 new large customers (annual billings of more than $100,000), taking the total count to 2,156 at the end of the first quarter, up from 2,042 recorded at the end of the fourth quarter of 2022. This uptrend, which has prevailed for the past several 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 ongoing digitalizing trend.
The company's recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. However, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing geopolitical uncertainties worldwide is likely to have weighed on its performance in the quarter to be reported.
What Our Model Says
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. However, that’s not the case here.
FTNT has a Zacks Rank #3 and an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Twilio TWLO, Celsius CELH and Inter Parfums IPAR have the right combination of elements to post an earnings beat in upcoming releases.
Twilio has an Earnings ESP of +6.90% and carries a Zacks Rank #2 at present. The company is scheduled to report second-quarter 2023 results on Aug 8. TWLO’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 138.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TWLO’s quarterly earnings is pegged at 29 cents per share, suggesting a year-over-year increase of 363.6%. Its quarterly revenues are estimated to increase 4.4% year over year to $984.5 million.
Currently, Celsius has an Earnings ESP of +50.64% and carries a Zacks Rank #2. The company is likely to report its second-quarter 2023 results on Aug 8. CELH’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once and delivering an average negative earnings surprise of 99%.
The Zacks Consensus Estimate for CELH’s second-quarter earnings is pegged at 31 cents per share, implying a year-over-year surge of 158.3%. The company is estimated to report revenues of $278.9 million, which suggests a surge of 81.1% from the year-ago quarter.
Inter Parfums has an Earnings ESP of +11.74% and a Zacks Rank #1 at present. The company is expected to report its second-quarter 2023 results on Aug 8. IPAR’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 37.2%.
The Zacks Consensus Estimate for Inter Parfums’ second-quarter earnings is pegged at 88 cents per share, indicating a 2.3% increase from the year-ago quarter’s earnings of 86 cents. The consensus mark for revenues is pegged at $309.1 million, suggesting a year-over-year increase of 26.3%.
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Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
Cloudflare, Inc. (NET) : Free Stock Analysis Report
