Cloudfare stock surges on Q4 revenue jump
Shares of Cloudflare (NET) gained ground Friday after the cybersecurity firm delivered better-than-expected fourth-quarter results, with a 32% year-over-year surge in revenue. The company cited robust customer demand shaping up in 2024 amid heightened cyber risks tied to an election cycle.
Yahoo Finance's Seana Smith and Brad Smith break down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
BRAD SMITH: Let's take another look at a trending ticker we're tracking here this morning. Cloudflare shares are jumping in the pre-market after reporting a 32% rise in revenue from a year ago. CEO Matthew Prince touted robust momentum with large customers in the quarter leading to strong results here.
You're taking a look at shares pre-market, they're up 24%. Kobe. Anyway, one of the huge things that we're tracking here with Cloudflare that they mentioned on this call, which was actually really interesting to me, was the fact that you've got an election year here where internationally, there's going to be so much more focus on cybersecurity. And they actually brought that up as one of the drivers of demand that they're seeing right now.
I thought that was particularly interesting as they were saying the fact that we've been leaders in protecting elections, making sure that elections are run without cybersecurity, being part of the story has gotten us in the conversation in a lot of places around the world. A record number of people heading to polls internationally here in 2024.
SEANA SMITH: Yeah, certainly, more spend on cybersecurity is one of the trends that we saw play out in 2023, and one of the trends that analysts industry watchers are expecting to continue here in 2024 for exactly the reason that you just laid out there, Brad. The lead ups here to the elections, not only in the US, but also around the world.
And digging into these results that we just got here from Cloudflare, a lot of the better than expected drivers here is because it was boosted by large new deals and also renewals. And a couple of the Street's analysts here pointing out that the upside to the quarter was mostly driven in large part to the US Department of Commerce deal and the largest renewal in company history. So that helped the company or lead the company to better margins, which we saw increase here on a year-over-year basis. So again, that stock jumping once again in pre-market trading.
