On August 1, 2024, Cloudflare Inc (NET, Financial) released its 8-K filing for the second quarter of fiscal 2024. Cloudflare, a San Francisco-based software company, specializes in security and web performance through its distributed, serverless content delivery network (CDN) and edge computing platform, Workers.
Performance Overview
Cloudflare Inc (NET, Financial) reported total revenue of $401.0 million for Q2 2024, representing a 30% year-over-year increase. This figure surpassed the analyst estimate of $394.69 million. The company also reported a GAAP loss from operations of $34.7 million, or 9% of revenue, and a non-GAAP income from operations of $57.0 million, or 14% of revenue.
Key Financial Achievements
Cloudflare's financial achievements in Q2 2024 include:
- Gross Profit: GAAP gross profit was $312.0 million, or 77.8% gross margin, compared to $233.3 million, or 75.6%, in Q2 2023. Non-GAAP gross profit was $316.6 million, or 79.0% gross margin, compared to $239.7 million, or 77.7%, in Q2 2023.
- Net Income (Loss): GAAP net loss was $15.1 million, compared to $94.5 million in Q2 2023. GAAP net loss per share was $0.04, compared to $0.28 in Q2 2023. Non-GAAP net income was $69.5 million, compared to $33.7 million in Q2 2023. Non-GAAP net income per share was $0.20, compared to $0.10 in Q2 2023.
- Cash Flow: Operating cash flow was $74.8 million, or 19% of revenue, and free cash flow was $38.3 million, or 10% of revenue, compared to $20.0 million, or 6% of revenue, in Q2 2023.
- Cash Reserves: Cash, cash equivalents, and available-for-sale securities totaled $1,757.4 million as of June 30, 2024.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $401.0 million | $308.5 million |
| Gross Profit | $312.0 million | $233.3 million |
| GAAP Net Loss | $15.1 million | $94.5 million |
| Non-GAAP Net Income | $69.5 million | $33.7 million |
Analysis and Commentary
Cloudflare's strong revenue growth and improved profitability metrics highlight its robust business model and effective execution. The company's ability to increase its gross margin and reduce its GAAP net loss significantly year-over-year is a positive indicator for investors.
We had a strong second quarter, crossing $1.6 billion in annualized revenue and growing 30% year-over-year. The world is still complicated, but our team remained focused on execution and delivered terrific results, including a double-digit year-over-year improvement in sales productivity," said Matthew Prince, co-founder & CEO of Cloudflare.
Future Outlook
For Q3 2024, Cloudflare expects total revenue between $423.0 million and $424.0 million, and non-GAAP income from operations between $50.0 million and $51.0 million. For the full fiscal year 2024, the company anticipates total revenue between $1,657.0 million and $1,659.0 million, and non-GAAP income from operations between $196.0 million and $198.0 million.
Cloudflare's continued focus on innovation and customer-centric solutions positions it well for sustained growth in the competitive software industry.
Explore the complete 8-K earnings release (here) from Cloudflare Inc for further details.
