Cloudflare IPO: What You Need To Know

Shares of a tech unicorn that has strong revenue growth potential is on offer for investors this week.

The IPO Terms

San Francisco, California-based Cloudflare, Inc is proposing to offer 35 million shares in an IPO at an estimated price range of $12-$14, according to the amendment to the preliminary prospectus filed with the SEC.

The price range has been upped from the initially estimated range of $10-$12.

At the mid-point of the estimated price range, the size of the offering is $455 million.

The company's shares have been approved for listing on the New York Stock Exchange under the ticker symbol NET.

Goldman Sachs, Morgan Stanley and JPMorgan are the lead managers for the offering, while Jefferies, Wells Fargo Securities and RBC Capital Markets will act as co-managers.

The Company

Cloudflare, founded in 2009, is a cybersecurity and internet services company, which has a global cloud platform that delivers broad range of network services such as VPN, internal and external firewalls, web security, content delivery networks, domain name systems, advanced threat prevention, and wide area network technology.

"Our platform serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premise, hybrid, cloud, and software-as-a-service (SaaS) applications," the company said in the filing.

About 10% of Fortune 1,000 companies are paying Cloudflare customers.

The Finances

Cloudflare's revenues grew 43% year-over-year in fiscal year 2018 to $192.7 million. The net loss, however, widened from $10.7 million in 2017 to $87.2 million in 2018.

Revenues for the six months ending June 30, 2019 grew 48% to $129.2 million but net loss widened from $32.5 million to $36.8 million.

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