Why Cloudflare Shares Are Seeing Blue Skies Today

Cloudflare Inc NET shares are trading higher by around 9% after the company reported strong Q2 FY23 results and issued above-consensus Q3 guidance.

Revenues of $308.5 million, up 32% Y/Y, came above the consensus of $305.6 million, with a record new ACV bookings.

Adjusted EPS of $0.10 surpassed the consensus of $0.07. 

Adjusted gross profit rose to $239.7 million from $185.0 million a year ago.

Adjusted operating income stood at $20.3 million, vs. an adjusted operating loss of $(0.9) million a year ago.

Operating cash flow of $64.5 million was higher than $38.3 million the prior year.

As of June 30, 2023, cash, cash equivalents, and available-for-sale securities stood at $1.58 billion.

"Our innovation engine remains in high gear, and by our estimates, Cloudflare is the most commonly used cloud provider across leading AI startups. In the second quarter alone, we shared ten major announcements and features to extend Cloudflare Workers as the preeminent development platform built for the age of AI. We believe we're uniquely positioned to become a leader in AI inferencing and have a lot more in store across the entire AI lifecycle to help enable companies to build the future," said Matthew Prince, co-founder & CEO.

Outlook: NET guided Q3 2023 revenues of $330.0 million-$331.0 million (consensus: $329.41 million) and adjusted EPS of $0.10 (consensus: $0.09). 

The company raised the 2023 revenues forecast to $1.283 billion -$1.287 billion (consensus: $1.28 billion) from $1.280 billion-$1.284 billion earlier and adjusted EPS to $0.37 (consensus: $0.34) from $0.34-$0.35. 

Also Read: There's Long-Term Potential in Cloudflare Despite Near-Term Macroeconomic Fluctuations, Analyst Says

Price Action: NET shares are up by 9.3% at $71.13 premarket on the last check Friday.