The global pandemic may have hurt several companies, but most cloud-based companies are soaring. Website infrastructure and security company Cloudflare (NYSE: NET) is one such company. Its stock has climbed nearly 90% since its IPO in September last year. As more and more companies migrate to remote working options, they are turning to companies like Cloudflare to offer services such as firewalls, network routing, and traffic management.
Revenues for the first quarter grew 48% to $91.3 million, ahead of the Street’s estimate of $87 million. Adjusted loss of $0.04 per share was also better than the Street’s estimate of a loss of $0.06 per share.
During the quarter, Cloudflare added 250,000 customers, ending the quarter with 2.8 million total customers, growing 40% over the year.
For the second quarter, Cloudflare forecast revenues of $93.5-$94.5 million, ahead of the market estimates of $92.5 million and a loss of $0.05-$0.06 per share, in line with the market’s forecast of a loss of $0.06 per share. Unlike other companies that are not providing an outlook, Cloudflare stood firm on its fiscal year’s guidance of revenues of $389-$393 million with a loss of $0.19-$0.21 per share. The market was forecasting revenues of $387.7 million for the year with a loss of $0.20 per share.
Cloudflare’s Growing Partnerships
The virus-related lockdown has helped Cloudflare grow its offerings. It has seen unprecedented growth of traffic on its platform in the past 12 weeks compared to the growth in the past year. It continues to improve the offerings available to these customers. For instance, its firewall team has released a series of improvements that have reduced 40% of the processing time off every request.
Earlier this year, it also announced a partnership with Kentik, a provider of an AIOps platform for network professionals. As part of the agreement, the companies will integrate network traffic intelligence from Kentik with Cloudflare Magic Transit for fast mitigation of distributed denial-of-service (DDoS) attacks. The partnership will help prevent advanced and targeted DDoS attacks. Kentik leverages network analytics and insights to identify DDoS attacks in real-time. The integration will allow Cloudflare Magic Transit to leverage these insights to mitigate these attacks even before they impact the business.
It also entered into an agreement with JD Cloud & AI, the intelligent technology provider of JD.com. As part of the collaboration, Cloudflare’s integrated global cloud platform will be integrated with JD Cloud & AI’s China network, infrastructure, and services to deliver a seamless experience for businesses in the region. JD Cloud & AI delivers public, private, and hybrid cloud services in China. The integration will enable enterprises to seamlessly deploy cloud-based firewall, DDoS mitigation, content delivery, and DNS services worldwide without a need for hardware or on-premise boxes.
Its stock is currently trading at $29.49 with a market capitalization of $8.5 billion. The stock has been climbing from the 52-week low of $14.50 that it had fallen to in October last year. In September last year, Cloudflare had listed on the NYSE at a list price of $15. Prior to listing, the company had raised $182 million in venture funding. It was last valued at $3.2 billion.