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Mar 31, 2023
Cloudflare Q1 2023 Earnings Report
Cloudflare's financial performance for Q1 2023 demonstrated strong revenue growth and improved profitability.
Key Takeaways
Cloudflare announced a 37% year-over-year revenue increase to $290.2 million for Q1 2023. The company also achieved record operating profit and margin for the third consecutive quarter and significantly outperformed on free cash flow.
Revenue increased by 37% year-over-year, reaching $290.2 million.
GAAP loss from operations was $47.3 million, representing 16% of total revenue.
Non-GAAP income from operations reached $19.4 million, or 7% of total revenue.
Operating cash flow was $36.4 million, or 13% of total revenue, with free cash flow at $13.9 million, or 5% of total revenue.
Cloudflare
Cloudflare
Forward Guidance
Cloudflare anticipates macroeconomic uncertainty will persist, leading to extended sales cycles and backend-weighted linearity. Despite this, Cloudflare provided guidance for Q2 2023 and full year fiscal 2023.
Positive Outlook
- Q2 2023 total revenue is expected to be between $305.0 to $306.0 million.
- Q2 2023 non-GAAP income from operations is projected to be $14.0 to $15.0 million.
- Q2 2023 non-GAAP net income per share is expected to be $0.07 to $0.08, utilizing approximately 345 million weighted average common shares outstanding.
- Full year fiscal 2023 total revenue is projected to be $1,280.0 to $1,284.0 million.
- Full year fiscal 2023 non-GAAP income from operations is expected to be $73.0 to $77.0 million.
Challenges Ahead
- Increasing macroeconomic uncertainty may lengthen sales cycles.
- Backend-weighting of linearity is expected to persist.
- External headwinds are anticipated to continue through the end of the fiscal year.
- Actual results may differ materially due to various factors.
- Guidance assumes continued reacceleration of new pipeline generation and sustained high win and renewal rates.