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Sep 30, 2020

Cloudflare Q3 2020 Earnings Report

Cloudflare's revenue increased by 54% year-over-year, reaching $114.2 million. GAAP net loss per share improved to $0.09, and non-GAAP net loss per share improved to $0.02. The company added a record of roughly 100 net large enterprise customers and secured its first $10 million ARR customer.

Key Takeaways

Cloudflare announced strong third-quarter results, exceeding $100 million in revenue and adding a record number of large enterprise customers. The company also released over a dozen new products and features.

Revenue totaled $114.2 million, an increase of 54% year-over-year.

GAAP net loss per share improved to $0.09, and non-GAAP net loss per share improved to $0.02.

Added roughly 100 net new large enterprise customers.

Secured first $10 million ARR customer.

Total Revenue
$114M
Previous year: $73.9M
+54.4%
EPS
-$0.02
Previous year: -$0.16
-87.5%
Gross Margin
76.3%
Previous year: 78.3%
-2.6%
Free Cash Flow Margin
-16%
Previous year: -45%
-64.4%
Gross Profit
$87.2M
Cash and Equivalents
$112M
Free Cash Flow
-$17.9M
Total Assets
$1.37B

Cloudflare

Cloudflare

Forward Guidance

Cloudflare provided revenue and earnings guidance for the fourth quarter and full year of fiscal 2020, which is subject to substantial uncertainty as a result of the COVID-19 pandemic.

Positive Outlook

  • Total revenue of $117.5 to $118.5 million for Q4 2020
  • Non-GAAP loss from operations of $10 to $9 million for Q4 2020
  • Non-GAAP net loss per share of $0.04 to $0.03 for Q4 2020
  • Total revenue of $422.5 to $423.5 million for full year fiscal 2020
  • Non-GAAP loss from operations of $38 to $37 million for full year fiscal 2020

Challenges Ahead

  • Non-GAAP net loss per share of $0.13 to $0.12 for full year fiscal 2020
  • Guidance is subject to substantial uncertainty due to the COVID-19 pandemic.
  • Guidance reflects estimates as of November 5, 2020, regarding the impact of the pandemic on operations.
  • Guidance is highly dependent on numerous factors that may not be predictable or controllable.
  • Factors include the duration, spread, and severity of the pandemic.