Cloudflare (NYSE:NET) Class A shares experienced a significant drop of up to 13.4% during after-hours trading on Thursday. This decline followed the release of their Q4 revenue guidance, which fell short of consensus expectations. At present, NET stock is down 5.2% to $53.62 after hours.
In their Q3 report, Cloudflare reported adjusted earnings per share of $0.16, surpassing estimates by 6 cents. Additionally, revenue increased by 32.2% year-over-year to $335.6 million, exceeding expectations by $5.02 million.
Based in San Francisco, California, Cloudflare (NET) offers a range of products, including cloud-based security frameworks, developer platforms for serverless applications, and networking security services. According to their website, Cloudflare (NET) powers Internet requests for millions of websites.
CEO Matthew Prince also highlighted the company’s new product, Workers AI, which is currently undergoing open beta testing. Workers AI enables users to run their own machine learning models on the Cloudflare (NET) network, using their own code.
“We believe inference is the biggest opportunity in AI, and inference tasks will largely be run on end devices and on connectivity clouds like Cloudflare (NET),” said Prince.
“By the end of 2024, we expect to have inference-optimized GPUs running in nearly every location where Cloudflare (NET) operates worldwide—within milliseconds of every Internet user,” Prince added.
However, Cloudflare’s (NET) guidance for Q4 was slightly weaker than expected. The company anticipates total revenue ranging from $352 million to $353 million, slightly below the consensus estimate of $356.31 million. Adjusted earnings per share are expected to be 12 cents, compared to a consensus of 10 cents.
Cloudflare (NET) has also refined its full-year revenue guidance to $1.286 billion to $1.287 billion, narrowing the previous range of $1.283 billion to $1.287 billion. The consensus estimate for full-year revenue is $1.28 billion. Adjusted earnings per share for the full year is now projected to be $0.45 to $0.46, compared to a consensus estimate of $0.37.
More on Cloudflare
Cloudflare continues to play a vital role in the cloud security and content delivery network sector. The company’s commitment to innovation, as demonstrated by the upcoming Workers AI product, positions them as a key player in the future of artificial intelligence and machine learning on the internet. Cloudflare’s global reach and dedication to optimizing its network for maximum efficiency make it an appealing choice for businesses worldwide. As the demand for secure and reliable online services grows, Cloudflare’s expertise in delivering fast and secure internet performance will likely be met favorably by investors and customers alike.