A lot of people take advantage of the recent pullback in $NET saying how bullish they are about this company as a long term investment. I'm not invested (blaming myself for not getting in in the $30s when I first noticed this name) but its on my radar and I monitor it closely.
1. One of the things I prefer to do when researching a company is going over their earnings calls. As I mentioned above, I'm learning about $NET prior to starting a position and below you can find things that I found interesting from the company's most recent call on 2/11/2021.
2. "For the year our revenue was a bit over $450 million up 50% over 2019. Our paying customer account grew to over a 111,000 up 10% QoQ and our strongest quarterly growth in several years".
3. "Large customers those that spend over a hundred thousand $ per year with us continue to be our strongest growth area adding 92 new customers in Q4 and bringing our total large customer account to 828".
4. "As you look across customer segments by side our large customer segment is growing the fastest. This is because our new logo wins and also because our land and expand motion is picking up steam".
5. "We are seeing more of our existing customers adopt cloud corporate teams our zero trust network security solution as well as Magic Transit. Customers see that they can use the full range of Cloudflare's products to achieve the corporate network of the future (CLouflare 1)."
6. "In Q4 more than 50,000 new developers wrote and deployed their first Cloudflare worker. The rate of new developers building on workers for the first time in a quarter has more than doubled since we last reported it in Q2".
7. "The engineering team at one of the leading software companies themselves building tools for developers approached us about better securing their own development environment".
8. "Cloudflare is the only company with a zero trust solution that really understands and is built for the needs of developers. Developers are the future of IT and having won their trust we expect will help us win, retain and expand more and more customers over time".
9. "A Fortune 500 oil and gas conglomerate signed a three-year $1million deal to implement a portion of our Cloudflare 1 architecture including Magic Transit, DDOS mitigation, firewall and DNS, replace spend they had with legacy telecom providers".
10. "A Fortune 500 US financial provider signed a three-year $1.6million deal to replace legacy telecom spends and moved towards the CLoudflare 1 architecture. They were particularly impressed with our product roadmap and our pace of innovation".
11. "A Fortune 500 Asian financial services company signed a four-year $8.5million deal with us. They too are implementing our Cloudflare 1 architecture to modernize their corporate network".
12. "A Fortune 500 pharmaceutical company leaning into their CLouflare implementation further adopting the Cloudflare 1 architecture. They signed a $450,000 per year deal to add our Magic Transit service".
13. "A Fortune 500 semiconductor provider signed a three-year $1.4million deal to replace a legacy network provider. The buyer appreciated our technical innovation, the way our products seamlessly work together and our performance".
14. "A Fortune 1000 enterprise software provider signed a three-year $2.6million deal to implement Cloudflare across their organization. They initially came to us to improve their performance in China something they struggled to be able to do with any other provider."
15. "In April of 2020 traffic grew across our network more in two weeks than we expected it to over two years. Less than 5% of our revenue comes from usage-based products. When traffic spikes out associated cost spikes but our revenue doesn't automatically follow".
16. "Our consistent pricing is one of the things that differentiates us but that means our team has to do the hard work, renegotiating bandwidth agreements, inventing new technologies and continuing to wring out every penny of efficiency".
17. "Since 2016 we have grown at a compound annual growth rate of 50% demonstrating our continued growth at scale. The US represented 53% of revenue and increased 54% YoY. EMEA represented 26% of revenue and increased 60% YoY. The Asia-Pacific - 16% and increased 33% YoY".
18. "We are in the process of transitioning from Baidu to JD as our primary partner in China. This transition might result in temporary short-term headwinds to growth in that region".
19. "Expanding internationally remains a priority. We open 3 new international offices in 2020 (Tokio, Paris, Toronto)".
20. "The acceleration in paying customer growth was primarily by increased new product adoption from free to paying customers. We saw significant expansion from our large enterprise customers which helped to drive a dollar based net retention rate of 119%".
21. "Efficiency remains at the core of our business and is demonstrated in the consistently high gross margin we generate from growing revenue and in the low CapEx we need to deploy and build out the footprint and capacity of our network (Q4 gross margin - 78.1%)".
22. "We ended Q4 with $1 billion in cash, cash equivalents and available for sale securities. The Q4 decrease in operating cash flow was driven primarily by an increase in DSO due to seasonality".
23. "For the first Q we expect revenue in the range of $130-131 million representing an increase of 42-44% YoY (full year - revenue of $589-593 an increase of 37-38% YoY). Operating loss for the full year in the range of $21-25 million".
24. It was a very impressive quarter for $NET The management team executes well, historical numbers were solid and I feel pretty good long term. What do you guys think? @Soumyazen @mukund @plantmath1 @JoTrader4 @TheMarkCooke @TMFJMo @caleb_investTML @jeremymday @tpsojda
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