[HN Gopher] Cloudflare announces fourth quarter and fiscal year ...
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Cloudflare announces fourth quarter and fiscal year 2021 financial
results
Author : systemvoltage
Score : 90 points
Date : 2022-02-10 21:25 UTC (1 hours ago)
(HTM) web link (cloudflare.net)
(TXT) w3m dump (cloudflare.net)
| kizer wrote:
| Yay... time to go check my Fidelity portfolio worth.
| woofcat wrote:
| I use Cloudflare and enjoy their products however I'm curious how
| long these companies can have losses.
| iamacyborg wrote:
| I certainly appreciate them dealing with ~250GB in bandwidth a
| day for me so that I don't have to pay for it.
| nwiswell wrote:
| Indefinitely provided their revenue is growing 50% year over
| year.
|
| Once upon a time similar criticism was leveled at Amazon and
| Salesforce.
| AdamN wrote:
| +1. Why focus on earnings when revenue growth is high??
| Obviously you don't want to go out of business and unit
| earnings need to be reasonable for when you shift from growth
| to extracting value but if people will fund it shoot for the
| moon. I'm a NET investor of course, big fan.
| LazyMans wrote:
| I know nothing about finances, but it says they have access to
| 1.8billion in cash/equivalents/securities.
| rmbyrro wrote:
| Not a CFO, but I presume by using debt, it's feasible and cheap
| to bear those losses.
|
| Providing revenue is growing and their ROI is higher than
| interest rates and will continue like that in the next few
| years.
| samwillis wrote:
| For as long as investors believe there is potential growth that
| can be turned into a profit in future.
|
| It's clear people believe that CloudFlare have a good chance of
| seriously competing with the "big" players. AWS has quarterly
| revenue of about $140B, CloudFlare at about $0.2B has a lot of
| potential growth ahead.
|
| Their strategy is clearly to expand into more of the cloud
| services industry. There are a few missing pieces currently
| (VPS, Containers, Database servers) but I'm confident they have
| plans in those areas.
|
| The interesting thing is that they are approaching each area
| thy go into with new ideas. Although I wouldn't be surprised if
| we see them make some acquisitions at some point.
| missedthecue wrote:
| I think you mean $14B not $140B
|
| (And these days it's a tad over $16B)
| [deleted]
| systemvoltage wrote:
| If you listen to their earnings call, the CEO emphasizes that
| he wants Cloudflare to be positioned along side the Big Tech
| Cloud, not against. But, I think you're right. Cloudflare
| will slowly encroach into the space of Workers + Workers KV +
| Pages and double down on serverless + edge compute - chip
| away at Lambda/App-engine with a gateway type product to
| offer with it. Currently, they're mostly focused on CDN +
| ZeroTrust security.
|
| Also they announced acquisition of Vetrix. I've never heard
| of it but seems interesting that they're venturing into app-
| level security market as well:
| https://cloudflare.net/news/news-details/2022/Cloudflare-
| Acq...
|
| Cloudflare's genius is in offering free CDN service for most
| solo people. That seems to be like the way Photoshop allowed
| pirating of the software with little DRM control, get people
| to use the product first. I wish SalesForce did that, they
| have no free plan. For my scrappy company, we just use excel
| sheet for CRM.
| mobilewatch7 wrote:
| Salesforce does offer 10 free licenses for nonprofits.
| throwthere wrote:
| They were cash flow positive in q4 and project positive cash
| flow into q1
| jyap wrote:
| Sales and Marketing line item is over 50% of their Operating
| Expenses. $96.2mill last quarter.
|
| Since it's still in a growth phase with revenue, the losses can
| continue as a customer acquisition cost.
|
| They can scale back at any time.
| galosh wrote:
| They need it to maintain growth, otherwise punished
| ruthlessly by market and lost access to credit. That's not an
| optional spend
| MattyMc wrote:
| Their cash or cash equivalents is $1,821.8 million. Net loss
| was $77.5 for the quarter. Without any changes, they could keep
| this up for about 6 years.
|
| However, Cloudflare has 79.2% gross margin, indicating that
| delivering their services is highly profitable. If they ever
| needed more money, they could simply raise it or scale-back in
| other areas.
|
| TLDR: They could go for a very long time.
| adventured wrote:
| > Their cash or cash equivalents is $1,821.8 million. Net
| loss was $77.5 for the quarter. Without any changes, they
| could keep this up for about 6 years.
|
| That's incorrect. They didn't burn $77m in cash in the
| quarter, GAAP net loss is not equal to them losing cash from
| operations. The calculation doesn't lead out to six years
| accordingly. They're no longer burning cash (as they
| previously were):
|
| "Net cash flow from operating activities was $40.6 million,
| compared to negative $8.8 million for the fourth quarter of
| 2020. Free cash flow was $8.6 million, or 4% of total
| revenue, compared to negative $23.5 million, or 19% of total
| revenue, in the fourth quarter of 2020."
|
| That could still slip back occasionally into the red, of
| course. More likely it's going to be two steps forward and
| one step back, culminating soon in predictably cash flow
| positive operations.
| abadger9 wrote:
| I'm always surprised by how fast cloudflare rejects my app. I
| would love to work there, but have gotten a 'Thank you for your
| application' email within 2 days of applying. Having worked at a
| unicorn start up and some notable names over the last decade+,
| never figured out why
| ratg13 wrote:
| Did you ask?
|
| Often times if you send a message that you are looking to
| improve and wondering what your perceived weaknesses are, they
| will be honest with you.
| mattbee wrote:
| Cloudflare are doing some really interesting edge network
| services, and real competition for the big clouds.
|
| But why do they still host network-destroying tools like
| ipstress.in, str3ssed.co, cybervm.io, instant-stresser.com and
| stresser.app? These are all on the first page of Google's results
| for "booter".
|
| Isn't this a conflict of interest?
| xwdv wrote:
| Cloudflare continues to be a great company to invest in and one
| that will make you some serious money if you go big. I have no
| doubt that they will achieve their goal of being the 4th public
| cloud. Zero.
| dangrossman wrote:
| I hope so too, and I wish I had invested more when they IPO'd.
| punnerud wrote:
| The Cloudflare CTO is often on HN to answer questions. Last was a
| couple of hours ago.
|
| I asked him if he had HN alerts, and this was his answer: "I have
| code that monitors Hacker News comments for mentions of various
| things (including cloudflare, my username). It runs once a minute
| and uses https://hn.algolia.com/ to find new comments. (..)"
|
| https://news.ycombinator.com/threads?id=jgrahamc
|
| A CTO that is this close to the users I see as a good sign.
| Mandatum wrote:
| For anyone else that wants to do this.. RSS + hnrss.org with
| search queries
| tibyat wrote:
| he's cto, ceo is eastdakota
| astrojams wrote:
| It was their CTO who said that. Their CEO is on paternity
| leave.
| punnerud wrote:
| Just corrected it. Thanks
| ElectronShak wrote:
| One of Cloudflare's strengths is taking dev issues really
| seriously. Couple weeks ago we had a post here about Cloudflare
| Images having lots of issues [1]. The post did outline a lot of
| valid issues. Someone from the team commented that they had
| forwarded the post to product manager and engineering lead for
| Cloudflare Images [2]. Issue 6 (Direct Creator Upload) on the
| list has been fixed, and the docs updated
|
| 1. https://blog.klungo.no/2021/12/07/cloudflare-images-has-a-
| lo...
|
| 2. https://news.ycombinator.com/item?id=29474943
| [deleted]
| MattyMc wrote:
| Great quarter for a great company.
|
| I want to hear about R2 on the earnings call. It's such an
| important part of their future, IMHO.
| jgalt212 wrote:
| At R2's pricing level, I'm not sure it's gonna be a cash cow
| for them.
| adventured wrote:
| It's all about hoovering in new customers into their
| expanding ecosystem of offerings that do have margin. That's
| the whole point of Cloudflare bothering with R2 and its
| pricing scheme. They're punching companies like AWS where it
| can still hurt somewhat (eg transfer).
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