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Valuation has now run too far away from the fundamental figures 👀🤑

Cloudflare Q3 2024 $NET (+3,8%)

Financial performance

• Revenue: Cloudflare reported revenue of $430.1 million for the third quarter, an impressive 28% increase year-over-year. This growth signals strong demand for Cloudflare's services and an increasing presence in the market.
• Net Income (Loss): GAAP net loss was $15.3 million, an improvement from the loss of $23.5 million in the same quarter of 2023. However, on a non-GAAP basis, net income was $72.6 million, compared to $55.3 million in the prior year, showing a positive trend in terms of profitability.
• Operating income: GAAP operating loss was $30.8 million, representing 7.2% of revenue, while non-GAAP operating income was $63.5 million, or 14.8% of revenue. These results reflect Cloudflare's efficiency in cost management and strong operational performance.

Balance Sheet Overview

• Total assets: As of September 30, 2024, total assets were $3,062.7 million, an increase from $2,759.8 million at year-end 2023.
• Liabilities: Total liabilities increased to USD 2,089.7 million, compared to USD 1,996.7 million at the end of 2023, largely due to the increase in convertible senior notes.
• Shareholders' equity: Total equity increased to USD 973.1 million compared to USD 763.0 million at the end of 2023, indicating a strengthened financial base.

Income details

• Gross profit: GAAP gross profit was USD 334.1 million with a gross margin of 77.7%, while non-GAAP gross profit was USD 339.1 million with a gross margin of 78.8%. These figures demonstrate a stable and robust margin structure, which is particularly important for Cloudflare's industry.
• Net loss per share: GAAP net loss per share was $0.04, an improvement from $0.07 in the third quarter of 2023. Non-GAAP earnings per share were $0.20, up from $0.16 in the year-ago quarter, underscoring the positive trend in profitability.

Cash flow overview

• Operating cash flow: Net cash provided by operating activities amounted to USD 104.7 million, a significant increase compared to USD 68.1 million in the third quarter of 2023.
• Free cash flow: Free cash flow amounted to USD 45.3 million, or 11% of revenue, compared to USD 34.9 million, or 10% of revenue, in the same quarter last year. This increase demonstrates Cloudflare's ability to generate cash and strengthen liquidity.

Key Performance and Profitability Metrics

• Free Cash Flow Margin: Free cash flow margin was 11% in the third quarter of 2024, up from 10% in the year-ago quarter.
• Operating margin: Non-GAAP operating margin was 14.8%, compared to 12.7% in the prior year quarter, indicating improved operating efficiency.

Competitive position

Cloudflare is establishing itself as a leader in the connectivity cloud, with 35% of Fortune 500 companies as paying customers. This strengthens its position against competitors and demonstrates high market penetration with large customers.

Forecasts and management comments

• Revenue forecast: Cloudflare expects Q4 2024 revenue of $451 million to $452 million, signaling continued growth.
• Non-GAAP operating income: Non-GAAP operating income is expected to be between $57 million and $58 million for the fourth quarter.

Risks and opportunities

• Risks: Key risks include negative macroeconomic conditions, geopolitical tensions and challenges in customer retention and acquisition.
• Opportunities: Cloudflare sees opportunities for growth through strategic initiatives and innovations in product development, which strengthens its position as a technology leader.

Summary of the results

Positives:

Strong revenue growth: Sales increased by 28% year-on-year, indicating increasing demand and market presence.

Improved non-GAAP profitability: Both non-GAAP net income and operating income show a positive development, supported by effective cost management.

Significant increase in operating cash flow: Operating cash flow increased significantly to USD 104.7 million, strengthening financial stability.

Expansion of customer base: Cloudflare gained a significant number of Fortune 500 customers, underlining its attractiveness to large enterprises.

Solid balance sheet structure: Increased assets and equity demonstrate a strengthened financial position.

Negative aspects:

Continued GAAP losses: Despite improvements, Cloudflare continues to report GAAP losses, indicating profitability challenges.

High stock-based compensation: Significant stock-based compensation is hurting GAAP earnings and could hurt shareholders in the long run.

Increased liabilities: The increase in convertible bonds in particular increases the debt ratio and poses financing risks.

Macroeconomic and geopolitical risks: These could affect demand and the company's earning power.

Dependence on non-GAAP measures: Cloudflare relies heavily on non-GAAP measures to achieve a positive financial presentation, which could affect transparency.

Cloudflare
$NET (+3,8%) has just announced its quarterly figures.

The earnings per share (EPS) amounted to 0,20 USD and exceeds expectations of 0,18 USD.

The turnover amounted to 430,08 million USD and is also above expectations of 424,12 million USD.

Earnings next week

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As every Sunday, the most important news from the past week, as well as the dates for the coming week.

Also as a video:

https://youtube.com/shorts/FGvcLLAZSYk?si=Xyx01rfa453zdtpG

Monday:

The order situation in German industry is developing poorly. Orders fell by 5.8% in August. Economists had expected a decline of only 2.0%. Experts see this as a further sign of crisis in German industry.

https://www.handelsblatt.com/politik/konjunktur/konjunktur-deutsche-industrie-mit-auftragsminus-von-58-prozent/100076767.html

In order to ease the burden on the German pension system, the economic experts now have an unconventional proposal. Children aged 6 and over could be given 10 euros a month by the state to invest in a selected fund with a high proportion of equities.

https://www.handelsblatt.com/politik/deutschland/finanzen-wirtschaftsweise-kindern-geld-fuer-fonds-kauf-geben/100076917.html

Tuesday:

$MCD (+0,2%) McDonald's is suing the four largest beef suppliers in the USA. The company accuses them of price fixing and forming a cartel. The companies include $JBSS3 JBS, $TSN (+1,49%) Tyson Foods, Cargill and National Beef

From Tuesday to Wednesday, the HBO documentary on $BTC (+0,32%) Bitcoin. According to HBO, the secret of Satoshi Nakamoto will be revealed. Nakamoto is considered the creator of Bitcoin, but his identity is still unknown. Nakamoto probably owns 1.1 million Bitcoins, which corresponds to a value of around USD 60 billion. A revelation could be highly explosive for the financial markets.

The revelation is that, according to HBO, Peter Todd is behind Satoshi Nakamoto, but he vehemently denies this.

https://www.bild.de/geld/wirtschaft/bitcoin-erfinder-satoshi-nakamoto-hbo-doku-will-das-geheimnis-lueften-67055b32dd4668399e3be478

https://www.btc-echo.de/schlagzeilen/hbo-tischt-falschen-bitcoin-erfinder-auf-193148/

Wednesday:

German exports are growing, contrary to expectations. In August, goods worth 131.9 billion euros were exported, 1.3% more than in July. The USA in particular is driving exports. Exports to Germany's most important trading partner grew by 5.5%. Exports to China and the UK also increased. Imports, on the other hand, fell slightly to 109.4 billion euros.

https://www.handelsblatt.com/politik/konjunktur/aussenhandel-deutsche-exporte-legen-zu-importe-sinken-deutlich/100077496.html

The FOMC minutes were published on Wednesday evening. Overall, these were received positively on the stock market. The 0.5 percentage point cut in the US was approved by a large majority. However, this is probably not intended to determine the pace of further interest rate cuts.

https://www.handelsblatt.com/finanzen/geldpolitik/fed-prokolle-us-notenbanker-xl-senkung-gibt-kein-tempo-fuer-zinswende-vor/100077711.html

Thursday:

With $BMW (-2,03%) BMW and $MBG (-1,33%) Mercedes, two German brands have made it into the top 10 best-known brands. According to Interbrand, the brand alone is worth more than the companies are currently valued on the stock market. $TSLA (+1,2%) Tesla, on the other hand, is clearly losing brand value. One of the reasons cited is that Elon Musk supports Donald Trump.

https://www.handelsblatt.com/unternehmen/it-medien/interbrand-ranking-zwei-deutsche-in-den-top-ten-der-wertvollsten-marken-der-welt/100072227.html

However, car manufacturers are unable to translate this brand strength into sales. BMW sold 13% fewer cars in the 3rd quarter than in the previous year. Sales fell to 540,000 vehicles. In China in particular, sales fell by 29.8%. However, the main reason for this was delivery stops due to Continental's brake systems. Mercedes was even able to increase sales, at least compared to the previous quarter. In China, however, Mercedes sales also fell by 13%. Mercedes sold a total of 503,600 cars in the 3rd quarter.

https://www.handelsblatt.com/unternehmen/industrie/bmw-und-mercedes-schwaches-china-geschaeft-belastet-den-absatz/100077838.html

Inflation in the USA falls to 2.4%, although this is 0.1 percentage points above the general expectation. This means that the inflation rate is still above the Fed's target of 2%. A second major interest rate cut of 50 basis points has therefore become less likely.

https://www.wiwo.de/finanzen/boerse/bitcoin-kurs-aktuell-inflation-in-den-usa-bei-2-4-prozent-bitcoin-gibt-leicht-nach/27382428.html

$NET (+3,8%) Cloudflare acquires Kivera, enabling it to further expand its position in IT security. This will make the use of cloud services in particular more secure for corporate customers.

https://netzpalaver.de/2024/10/10/cloudflare-uebernimmt-kivera-zur-gewaehrleistung-einfacher-praeventiver-cloud-sicherheit/

Elon Musk has promised autonomous driving, but he has delivered a new date. In 2026, series production at $TSLA (+1,2%) start at Tesla. That would be 10 years since he announced the breakthrough. Elon Musk has thus disappointed the markets. What's more, if his bet on Trump doesn't work out, 2026 is also unlikely to be achievable. Only with Trump could the rules be adapted so that the robo-taxi arrives as early as 2026.

https://www.businessinsider.de/wirtschaft/international-business/elon-musk-enthuellt-robotaxi-von-tesla-so-viel-soll-es-kosten/

Friday:

Also $P911 (-1,57%) Porsche is also selling fewer cars, and Porsche's main problem lies in the Chinese sales market. Porsche is also selling almost 1/3 fewer vehicles in China. Similar to Mercedes and BMW, Porsche has hardly granted any price reductions on its vehicles.

https://www.handelsblatt.com/unternehmen/industrie/vw-konzern-porsche-verkauft-weniger-autos-taycan-absatz-bricht-ein/100077981.html

Most important dates in the coming week:

Tuesday: 11:00 ZEW survey (DE)

Thursday: 14:15 Interest rate decision (ECB)

Friday: 10:00 Current account balance (EU)

What other important dates can you think of?

#termine
#nachrichten
#ezb

Cloudflare( $NET (+3,8%) ) has taken over Kivera. This boosts investors and drives the share price upwards

Who has something to $NET (+3,8%) ? Unfortunately I can't find anything

Users in Brazil 🇧🇷 can now access without VPN 𝕏 without a VPN.

According to reports, this is because 𝕏 the services of Cloudflare
$NET (+3,8%) to protect its servers.

The IP address of 𝕏 is changed dynamically.

Since Cloudflare in Brazil operates major institutions such as banks and government websites, blocking the app becomes much more difficult.

$TXN (-2,51%) - Texas Instruments - Long

✅ Next stop - 202,29€

$NET (+3,8%) - Cloudflare - Long

✅ Next stop - 106,15€

$UBER (+0,19%) - UBER - Long

✅ Next stop - €73.84

❗️❗️❗️ Investments are speculative and carry a high level of risk. Every investment is unique and involves unique risks. When trading with shares and other securities, your capital is capital is at risk. ❗️❗️❗️

away with the b&h individual shares part 1