Cloudflare, Inc. (NYSE: NET), the security, performance, and reliability company helping to build a better Internet, today announced financial results for its fourth quarter and fiscal year ended December 31, 2023.
"We had an exceptionally strong fourth quarter. We grew revenue by 32% percent year-over-year, to $362.5, blew away our previous records for new ACV—delivering the highest quarterly growth since 2021—and signed both our largest new customer win and largest customer renewal ever. Our pipeline close rates, sales force productivity, average deal size, and linearity all improved markedly quarter-over-quarter. To close out the year, strength in our business was driven by robust momentum with large customers, significant progress in the public sector, and growth in Cloudflare One," said Matthew Prince, co-founder & CEO of Cloudflare. "The machine that underlies Cloudflare is firing efficiently on all cylinders, and while the macro environment remains challenging to predict, customers continue to turn to us to connect, protect, and optimize their systems so they can gain the control they need to accelerate their businesses."
Fourth Quarter 2023 Financial Highlights
- Revenue: Total revenue of $362.5 million representing an increase of 32% year-over-year.
- Gross Profit: GAAP gross profit was $279.2 million or 77.0% gross margin, compared to $206.9 million or 75.3%, in the fourth quarter of 2022. Non-GAAP gross profit was $286.0 million or 78.9% gross margin, compared to $212.5 million, or 77.4%, in the fourth quarter of 2022.
- Operating Income (Loss): GAAP loss from operations was $42.8 million, or 11.8% of total revenue, compared to $50.7 million, or 18.5% of total revenue, in the fourth quarter of 2022. Non-GAAP income from operations was $39.8 million, or 11.0% of total revenue, compared to $16.8 million, or 6.1% of total revenue, in the fourth quarter of 2022.
- Net Income (Loss): GAAP net loss was $27.9 million, compared to $45.9 million in the fourth quarter of 2022. GAAP net loss per basic and diluted share was $0.08 compared to $0.14 in the fourth quarter of 2022. Non-GAAP net income was $53.5 million, compared to $21.6 million in the fourth quarter of 2022. Non-GAAP net income per diluted share was $0.15, compared to $0.06 in the fourth quarter of 2022.
- Cash Flow: Net cash flow from operating activities was $85.4 million, compared to $78.1 million for the fourth quarter of 2022. Free cash flow was $50.7 million, or 14% of total revenue, compared to $33.7 million, or 12% of total revenue, in the fourth quarter of 2022.
- Cash, cash equivalents, and available-for-sale securities were $1,673.7 million as of December 31, 2023.