Cybersecurity stocks under pressure in Thursday’s late trading
Cloudflare Inc. shares declined 6% in Thursday’s extended session after the cybersecurity company beat revenue expectations for its latest quarter but came up a bit shy with its top-line view of the ongoing quarter.
The company posted a third-quarter net loss of $23.5 million, or 7 cents a share, compared with a loss of $42.5 million, or 13 cents a share, in the year-prior quarter. On an adjusted basis, Cloudflare NET, +2.97% earned 16 cents a share, up from 6 cents a share a year before, while analysts were modeling 10 cents a share.
Revenue increased to $335.6 million from $253.9 million, whereas analysts were calling for $330.5 million.
For the fourth quarter, Cloudflare executives model $352 million to $353 million in revenue, along with 12 cents in adjusted earnings per share. The FactSet consensus was for $356 million in revenue and 10 cents in adjusted EPS.
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“We believe inference is the biggest opportunity in [artificial intelligence], and inference tasks will largely be run on end devices and on connectivity clouds like Cloudflare,” Chief Executive Matthew Prince said in a release. “By the end of 2024, we expect to have inference-optimized [graphics processing units] running in nearly every location where Cloudflare operates worldwide — within milliseconds of every internet user.”
Cloudflare’s results come as fellow cybersecurity company Fortinet Inc. FTNT, +0.49% also posted earnings Thursday afternoon, bringing a significant miss on its outlook. That guidance seemed to be weighing on the sector in the extended session, with shares of Palo Alto Networks Inc. PANW, +2.25% and Zscaler Inc. ZS, +1.62% both down.