UPDATED 18:45 EST / FEBRUARY 09 2023

SECURITY

Amid economic concerns and layoffs, Cloudflare, Qualys and CyberArk report mixed earnings

Amid broad concerns for the global economy and tech layoffs, cybersecurity-related firms Cloudflare Inc., Qualys Inc. and CyberArk Software Ltd. reported a wide mix of earnings results today.

Cloudflare led the pack, reporting earnings before costs such as stock compensation income of $21.6 million, or six cents per share, in its fiscal fourth quarter, up from $100,000 in the same quarter of 2021. Revenue jumped 42%, to $274.7 million. Cloudflare surprised analysts who had been expecting earnings per share of four cents and revenue of $274.4 million.

“In the fourth quarter, we delivered record operating profit, operating margin and free cash flow,” Matthew Prince, co-founder and chief executive officer of Cloudflare, said in a statement. “We also surpassed more than 2,000 large customers paying us over $100,000 per year and signed a record number of deals greater than $500,000.”

For the full year 2022, Cloudflare reported adjusted net income per share of 13 cents on revenue of $875.2 million, up 49% year-over-year.

Looking forward, Cloudflare said it expects adjusted earnings per share of three to four cents in the first quarter of 2023 on revenue of $290 million to $291 million. For the full year 2023, the company expects adjusted earnings per share of 15 to 16 cents and revenue of $1.33 billion to $1.324 billion.

Amid a sea of gloom in the sector, investors loved the numbers, bidding Cloudflare stock up almost 11% in late trading.

By comparison, Qualys shares were flat despite reporting some decent results. For its fourth quarter, Qualys reported adjusted earnings of $38.9 million, or $1.01 per share, up from $33.8 million, or 84 cents per share, the year prior. Revenue rose 19%, to $130.8 million. Analysts had expected adjusted earnings of 90 cents per share and revenue of $130.85 million.

“In 2022, we continued to innovate, introducing new applications as well as enhancing existing applications to further strengthen our market position in the cybersecurity space,” Sumedh Thakar, president and CEO of Qualys, said in the company’s earnings release.

Rounding out the three, CyberArk’s shares were down after it reported mixed results and a lower-than-expect outlook.

For the quarter that ended Dec. 31, CyberArk reported non-GAAP net income of $7.2 million or 16 cents per share on revenue of $169.2 million, up 12% year-over-year. Analysts had expected EPS of 12 cents and revenue of $174.25 million.

“Our results in the fourth quarter and full year 2022 demonstrate the durability of demand for our solutions and strong execution,” Udi Mokady, CyberArk’s current chairman and CEO, said in a media release.

Still, he’s departing the CEO role as of April 3 and Chief Operating Officer Matthew Cohen, will become CEO. “With the execution of our long-term strategy, CyberArk is poised for continued success,” said Mokady. “Our subscription transition has created a durable business model.”

CyberArk’s numbers came in below analysts’ expectations. It’s expecting an adjusted loss of 23 to 30 cents per share in the first quarter versus a predicted loss of 11 cents. Revenue is predicted to be $160 million to $164 million, the midpoint below analysts’ expected $163.63 million.

The company, which released its earnings at the beginning of trading, saw its share price close down 2.6%, to $145.30.

Photo: Wikimedia Commons

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