Business Cloudflare sinks 22% on 'insufficient' Q3 performance despite earnings beat - LMAO "In 2022, we received negative publicity in connection with the use of our network by Kiwi Farms... and we are aware of potential customers who decided not to subscribe to our products because of this."

• Cloudflare (NYSE:NET) shares plunged -22% Friday even as the cloud-based security company exceeded Wall Street estimates with its third quarter results and raised full year forecast.
• In Q3, the company generated adj. EPS of $0.06 on revenue of $253.9M that grew 47% year-over-year, surpassing $1B in annualized revenue.
• Analysts suggested the financial performance was not strong enough to justify the stock’s high valuation, which could explain the investor rout. Citi said the results had “insufficient oomph for this multiple, in this tape” and were “disappointingly in line,” while Morgan Stanley noted revenue growth was below 50% and fell short of investor expectations, even with macro pressures.
• Still, RBC Capital Markets suggested Cloudflare (NET) is navigating macro headwinds well and is “likely more resilient than most”.
• Cloudflare expects 2022 sales to be between $974M to $975M, up from a prior outlook of $968M and $972M. Analysts currently expect the company to generate $974.67M in sales. Fourth quarter sales are estimated to be between $273.5M to $274.5M, compared to estimates of $274.17M.

https://seekingalpha.com/news/39019...fficient-q3-performance-despite-earnings-beat (Archive)

Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others.

Activities of our paying and free customers or the content of their websites and other Internet properties could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and other third parties. [...] In 2022, we received negative publicity in connection with the use of our network by Kiwi Farms, a forum website tied to harassment campaigns and direct threats toward individuals. We are aware of some potential customers that have indicated their decision to not subscribe to our products was impacted, at least in part, by the actions or potential actions of certain of our paying and free customers. We may also experience other adverse political, business and reputational consequences with prospective and current customers, employees, suppliers, and others related to the activities of our paying and free customers, especially if such hostile, offensive, or inappropriate use is highly publicized.

Conversely, actions we take in response to the activities of our paying and free customers, up to and including banning them from using our products, may harm our brand and reputation. [...] following escalating, direct threats towards individuals in September 2022, we blocked access to Kiwi Farms content through our infrastructure. We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our network and products, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this.

Page 66: https://cloudflare.net/files/doc_financials/2022/q3/dd287e1e-06fc-4ab3-9f0b-8d87a6c40692.pdf (Archive)

 

[XANA]

I'm pretty sure groveling to a bunch of whiny piss-babies and exiting the evil Kiwi Farms from their services would result in an increase of demand for their services from the usual suspects.

Oh wait, it's probably because prospective clients realized that terminating service under false or exceptionally shaky reasons isn't a good look for a company that claims to safeguard websites against slander and online ddos attacks.

 

[LurkTrawl]

That’s the real story though: they couldn’t. A small forum website was costing Cloudfare untold amounts of money. When their service was actually stress-tested, it didn’t work. That’s why they really dropped Kiwifarms. They will drop any website that actually gets continual real DDOS attacks. The whole product is a sham.

Shocked I haven't seen that take before and a bit envious that I didn't think of it. That's most likely the actual reason for them dropping the Farms.

It'd also explain why this had a larger impact possibly than it should've even with the media attention. Their product didn't fucking keep the farms up when it was still working, did it? I didn't even think of it at the time.

 

[Kosher Dill]

That’s why they really dropped Kiwifarms. They will drop any website that actually gets continual real DDOS attacks.

I'm not sure about that. I think they do like having DDOS attacks in their system that they can use as training data. A big DDOS against a user no one cares about is probably the dream scenario for them - free training without consequences if they stumble. That's also why they allow DDOS attackers to keep using CF.

Their product didn't fucking keep the farms up when it was still working, did it?

My impression was that Cloudflare worked decently well at what it does, but it's just not a universal solution for every possible attack. I think at least some of the attacks we've seen bypass CF and try to directly cause problems for Null's router hardware. (Anyone who knows more, please feel free to correct)

 

[Angry Alt Right Nerd]

That’s the real story though: they couldn’t. A small forum website was costing Cloudfare untold amounts of money. When their service was actually stress-tested, it didn’t work. That’s why they really dropped Kiwifarms. They will drop any website that actually gets continual real DDOS attacks. The whole product is a sham.

Reminder that infinite does not exist, remember this the next time you go to an all-you-can-eat buffet.

 

[Capsaicin Addict]

@Baraadmirer Your quotes from moocow kind of jibe with something Greenwald had said in his substack: namely, that shadow faggot Ben Collins had put the pressure on CF to kick Kiwifarms to the curb.

That to me is a hell of a lot more plausible, since Collins wields some weird fucking internet-scrubbing powers. He would NOT want KF shitposters making his job harder.

 

[KiwiFuzz]

Hahahaha! Choke on that giant tranny cock you retarded fucks!

Bold of you to assume Liz Fong-Jones has a giant cock.

 

[moocow]

A few of the stock pick suggestion sites are saying to sell.

They're not wrong. I saw one of them advise something to the effect of "sell next time this stock rallies, because that's the highest it'll ever go." IMHO Cloudflare was overvalued and their stock absurdly overpriced.

Scuttlebutt says they've only got three profitable products (WAF, DDoS protection, paid CDN) and the rest mostly lose money (or break even at best). Engineers complain that projects not related to those three products are woefully understaffed and starved for resources, and while the company has earned a lot of (now mostly squandered) goodwill from the internet community by giving away a lot of services on their free tier, shareholders aren't too thrilled at how much potential revenue the company gives up by doing so.

There are more chinks in the armor than just the big one (i.e. censorship). To add to all that, this Q3 2022 report straight-up tells investors "hey, we think we'll make more profit down the road if we eat a bit of loss now, also wowzers the competition's heating up fast." Now, CF's probably right about that, but that's still one of the best ways to make many investors run for the hills. That won't help the share price either.

I'm so fucking glad I sold my shares early in the year near the peak. Right around when the ruskies handed the ukies a valentine. Just kinda had a feeling the whole market (and the tech sector in particular) was about to eat a shit sandwich from that.

ETA:

namely, that shadow faggot Ben Collins had put the pressure on CF to kick Kiwifarms to the curb.

Does that nigger have a thread yet? Because if anyone has earned one besides the troon brigade throughout this debacle, it's him.

 

[Absurdist Laughter]

Should I sell my Puts now or wait for Q4? Side note, this is Q3 earnings, I believe they dropped us during the Q4 threshold? If that is so...well, wait, the fun is just starting.

 

[ロボ﹏§¤r﹏h¶rœ]

Does that nigger have a thread yet? Because if anyone has earned one besides the troon brigade throughout this debacle, it's him.

No, you're free to make one. He only gets mentioned here and there.

 

[Kosher Dill]

chinks in the armor

So to speak.

 

[Caustic Gelatin]

It's never about the troonbux, not even at a place like Cloudflare where they probably do have a lot of troony network admins in their customer base.
What it is about, only real insiders probably know, and they're not talking. Matthew Prince was obviously forced to make a sudden U-turn for some reason, and it surely wasn't because of Cloudflare's reputation with gullible troons - that bridge was presumably already burnt. If anything, it's going to be even worse now because they'll say "CF can deplatform sites and has done it recently, they just choose not to for our latest target".

The wild speculative theory I like most is that a payment processor threatened to shut Cloudflare off. It seems like the easiest way for the situation to turn on a dime (so to speak).

I seem to recall somewhere during this whole hullabaloo someone at cloudfire talking about (some) regret after dropping daily stormer and afterwards having many different factions calling them up screaming they drop support for various websites. I believe they mentioned even government entities demanding CF needs to drop humanitarian organizations citing that incident. Or something of that nature.

But sure that was a super specific, once in a life time, out of the norm, totally isolated isolated incident, right? Will never happen again. But then it did happen again. So whats the takeaway? That CF will totally provide services so long as there isn't a big enough shit-fit thrown and/or our coin purse holders aren't whined at? That the services provided are tenuous unless you are some super huge big tech company and if any heat is applied we will throw your smaller websites out and crumple like a cheap paper bag?

I mean its a whole can of worms here. If I hire a security company to provide security, but they will immediately fold and revoke their service as soon as the people wishing to do me harm calls the company a meanie-bo-beanie. Then Why the fuck would I pay for that service?
Sure the KF drama probably isn't entirely the reason for CF's low preformance, but I can't not believe it didn't have something to do with it.

 

[RodgerDodger]

I love how in their first paragraph they make it sound like people chose not to use Cloudflare because Kiwi Farms was a customer but they later admit that the exact opposite was true and that they lost business because people were afraid that they'd be dropped with no notice for no reason.

For this to be important enough to call out in their 10-Q there must have been a lot of people who voiced their concerns.

Well look at it from a large corporations point of view. Let’s say Disney was using their services. When suddenly the Trans Mafia starts making threats and noise about Florida’s “Don’t Say Gay Law” and how Disney isn’t being good Ally’s. We all know the drill. Could one call from a mentally I’ll moron take their multi billion dollar business off the internet?

Cloudflare really fucked themselves. Because the thing a lot of customers are quietly asking is “what laws did Kiwifarms violate?“

 

[Windows Error 98]

I seem to recall somewhere during this whole hullabaloo someone at cloudfire talking about (some) regret after dropping daily stormer and afterwards having many different factions calling them up screaming they drop support for various websites. I believe they mentioned even government entities demanding CF needs to drop humanitarian organizations citing that incident. Or something of that nature.

But sure that was a super specific, once in a life time, out of the norm, totally isolated isolated incident, right? Will never happen again. But then it did happen again. So whats the takeaway? That CF will totally provide services so long as there isn't a big enough shit-fit thrown and/or our coin purse holders aren't whined at? That the services provided are tenuous unless you are some super huge big tech company and if any heat is applied we will throw your smaller websites out and crumple like a cheap paper bag?

I mean its a whole can of worms here. If I hire a security company to provide security, but they will immediately fold and revoke their service as soon as the people wishing to do me harm calls the company a meanie-bo-beanie. Then Why the fuck would I pay for that service?
Sure the KF drama probably isn't entirely the reason for CF's low preformance, but I can't not believe it didn't have something to do with it.

Cloudflare still hosts fucking Al-Qaeda btw.

 

[pikachudidnothingwrong]

They have somehow managed to do the very worst thing possible on this and piss everyone off. Sticking to their claims of hands off and not actually being hands off. The woke are pissed because they won't give in fully and promise to thwart the wrong thinkers in all cases, everyone else is upset that they are still playing internet police! Fuck them, they made their bed.

 

[The Internet Dick]

I mean its a whole can of worms here. If I hire a security company to provide security, but they will immediately fold and revoke their service as soon as the people wishing to do me harm calls the company a meanie-bo-beanie. Then Why the fuck would I pay for that service?
Sure the KF drama probably isn't entirely the reason for CF's low preformance, but I can't not believe it didn't have something to do with it.

I'm guessing most Woke corporate types are only pretending to be Woke. Many C-Suite executives don't hold to a defining ideology and they sure as hell don't ascribe to a religion; they just outwardly go with the cultural flow. They're the modern day equivalent of the Medieval merchant class playing nice with the Church. Look at Nike, embracing the Woke while using slave labor to make its shoes. They're venal fucking sociopaths driven solely by greed. Business concerns are their only concerns, so yes, you're right: Cloudflare is likely hurting because the company blew its credibility. It can't be counted on. It's unreliable, and service reliability is one of the major metrics in that industry by which customers and stockholders measure value.

Fuck Cloudflare. Reap, sow motherfuckers.

 

[not william stenchever]

everyone else is upset that they are still playing internet police!

I misread that as "still paying the internet police". Still quite applicable.

 

[Goofy Logic]

Didn't Null say on Jim's stream that shareholders can force companies to make profitable decisions? Is there necessarily something stopping someone from buying a share in such companies and initiating a class action suit or something along those lines? Granted, I imagine it's probably not that simple to get it to be enforced.

Dodge Brothers vs. Ford Motor Co. Is the precedent case, basically saying the company must follow the direction given by the shareholders. This case basically means if shareholders don't like a decision a company has made against their opinion, they can sue to get the decision reversed.

 

[Creepy McGee]

They have somehow managed to do the very worst thing possible on this and piss everyone off. Sticking to their claims of hands off and not actually being hands off. The woke are pissed because they won't give in fully and promise to thwart the wrong thinkers in all cases, everyone else is upset that they are still playing internet police! Fuck them, they made their bed.

They were always going to piss one side off. What none of these companies seem to recognize is that they can never do enough to make these lunatics happy. The moment anyone starts to capitulate to the hysterical whining is the moment they lose.

They just can’t help but shoot themselves in the foot.

 

[ShitLurker]

Bold of you to assume Liz Fong-Jones has a giant cock.

It tapes one of those rainbow dragon dildos on it's gash to get the effect going.

 

[XYZpdq Jr.]

Cloudflare still hosts fucking Al-Qaeda btw.

>tfw you're literally more hardcore cyberfugitiveof the hyperonlines than Al-Qaeda