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)

 

[usernames can change now!]

Who must go?

 

[quaawaa]

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.

 

[Super-Chevy454]

Who must go?

I wondered the same question and I'll add who menaged to stay?

 

[Kane Lives]

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.

Shoutout to all you deep undercover Farmers who heeded Null's call to voice displeasure at Matt Price's faggotry.

 

[Pelican Bones]

It makes me wonder which companies saw this shit, said "lol no thank you", and eventually made cloudflare come out with this statement. Blessed timeline.

 

[Flan Handler]

I love how they have to disclose this due the SEC regulations. On Twitter they can flex about how Hate Has No Home Here but they are legally required to tell the shareholders that Unhoming Hate is hitting the shareholders in the change purse.

 

[ロボ﹏§¤r﹏h¶rœ]

Was the tranny money worth it, Cloudflare? I hope you get bought up by China.

 

[not william stenchever]

Sites that actually make money don't want to risk Cloudflare repeating it's behavior with them? Shocking.

 

[ShitLurker]

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

 

[NoReturn]

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.

My EXACT fucking thoughts. There are probably a handful of absolute retards at CloudFlare who think those people dropped because of CF previously supporting KF, but anyone with two brain cells to rub together knows what the decision actually meant.
Hell, even if you don't believe the decision was made because of the tranny brigade, then that just makes things WORSE because it's basically confirmation that CF is compromised by some other organization that has the power to boot sites off the platform and use trannies as a cover story.

 

[Catler]

It makes me wonder which companies saw this shit, said "lol no thank you", and eventually made cloudflare come out with this statement. Blessed timeline.

Any sane one would have at least second thoughts. The only thing that matters when running a tech product/service is stability on a technical and organizational level. Cloudflare has clearly shown they aren't reliable when the going gets tough.

Companies don't want Cloudflare to take a political stance, they want them to take their money and to shut up.

 

[Grub]

Even on hacker news the top comment on the thread about cloudflare dropping the farms was

I am no fan of kiwifarms, I have my own reasons to hate that site but…

archived 4 Nov 2022 20:32:10 UTC

archive.ph

I am no fan of kiwifarms, I have my own reasons to hate that site but I also strongly support free speech so I simply don't visit. That's changed for the past month because keffals decided to open another pandora's box.
Anyone not only getting their info from keffals + supporters can see that this was a coordinated attack. A anonymous call from someone claiming to be a KW member swatting a politician prone to jumping the gun, a dormant account posting a threat that keffals supporters caught immediately and paraded around twitter, that causes matthew prince to cut off KW soon after.

Not only is this a bad precedent to anyone who hosts content that rejects keffals lifestyle choices but this gives many pro-censorship politicians ammunition to push more moderation of the internet while the progressive types continue to do exactly what they claimed kiwifarms was doing.

And well, hacker news is what it is, but it's full of a lot of people cloudflare probably doesn't want to piss off. The kind of people who would be paying clousflare money or invested in cloudflare.

 

[quaawaa]

Even on hacker news the top comment on the thread about cloudflare dropping the farms was

I am no fan of kiwifarms, I have my own reasons to hate that site but…

archived 4 Nov 2022 20:32:10 UTC

archive.ph

And well, hacker news is what it is, but it's full of a lot of people cloudflare probably doesn't want to piss off. The kind of people who would be paying clousflare money or invested in cloudflare.

They probably they thought they had public opinion on their side because LFJ/Keffals' bot army brigaded that thread and downvoted/flagged everything in support of the Farms.

 

[Bogliacci]

Even on hacker news the top comment on the thread about cloudflare dropping the farms was

I am no fan of kiwifarms, I have my own reasons to hate that site but…

archived 4 Nov 2022 20:32:10 UTC

archive.ph

And well, hacker news is what it is, but it's full of a lot of people cloudflare probably doesn't want to piss off. The kind of people who would be paying clousflare money or invested in cloudflare.

Damn the replies are poison though

 

[Catler]

Damn the replies are poison though

HN is chock full of troons just like the software industry as a whole. It's more shocking there's any dissent to be found.

 

[Johan Schmidt]

I do wonder if this was literally because a bunch of no humoured analysts doing profit/loss assessments just looked over cloudflare, and said 'They dropped a website without a warrant, that had a traffic of X without warning. This is a risky group to work with.'

When I worked for a HR company, we'd have to run those sorts of reports all the time, we'd literally just get a bunch of performance data about various companies offering to hire workers, look at how long each worker stayed, and the client satisfaction, and bin the bottom four. Cloudflare is a business; and they offer a service that other large - and quite serious - businesses rely on. Matthew Prince effectively had a tantrum and dumped a client with zero warning and no demand from the law to do so. Would you buy a sandwich from a shop where the owner walked out and poured bleach onto the food of a customer because he didn't like them joking about the Kardashians?

 

[Wallace]

I hope it was worth betraying your principles, mister Price.

 

[NoReturn]

Guys I found their Q3 earnings call transcript and financial results release!

---

Highlights from the SEC PDF in the OP:


Let's zoom in on that last line, shall we?

What else is in here?

Slow clap for these boneheads.

---

From the results document:


And the call:

Look who it is.

This part is interesting. He clearly wants CloudFlare to be the #1 service for this, and I can see why they want to avoid bad publicity, but I'm also curious what else is going on behind the scenes here.

Also, if you needed any more proof they're in bed with the feds.


From the Q&A section

 

[The Partisan]

Turns out people don't like it when you decide to unilaterally become moral arbiters of the internet on behalf of your CIA handlers.

Bit of a white pill boys.