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)

 

[Pentex]

Wow.

Imagine your current and future customers getting nervous that you will cut their services at a moment's notice due to tranny whinging and gayops, that you are more concerned about the people who don't give you money than you are the people who do.

Who would have thought it?

 

[NoReturn]

Vote with your wallet. The only language companies understand is money. If that goes away, you've made an impact. Hope it was worth it, Cloudflare. I truly do.

That means purchases AND investing.

 

[Drag-on Knight 91873]

And now I'm going to tell you about a transscorpion. This transscorpion wanted to destroy a website which made him look bad, so he asked the Prince to carry him. No, said the Prince, no thank you. If I let you destroy this website that paid me for my services, you may sting me and the sting of the transcorpion is death. Now, where, asked the transscorpion, is the logic in that? For transscorpions always try to be logical. If I sting you, you will die. I will drown. So, the Prince was convinced and allowed the transscorpion on his back. But, just in the middle of the river, he felt a terrible pain and realized that, after all, the transscorpion had stung him. Logic! Cried the dying Prince as his stock price started under, bearing the transscorpion down with him. There is no logic in this!
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Should have let Jersh be president of Cloudflare. Taking out trannies in his nature.

 

[The Last Stand]

Wow.

Imagine your current and future customers getting nervous that you will cut their services at a moment's notice due to tranny whinging and gayops, that you are more concerned about the people who don't give you money than you are the people who do.

Who would have thought it?

Those same people would turn on them in an instant if you so much as point out basic biology.

 

[Kuritan Deplorable]

Its a good day when Karma shines on the Kiwifarms of all places.

 

[anustart76]

Sure If you go Woke you get Blackrock Moneys for free, but Blackrock can only take so many massive baths before it starts to hurt.

Communism works..until you run out of other people's money to spend.

The phrase is "GET woke, go broke". But anyway the thing to remember about Blackrock and other megabanks is they get their money direct from the Federal Reserve. Until recently, it was free money, 0% interest rates.

 

[AnotherPleb]

The phrase is "GET woke, go broke". But anyway the thing to remember about Blackrock and other megabanks is they get their money direct from the Federal Reserve. Until recently, it was free money, 0% interest rates.

Can they stay retarded longer than the USA can stay solvent?

 

[anustart76]

Can they stay retarded longer than the USA can stay solvent?

It depends on how long the Federal Reserve, WEF, and all their cronies can keep it up.

 

[AnonymousKot]

Karma to Cuckflare for messing with us

 

[Positron]

Trash company goes 41% with the troons.

 

[Honka Honka Burning Love]

The phrase is "GET woke, go broke". But anyway the thing to remember about Blackrock and other megabanks is they get their money direct from the Federal Reserve. Until recently, it was free money, 0% interest rates.

That is not entirely true, Blackrock has alot of Pension fund money as their slush funds, eventually those have to pay out, and The Federal Reserve printing money only makes Blackrock's money less valuable. That is why I don't think the WEF will take over the world, they can't actually create or build anything of value.

We are going to have a horrific economic downturn because we listened to these Faggots, but I don't think their Saturday Morning Villain take over the plans are viable long term.

 

[Kosher Dill]

But if this isn't the perfect example of "Go woke, go broke." please feel free to enlighten my sorry old ass to a better one.

Actually, it's almost always the reverse, including in this case. Companies first go broke, then go woke because someone is promising them magic beans that will bring back their profits.
"Stock price down? It's because troons are 60% of the population and none of them are buying your product! I can help!"

Even in the Cloudflare case, this disastrous earnings report came before any blowback from the KF kerfuffle really hit. I don't think the reputational damage was enough to tank their entire quarter, they don't mention any sort of mass exodus. It's only mentioned as a risk going forward.

 

[Barry McKockner]

See, they could have approached this as "Kiwifarms is a statement to the power of our service. If we can mitigate the attacks on them, we can mitigate the attacks on ANYONE!"

Instead, the fucking buckled like broke bitches.

 

[Dysnomia]

Wow.

Imagine your current and future customers getting nervous that you will cut their services at a moment's notice due to tranny whinging and gayops, that you are more concerned about the people who don't give you money than you are the people who do.

Who would have thought it?

I wish more companies would see that troonbux are minimal compared to profits from people not on HRT. But I think it's still going to be awhile before the troon army loses its power.

 

[Kosher Dill]

I wish more companies would see that troonbux are minimal compared to profits from people not on HRT. But I think it's still going to be awhile before the troon army loses its power.

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).

 

[Baraadmirer]

Hey gimme some credit ... I'm not always full of shit

For the uninitiated, moocow had a fun time on a call with Cloudflare a while back.

My employer is an enterprise customer w/Cloudflare and we spend 7 figures a year on their services. After I grilled them about KF's banning during our last annual account review (and they gave thoroughly unacceptable answers), we're spreading out our infrastructure now and reducing (and ultimately will eliminate) our dependence on their service. We've told them as much and told them why. The call began as a routine "oh boy we get to upsell more services now!" kind of meeting but ended with them scrambling to figure out how to save the account at all. I guarantee our meeting was the topic of heated discussion at a higher-level meeting within CF after it was finished.

Also, they openly discussed Null's account information with us and lied that he was a "free" user (he wasn't). The only assurance they would give us that we wouldn't just get unilaterally shut off if some prima donna whined about us was that we were an enterprise customer. I literally asked "so we only get free speech because we're paying for it?" and got a dumbfounded look but no response. That seriously worried the C-levels on my end. And they talk to other C-levels at other companies.

I can't give details on what my company does for obvious reasons but suffice to say we do not allow or publish any user-generated content but we do provide aggregated (public) data to paying customers. Nothing even remotely controversial, but given how fucking stupid our current batch of politicians are, you never know.

This has not been a casual nothingburger for Cloudflare. High-value customers are fucking pissed and (justifiably) very worried that they could be next now that it's been shown that an angry tranny can knock down the whole house of cards. There are a great many conversations happening in private at a lot of big companies right now concerning whether to continue using Cloudflare. Their actual services are fantastic but they've just proven they're vulnerable in a different (and infinitely more exploitable and unpredictable) fashion that renders it all worthless. It doesn't matter one bit how theoretically tough and fast your security services may be if you can be scared into just turning it off.


I got that vibe from this too. They know current Twitter management is retarded enough to drag this to SCOTUS (though Musk's purchase might change that) and of course Facebook/Meta has no problem lying to congress so they might "lead the charge" too.

That was one of the more lengthy awkward silences during the meeting. I brought this up specifically (both their blog history praising free speech and then their full 180 on their "we're not banning anybody" stance with KF. I asked them directly, "if you're willing to make a public statement telling people off for demanding censorship and regretting ever banning anyone, and then turn around less than 48 hours later and ban someone anyway, how can we even remotely trust your service?"

The best assurance they could offer (after a lot of back-and-forth) was "well if there's ever any kind of controversy we'd talk to you first before we took any action" along with a vague promise that they'd give us a "couple of days" to transfer off the platform if it ever came to that.

It was fucking ridiculous, and they know we're not happy.


Firing paying customers (or profitable users) is expensive, though. That's the crazy part. They're giving up cash flows when they ban people. Banning never improves revenue -- the people clamoring for it aren't paying customers and are rarely profitable users themselves, and they never stop demanding more and more bans anyway. The mythical "end of our boycott" never comes because there's always someone else offending them that simply must be removed.

Funny you should ask! They wouldn't intimate whether the decision to ban KF was entirely driven internally or as the result of external legal pressure and were very shifty about it. Bear in mind these were mostly sales drones, but of course it was clear within moments of my first question about it that they knew exactly what I was talking about (I didn't actually mention KF by name at first, just that they "unilaterally banned a controversial website without notice").

They did indeed try to assure us that because our business doesn't involve end-user interactions or user-generated content of any kind, we would "probably" never run afoul of whatever vague threat (which they never defined despite my asking several times) finally motivated them to ban KF.

To be blunt, yes, I would have been far happier if they'd actually just said either "we decided KF crossed the line, and we're not going into details about it with you" or "yes, behind the scenes someone important threatened us with major consequences if we didn't, and we're not going into details about it with you." That would at least show internally-consistent behavior (either they collectively decided censorship was justified or they collectively decided they'd rather take this heat than lose the entire business). The fact that they were so uncomfortable in that meeting and simply couldn't give a straight answer tells me there was significant disagreement about the action and they (still) haven't been given coherent instructions on what to tell angry customers -- possibly because there could well still be internal strife over it.

One coworker who's used CF for years for various things didn't actually believe me at first when I relayed the details of the meeting to him until his boss (who was present for it) said "nah, Moocow ain't lyin'."

Prince's rapid 180 after praising free speech lends credence to the idea that something big beyond any one company's control cleared its throat to provoke this action. My colleagues have a gut feeling that some troon-sympathetic mid-level (or higher) manager at Visa/MC caught wind of this shitstorm who had enough influence convince his masters to threaten to block CF's credit card processing if they didn't take action.

Even though it's likely they could get that reversed (assuming they complied, of course), that would make international news and raise serious doubts among customers and shareholders about CF's long-term viability. After all, if you're in a public-facing business like CF is and you can't take credit card payments, you're sunk. Nobody cares whose fault it is; they only care that your revenue has suddenly dropped to near-zero.

It's really the only realistic "major" thing any of us could think of that's big enough for CF to consider a direct existential threat worthy of immediate action. The only other things we could think of was either whatever corporate bank they use started growling or some shady government spook threatened to sic the SEC, FTC or IRS on them or something.

Link to long post that can't be quoted.

Premature celebration is something all of these cows have in common. It never stops being funny.


I think the reason the confrontation went the way it did was that I/we didn't explicitly take KF's side (for one thing, I knew if I approached it from that angle they'd just write me off as a nazi). We asked pointed questions about how we specifically can avoid ever being in their crosshairs like that and then followed up hard when they couldn't give us good answers.

You're right that they absolutely weren't expecting any backlash, especially from enterprise clients. I do know a few others who pay CF a healthy sum every month and all I can say is that we're not the first (and won't be the last) to bring it up with CF.

 

[Drag-on Knight 91873]

Mister Price! Tear down this wall!

-Null probably

 

[Jet Fuel Johnny]

You know, I should have kept my shares and see if they did public voting on stuff like Ford and other companies.

One share entitles you, with a lot of companies, to vote on things. It's not a huge vote, but something can be done. There stock is estimated to continue to fall since "investor confidence" in them has dropped.

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

They lost 30% of their value in a month. That's not good.

Sure, mine wasn't that big of a deal. It was only a few shares. But that can add up. Everyone knows troons don't buy stock.

 

[2ndBest]

See, they could have approached this as "Kiwifarms is a statement to the power of our service. If we can mitigate the attacks on them, we can mitigate the attacks on ANYONE!"

Instead, the fucking buckled like broke bitches.

Still wouldn't be very good.

"If we can mitigate attacks on them, we can mitigate attacks on anyone! Until we decide to drop your service for some arbitrary and still unknown reason, then you're left in the dust."

 

[George Lucas]

See, they could have approached this as "Kiwifarms is a statement to the power of our service. If we can mitigate the attacks on them, we can mitigate the attacks on ANYONE!"

Instead, the fucking buckled like broke bitches.

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.