Cloudflare to incur $140M-$150M charges due to layoffs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy NET?
Source: stocktwits
- Layoff Charges Expected: Cloudflare anticipates incurring charges between $140 million and $150 million due to layoffs, which will be reflected in Q2 earnings, indicating financial strain during its transformation process.
- Performance Beats Expectations: The company reported adjusted earnings of $0.25 per share for Q1, exceeding the expected $0.23, with revenue rising to $639.8 million from $479.1 million a year prior, showcasing strong market performance amid its AI transition.
- Upgraded Future Outlook: Cloudflare raised its 2026 adjusted earnings guidance to between $1.19 and $1.20 per share, significantly above the previous forecast of $1.11 to $1.12, reflecting management's confidence in future performance despite uncertainties from layoffs.
- Market Sentiment Analysis: While Cloudflare's stock has soared 111% over the past year, investor sentiment appears cautious following the layoff announcement, with some analysts suggesting that the cuts may introduce execution risks that could undermine investor confidence.
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Analyst Views on NET
Wall Street analysts forecast NET stock price to fall
25 Analyst Rating
15 Buy
10 Hold
0 Sell
Moderate Buy
Current: 256.790
Low
131.00
Averages
253.24
High
318.00
Current: 256.790
Low
131.00
Averages
253.24
High
318.00
About NET
Cloudflare, Inc. is a connectivity cloud company. The Company delivers a range of services to businesses of all sizes and in all geographies, enhancing the performance of business-critical applications. Its full suite of products consists of application services that help deliver security, performance, and reliability for any organization's applications connected to the Internet, including Websites and application programming interfaces (APIs) and its secure access service edge (SASE) platform, which contains its suite of and workplace security services and network services solutions to help ensure traffic in and out of an organization’s network and devices is verified and authorized and data is protected and secured, as well as to securely connect data centers, cloud services, and branch offices to an organization with its connectivity cloud. The Company also offers developer-based solutions which build and deploys serverless and artificial intelligence applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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