Cloudflare reports wider first-quarter operating loss, shares slide

Cloudflare reported wider first-quarter operating loss on Thursday as sales and marketing costs jumped in the period, sending shares down 12% in trading after the bell.

High interest rates have hurt enterprise budgets as businesses expect some economic uncertainty and look to protect their bottom line and cash balances.

Loss from operations widened to $54.6 million in the March quarter from $47.3 million a year ago, as sales and marketing expenses jumped about 42% to $194.1 million.

Cybersecurity firms such as Palo Alto Networks and Crowdstrike Holdings have gained market share in the past year as companies look to adopt more efficient and cheaper consolidated platforms for a variety of applications.

The company expects second-quarter revenue between $393.5 million and $394.5 million, compared with analysts’ estimate of $393.5 million, according to LSEG data.

It posted revenue of $378.6 million in the first quarter, up 30% from the prior year, and also above estimates of $373.1 million.

Adjusted profit in the quarter was 16 cents per share, compared with 8 cents per share a year ago. Reuters