Cloudflare raises full-year forecast after strong quarter, shares rise

(Reuters) - Software company Cloudflare raised its annual revenue and profit forecast on Thursday after a strong quarter, sending its shares up 9% in post-market trading.

Companies are increasing their expenditure on technology as cooling inflation and the recent strength in consumer activity signal a stabilizing macroeconomic outlook.

"We had a strong second quarter, crossing $1.6 billion in annualized revenue and growing 30% year-over-year," said CEO Matthew Prince.

San Francisco, California-based Cloudflare sells tools and software, grouped as content delivery network (CDN) services, that help companies manage their applications on the internet. It was founded in 2009 and went public at a valuation of over $4 billion in 2019.

The company now expected 2024 revenue in the range of $1.657 billion to $1.659 billion, compared to its earlier forecast of $1.648 billion to $1.652 billion.

It also raised its per-share adjusted earnings forecast to 70 cents to 71 cents from 60 cents to 61 cents earlier.

For the quarter ended June 30, Cloudflare's revenue grew 30% to $401.0 million, inching past analysts' average estimate of $394.7 million according to LSEG.

Gross profit margin, a key measure for software businesses with high recurring revenue, came in at 77.8%, compared with 77.5% in the preceding quarter and 75.6% in the corresponding quarter last year.

The company forecast third-quarter revenue in the range $423.0 million to $424.0 million, compared to analysts' expectation of $423.6 million.

(Reporting by Yuvraj Malik in Bengaluru; editing by Alan Barona)