Cloudflare, Internet infrastructure and security company, reported earnings on Thursday, hitting a significant milestone. With revenue of almost $254 million, the company topped $1 billion for the first time.
Revenue, which was up 47% from a year earlier, also beat the Street estimate of $250.6 million. That win was offset by a third-quarter loss of $42.5 million, or 13 cents per share. Still, Cloudflare reported a much smaller loss than in last year’s quarter, when it reported losses of $107.3 million, or 34 cents per share. on MarketWatch.
After the earnings, Cloudflare co-founder and CEO Matthew Prince announced that the company has set a lofty goal of reaching $5 billion in organic revenue within five years. “Even when we hit $1 billion, we penetrated less than 1% of our identified market for products that we already have available today.”
“That’s why we’re confident we’re on track to organically achieve $5 billion in annual revenue over the next five years,” Prince told analysts on the earnings call.
Prince also pointed out how rare it is for a company to reach $1 billion in revenue. “Only 6% of public software companies have achieved this milestone, so we’re proud to have passed it, but we’re nowhere near done,” Prince said.
As usual, the markets reacted to this news with a kick in the teeth, with the company’s shares falling as much as 13% overnight on Thursday and down more than 18.5% by Friday’s close.
But how realistic is the $5 billion goal given the current situation and projected revenue for 2023?