Cloudflare, an IT service provider, has become profitable and attracted a record number of large customers.

The Cloudflare Inc. (NET) developer presented a report for the third quarter on November 8. One of the most important news was the company’s return to profitability without GAAP. Cloudflare’s revenue in the third quarter grew 51% year-on-year to $172 million, more than $10 million higher than Wall Street expectations. 

But even more, important news was the company’s return to profitability (excluding GAAP) – almost a year ahead of schedule. Non-GAAP net profit was $1.4 million, while in the same quarter a year earlier, the company made a loss of $5.8 million. In addition, Cloudflare’s gross margin increased to 79.2%. One of the drivers of Cloudflare’s growth was attracting a record number of large customers in the past quarter (the expenses of such customers exceed $ 100,000 per year). 

According to the data provided by Cloudflare management, in the third quarter, it was possible to attract about 170 large customers, and now their total number is 1,260, which is 71% more year-on-year. As a result, Cloudflare’s forecast for the fourth quarter assumes revenue in the range of $184 million to $185 million. 

But this forecast may be conservative, given the dynamics of attracting large customers and the high demand for Cloudflare services. Recall that the company supplies IT solutions that, among other things, speed up the online operation of the Internet application without adding hardware, installing software, or changing the code. 

Last year, Cloudflare introduced a new service for remote work, Cloudflare for Teams, which almost immediately became popular as it appeared in a favorable market environment. In addition, the company supplies digital security and data protection solutions. At the auction on November 8, the NET stock was worth $197.26.