Investing in ChatGPT to accept Microsoft? Try Cloudflare!

Listed companies participating in ChatGPT are not only $Microsoft (MSFT.US)$ Its CDN provider $Cloudflare (NET.US)$ It has benefited a lot recently.

prefers $C3.ai (AI.US)$ Cloudflare has a sacred code “NET,” which makes investors happy the first time they see it.

However, c 3. AI has experienced headwinds in recent quarters; does Cloudflare have similar issues?

Cloudflare, Inc. is a US-based company that provides cloud-based services to website owners and internet users. The company was founded by Matthew Prince, Lee Holloway, and Michelle Zatlin in 2009 and is headquartered in San Francisco, California.

Cloudflare's mission is to help build a better internet by providing services that improve website performance, security, and reliability. The company's services include a content delivery network (CDN), DDoS protection, DNS management, web application firewall (WAF), and security analysis.

One of the key services Cloudflare provides is its CDN, which accelerates the delivery of website content to users around the world. This is achieved through a network of servers located in multiple data centers around the world. A CDN also helps reduce the load on a website's origin server, thereby improving website performance and lowering hosting costs.

Another important service provided by Cloudflare is DDoS protection, which helps protect websites from distributed denial-of-service attacks. This is achieved through advanced security measures such as rate limiting, IP reputation, and web application firewall (WAF) rules.

In addition to these core services, Cloudflare also provides DNS management, which allows website owners to manage their Domain Name System (DNS) records through an easy to use interface. This is very useful for managing website traffic, email routing, and other aspects of website operation.

First, innovative technology and the ability to continuously adapt to changing market demands, such as its content delivery network (CDN), DDoS protection, and web application firewall (WAF), are designed to address the most pressing issues of website owners and internet users, including performance, security, and reliability. Cloudflare Anycast technology, the same global IP, all Cloudflare servers can run all of their services.

Second, global networks and influence. Cloudflare has an extensive network of data centers around the world, which enables it to provide fast and reliable services to its customers no matter where they are. This global influence also enables the company to serve a diverse customer base in different industries and regions. In terms of security defense, Cloudflare introduced 1.1. 1.1 Public DNS, which is also the fastest DNS to date.

Third, timely and effective customer service and support. The company provides its customers with ith's comprehensive documentation, tutorials, and support resources, as well as 24/7 customer support to ensure that any issues or concerns are addressed promptly and effectively.

Of course, Chinese internet sites aren't necessarily familiar with it, because it's slow to access in mainland China, and the law requires a filing to use domestic servers, so Cloudflare's domestic nodes cannot be directly provided to any website. At the same time, its commercial version starts at $200 per month, and the enterprise version is expensive at $2,000 per month.

In the just-released financial report for the fourth quarter of fiscal year 2022, the company's revenue was US$274 million in the US, in line with expectations, up 47% year-on-year. Furthermore, since listing, the company's revenue growth rate has remained above 50% each quarter. In 2022, the US had annual revenue of 975 million US dollars, an increase of 49% over the previous year.

The company's growth is still at a high level within the industry, and marginal effects can also make profit margins higher and higher.

The customer retention rate is an important indicator for SaaS companies, staying at 122.

In terms of performance guidance, the company's deferred revenue for the next five years is US $5 billion, which means that the compound annual growth rate is still over 35%.

At its peak in 2021, Cloudflare's market capitalization once reached 73 billion US dollars, and now it is 22.5 billion US dollars. Corresponding to revenue of nearly 1 billion US dollars, its revenue multiplier (market sales rate) also exceeded 20 times, and the average of similar SaaS companies was 15 times; even with EV/T 12 million in revenue, Cloudflare exceeded 15 times, and the industry average was 10 times higher, and it was still valued higher than the industry average.

However, according to the company's current growth rate, the EV/sales forecast for 2023 can fall to 12.6, which can reduce the gap with the industry average. After all, the company's revenue growth rate is still quite high in the industry as a whole.

As a result, the market is currently also giving a net premium.

Activist investors like Kathy Wood prefer companies like this. The current Ark Foundation $ARK Innovation ETF (ARKK.US)$ Its position accounted for 0.21%.