SA国际传媒

Today, , an Internet security and content delivery company, as expected. The company joins in a dash to become public companies while the global equity markets are still richly-valued.

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The company鈥檚 S-1 filing details a healthy company, with revenue growing from $87.1 million in the first half of 2018 to $129.2 million in the first half of 2019. That growth, combined with a net loss that scooted up a slim $4 million. The company’s net loss rose from $32.5 million in the first half of 2018 to $36.8 million in the corresponding period this year, making Cloudflare a company that we can both understand and explain.

That鈥檚 a welcome respite after trying to untangle Uber鈥檚 numbers听补苍诲 WeWork鈥檚 filing. Let鈥檚 begin with some history, and then talk numbers.

History, And In-Practice

According to SA国际传媒, San Francisco-based Cloudflare has since it was founded in 2009. Its last known financing was a that was announced in March at a pre-money valuation of $3.1 billion. led that round.

Other known investors who would benefit from a successful public exit include and , among others. We originally reported on the possibility of Cloudflare going public on July 31 and at the time, wrote that it intended to float this September, according to

Back then, we detailed Cloudfare’s business for you all:

鈥�Cloudflare is best known for its CDN, or content delivery network; the company鈥檚 services help speed Internet content to consumers around the world, helping the patchwork quilt that we call the web function with minimal delays.

Cloudflare鈥檚 business is part of the furniture to a degree. It鈥檚 also something critically important to how well online video works, for example. Which makes its debut interesting and somewhat exciting. Here鈥檚 part of the Internet鈥檚 backbone, going public.鈥�

Got all that? Let鈥檚 get into the money.

The Numbers

As noted before, the company鈥檚 H1 2019 revenue grew from $87.1 million in the year-ago period to $129.2 million. That鈥檚 growth of 48.3 percent, year over year. That pace of growth compares favorably to the company鈥檚 full-year 2018 performance, when its revenue grew from $134.9 million to $192.7 million, a gain of 42.8 percent.

Cloudflare鈥檚 accelerating growth rate is heartening for the firm, but it does come at the cost of slightly worse profitability in gross terms. The firm鈥檚 net loss grew from $32.5 million in H1 2018 to $36.8 million in the first two quarters of 2019. While its net loss did widen, the firm鈥檚 operating cash burn fell during the two periods from $17.1 million to $12.6 million, another sign of health.

The company is, therefore, managing toothsome growth with net losses that are shrinking in percent-of-revenue terms, while it consumes less cash. Its investors must find that particular cocktail encouraging.

And Cloudflare doesn鈥檛 have to go public. With over $124 million in cash on hand at the end of Q2 2019. So, it can afford to self-fund for years. But, with the public markets until recently at record highs, it isn鈥檛 a huge surprise that the company wants to go public now. Why not get out while the getting is still good?

A final note for fans of recurring revenue. According to Cloudflare, its 鈥渄ollar-based net retention rate鈥� bounces between 110 percent and 115 percent, depending on the quarter. Built-in growth of that sort is key to a modern software services company鈥檚 ability to expand while keeping a lid on costs.1

Nuts, Bolts

According to its S-1, Cloudflare plans to list its shares on the New York Stock Exchange under the symbol 鈥淣ET.鈥� Underwriters include Goldman Sachs, Morgan Stanley, Wells Fargo Securities, RBC Capital Markets and JMP Securities, among others.

The company鈥檚 S-1 has a placeholder $100 million figure in place regarding the size of the deal. Expect more on that front when we get the company鈥檚 initial pricing interval.

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