A quick look at the Cloudflare S-1

Aug 25, 2019 · 2 min read
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So Cloudflare recently filed their S-1 and are expected to go public before the end of the year. We thought we’d take a quick look at the company and the S-1 together.

What is Cloudflare?

Cloudflare is a web infrastructure and security company, providing content delivery network services, DDoS mitigation, Internet security and distributed domain name server services. These are the guys that keep websites online.

From the S-1:

  • Revenues of $87.1 million in the first half of 2018 to $129.2 million in the first half of 2019 (growth of 48.3 percent, year over year.) With net net loss rose from $32.5 million in the same period
  • Net loss grew from $32.5 million in the first half of 2018 to $36.8 million to the same period in 2019.
  • Dollar-based net retention rate of 115%

We also particularly liked this from the S-1:

Today, our network spans 193 cities in over 90 countries and interconnects with over 8,000 networks globally, including major ISPs, public cloud providers, SaaS services, and enterprises. We estimate that we operate within 100 milliseconds of 98% of the Internet-connected population in the developed world, and 93% of the Internet-connected population globally (for context, the blink of an eye is 300–400 milliseconds). We intend to continue expanding our network to better serve our customers globally and enable new types of applications, while relentlessly driving down our unit costs.

This proves Cloudflare has a strong portfolio behind it with a viable business model too and with an impact that affects millions of websites.

A cautionary stat:

They went from growing at 60% YoY in 2017 with an 8% Operating Loss, to growing 43% YoY with an Operating Loss of 44% in 2018. Possibly suggesting that they’re going from a “scrappy startup” to “bloated unicorn” status. This may have been done to inflate stats before IPO.


To sum everything up, we really like this company, despite revenue net loss of ~$37M. They aren’t bleeding money like Uber or WeWork. We can imagine many ways they could close that gap, and in fact, the ratio has improved over the last few years.

If you’re interested in speculating on Cloudflare when they IPO, you should checkout Foresight, a fantasy stock trading game with real prizes!


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