SAN FRANCISCO - Cloudflare, Inc. (NYSE: NYSE:NET), a prominent player in the connectivity cloud sector, has announced the acquisition of Kivera, a cloud security and compliance platform. This strategic move aims to enhance the Cloudflare One platform by incorporating Kivera's technology to provide proactive controls for cloud deployments, reducing security risks before they occur.
Gartner (NYSE:IT)® research suggests that through 2027, 99% of cloud breaches will likely result from user errors, such as misconfigurations and account compromises, rather than issues with cloud providers themselves. Cloudflare's acquisition of Kivera is positioned to address these vulnerabilities by integrating preventive measures directly into the cloud deployment process.
Matthew Prince, co-founder and CEO of Cloudflare, stated that the integration of Kivera's technology is expected to help customers manage their use of multiple cloud providers more securely and reliably. The combined capabilities of Cloudflare One and Kivera will offer customers the ability to:
- Detect and alert on cloud misconfigurations across major cloud providers.
- Implement preventive security measures with a single click to protect against breaches.
- Define boundaries around cloud resources to prevent accidental data sharing.
- Mitigate the risks associated with shadow IT.
- Automatically enforce compliance with common regulatory frameworks.
Vernon Jefferson, Co-founder of Kivera, expressed enthusiasm for the acquisition, highlighting how it will empower security teams by reducing the margin for error in cloud configurations.
Cloudflare's recent acquisition of BastionZero in May 2024, a Zero Trust infrastructure access company, broadened the scope of Cloudflare One's VPN replacement solution. The collaboration between Kivera and BastionZero is set to deliver centralized security management and support Zero Trust best practices for hybrid IT environments.
The financial terms of the acquisition have not been disclosed. This strategic move is expected to further solidify Cloudflare's position in the cloud security market, providing comprehensive solutions for businesses navigating the complexities of cloud computing.
This article is based on a press release statement from Cloudflare, Inc.
In other recent news, Cloudflare Inc . has reported robust financial growth in Q2 2024, with a 30% year-over-year increase in revenue, reaching $401 million, and an impressive $1.6 billion in annualized revenue. Large customers, now totaling 3,046 after the addition of 168 new ones, contributed 67% to the revenue. The company also reported strong profitability, with an operating profit of $57 million and a free cash flow of $38.3 million.
In other recent developments, Cloudflare is actively collaborating with the White House and other major tech companies to strengthen internet censorship evasion tools in countries like Russia and Iran. The company is working with researchers to better document instances of internet shutdowns and censorship.
Susquehanna Financial Group recently adjusted its price target for Cloudflare, increasing it to $85 from the previous $80, while maintaining a Neutral rating on the stock. Similarly, Citi reiterated its Neutral rating on Cloudflare, citing enthusiasm for long-term revenue growth but a high current valuation.
Cloudflare's recent announcements included significant developments in cyber and Secure Access Service Edge (SASE) initiatives, as well as improvements to performance and user experience for existing solutions. These updates are part of Cloudflare's broader strategy to enhance its Workers and AI offerings. Despite the positive developments, Citi's analysis indicates that the current enterprise value to sales ratio reflects the market's optimism.
InvestingPro Insights
Cloudflare's acquisition of Kivera aligns with its growth strategy and market positioning, as reflected in recent financial data and analyst insights from InvestingPro. The company's revenue growth of 31.09% over the last twelve months, coupled with a robust gross profit margin of 77.3%, underscores its strong market performance and ability to fund strategic acquisitions like Kivera.
InvestingPro Tips highlight that Cloudflare's net income is expected to grow this year, and analysts predict the company will be profitable. This positive outlook suggests that the integration of Kivera's technology could contribute to Cloudflare's path to profitability, addressing the current situation where the company is not profitable over the last twelve months.
The acquisition also appears timely given Cloudflare's impressive gross profit margins and strong return over the last five years, as noted in the InvestingPro Tips. These factors indicate that Cloudflare is well-positioned to leverage Kivera's capabilities to enhance its cloud security offerings and potentially increase its market share.
It's worth noting that Cloudflare is trading at a high revenue valuation multiple, which may reflect market expectations for continued growth and innovation through strategic moves like the Kivera acquisition. Investors interested in a deeper analysis of Cloudflare's financial health and growth prospects can access additional insights through InvestingPro, which offers 11 more tips for NET stock.
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