News for hackers. Stuff that matters.

A comment on Cloudflare announces fourth quarter and fiscal year 2021 financial results. Parent comment

Re:Cloudflare announces fourth quarter and fiscal year 2021 ... by jyap on Thursday February 10, 2022 @04:49PM (#30293174)
Sales and Marketing line item is over 50% of their Operating Expenses. $96.2mill last quarter.

Since it’s still in a growth phase with revenue, the losses can continue as a customer acquisition cost.

They can scale back at any time.

[ Parent | on HN ]
Re:Cloudflare announces fourth quarter and fiscal year 2021 ... by mathattack on Thursday February 10, 2022 @07:01PM (#30294737)
Churn is very low for CDNs, so the revenue they get lasts a long time but the sales cost is up front.
[ Parent | on HN ]
Re:Cloudflare announces fourth quarter and fiscal year 2021 ... by galosh on Thursday February 10, 2022 @05:56PM (#30293952)
They need it to maintain growth, otherwise punished ruthlessly by market and lost access to credit. That's not an optional spend
[ Parent | on HN ]
Re:Cloudflare announces fourth quarter and fiscal year 2021 ... by mbesto on Thursday February 10, 2022 @06:40PM (#30294474)
> I'm curious how long these companies can have losses.

Parent didn't ask about access to credit or market capitalization rates, they asked how long they can burn for. If you no longer need credit because you're profitable, then keeping your asset value up is moot.

So yes it very much is an optional spend. I welcome you to listen to a podcast by the CFO of NetSuite:

https://a16z.com/2015/05/15/a16z-podcast-why-saas-revenue-is...

NetSuite's most profitable year was...2009. Yes that 2009. They basically turned off S&M when the economy crashed.

[ Parent | on HN ]