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Cloudflare S-1

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Re: Cloudflare S-1

#351

Post by bonestamp2 »

repolfx wrote: post #344
bonestamp2 wrote: post #244

Earlier quoted context omitted.

I agree with all of that, but the other important thing (at least to me as an investor) is their 51% growth over two years (with 77% gross margin). You can have the best product, but if you're not actually growing and profitable then as much as I like the company or the product I'll put my investment dollars elsewhere.

They're growing but not profitable. It's easy to grow by giving valuable stuff away below cost. It's not so easy to grow if you're making positive margin. Given CloudFlare's size and age, why are they losing money?

> why are they losing money?

I don't know for sure, but I would guess it's their aggressive expansion efforts. Those might cost more than they've returned so far. If that is the case, and since their GM is so high, they should be profitable once buildout costs start to plateau.

Re: Cloudflare S-1

#352

Post by dmix »

JakeTheAndroid wrote: post #222
dmix wrote: post #214

Earlier quoted context omitted.

There's a big shift towards privacy happening now. If Cloudflare came out a decade ago I'd also be in their camp. But the risks are too high and developers are starting to recognize that Cloudflare is far from free and comes with long terms consequences for the health and resiliency of the internet. I appreciate how they pushed HTTPs widely. But now that's Let's encrypt exists there's no excuse. Ill also never forgiv…

I mean, that's like your opinion or whatever, sure. But this S-1 filing is about if they are a sustainable business. And none of what you touched on would seem to have any serious impact on their business model. The Tor stuff feels way over blown to me. I worked at CF while it was a problem, and was an avid Tor user at the time. It was a terrible user experience, but it wasn't completely Cloudflare's fault. They didn…

There's always a compromise with privacy that people are willing to ignore in the short term, but I'd rather bet on long-term trendlines than people's laziness today.

Their business model of taking over and centralizing whole sections of internet will continually cause a backlash. They only have a percentage of all traffic today and it continues to increase. And apparently so does their willingness to not be a neutral service provider as we saw with 8chan, which is in stark contrast to their policy towards the LulzSec hackers and plenty of other "bad guys".

I'm sure Cloudflare will continue to be a good business in the short-term, but that should never be the relevant metric for any business. But it will become more and more obvious to everyone the bigger they get.

Re: Cloudflare S-1

#353

Post by ksec »

nezgar wrote: post #113
sciurus wrote: post #97

Earlier quoted context omitted.

> Cloudflare is very difficult to duplicate. Unless you're one of their many competitors, like, say, AWS. From the S-1: "Our current and potential future competitors include a number of different types of companies, including: • on-premise hardware network vendors, such as Cisco Systems Inc., F5 Networks, Inc., Check Point Software Technologies Ltd., FireEye, Inc., Imperva, Inc., Palo Alto Networks, Inc., Juniper Net…

>"on-premise hardware network vendors..." Wow, they grammar goofed "on-premise" 33 times on their filing. (should be on-premises)

Not sure why the above getting downvoted, unless On-Premises is wrong? ( Honest Question, I have always used On-Premises )

Edit: And Now I am getting downvoted for asking a question.

Re: Cloudflare S-1

#354

Post by ksec »

yumraj wrote: post #300
sexy_seedbox wrote: post #281

Fun fact: Matthew Prince had to borrow money from his mother when Cloudflare was just starting out. They've come a long way. https://twitter.com/eastdakota/status/1129929178382446592

No offense, but borrowing from a parent is not really borrowing , at least in most cultures.

No Offence, but care to explain which part of this is not borrowing?

Edit: And not sure about the down vote.

Re: Cloudflare S-1

#355

Post by tracker1 »

llama052 wrote: post #317
tracker1 wrote: post #206

Earlier quoted context omitted.

DNS for sites protected by cloudflare are on cloudflare's DNS afaik.

That's optional and has been for awhile now I believe, you can CNAME from your own DNS provider. While that does rely on their DNS for that one record, it means you still have control to changeover if need be.

And, that doesn't change the point... the website protected by cloudflare still controls the effective dns for that site. The lookups are controlled, and CF is a mitm vector.

A client deployment of an app, that the client had behind cloudflare was making 80ms API requests take 8 seconds. It's not always great.

I'm not saying that there aren't alternatives, and that people have to use Cloudflare... but there really isn't much in the way of an alternative at even a similar level of support and price on the low/introduction side of things. The issue regarding recaptcha can be REALLY annoying, especially on a non-google browser.

Re: Cloudflare S-1

#356

Post by nezgar »

ksec wrote: post #353
nezgar wrote: post #113

Earlier quoted context omitted.

>"on-premise hardware network vendors..." Wow, they grammar goofed "on-premise" 33 times on their filing. (should be on-premises)

Not sure why the above getting downvoted, unless On-Premises is wrong? ( Honest Question, I have always used On-Premises ) Edit: And Now I am getting downvoted for asking a question.

"on-premises" is indeed correct in this context.

"premise" is a thought or idea. "premises" is a location, like your servers can be "on-premises". Completely different meanings.

I hear lots of people these days mistakenly saying "on-premise" during hybrid-cloud conversations and in documentation when they really mean "on-premises". (And yes, looks like I've been down-voted for my first hacker news comment too.)

Re: Cloudflare S-1

#357

Post by umeshunni »

GordonS wrote: post #349
umeshunni wrote: post #347

Earlier quoted context omitted.

Not surprising that this is the case in tiny homogeneous affluent countries, but not in large, diverse ones. Sure.

Norway isn't nearly as homogeneous as it used to be - it's really quite multi-cultural these days.

Did some research based on your comment - I was surprised to learn that 13% of Norwegian population are now immigrants. It also looks like the vast majority of population growth (1%/year) comes from immigration.

Re: Cloudflare S-1

#358

Post by jjeaff »

ac29 wrote: post #245
jjeaff wrote: post #237

Earlier quoted context omitted.

There's more to it than that. In order to pay dividends, you have to pay corporate tax before you can pay out the dividends. And that is almost 40% on the top end. So the effective tax of qualified dividends is more like 60%. Alternatively, if you can stash money overseas in tax free accounts or invest the money back into the business to avoid taxes, then you only have the long term capital gains tax.

"After the passage of the Tax Cuts and Jobs Act, on December 20, 2017, the corporate tax rate has been changed to a flat 21% starting January 1, 2018"

You are right. So only double the taxes instead of triple by receiving a dividend.

Re: Cloudflare S-1

#359

Post by ksec »

nezgar wrote: post #356
ksec wrote: post #353

Earlier quoted context omitted.

Not sure why the above getting downvoted, unless On-Premises is wrong? ( Honest Question, I have always used On-Premises ) Edit: And Now I am getting downvoted for asking a question.

"on-premises" is indeed correct in this context. "premise" is a thought or idea. "premises" is a location, like your servers can be "on-premises". Completely different meanings. I hear lots of people these days mistakenly saying "on-premise" during hybrid-cloud conversations and in documentation when they really mean "on-premises". (And yes, looks like I've been down-voted for my first hacker news comment too.)

It just means the quality of HN is downgrading very rapidly.

Re: Cloudflare S-1

#360

Post by leedo__ »

qeternity wrote: post #164
AznHisoka wrote: post #147

Earlier quoted context omitted.

I agree, but the greater fool theory and financial engineering (ie buybacks) will lead to greater profits for stockholders in the long run.

Buybacks are a more tax efficient vehicle for returning capital to shareholders.

While this may be true, they seem to be largely funded by debt. Taking on debt and not using it for capital seems exceedingly risky in the face of a recession.

And I gather this popular because of the tax implications of a dividend vs increase in stock price. I'm in favor of people paying taxes, so I'd prefer a dividend.

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