03:53 PM EDT, 07/24/2024 (MT Newswires) -- Cloudflare's ( NET ) Q2 results will be a "mixed setup" involving H2 guidance and prospects for a revised macro outlook shifting from cautious, indicating a more balanced risk/reward, UBS Securities said Wednesday in a report.

The firm said it turned "less cautious" on quarterly earnings, "particularly as our enterprise security partner checks continue to sound more optimistic. Results for Q2 are expected on Aug. 1.

The company "historically been overly cautious and early in calling out macro headwinds, and could revise its outlook this quarter," UBS said.

Small customer revenue growth and the momentum with Cloudflare's ( NET ) AI Firewall offering will be in focus, UBS said.

Cloudflare ( NET ) "is not immune to the heightened SMB weakness that other software companies are seeing" after the company's small customer revenue growth eased to 13% in Q1 from 21% in Q4, UBS said.

UBS reiterated its neutral rating on the stock with an $82 price target.

Shares of Cloudflare ( NET ) slumped 5.9% in recent trading Wednesday.

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