Cloudflare (NET  ) shares were about 5% lower following the company's Q4 results which topped analysts' expectations on the top and bottom line. However, the company issued 2022 guidance which was above expectations.

Cloudflare was one of the premier growth and tech stocks during the initial thrust off the March 2020 lows. Share prices went from under $15 to above $220 in November 2021. However, shares have essentially crashed during the last couple of months as the stock declined by 66% until bottoming on January 24. Since then, shares had an impressive 61% rebound but started to move lower in recent days due to hawkish Fed comments and strong inflation data.

Inside the Numbers

In Q4, Cloudflare reported better than expected earnings as the company broke even while analysts were expecting a loss of $0.02 per share. Revenue increased 54% to $193.6 million which also topped analysts' expectations of $185 million.

In addition, Cloudflare issued Q1 2022 revenue that came in well above expectations. Analysts were looking for $195 million in revenue, but the company is expecting between $205 million and $206 million. For the full year, it sees revenue of around $929 million beating estimates of $891 million.

One constructive development for Cloudflare is its strong results with enterprise customers which are defined as customers who spend more than $100,000. This segment grew 71% and now accounts for 54% of total revenue vs 46% last year. This is a promising development that Cloudflare's offerings are gaining reactions with enterprise customers and validation of its business strategy to focus on distribution first.

In total, Cloudflare had 1,416 customers spending over $100,000. It added 156 enterprise customers in Q4 which was a tick lower from 172 in the previous quarter.

The company also announced the acquisition of cybersecurity firm Vectrix which does quick, one-click security scans for SaaS systems. In fact, Vectrix has many similarities with Cloudflare's DDOS protection which is the foundation of its business.

Overall, Cloudflare faces a similar struggle with other growth stocks. It has a great business and a lot of appeal, but there's simply less appetite for high-multiple stocks in an inflationary environment. Therefore, investors and traders should wait for the surge in short-term rates to end before trying to pick a bottom in these stocks.