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Investor Day 2025 MARCH 12, 2025
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2 This presentation has been prepared by Cloudflare, Inc. (“Cloudflareˮ) for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise, or representation by the presenter or Cloudflare or any officer, director, employee, agent, or advisor of Cloudflare. This presentation does not purport to be all-inclusive or to contain all of the information you may desire. Except as otherwise set forth in this presentation, information provided in this presentation speaks only as of the date set forth on the cover page of this presentation.This presentation should be viewed with the accompanying oral commentary. This presentation and the accompanying oral commentary contain express and implied “forward-lookingˮ statements within the meaning of the federal securities laws, and these statements involve substantial risks, assumptions, and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, the current and planned development and functionality of our products, demand for our products, our ability to effectively sell our existing and new products, our ability to attract and retain new customers (including new large customers), expectations of future operating results or financial performance, business strategy and plans, the impact of adverse macroeconomic conditions, the impact of the conflicts in the Middle East and Ukraine and other areas of geopolitical tension around the world, or any potential worsening or expansion of those conflicts or tensions and other geopolitical events such as elections and other governmental changes, market volatility, size and growth opportunities, the calculation of certain of our key financial and operating metrics, capital expenditures, plans for future operations, competitive position, rapidly evolving technological developments, including advancements in AI, and strategic relationships, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements by terminology such as “may,ˮ “will,ˮ “should,ˮ “could,ˮ “expect,ˮ “plan,ˮ “anticipate,ˮ “believe,ˮ “estimate,ˮ “predict,ˮ “intend,ˮ “potential,ˮ “would,ˮ “continue,ˮ “ongoingˮ or the negative of these terms or other comparable terminology. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Actual results could differ materially from our current expectations as a result of many factors, including those identified in the “Risk Factorsˮ section of our filings made with the Securities and Exchange Commission ("SEC"). You can locate these reports on our investor relations website (https://cloudflare.NET) or on the SEC website (www.sec.gov). If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements included in this presentation represent our views only as of the date of this presentation, and except as required by law, we assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations. In addition to our results determined in accordance with generally accepted accounting principles (“GAAPˮ), this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. See the appendix for a reconciliation of those measures to the most directly comparable GAAP measures. This presentation and the accompanying oral commentary may contain statistical data, estimates, and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation. By attending or receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business and products. The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the network and products of Cloudflare. Safe Harbor and Other Information
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Phil Winslow Vice President of Strategic Finance, Treasury, & Investor Relations 3
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4 100 pm - 105 pm Opening Remarks Phil Winslow Vice President of Strategic Finance, Treasury, & Investor Relations 105 pm - 130 pm Vision Matthew Prince Co-founder & Chief Executive Officer 130 pm - 200 pm Product CJ Desai President of Product & Engineering 200 pm - 220 pm AI Rita Kozlov Vice President of Product 220 pm - 240 pm Go-To-Market Mark Anderson President of Revenue 240 pm - 300 pm Finance Thomas Seifert Chief Financial Officer 300 pm - 330 pm Q&A
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Matthew Prince Co-founder & Chief Executive Officer 5
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CJ Desai President of Product & Engineering 7
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Why did I join Cloudflare? 8
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9 Why did I join Cloudflare? Relentless focus on innovation with a wide portfolio and unique approach One programmable network, one composable platform Massive potential for ALL customers and use cases Mission to help build a better Internet
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10 One programmable network, one composable platform
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Every Cloudflare service Built to run over every Cloudflare server In every Cloudflare data center 11 Across 335+ cities . in 125+ countries A single, composable platform of Internet-native services #1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM Note: Figures as of December 31, 2024.
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Planned for 2025 Note: Network capacity as of January 21, 2025. Number of cities for AI inference powered by GPUs as of March 3, 2025. All other figures as of December 31, 2024. 335 cities in 125+ countries, including mainland China w/190 cities for AI inference powered by GPUs 50 ms from 95% of the worldʼs Internet-connected population 348 Tbps of network capacity and growing Cloudflare city (as of Q4 2024 Cloudflare backbone (as of Q4 2024 13,000 networks directly connect to Cloudflare, including ISPs, cloud providers, and large enterprises 12 #1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM A single, programmable network unlike any other ● Doubling our global compute capacity ● Expanding existing sites and adding 3 new countries in British Virgin Islands, Malawi, and Kyrgyzstan ● Investing in India with 16 new cities 12
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#1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM One programmable network More effective by simplifying connectivity and policy management More productive by ensuring fast, reliable, and consistent user experiences everywhere More agile by innovating rapidly to meet evolving security requirements One composable platform Unified security for external-facing systems and internal resources Any-to-any connectivity for users, apps, branches, data centers, & clouds Flexibility to customize the platform with full-stack developer tools Cloudflare is built for whatʼs next 13
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14 Relentless focus on innovation with a wide portfolio and unique approach
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A platform that constantly delivers innovation Magic WAN Workers Analytics Engine #2 RELENTLESS FOCUS ON INNOVATION 152018 DNS Data Localization Gateway Area 1 Email Security Rate Limiting 2014 2022 2010 Resolver AI Gateway Vectorize Workers AI D1 Privacy Gateway Magic WAN Connector Cache Reserve Turnstile Queues R2 Storage Workers Logpush Threat Intel Static IPs for Spectrum CASB DLP Argo for Packets Magic Network Monitoring Page Shield Magic Firewall Waiting Room Argo for Spectrum Ethereum Gateway Custom Domain Protection Advanced Certification Manager Gateway DNS Zaraz Images Web Analytics Durable Objects Browser Isolation Payload Inspection API Shield Pages Automatic Platform Optimization Regional Services Image Resizing Magic Transit Bot Management Registrar IPFS Gateway mTLs Stream Workers KV Workers Domains Spectrum Argo DDoS Access Load Balancing SSL for SaaS DNS Firewall Page Rules CDN SSL WAF China Network Calls 2024 Note: Products represented are revenue generating and generally available.
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LEADER in IDC MarketScape for EDS 2024 LEADER in GigaOm Radar App & API Security 2024 MAJOR PLAYER in IDC MarketScape for WAAP 2024 STRONG PERFORMER in Forrester Wave for Bot Management 2024 LEADER in KuppingerCole Leadership Compass for WAF 2024 LEADER & OUTPERFORMER in GigaOm Radar for CDN 2024 VISIONARY in Gartner EMQ GenAI Infrastructure 2024 CHALLENGER in Gartner Magic Quadrant Cloud Application Platforms 2024 LEADER & FAST MOVER in GigaOm Radar for Edge Development Platforms 2024 Application Services Zero Trust & Network Services Developer Services NEW NICHE PROVIDER in Gartner Magic Quadrant for Email Security 2024 NICHE PROVIDER in Gartner Magic Quadrant for SSE 2024 NICHE PROVIDER in Gartner Magic Quadrant for SVSASE 2024 STRONG PERFORMER in Forrester Wave for SSE 2024 CUSTOMERʼS CHOICE in Gartner Peer Insights ‘Voice of the Customerʼ ZTNA 2024 LEADER & OUTPERFORMER in GigaOm Radar Network as a Service 2024 NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW #2 RELENTLESS FOCUS ON INNOVATION Note: For the calendar year ended December 31, 2024. 16 Cloudflare recognized 156x by the Top 3 analyst firms
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17 #2 RELENTLESS FOCUS ON INNOVATION Connect, protect, and build everywhere
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18 Massive potential for ALL customers and use cases 18
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19 #3 MASSIVE POTENTIAL Legacy networks and point products create rising complexity and costs, holding back digital progress ✖ Missing visibility or control in infrastructure sprawl ✖ Ballooning cost of managing legacy and cloud-based, point- product solutions ✖ Lack of scale and flexibility/agility ZTNA Internal apps External apps Security NGFW DDoS WAF SWG (etc.) Attackers Private connectivity AWS Azure GCP Workday SalesforceRemote employees WAF CDN Internet O365 Customers In-office employees Data Center CASB SWG WAN DDoS
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20 Internal apps Edge Connector In-office employees Data Center External apps WAF, Rate Limiting, DDoS, Bot, API CDN, DNS, LB, Smart Routing ZTNA, SWG, CASB, DLP, WAN, Firewall, Email External-facing controls L3 DDoS, Firewall Attackers AWS Azure GCP Workday SalesforceRemote employees O365Customers Internal controls Threats blocked Cloudflare connectivity cloud Internet #3 MASSIVE POTENTIAL A radically different platform approach for customers to connect, protect, accelerate, and build their businesses. This enables organizations to… ✓ regain control, ✓ lower costs, and ✓ reduce the risks …of a complex and disjointed IT environment. Cloudflare is the only composable, Internet-native platform that delivers local capabilities with global scale
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21 #3 MASSIVE POTENTIAL Organizations of all sizes…
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22 #3 MASSIVE POTENTIAL Communication Services Consumer Staples Information Technology Financial Services Healthcare Consumer Discretionary Utilities 40 30 20 10 0 Number of Cloudflare Customers in the Top 100 30 24 40 27 33 27 14 …and from all industries rely on Cloudflare Source: FactSet company screening report as of February 2024; screen uses FactSet Revere Business Industry Classification System RBICS) and S&P Composite 1500 Index. Top 100 companies by industry are ranked by latest fiscal year revenue. Customer data as of December 31, 2024.
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23 #3 MASSIVE POTENTIAL Cloudflare fits in everywhere an organization needs
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Benefit 24 #3 MASSIVE POTENTIAL Platforms win! Effort ESCAPE VELOCITY Platform adoption ● Future projects take less effort, because the cloud infrastructure is in place. ● Benefits of vendor and platform consolidation are realized. ● Marginal operational costs go down using one platform with one user interface and API and one set of policies. FALSE PROMISE First modernization project ● Any “firstˮ modernization can deliver benefits. ● Future problems are not on the event horizon yet. DIMINISHING RETURNS Point product sprawl ● Implementing different products for each modernization project leads to increased complexity and vendor sprawl. ● Effort does not go down, and there is no benefit of vendor consolidation. ● Marginal operational costs go up and consume projectsʼ potential benefits. Project 1 Example Inbound Traffic Project 2 Example Outbound Traffic Project 3 Example WAN Networking Project 4 Example Multi-cloud Networking
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Application security and performance Zero Trust access Developer platform We can focus on growing our product and expanding into new markets with confidence, knowing that our platform is fast, reliable, and secure.ˮ Global application reliability for petabytes of monthly traffic Secure access for 5,500 users and contractors Faster development, stronger customer experiences 25
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Application security and performance Data localization Developer platform Having a globally distributed assets cache, using Workers to power our applications, and avoiding bottlenecks with smart routing and load balancing makes our websites faster and more reliable.ˮ Security, performance, and reliability across all public websites, endpoints, and applications Streamlined European and international data localization compliance 40% improvement in performance with a globally distributed asset cache and Workers powering applications 26
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27 Mission to help build a better Internet
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Advocating for network neutrality Monitoring places where the Internet is not open Protecting human rights and democratic institutions Deploying standards that improve the privacy and security of data flows Participating in Internet standards development Supporting multistakeholder Internet governance 28 #4 MISSION Cloudflare is proud to be part of the global community standing up for the Internet. The Internet is a miracle. The connection of diverse networks with common standards enables us to exchange data around the world in a way that is resilient, interoperable, and accessible to anyone. Today, we depend on it for economic growth and innovation, access to information and free expression, and rule of law and democratic principles.
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2025 Accelerating world-class innovation 29
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Lessons from my past How to execute on product strategy for “Land and Expandˮ to work at scale? How to be there for customers when they need us? How do engineering and sales work together as a team? 30
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31 Scale and enhance product and engineering to take us to $5B and beyond Network Platform DeveloperCloudflare OneApplication Services Customer support● Secure APIs and AI workloads ● Accelerate cross-functional product adoption and customer ROI ● Deliver native observability and forensics in the Cloudflare platform ● Modernize remote access and workspace threat protection ● Simplify for branch deployments with cohesive solutions for networking and security (i.e., “coffee shopˮ networking) ● Accelerate platform capabilities to establish Workers as the best place to build full-stack and AI applications ● Ensure the developer experience is seamless from local development to production Execution Plan for 2025 ● Provide world-class support to ALL customers — from PAYGO to enterprise ● Scale with enhanced network design, continued resiliency efforts, and doubling compute capacity ● Support higher traffic volumes and more efficient routing ● Improve enterprise-grade features (e.g., RBAC and SCIM) and support public sector requirements (e.g., FedRAMP High)
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32 Extraordinary opportunity to help build another iconic technology company
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33 Rita Kozlov Vice President of Product for Cloudflare Developer Platform
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Cloudflareʼs vision for developers CLOUDFLARE DEVELOPER PLATFORM Remove friction & improve developer velocity Provide primitives to build on Enterprise grade solutions and scale Enable new AI workloads 34 To help build a better Internet with a modern cloud platform that accelerates developer velocity and drives better end user experiences.
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A bold, non-consensus decision we made when building the foundation of our developer platform: isolates Hours to deploy OS, runtime, libraries and application Generation Two No metal box; Virtual machines Minutes to deploy Runtime, all libraries, and applications Generation Three No virtual machine; Containers/Kubernetes Generation Four No containers; Serverless V8 isolates Seconds to deploy Uncommon libraries and applications ~10x Higher price-performance vs. other cloud platforms Weeks to deploy OS, runtime, libraries and application Generation One One box; One application 35 0ms Cold starts (no container runtime) for auto-scaling 0 Scales down to zero No “DevOps” or infrastructure management (scaling up happens automatically) CLOUDFLARE DEVELOPER PLATFORM
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CLOUDFLARE DEVELOPER PLATFORM 36 One unified platform for building full-stack and AI applications powered by an intelligent, programmable global cloud network designed for performance, efficiency, and scalability. This enables developers to… ✓ build quickly, ✓ deploy instantly, and ✓ scale effortlessly …all without having to manage infrastructure. Deploy applications to region: Earth
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38 2010 2007 Mobile 2022 AI 2000 CLOUDFLARE DEVELOPER PLATFORM AI is the next paradigm shift in the way applications are built SocialCloud
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39 Last year…
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Last year… We believed AI adoption was poised to explode and become a routine part of how we do our work and go about our lives. 40
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of developers are currently using AI in their development process1 76% Today… of global knowledge workers using generative AI, nearly doubling in the since the end of 20242 75% Today… 41 1. “Highlights from the 10th DORA reportˮ, Google Cloud 2. "2024 Work Trend Index Annual Reportˮ, Microsoft
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Last year… We stated that although the focus of AI had been on training… 42
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Last year… …the focus of AI was going to shift to inference. 43
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44 Itʼs happening… Engineering innovations are significantly lowering the cost of AI model training and reducing model sizes — thereby, reshaping the AI value chain toward inference, where efficiency, scale, and speed are critical. o1 Most LLMs InferencePre-training Post-training Inference Pre-training Post-training
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45 Whatʼs next?
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The next focus of AI is going to be on automating end-to-end tasks. 46 Train Infer Automate
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How is AI evolving? 47 Predictive AI Machine Learning) Generative AI Agentic AI Definition AI systems that recognize patterns from data and make predictions or classifications. AI systems that create new content (e.g., text, images, or data.) AI systems that can act autonomously, make decisions, and adapt to changing environments based on goals. Goal To find patterns in data and make predictions or decisions based on historical data. To generate new, realistic outputs based on learned patterns. To independently solve problems and take actions based on goals. Example Lead scoring (i.e., “Based on previous examples, which customer is most likely to buy?ˮ) Text generation (i.e., “Help me draft an email to a customer.ˮ) Autonomous campaign management (i.e., “Run a campaign targeting XYZ customers.ˮ)
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Augmentation → Automation Augmentation Generative AI Help me draft an email to a customer I met at a conference, reminding them of the benefits of Cloudflare I'll help you draft a professional follow-up email. Hereʼs a professional follow-up email that highlights Cloudflare's key benefits while maintaining a friendly tone. Would you like me to customize any specific parts based on your conversation at the conference? Just let me know what you'd like to adjust! Reply…. Cloudflare Email Click to open Automation Agentic AI Good Morning, Rita Run a campaign following up with everyone I met at the conference last week: get a list of customers draft up an email send to me for sign off fire off ping me when the customer responds 48
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49 Interpretation & Reasoning Workflow Generation Workflow Execution Output/ Outcome User Instructions Manager Agent External Systems User Feedback Iterative Improvement User Satisfaction Analyst Agent Checker Agent Planner Agent No Yes. How do agentic AI systems work? AI Workflows + APIs = Agents
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Human-in-the-loop Example: CRM agent Speech to text model LLM WebRTC Web browser APIs Internal servicesChat UI Vector database OrchestrationCache & evals User HOW DO AGENTIC AI SYSTEMS WORK? 50 #3 cache and evaluate #3 cache and evaluate #6 dispatch action & maintain state e. confirm next action #1 connect to send query #4 send query to LLM #5 route .c. access internal service #2 translate d. query a. navigate to a website b. connect to API
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Human-in-the-loop Example: CRM agent with Cloudflare Workers HOW DO AGENTIC AI SYSTEMS WORK? 51 #3 cache and evaluate #3 cache and evaluate #5 route #1 connect to send query Browser Rendering Zero Trust Vectorize Workers D1 Pages AI Gateway Workers AI Workers AIRealtime Durable Objects WorkflowsWorkers a. navigate to a website b. connect to API APIs User #4 send query to LLM e. confirm next action .c. access internal service #2 translate d. query #6 dispatch action & maintain state
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52 Distributed network Userʼs device Centralized cloud Cloudflare is the best platform for developers to build and scale AI inference and agents
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Why Cloudflare Workers? (a.k.a. Why not build AI agents on a hyperscaler? 53
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Cloudflare Workers, the best platform for developers to build and scale AI inference and agents Cost + Scalability Performance Developer experience Deploy from region: Earth Code executes within 50ms of 95% of the Internet-connected global population. 3+ million developers on Cloudflare Scale up and down to zero Run AI models on GPUs without having to pay for pre-provisioned resources for months in advance, at peak. Simply pay for what you use. Orchestration and execution in one place Workers are able to interface with APIs, LLMs, and external or internal services — wherever it is the most efficient for them to run. 54 All the products you need Access inference, state management, UI deployment, or workflows in one platform. No compute = no bills for usage Compute-based pricing means you are not charged when your function is sitting around waiting on I/O. Applications can spend ten times more time waiting on I/O than using the CPU.) Idea to production in seconds Easy development experience, including local development and rapid deployment. Save time No tuning necessary. Automatic placement for optimal performance.
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Serverless inference that scales up and down to zero #1 COST SCALABILITY Inference is hard to predict and spiky in nature, unlike training. GPU utilization is, on average, only 30% — with one-third of organizations utilizing less than 15%. Workers AI allows customers to save by only paying for usage. No guessing or committing to hardware that goes unused. 55 Pre-provisioned GPU capacity: What you pay for on a hyperscaler GPU usage: What you pay for on Cloudflare Cloudflareʼs network can dynamically schedule workloads where resources are available, passing cost savings to users while also improving our capital efficiency.
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Serverless billing that scales down to zero Network 2 Network 3 By utilizing V8 isolates, Workers can effectively scale to zero when there are no requests — meaning you never have to keep instances of your application sitting idle, waiting for something to happen. Workersʼ pricing model extends the concept of “scale to zeroˮ even further, billing only if an application is actually performing work (compute-time). The CPU or GPU can be used for other tasks, which improves the utilization of and, therefore, return on our invested capital. Most compute platforms today — including those that are considered to be “serverlessˮ — are based on containers or virtual machines under the hood. The programming model of containers requires them to stay running while waiting on external tasks, meaning they cannot truly scale to zero. Regardless of whether code is actively executing or just waiting on slow external resources or even LLMs, the cost of running the container (wall-clock time) is passed to the user. 56 Hyperscalers #1 COST SCALABILITY Cloudflare Compute time Compute time Idle time Wall-clock billing time: 207ms 5ms 200ms 2ms 5ms 2ms + Compute billing time: 7ms Examples are illustrative.
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#1 COST SCALABILITY 57 What are agents if not AI APIs? However, when an agent makes a request to a third-party API, you can not control how long that API takes to return a response. Thatʼs the difference between scaling up and down to zero and billing for compute time vs. wall-clock time. Metaphor: The meter doesnʼt keep running, when your taxi driver stops to refuel. Imagine a similar scenario… ✖ On the way, the driver decides to stop to refuel and grab a snack but leaves the meter running. ✖ This is not time spent bringing you closer to your destination. However, it is time that you are paying for. Now imagine… For the time the driver was refueling the car, the meter was paused.✓ No compute = no bills for usage
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#2 PERFORMANCE Run inference tasks on Workers AI, the first globally- distributed serverless AI inference platform 58 Deploy from region: EarthCode executes within 50ms of 95% of the Internet- connected global population 335 cities in 125 countries, including mainland China Growing constellation of cities for AI inference powered by GPUs 190 cities with GPUs Note: Number of cities with GPUs as of March 3, 2025. All other figures as of December 31, 2024.
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Other Vendors Cloudflare Orchestrating AI APIs with Cloudflare Workers #2 PERFORMANCE Orchestration & execution Workers are able to interface with APIs, LLMs, external or internal services, or even spin up browsers. With compute time pricing, users do not have to pay while waiting on execution. Durable Objects and Workflows can guarantee execution and retry as needed. 59 Cloudflare can schedule workloads near users, GPUs, and/or APIs — maximizing throughput and minimizing latency — to enable agents to make real-time decisions.
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#3 DEVELOPER EXPERIENCE Developer velocity is critical 60 ~50% Amount of time developers spend writing code Time is wasted when developers arenʼt coding. Developer velocity is a key factor to accelerate time to market, innovate faster, improve software quality, and attract and retain top talent.
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AI and agents fit seamlessly into Cloudflareʼs developer experience to accelerate Network Send information to/from different locations Storage Provide contextual information Developer Experience Allows for focus on application differentiation Application Developers choose these tools based on… Compute Power the logic of an application AI Run inference for generative AI models 61 #3 DEVELOPER EXPERIENCE Cloudflare Workers is so easy to deploy. In minutes, we can make changes, create third-party integrations, or onboard new technologies that would otherwise take us hundreds of hours of development and testing.ˮ
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62 #3 DEVELOPER EXPERIENCE What developers want and get from Cloudflare Everything everywhere all at once…all on one platform
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63 The networkis the computer
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64 CRM Provide in-depth information that would require hours-worth of research to sales team about prospects, their businesses, and their organizational structures. Finance Perform due diligence on M&A targets by researching everything from verticals, competitors, team sizing, and headcount. Medicine Review and analyze clinical trial results and write up reports to share with doctors. Customer support Automate customer support by pulling information about user state, internal systems, documentation and generate accurate responses — requiring access to many systems and APIs, as well as several LLMs and human in the loop to vet responses. Media An existing customer is looking to extend their use of Cloudflare to build an agent for answering questions about legal documents. Marketing Streamline marketing content generation by automating discovery of cyber security news to generating SEO-optimized content. Agentic AI customer-built use cases on Workers
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65 One final thought…
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More code will be written in the next 5 than has been cumulatively written in all of programming history years 66
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67 Mark Anderson President of Revenue
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What am I hearing from customers and prospects? 68
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69 2x IT software budgets doubled from 2010 to 2020
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70 50% of technology leaders will see technical debt severity rise in 2025
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37% 32% 31% Generative AI Artificial intelligence Cyber/ information security Biggest expected increases in IT spending during 2025 3.8% Average expected IT budget increase Source: "2025 CIO and Technology Executive Agenda: Grow the Digital Vanguard, Gartner, Raf Gelders, Daniel Sanchez Reina, Jaime Capella, Mandi Bishop, Tsuneo Fujiwara, 10/21/2024" and "2025 CIO Agenda: Global Data, Gartner, Daniel Sanchez Reina, Jaime Capella, Mandi Bishop, Tsuneo Fujiwara, Erin Neus-Cheong, 01/29/2025" In 2025, digital modernization will accelerate… 4.9% Average expected change to revenue 71
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72 Projects that met expectations: Projects that partially met expectations: Projects that failed to meet expectations: Only 30% of large-scale tech programs meet timeline, budget, and scope expectations 30% 35% 35% 70% companies fail to deliver fully on timeline, budget, and scope …but most teams struggle to deliver on digital projects Source: BCG “Build for the Future global study, 2024.ˮ
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73 Legacy network complexity creates tension between critical IT priorities ✖ Vendor sprawl ✖ Increase in cyber attacks ✖ Legacy infrastructure drag ✖ Delayed product releases ✖ Application performance and downtime ✖ Employee overtime and churn ✖ Loss of business reputation
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74 Cloudflareʼs connectivity cloud: A unified, intelligent platform whose programmable cloud-native services provide secure, low-latency, and infinitely scalable connectivity across networks, applications, and users. Cloudflareʼs unified platform of Internet-native services resolves digital complexity
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The market is coming to where Cloudflare is already 75 Business Transformation There is no longer a business and technology strategy. There is a strategy, and technology is driving it. CXO Initiatives Transformation is a must to accelerate cloud, digital journey, and value to the business. Cloudflare Global platform and partner for cloud, digital, and business transformation.
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2025 Accelerating our journey to become world-class in go-to-market 76
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Skier looking up a mountain 77 2023 We started transforming our go-to-market
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78 Action items for 2025 Scale and enhance our go-to-market to take us to $5B and beyond Accelerate AE Momentum Continue to improve sales productivity and attainment levels. Increase hiring in our sales organization — with a focus on enterprise account executives with proven track records. Launch Developer Speed Boat Establish developer-centrics Speed Boat for cross-functional coordination. Connect grassroots interest with strategic sellers to land large deals at targeted accounts. Win with Partners First Deepen investments in GSI, service provider, and MSSP partners. Global partnerships to drive Cloudflare into multi-million-dollar deals. Align to Customersʼ Digital Imperatives Deliver solution/sales play combinations to AEs to address customersʼ digital initiatives. Communicate the value of Cloudflareʼs platform significantly more than any combination of competitive point products.
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Physics 101 p = m v Mass, n. the quantity of matter within a given object Velocity, n. a quantity that designates speed together with the direction of movement Momentum, n. the quantity of motion in a moving body, expressed as the product of its mass and velocity 79 #1 ACCELERATE AE MOMENTUM
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Physics 101…translated to B2B sales p = m v Capacity Productivity ACV 80 #1 ACCELERATE AE MOMENTUM
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Productivity Rolling 4Quarter ACV per Account Executive Net We are encouraged by the continued improvement in sales productivity from the trough in 2023. 81 #1 ACCELERATE AE MOMENTUM
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Capacity Account Executive Capacity Net Y/Y Growth 82 We expect year-over-year growth in ramped AEs to accelerate each quarter throughout 2025. #1 ACCELERATE AE MOMENTUM
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83 Modernizing apps across hybrid/multi cloudManaging cyber risk Adopting AI and machine learning Improving data governance Building digital resiliency Simplifying and consolidating IT and security stacks #2 ALIGN TO DIGITAL CUSTOMERSʼ IMPERATIVES Identify digital imperatives for customers in 2025, and…
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84 #2 ALIGN TO DIGITAL CUSTOMERSʼ IMPERATIVES …align Cloudflareʼs platform to addresses these key digital imperatives App + API services: Protect and accelerate web applications Network services: Connect and secure hybrid cloud usage1 2 3 4 6 5 Cloudflareʼs connectivity cloud services: Building digital resiliency Simplifying global data compliance Consolidating IT and security stacks Modernizing apps across hybrid/multi cloud Adopting AI and machine learning Managing cyber risk Digital Imperative SSE Enforce Zero Trust policies for every user and device App + API security: Block zero-days and other threats Developer: Run inference at the edge, manage AI usage SSE Control how employees use AI productivity apps App + API security: Mitigate the largest attacks with ease App performance: Ensure strong performance globally Data Localization Suite: Limiting traffic and data locality to specific countries and regions — across apps and users SSE, SASE, App + API security / performance, and Developer + AI services — all on a single platform
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#3 LAUNCH DEVELOPER SPEED BOAT 85 Revenue Connecting grassroots interest with strategic sellers to land large deals at targeted accounts. Product usage Product-led monetization Self-serve purchase Pipeline Revenue Product usage Product-led sales Sales closing Pipeline Revenue Revenue Sales prospecting Sales-led monetization Sales closing Pipeline Revenue Extending product-led growth with sales-led growth
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Developed Curated List of Target Developer Accounts Community Development + Start-Up Program + Targeted Talking Points Expanded Team of Developer Specialists/Architects + Nurture PAYGO Customers Dedicated Customer Support for Developer Solutions ● Target list includes startups, midmarket, and large enterprise prospects across multiple sectors — fintech, enterprise SaaS, ecommerce, AI/ML, media, and healthcare. ● Prospecting in PAYGO user base. ● Broad-based awareness and branding content across Developer communities. ● Expanded Start-Up program for developers in PAYGO. ● “Snackableˮ talking points for Account Executives for lead generation in target accounts. ● Scale a team of specialists to support Account Executives in technical discussion, POCs, etc. ● Nurture PAYGO customers through introduction of new Product Advocate role, a Cloudflare trusted advisor for large and strategic PAYGO customers. ● Build out developer support specialists. ● Create dedicated skill groups for better customer support routing. ● Ensure continuous training and direct engineering access for support team. 86 Developer-Centric Speed Boat for Cross-Functional Coordination Developer-centric go-to-market approach #3 LAUNCH DEVELOPER SPEED BOAT Targeting Marketing & Pipeline Pre Sales Post Sales
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87 Investing in multiple partner routes to revenue #4 WIN WITH PARTNERS FIRST Solution Providers Managed Security Service Providers Technology Alliance Partners Systems Integrators / Consulting Partners Distributors Service Providers
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88 2025 We will become world-class in go-to-market
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89 Thomas Seifert Chief Financial Officer
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Pools of Funds PoF 101 90
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91 Pool of funds accelerate platform adoption at large customers but can impact the “shapeˮ of financial reporting
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Pool of funds accelerate platform adoption… Enterprises are increasingly accustomed to purchasing cloud services through flexible consumption models. 92 Pool of Funds as a % of ACV Q1ʼ23 Q2ʼ23 Q4ʼ23Q3ʼ23 Q1ʼ24 Q2ʼ24 Q3ʼ24 Q4ʼ24 0.0% 2.5% 5.0% 7 .5% 10.0% Pool of funds contracts benefit both customers and Cloudflare: ✓ reduced friction to platform adoption, ✓ streamlined procurement process, ✓ longer-term commitments, ✓ increased customer lifetime value, ✓ enhanced sales leverage, and ✓ spending aligned with value recognition
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…but can impact the “shapeˮ of financial reporting Example: Existing customer transitioning to pool of funds A Leading Technology Company: Signed a 3Year $40M PoF in Q1ʼ24 93 Signed $40M PoF with 40 products Load Balancing & Domains App Services Bundle Data Localization Suite & Gateway SSL for SaaS Workers & BYOIP Workers for Platforms 3% Q/Q 6% Q/Q 24% Q/Q 11% Q/Q Note: Revenue figures for 20182023 represent reported fiscal year revenue. Q1Q4 2024 represent annualized revenue.
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…but can impact the “shapeˮ of financial reporting A Fast-Growing AI Company: Signed a 1Year $7M PoF in Q3ʼ24 Signed initial $500K contract PoF Service Start Date Example: New customer adopting pool of funds Signed $7M PoF Service Start Date 94Note: Chart represents monthly revenue.
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Pool of funds contracts are effectively ramped deals… 2024 PoF Cohort: Net Revenue Recognition % Impact 2024 PoF Cohort: PoF Revenue vs. If-Ratable Revenue 95 Although revenue recognition is often lower in the near term as compared with ratable contracts, PoF contracts lead to higher revenue growth over time, as customers accelerate adoption and expansion. …with the net negative impact to revenue growth expected to fade in the second half of 2025.
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Drivers of Value Creation Growth + Profitability 96
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97 Improving sales productivity and attainment levels Growing pipeline Accelerating traction in key product areas Increasing platform adoption Building momentum with $1+ million customers Ramping capacity of account executives Crisis Response Accelerating Growth
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98 Distribution of Ramped Account Executive AE Quota Attainment Rolling 4Quarter ACV per Account Executive Net In 2024, we delivered a 10 percentage point increase in ramped AEs achieving over 80% of quota compared with 2023. #1 IMPROVING SALES PRODUCTIVITY AND ATTAINMENT Go-to-market initiatives are paying off
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99 Pipeline continues to grow #2 GROWING PIPELINE Robust pipeline growth gives us confidence to invest in sales capacity. Pipeline $M ↑40%
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100 Composition of New AE Hires Account Executive Capacity Net Y/Y Growth 2023 2024 2025 Plan 2022 28% 60%58% 27% 72%40%42% 73% #3 RAMPING CAPACITY OF ACCOUNT EXECUTIVES Increased hiring of stage-appropriate GTM talent We continue to increase hiring in our sales organization — with a focus on enterprise account executives with proven track records. Midmarket EnterpriseActual Forecast
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#4 BUILDING MOMENTUM WITH $1 MILLION CUSTOMERS Source: Latest company reports, filings, and investor presentations. Annualized Revenue = quarterly revenue x 4, except for UiPath displaying Annual Recurring Revenue. Chart uses data from CY2020 to CY2024, except for ServiceNow 2015 to 2018. Some of Zscaler, Datadog, and Snowflakeʼs latest data points not displayed due to boundaries of the chart. 101 Enterprise accounts are just getting started… $1M Customers vs. Annualized Revenue 0 $500 $1,000 $1,500 $2,000 $2,500 Annualized Revenue $M 100 200 300 $1M Customers 400 500 600 $1M+ customers represent less than 1% of Cloudflareʼs total paying customers.
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$1M$5M 34x $500K$1M 30x $100K$500K 19x $100K 5x $5M 31x 20222021202020192018 2023 2024 Note: Growth factors (e.g., 5x for $100K) are calculated as Q4ʼ24 revenue divided by Q1ʼ18 revenue, except for $5M, which compares Q4ʼ24 to Q4ʼ18. Fortune 500 figure is as of December 31, 2024. #4 BUILDING MOMENTUM WITH $1 MILLION CUSTOMERS 102 …with already increasing volume and scale Revenue $M) by All Customers 35 % of the Fortune 500
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#5 INCREASING PLATFORM ADOPTION 103 Note: Annualized Recurring Revenue by Product SKU as of December 31, 2024 for contracted customers. Revenue contribution by product attach rate cohorts is as of the fourth quarter of each respective year. See the Appendix for how we define Annualized Recurring Revenue ARR) and contracted customers. Land-and-expand strategy fueled by… Revenue Contribution by Product Attach Rate Cohorts $M Annualized Recurring Revenue by Product SKU Our success in driving platform adoption is evidenced by the consistently increasing amount spent with Cloudflare in higher product attach rate cohorts.
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Cloudflare One ● VPN ● Content Filtering ● Remote Browser Isolation ● Data Loss Prevention ● Privileged Access Management ● Network Analytics ● Email Security ● CASB ● Cloud Security Posture Management …a consistently expanding TAM Cloudflare Zero Trust Services Note: Calculations performed by Cloudflare. Graphic created by Cloudflare based on Gartner® research. Figures reflect the markets addressed by our current product offerings. For full citation details on the Gartner forecasts used in Cloudflareʼs estimations, see the Appendix. ● Application Delivery Controllers ● CDN ● DDoS ● Web Application Firewall ● Bot Management ● Anti-Fraud ● Threat Intelligence Cloudflare Developer Services ● Application Platform ● Object Storage ● Network Firewall ● MPLS ● SDWAN ● Intrusion Detection & Prevention ● Multi-Cloud Networking 2018 2025 2026 2028 $231B $181B Cloudflare Application Services Cloudflare Network Services $196B 2027 $214B Areas for Potential Incremental Growth AI Internet of Things 5G Cellular Database Network Services $32B #5 INCREASING PLATFORM ADOPTION 104 1
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#6 ACCELERATING TRACTION IN KEY PRODUCT AREAS 105 Cloudflare One Developer ↑43% ↑76% y/y growth in ACV booked in 2024, an acceleration from 20231 y/y growth in ACV booked in 2024, an acceleration from 2023 1. Calculations normalized for Department of Commerce contract in 2023. See the Appendix for how we define “Annual Contract Valueˮ or “ACV.ˮ Cloudflareʼs multi-act play is only just beginning.
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106 Profitability Long-term operating model Unit economics
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Unit Economic Margin by Component Unit economics 107 Attrition Whatʼs the expected lifetime revenue from $1 ARR? Lifetime Revenue LTR = $1 ARR / attrition rate Cost to Book CTB Cost to Serve CTS How much does it “cost to serveˮ the lifetime revenue? CTS = Delivery, R&D, Support & G&A cost as % of ARR Note: Unit economic margin in this and subsequent slides are calculations based on assumptions derived from Cloudflareʼs historical operations regarding unit lifetime revenue and subscription economics, including cost to book, cost to serve, and attrition dynamics. Unit economic margin is not operating margin. The calculations charted are as of fourth quarter of the respective years. What does it “cost to bookˮ $1 of incremental ARR? CTB Sales & Marketing cost per dollar of incremental ARR Unit Economic Margin What is the economic margin created by $1 ARR? Unit Economic Margin = LTR CTB - CTS LTR ] / LTR 42% Unit Economic Margin
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Note: See Appendix for GAAP to Non-GAAP reconciliation and list of companies in SaaS Peer Group. Data as of March 6, 2025. Cloudflare outperforms peers on unit economic margin KPIs… UNIT ECONOMICS Cost to Book vs. SaaS Peer Group Cost to Serve vs. SaaS Peer Group DNR vs. SaaS Peer Group 108
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…and we remain focused on continual improvement 109 Effect of Lower Cost to Book Effect of Lower Cost to Serve Effects of Lower Attrition & Higher Expansion UNIT ECONOMICS
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Note: Metrics shown are Non-GAAP. See Appendix for GAAP financial measures and GAAP to Non-GAAP reconciliation. 2021 2022 2023 2024 Long-term model Gross Margin 79 % 78 % 78 % 79 % Leverage efficiency and elasticity of our network and ingress/egress dynamics 75% 77% Sales & Marketing % of revenue) 45 % 42 % 40 % 38 % Scale go-to-market operations with a focus on improving productivity 27% 29% Research & Development % of revenue) 20 % 19 % 17 % 16 % Continue to prioritize product innovation 18% 20% General & Administrative % of revenue) 15 % 14 % 12 % 11 % Benefit from economies of scale and automation 8% 10% Operating Margin 1% 4% 9% 14% 20% Free Cash Flow Margin 7% 4% 9% 10% 25% Unit economics support 20% long-term operating margins 110 Long-term operating model
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111 Co-founder & Chief Executive Officer Matthew Prince Co-founder & President Michelle Zatlyn Chief Financial Officer Thomas Seifert President of Revenue Mark Anderson President of Product & Engineering CJ Desai
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Investor Day 2025 MARCH 12, 2025 112
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Appendix 113
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GAAP to Non-GAAP Reconciliation Annual 114
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GAAP to Non-GAAP Reconciliation Quarterly) 115
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Paying Customers. We believe our ability to grow the number of paying customers on our network provides a key indicator of growth of our business and our future business opportunities. We define a paying customer at the end of the quarter as a person or entity who has generated revenue and has an active contract with us or one of our partners during such quarter, excluding (i) customers that were not acquired through ordinary sales channels, (ii) customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and Warp, which agreements and customers together represent an insignificant amount of our revenue. An entity is defined as a company, a government institution, a non-profit organization, or a distinct business unit of a large company. An active contract is defined as a customer relationship for which we have provided services during the quarter. Paying Customers (> $100,000 Annualized Revenue). While we continue to grow customers across all sizes, over time, our large customers have contributed an increasing share of our revenue. We view the number of customers with Annualized Revenue greater than $100,000 as indicative of our penetration within large enterprise accounts. To measure Annualized Revenue at the end of a quarter, we take the sum of revenue for each customer in the quarter and multiply that amount by four. For example, if we signed a new customer that generated $1,800 of revenue in a quarter, that customer would account for $7,200 of Annualized Revenue for that year. Our Annualized Revenue calculation excludes (i) agreements that were not entered into through ordinary sales channels, (ii) revenue generated from customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and Warp, which agreements and customers together represent an insignificant amount of our revenue. Our Annualized Revenue metric also includes any usage charges by a customer during a period, which represents a small portion of our total revenue and may not be recurring. As a result, Annualized Revenue may be higher than actual revenue over the course of the year. Dollar-Based Net Retention. Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue generated from our existing paying customers. We believe that we will achieve these objectives by continuing to focus on customer loyalty and adding additional products and functionality to our network. Our dollar-based net retention rate is a key way we measure our performance in these areas. Dollar-based net retention measures our ability to retain and expand recurring revenue from existing customers. To calculate dollar-based net retention for a quarter, we compare the Annualized Revenue from paying customers four quarters prior to the Annualized Revenue from the same set of customers in the most recent quarter. Our dollar-based net retention includes expansion and is net of contraction and attrition, but excludes Annualized Revenue from new customers in the current period. Our dollar-based net retention excludes the benefit of free customers that upgrade to a paid subscription between the prior and current periods, even though this is an important source of incremental growth. We believe this provides a more meaningful representation of our ability to add incremental business from existing paying customers as they renew and expand their contracts. Contracted Customers. Our contracted customers, which consist of customers that enter into contracts for our Enterprise subscription plan, have contracts that typically range from one to three years and are typically billed on a monthly or annual basis. Our agreements with contracted customers are tailored and priced to meet their varying needs and requirements. Enterprise subscription plan agreements for our contracted customers generally include a base subscription and a smaller portion based on usage or per seat. Definitions & Methodologies Appendix 116
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Definitions & Methodologies Appendix Annualized Recurring Revenue ARR. Annualized Recurring Revenue, or ARR, is defined as the annualized value of our customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. ARR is calculated by multiplying the revenue in the fourth quarter of each respective year by four. Annual Contract Value ACV. Annual Contract Value, or ACV, is defined as the revenue that we would contractually expect to recognize over the term of the contract divided by the term of the contract in years. Total Addressable Market. Total Addressable Market figures are Cloudflare estimates based on Gartner market forecasts and include the following Gartner sources: 1 Forecast Enterprise Network Equipment by Market Segment, Worldwide, 20222028, 4Q24 Update, Gartner, Christian Canales, Naresh Singh, Gurjyot Uppal, 12/24/2024 2 Forecast Analysis: Edge Distribution Platforms, Worldwide, Gartner, Brandon Medford, Jimmy Chuang, 08/22/2024 3 Forecast: Information Security, Worldwide, 20222028, 4Q24 Update, Gartner, Shailendra Upadhyay, Akshita Joshi, Elizabeth Kim, Ruggero Contu, Charanpal Bhogal, Rahul Yadav, Matt Milone, Sean O'Neill, Mark Wah, Christian Canales, 12/19/2024 4 Forecast: IT Operations Management Software, Worldwide, 20222028, 2Q24 Update, Gartner, Shailendra Upadhyay, Kanchi Bindal, Colin Fletcher, 10/16/2024 5 Forecast Analysis: Communications Services, Worldwide, Gartner, Grigory Betskov, Shashank Nigam, Gaspar Valdivia, Rashi Priyam, Shivansh Gupta, Vartika Dixit, 02/23/2024 6 Forecast Analysis: CPaaS, Worldwide, Gartner, Lisa Unden-Farboud, Daniel O'Connell, Ajit Patankar, 03/08/2024 7 Forecast: Enterprise Infrastructure Software, Worldwide, 20222028, 4Q24 Update, Gartner, Arunasree Cheparthi, Colin Fletcher, Robin Schumacher, Lisa Unden-Farboud, Nicholas Carter, Saikat Ray, Sharat Menon, Kelli Smith, Irina Guseva, Christian Canales, Brandon Medford, Amarendra ., Shailendra Upadhyay, Varsha Mehta, 12/17/2024. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Methodology of Potential Opportunity of Current Products within Existing Customer Base. The analysis begins with the reported or estimated revenue of each Cloudflare existing customer on the measurement date. If reported customer revenue is not available, a proxy customer revenue is estimated based on various factors, including the customerʼs last outside funding date, amount, and implied valuation. An IT spend % of revenue (based on a third party estimate) is then applied to the customerʼs reported or estimated revenue based on the customerʼs industry and size, followed by a TAM Total Addressable Market) % of Global IT Spend (as obtained from a third party estimate), and SAM Serviceable Addressable Market) % to TAM at the country level, to get to the potential opportunity from the existing Cloudflare customer. However, if the customerʼs current ARR is greater than that number, then the customerʼs current ARR with a multiplier of 1.5x or less is used for the potential opportunity from that existing customer. SaaS Peer Group. The SaaS peer group in 4Qʼ24 includes the following companies who reported their fourth quarter calendar year 2024 results as of March 6, 2025 Adobe, Atlassian, Autodesk, Akamai, CrowdStrike, Datadog, Okta, Palantir, Salesforce, ServiceNow, Shopify, Snowflake, Twilio, Veeva Systems, Workday, Zoom Communications, Zscaler, BILL Holdings, Bentley Systems, Confluent, DigitalOcean, Dropbox, Dynatrace, Elastic, Five9, HubSpot, monday.com, MongoDB, Paycom Software, Paylocity Holding, Procore Technologies, RingCentral, SS&C Technologies, Wix.com, ZoomInfo, 88, AppFolio, BigCommerce, Blackbaud, BlackLine, C3.ai, Domo, Fastly, Freshworks, Gitlab, Guideware Software, Jamf Holding, JFrog, LiveRamp, Olo, Paycor HCM, Q2 Holdings, Qualys, Rapid7, Samsara, SolarWinds, Sprout Social, Tenable Holdings, Varonis Systems, Vertex, Workiva, Yext, Appian, Clearwater Analytics, Couchbase, CS Disco, CyberArk Software, Docebo, DoubleVerify, Doximity, GoDaddy, Lightspeed Commerce, N-able, NICE, Nutanix, OneSpan, Pegasystems, PROS Holdings, SPS Commerce, Unity Software, VTEX, Zeta Global Holdings, and Palo Alto Networks. The SaaS peer group in prior quarters also includes DocuSign, Asana, SentinelOne, UiPath, Braze, nCino, PagerDuty, EverCommerce, Phreesia, and Sprinklr in addition to the aforementioned list of peers. 117