Slide 1: Investor Day 2025
Investor Day 2025 MARCH 12, 2025
Slide 2: Safe Harbor and Other Information
Safe Harbor and Other Information 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
Slide 3: Phil Winslow
Phil Winslow Vice President of Strategic Finance, Treasury, & Investor Relations 3
Slide 4: Opening Remarks Agenda
Phil Winslow 100 pm - 105 pm Opening Remarks Vice President of Strategic Finance, Treasury, & Investor Relations Matthew Prince 105 pm - 130 pm Vision Co-founder & Chief Executive Officer CJ Desai 130 pm - 200 pm Product President of Product & Engineering Rita Kozlov 200 pm - 220 pm AI Vice
Slide 5: Matthew Prince
Matthew Prince Co-founder & Chief Executive Officer 5
Slide 6: 6
6 6
Slide 7: CJ Desai
CJ Desai President of Product & Engineering 7
Slide 8: Why did I join Cloudflare?
Why did I join Cloudflare? 8
Slide 9: Why did I join Cloudflare?
Why did I join Cloudflare? One programmable network, one composable platform Relentless focus on innovation with a wide portfolio and unique approach Massive potential for ALL customers and use cases Mission to help build a better Internet 9
Slide 10: One programmable network, one composable platform
One programmable network, one composable platform 10
Slide 11: A single, composable platform of Internet-native services
#1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM A single, composable platform of Internet-native services Every Cloudflare Built to run over service every Cloudflare server In every Cloudflare data center Across 335+ cities . in 125+ countries Note: Figures as of December 31, 2024. 11
Slide 12: A single, programmable network unlike any other
#1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM A single, programmable network unlike any other 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 13,000 networks directly connect
Slide 13: Cloudflare is built for what's next
#1 ONE PROGRAMMABLE NETWORK, ONE COMPOSABLE PLATFORM Cloudflare is built for whatʼs next One composable platform Unified security Any-to-any Flexibility for external-facing connectivity to customize the systems and internal for users, apps, branches, platform with full-stack resources data centers,
Slide 14: Relentless focus on innovation
Relentless focus on innovation with a wide portfolio and unique approach 14
Slide 15: A platform that constantly delivers innovation
#2 RELENTLESS FOCUS ON INNOVATION A platform that constantly delivers innovation 2022 Argo for Spectrum Ethereum Gateway Custom Domain Spectrum Gateway Protection 2014 Advanced Area 1 Email Domains API Shield Security Certification Manager Access Regional Services Images DLP Calls R2 DNS Firewall A
Slide 16: Cloudflare recognized by the Top 3 analyst firms
#2 RELENTLESS FOCUS ON INNOVATION Cloudflare recognized 156x by the Top 3 analyst firms Application Zero Trust & Developer Services Network Services Services NEW LEADER in IDC MarketScape NEW NICHE PROVIDER in Gartner NEW VISIONARY in Gartner EMQ for EDS 2024 Magic Quadrant for Email GenAI Infras
Slide 17: Connect, protect, and build everywhere
#2 RELENTLESS FOCUS ON INNOVATION Connect, protect, and build everywhere 17
Slide 18: Massive potential
Massive potential for ALL customers and use cases 18
Slide 19: Legacy networks and point products create rising complexity
#3 MASSIVE POTENTIAL Legacy networks and point products create rising complexity and costs, holding back digital progress Attackers Customers Remote employees AWS Azure GCP Workday Salesforce O365 ✖ Missing visibility or control in infrastructure sprawl WAF DDoS ZTNA CASB SWG ✖ Ballooning cost of C
Slide 20: Internet-native platform delivers local capabilities with global scale
#3 MASSIVE POTENTIAL Cloudflare is the only composable, Internet-native platform that delivers local capabilities with global scale A radically different platform Attackers Customers Remote employees AWS Azure GCP Workday Salesforce O365 approach for customers to Threats connect, protect, accelerat
Slide 21: Organizations of all sizes…
#3 MASSIVE POTENTIAL Organizations of all sizes… 21
Slide 22: Customers in the Top 100
#3 MASSIVE POTENTIAL …and from all industries rely on Cloudflare 40 40 33 Customers in the Top 100 30 Number of Cloudflare 30 27 27 24 20 14 10 0 Communication Consumer Information Financial Healthcare Consumer Utilities Services Staples Technology Services Discretionary Source: FactSet company scr
Slide 23: Cloudflare fits in everywhere an organization needs
#3 MASSIVE POTENTIAL Cloudflare fits in everywhere an organization needs 23
Slide 24: Platforms win!
#3 MASSIVE POTENTIAL Platforms win! Project 1 Example Project 2 Example Project 3 Example Project 4 Example Inbound Traffic Outbound Traffic WAN Networking Multi-cloud Networking ESCAPE VELOCITY Platform adoption ● Future projects take less effort, because the cloud infrastructure is in place. ● B
Slide 25: Application security and performance
Application security Global application reliability for and performance petabytes of monthly traffic Secure access for 5,500 Zero Trust access users and contractors Faster development, stronger Developer platform customer experiences We can focus on growing our product and expanding into new market
Slide 26: Application security and performance
Application security Security, performance, and reliability across all public websites, endpoints, and performance and applications Streamlined European and international Data localization data localization compliance 40% improvement in performance with Developer platform a globally distributed asse
Slide 27: Mission
Mission to help build a better Internet 27
Slide 28: Cloudflare is proud to be part of the global community
#4 MISSION 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 Advocating for on it for economic growth and innovation, access to networ
Slide 29: Accelerating world-class innovation
2025 Accelerating world-class innovation 29
Slide 30: Lessons from my past
Lessons from my past How to execute on How do product strategy for engineering and “Land and Expandˮ sales work to work at scale? together as a team? How to be there for customers when they need us? 30
Slide 31: Execution Plan for 2025
Execution Plan for 2025 Scale and enhance product and engineering to take us to $5B and beyond Application Services Cloudflare One Developer Customer support ● Secure APIs and AI workloads ● Modernize remote access and ● Accelerate platform capabilities ● Accelerate cross-functional workspace threat
Slide 32: Extraordinary opportunity
Extraordinary opportunity to help build another iconic technology company 32
Slide 33: Rita Kozlov
Rita Kozlov Vice President of Product for Cloudflare Developer Platform 33
Slide 34: Cloudflare's vision for developers
CLOUDFLARE DEVELOPER PLATFORM Cloudflareʼs vision for developers To help build a better Internet with a modern cloud platform that accelerates developer velocity and drives better end user experiences. Remove friction & Provide Enterprise grade Enable improve developer primitives solutions and new A
Slide 35: A bold, non-consensus decision: isolates
CLOUDFLARE DEVELOPER PLATFORM A bold, non-consensus decision we made when building the foundation of our developer platform: isolates 0ms Cold starts (no container runtime) for auto-scaling ~10x Higher price-performance Generation One Generation Two Generation Three Generation Four vs. other cloud p
Slide 36: Deploy applications to region: Earth
CLOUDFLARE DEVELOPER PLATFORM Deploy applications to region: Earth 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, ✓ deplo
Slide 37: The secret is out!
CLOUDFLARE DEVELOPER PLATFORM The secret is out! December 2024: 3+ million April 2024: 2+ million June 2024: 2.4+ million November 2022: 1+ million November 2021: 350,000+ May 2022: 450,000+ 2019 2020 2021 2022 2023 2024 Note: Developer count represents active developers, defined as the unique count
Slide 38: AI is the next paradigm shift
CLOUDFLARE DEVELOPER PLATFORM AI is the next paradigm shift in the way applications are built Cloud Social 2000 2010 2007 2022 Mobile AI 38
Slide 39: Last year…
Last year... @®. crourcare 39
Slide 40: Last year…
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
Slide 41: Today…
Today… Today… 76% 75% of developers are currently using AI of global knowledge workers using in their development process1 generative AI, nearly doubling in the since the end of 20242 1. “Highlights from the 10th DORA reportˮ, Google Cloud 2. "2024 Work Trend Index Annual Reportˮ, Microsoft 41
Slide 42: Last year…
Last year… We stated that although the focus of AI had been on training… 42
Slide 43: Last year…
Last year… …the focus of AI was going to shift to inference. 43
Slide 44: It's happening…
Itʼs happening… Inference Engineering innovations are Most Pre-training Post-training significantly lowering the cost of AI LLMs model training and reducing model sizes — thereby, reshaping the AI Pre-training Post-training Inference o1 value chain toward inference, where efficiency, scale, and spee
Slide 45: What's next?
What's next? ® crouvrtare 45
Slide 46: The next focus of AI is automation
The next focus of AI is going to be Train Infer Automate on automating end-to-end tasks. 46
Slide 47: How is AI evolving?
How is AI evolving? Predictive AI Generative AI Agentic AI Machine Learning) AI systems that can act AI systems that recognize AI systems that create new autonomously, make decisions, and Definition patterns from data and make content (e.g., text, images, or adapt to changing environments predictio
Slide 48: Augmentation → Automation
Augmentation → Automation Augmentation Generative AI Automation Agentic AI Help me draft an email to a customer I Good Morning, Rita met at a conference, reminding them of the benefits of Cloudflare Run a campaign following up with everyone I met at the conference last week: I'll help you draft
Slide 49: How do agentic AI systems work?
How do agentic AI systems work? AI Workflows + APIs = Agents User Feedback Manager Agent No Analyst Agent Checker Planner Agent External Yes. Agent Systems User Satisfaction User Interpretation Workflow Workflow Iterative Output/ Instructions & Reasoning Generation Execution Improvement Outcome 49
Slide 50: Example: CRM agent
HOW DO AGENTIC AI SYSTEMS WORK? Example: CRM agent #2 translate Web browser a. navigate to WebRTC Speech to text model a website #1 #3 connect to cache and #6 send query evaluate dispatch action & b. connect to maintain state API APIs User #3 #4 #5 .c. access internal cache and send route service ev
Slide 51: Example: CRM agent with Cloudflare Workers
HOW DO AGENTIC AI SYSTEMS WORK? Example: CRM agent with Cloudflare Workers #2 translate Browser Rendering a. navigate to Realtime Workers AI D1 a website #1 #3 connect to cache and #6 send query evaluate dispatch action & b. connect to maintain state API APIs User #3 #4 #5 .c. access internal cache
Slide 52: Cloudflare is the best platform for AI inference
Distributed network Userʼs device Centralized cloud Cloudflare is the best platform for developers to build and scale AI inference and agents 52
Slide 53: Why Cloudflare Workers?
Why Cloudflare Workers? (a.k.a. Why not build AI agents on a hyperscaler? 53
Slide 54: Cloudflare Workers, the best platform for AI
Cloudflare Workers, the best platform for developers to build and scale AI inference and agents Cost + Developer Performance Scalability experience Scale up and down to zero Deploy from region: Earth All the products you need Run AI models on GPUs without having Code executes within 50ms of Access i
Slide 55: Serverless inference that scales up and down to zero
#1 COST SCALABILITY Serverless inference that scales up and down to zero Pre-provisioned GPU capacity: What you pay for Inference is hard to predict and spiky on a hyperscaler in nature, unlike training. GPU utilization is, on average, only 30% — with one-third of organizations utilizing less th
Slide 56: Serverless billing that scales down to zero
#1 COST SCALABILITY Serverless billing that scales down to zero Hyperscalers Cloudflare 5ms 200ms 2ms 5ms 2ms + Compute Idle Compute time time time Compute billing time: 7ms Wall-clock billing time: 207ms Examples are illustrative. Most compute platforms today — including those that are Network 2
Slide 57: No compute = no bills for usage
#1 COST SCALABILITY No compute = no bills for usage 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. Metaphor: The meter doesnʼt keep running, when your taxi driver stops to refuel. Ima
Slide 58: Run inference tasks on Workers AI
#2 PERFORMANCE Run inference tasks on Workers AI, the first globally- distributed serverless AI inference platform Deploy from 335 Code executes within 50ms 190 Growing constellation of region: Earth of 95% of the Internet- cities for AI inference cities cities powered by GPUs in 125 connected
Slide 59: Orchestrating AI and APIs with Workers
#2 PERFORMANCE Orchestrating AI APIs with Cloudflare Workers Orchestration & Other Vendors Cloudflare 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. D
Slide 60: Developer velocity is critical
#3 DEVELOPER EXPERIENCE Developer velocity is critical 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. ~50% Amount of time developers spend writing code 60
Slide 61: AI and agents fit seamlessly into developer experience
#3 DEVELOPER EXPERIENCE AI and agents fit seamlessly into Cloudflareʼs developer experience to accelerate 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 developm
Slide 62: What developers want and get from Cloudflare
#3 DEVELOPER EXPERIENCE What developers want and get from Cloudflare Everything everywhere all at once…all on one platform 62
Slide 63: The network is the computer
The network is the computer 63
Slide 64: Agentic AI customer-built use cases on Workers
Agentic AI customer-built use cases on Workers Finance CRM Perform due diligence on M&A targets by Provide in-depth information that would researching everything from verticals, require hours-worth of research to sales competitors, team sizing, and headcount. team about prospects, their businesses,
Slide 65: One final thought…
One final thought… 65
Slide 66: More code will be written in the next years
More code 5 will be written in the next years than has been cumulatively written in all of programming history 66
Slide 67: Mark Anderson
Mark Anderson President of Revenue 67
Slide 68: What am I hearing from customers and prospects?
What am I hearing from customers and prospects? 68
Slide 69: IT software budgets doubled from 2010 to 2020
2x IT software budgets doubled from 2010 to 2020 69
Slide 70: Technology leaders will see technical debt rise
50% of technology leaders will see technical debt severity rise in 2025 70
Slide 71: In 2025, digital modernization will accelerate
In 2025, digital modernization will accelerate… Biggest expected increases in IT spending during 2025 3.8% Average expected IT 37 % 32 % budget increase 31 % 4.9% Cyber/ Generative Artificial information Average expected AI intelligence security change to revenue Source: "2025 CIO and Technology Exe
Slide 72: Most teams struggle to deliver on digital projects
…but most teams struggle to deliver on digital projects Only 30% of large-scale tech programs meet timeline, budget, and scope expectations Projects that met expectations: 30% Projects that partially met expectations: 35% Projects that failed to meet expectations: 35% 70% companies fail to deliver f
Slide 73: Legacy network complexity creates tension between IT priorities
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 73
Slide 74: Unified platform resolves digital complexity
Cloudflareʼs unified platform of Internet-native services resolves digital complexity 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.
Slide 75: The market is coming to where Cloudflare is already
The market is coming to where Cloudflare is already Business CXO Initiatives Cloudflare Transformation Transformation is a must to Global platform and partner accelerate cloud, digital for cloud, digital, and There is no longer a business and journey, and value to the business transformation. techno
Slide 76: Accelerating our journey to become world-class in go-to-market
2025 Accelerating our journey to become world-class in go-to-market 76
Slide 77: We started transforming our go-to-market
2023 We started transforming our go-to-market Skier looking up a mountain 77
Slide 78: Action items for 2025
Action items for 2025 Scale and enhance our go-to-market to take us to $5B and beyond Accelerate AE Align to Customersʼ Launch Developer Win with Momentum Digital Imperatives Speed Boat Partners First Continue to improve sales Deliver solution/sales play Establish developer-centrics Deepen investmen
Slide 79: Physics 101
#1 ACCELERATE AE MOMENTUM Physics 101 p=mv Momentum, n. Mass, n. Velocity, n. the quantity of motion in a the quantity of matter within a given a quantity that designates speed moving body, expressed as the object together with the direction of product of its mass and velocity movement 79
Slide 80: Physics 101…translated to B2B sales
#1 ACCELERATE AE MOMENTUM Physics 101…translated to B2B sales p=mv ACV Capacity Productivity 80
Slide 81: Productivity
#1 ACCELERATE AE MOMENTUM Productivity Rolling 4Quarter ACV per Account Executive Net We are encouraged by the continued improvement in sales productivity from the trough in 2023. 81
Slide 82: Capacity
#1 ACCELERATE AE MOMENTUM Capacity Account Executive Capacity Net Y/Y Growth We expect year-over-year growth in ramped AEs to accelerate each quarter throughout 2025. 82
Slide 83: Identify digital imperatives for customers in 2025
#2 ALIGN TO DIGITAL CUSTOMERSʼ IMPERATIVES Identify digital imperatives for customers in 2025, and… Modernizing apps across Managing cyber risk hybrid/multi cloud Adopting AI and machine learning Improving data governance Simplifying and consolidating Building digital resiliency IT and security sta
Slide 84: Align Cloudflare's platform to key digital imperatives
#2 ALIGN TO DIGITAL CUSTOMERSʼ IMPERATIVES …align Cloudflareʼs platform to addresses these key digital imperatives Digital Imperative Cloudflareʼs connectivity cloud services: 1 Modernizing apps across hybrid/multi cloud App + API services: Protect and accelerate web applications Network services:
Slide 85: Extending product-led growth with sales-led growth
#3 LAUNCH DEVELOPER SPEED BOAT Extending product-led growth with sales-led growth Product-led sales Pipeline Revenue Revenue Product Sales usage closing Product-led monetization Sales-led monetization Pipeline Revenue Pipeline Revenue Revenue Product Self-serve Sales Sales usage purchase prospectin
Slide 86: Developer-centric go-to-market approach
#3 LAUNCH DEVELOPER SPEED BOAT Developer-centric go-to-market approach Marketing & Targeting Pre Sales Post Sales Pipeline Developed Curated List of Community Development Expanded Team of Developer Dedicated Customer Support Target Developer Accounts + Start-Up Program Specialists/Architects for De
Slide 87: Investing in multiple partner routes to revenue
#4 WIN WITH PARTNERS FIRST Investing in multiple partner routes to revenue Solution Providers Distributors Systems Integrators / Consulting Partners Technology Alliance Partners Managed Security Service Providers Service Providers 87
Slide 88: We will become world-class in go-to-market
2025 We will become world-class in go-to-market 88
Slide 89: Thomas Seifert
Thomas Seifert Chief Financial Officer 89
Slide 90: Pools of Funds 101
Pools of Funds PoF 101 90
Slide 91: Pool of funds accelerate platform adoption
Pool of funds accelerate platform adoption at large customers but can impact the “shapeˮ of financial reporting 91
Slide 92: Pool of funds accelerate platform adoption
Pool of funds accelerate platform adoption… Pool of Funds as a % of ACV 10.0% Pool of funds contracts benefit both customers and Cloudflare: 7.5% ✓ reduced friction to platform adoption, ✓ streamlined procurement process, ✓ longer-term commitments, 5.0% ✓ increased customer lifetime value, ✓ enhance
Slide 93: But can impact the shape of financial reporting
…but can impact the “shapeˮ of financial reporting A Leading Technology Company: Signed a 3Year $40M PoF in Q1ʼ24 Example: Signed $40M PoF with 40 Existing products customer Workers for transitioning to Platforms 24% Q/Q pool of funds 11% Q/Q 3% Workers & Q/Q Data BYOIP 6% Localization Q/Q Sui
Slide 94: Fast-Growing AI Company example
…but can impact the “shapeˮ of financial reporting A Fast-Growing AI Company: Signed a 1Year $7M PoF in Q3ʼ24 Example: New customer Signed $7M PoF adopting pool of funds PoF Service Start Signed initial Date $500K contract Service Start Date Note: Chart represents monthly revenue. 94
Slide 95: Pool of funds contracts are effectively ramped deals
Pool of funds contracts are effectively ramped deals… 2024 PoF Cohort: PoF Revenue 2024 PoF Cohort: Net Revenue vs. If-Ratable Revenue Recognition % Impact Although revenue recognition is often lower in the near term as compared with ratable contracts, PoF contracts lead to higher revenue growth ove
Slide 96: Drivers of Value Creation
Drivers of Value Creation Growth + Profitability 96
Slide 97: Accelerating Growth
Accelerating Improving sales traction in key productivity and product areas attainment levels Increasing Growing platform adoption Crisis Response pipeline Accelerating Growth Building momentum Ramping capacity with $1+ million of account customers executives 97
Slide 98: Go-to-market initiatives are paying off
#1 IMPROVING SALES PRODUCTIVITY AND ATTAINMENT Go-to-market initiatives are paying off Rolling 4Quarter ACV per Account Distribution of Ramped Account Executive Net Executive AE Quota Attainment In 2024, we delivered a 10 percentage point increase in ramped AEs achieving over 80% of quota comp
Slide 99: Pipeline continues to grow
#2 GROWING PIPELINE Pipeline continues to grow Pipeline $M ↑40% Robust pipeline growth gives us confidence to invest in sales capacity. 99
Slide 100: Increased hiring of stage-appropriate GTM talent
#3 RAMPING CAPACITY OF ACCOUNT EXECUTIVES Increased hiring of stage-appropriate GTM talent Account Executive Capacity Net Y/Y Growth Composition of New AE Hires We continue to increase hiring in our sales 42% 40% 72% 73% organization — with a focus on enterprise 58% 60% account executives with pr
Slide 101: $1M+ Customers
#4 BUILDING MOMENTUM WITH $1 MILLION CUSTOMERS Enterprise accounts are just getting started… $1M Customers vs. Annualized Revenue 600 500 $1M+ customers represent less than 1% of $1M Customers 400 300 Cloudflareʼs total paying customers. 200 100 0 $500 $1,000 $1,500 $2,000 $2,500 Annualized Reve
Slide 102: Increasing volume and scale of the Fortune 500
#4 BUILDING MOMENTUM WITH $1 MILLION CUSTOMERS …with already increasing volume and scale Revenue $M) by All Customers $5M 31x $1M$5M 35 34x $500K$1M 30x $100K$500K 19x of the Fortune 500 2018 2019 2020 2021 2022 2023 2024 $100K 5x % Note: Growth factors (e.g., 5x for $100K) are calcula
Slide 103: Land-and-expand strategy
#5 INCREASING PLATFORM ADOPTION Land-and-expand strategy fueled by… Annualized Recurring Revenue by Revenue Contribution by Product Our success in Product SKU Attach Rate Cohorts $M driving platform adoption is evidenced by the consistently increasing amount spent with Cloudflare in higher produc
Slide 104: A consistently expanding TAM
#5 INCREASING PLATFORM ADOPTION …a consistently expanding TAM Cloudflare $231B Developer Services $214B Areas for Potential ● Application Platform Incremental Growth $196B ● Object Storage $181B Cloudflare Network Services AI 1 Cloudflare One ● Network Firewall ● MPLS ● SDWAN Database ● Intrusion
Slide 105: Cloudflare Developer One
#6 ACCELERATING TRACTION IN KEY PRODUCT AREAS Cloudflare Developer One Cloudflareʼs multi-act play ↑43% ↑76% is only just beginning. y/y growth in ACV booked in y/y growth in ACV booked in 2024, an acceleration from 2024, an acceleration from 20231 2023 1. Calculations normalized for Department of
Slide 106: Profitability
Unit Long-term economics operating model Profitability 106
Slide 107: Unit economics
Unit economics Unit Economic Margin by Component What does it “cost to bookˮ $1 of Cost to Book incremental ARR? CTB Sales & CTB Marketing cost per dollar of incremental ARR How much does it “cost to serveˮ Cost to Serve the lifetime revenue? CTS = CTS Delivery, R&D, Support & G&A cost as % of
Slide 108: Cloudflare outperforms peers on unit economic margin KPIs
UNIT ECONOMICS Cloudflare outperforms peers on unit economic margin KPIs… Cost to Book vs. Cost to Serve vs. DNR vs. SaaS Peer Group SaaS Peer Group SaaS Peer Group Note: See Appendix for GAAP to Non-GAAP reconciliation and list of companies in SaaS Peer Group. Data as of March 6, 2025. 108
Slide 109: We remain focused on continual improvement
UNIT ECONOMICS …and we remain focused on continual improvement Effect of Lower Effect of Lower Effects of Lower Attrition & Cost to Book Cost to Serve Higher Expansion 109
Slide 110: Long-term operating model
Unit economics Long-term operating model support 20% long-term operating margins Long-term 2021 2022 2023 2024 model Gross Leverage efficiency and 79 % 78 % 78 % 79 % elasticity of our network and 75% 77% Margin ingress/egress dynamics Sales & Marketing Scale go-to-market operations 45 % 42 % 40
Slide 111: Matthew Prince, Michelle Zatlyn, Thomas Seifert, Mark Anderson, CJ Desai
Matthew Prince Michelle Zatlyn Thomas Seifert Co-founder & Chief Co-founder & Chief Financial Executive Officer President Officer Mark Anderson CJ Desai President of President of Product & Revenue Engineering 111
Slide 112: Investor Day 2025
Investor Day 2025 MARCH 12, 2025 112
Slide 113: Appendix
Appendix 113
Slide 114: GAAP to Non-GAAP Reconciliation (Annual)
GAAP to Non-GAAP Reconciliation Annual 114
Slide 115: GAAP to Non-GAAP Reconciliation (Quarterly)
GAAP to Non-GAAP Reconciliation Quarterly) 115
Slide 116: Definitions & Methodologies
Appendix Definitions & Methodologies 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 wh
Slide 117: Definitions & Methodologies
Appendix Definitions & Methodologies 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