Cloudflare, Inc. · NYSE:NET
Cloudflare — Investor Day (February 2021)
33 slides from Cloudflare's investor day presentation, Feb 12, 2021
Slide 1: Investor Day
Investor Day February 12, 2021
Slide 2: Agenda
Jayson Noland 1200 pm Welcome Head of Investor Relations Matthew Prince 1205 pm - 1225 pm A Culture of Innovation Chief Executive Officer Michelle Zatlyn 1225 pm - 1255 pm Customer Panel President & COO Agenda Product Panel Jen Taylor 1255 pm - 125 pm featuring Aly Cabral, David Harnett, Chie
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying oral commentary have been prepared by Cloudflare, Inc. (“Cloudflare”) 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 b
Slide 4: A Culture of Innovation
A Culture of Innovation Matthew Prince Chief Executive Officer
Slide 5: Help build a better Internet
Cloudflare’s mission is to Help build a better Internet
Slide 6: Helping Build a Better Internet: Share of the Internet
Helping Build a Better Internet 20% Share of the Internet* 15% 10% Cloudflare 5% 0% * Based on reverse proxy analysis of W3Tech, a division of QSuccess, which is based on the top 10 million websites according to Alexa and Tranco.
Slide 7: An Integrated Global Cloud Platform
An Integrated Global Cloud Platform
Slide 8: A Culture of Innovation
A Culture of Innovation Annual revenue
Slide 9: The Cloudflare Innovation Machine
The Cloudflare Innovation Machine
Slide 10: Customer testimonials: Project Fair Shot
“ Bottom line is Cloudflare saved lives today. Our County will forever be grateful for your participation in getting the vaccine to those that need it most in an elegant, efficient and ethical manner. “ Project Fair Shot has enabled RSVPify's critical vaccination scheduling portals to seamlessly han
Slide 11: A Global Network Powering Our Platform
A Global Network Powering Our Platform Cloudflare network city Note: Figures as of December 31, 2020.
Slide 12: Strategic Sales Hiring
Strategic Sales Hiring David Matthew Amy Harnish Masakazu Boris Bob Bobby Irene Tracye Christina Ash Richard Roth Harrell Lee Kanani Aoba Lecoeur Laskey Guhasarkar Chang Shaw Kan-Duley Mathur Armstrong Head of Head of Revenue VP, Head Head of Head of Head of North VP, Marketing Expansion Mid Market
Slide 13: Our Platform is a Durable Moat
Our Platform is a Durable Moat Serve Everyone Better Increased Helping Build a Serverless Ease of Products Efficiency Better Internet Architecture use Global Scale
Slide 14: Customer Panel
Customer Panel Michelle Zatlyn President & COO
Slide 15: Product Panel
Product Panel Jen Taylor Chief Product Officer
Slide 16: Investing for Durable Growth
Investing for Durable Growth Thomas Seifert Chief Financial Officer
Slide 17: Key Financial Highlights
Key Financial Highlights At IPO Total CAGR Revenue GAAP Large Addressable Gross Customers Growth Market Margin Today Total Y/Y GAAP Large Revenue Addressable Gross Customers Growth Market Margin Note: Total addressable market at IPO represents 2018 expected spend from our analysis based on IDC data.
Slide 18: Innovation Drives TAM Expansion
Innovation Drives TAM Expansion Areas for Potential Incremental Growth ● Carrier Services Serverless MPLS & SDWAN Internet of Things ● Application Delivery ● VPN Controllers ● Content Filtering ● WAN ● Remote Browser ● CDN Isolation 5G Cellular ● DDoS ● Data Loss ● Intrusion Prevention Detection
Slide 19: Delivering Sustained High Revenue Growth
Delivering Sustained High Revenue Growth Total Revenue ($M $431 GR CA $287 % 50 $193 $135 $85 2016 2017 2018 2019 2020
Slide 20: Investment in Enterprise Sales Yields Significant ROI
Investment in Enterprise Sales Yields Significant ROI Large Customers Large Customers - Revenue Contribution $100,000 Annualized Revenue $100,000 Annualized Revenue ($M 828 $198 AGR % C AGR 73 C 526 % 90 $117 46% revenue 294 $62 41% revenue 160 $29 32% revenue 21% revenue 2017 2018 2019 2020 2017
Slide 21: Significant Growth in Large Customer Cohorts
Significant Growth in Large Customer Cohorts $100K $500K $1M Customers 828 Customers 71 Customers 32 AGR R C AG R C 51 G % 73 CA 526 % 86 0% 17 10 27 294 11 160 11 4 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020 Note: See the Appendix for how we define “Large Customers,” which are t
Slide 22: Land and Expand Strategy Drives Growth Across Cohorts
Land and Expand Strategy Drives At the IPO, Growth Across Cohorts of contracted customers used products 2020 2019 Today, 2018 2017 2016 Annualized Billings 2015 of contracted customers use 2014 2013 products 2012 & Prior Today, of contracted customers use 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 23: Strong Dollar-Based Net Retention
Strong Dollar-Based Net Retention 119% 117% 115% 116% Q1’20 Q2’20 Q3’20 Q4’20 Note: See the Appendix for how we define “Dollar-Based Net Retention.” Gross revenue retention is defined as 1 gross revenue churn.
Slide 24: Broadly Diversified Customer Base
Broadly Diversified Customer Base 2020 Revenue Mix by 2020 Revenue Mix by 2020 Revenue Mix by Customer Type Geography Top 100 Customers SMB Large Other Top 100 U.S. APAC Mid-Market EMEA Other Note: See the Appendix for how we define “Large Customers.” Mid-Market customers are defined as our contract
Slide 25: Network Efficiency Drives Resilient Gross Margin
Network Efficiency Drives Resilient Gross Margin Products on the network have increased Non-GAAP Gross Margin since the IPO 79% 79% 78% 78% 77% 77% Global traffic on Cloudflare’s network increased in 2020 1.4M free & paying customers since the IPO, representing an increase of Platform efficiency yi
Slide 26: Increasing Non-GAAP Operating Leverage
Increasing Non-GAAP Operating Leverage 22% 31% 23% of operating leverage since 2018 Operating Expense as a % of Revenue 18% 27% 27% 21% 48% 52% 46% 2018 2019 2020 S&M R&D G&A Note: See the Appendix for GAAP to Non-GAAP reconciliation.
Slide 27: Guidance
Guidance Revenue $130.0131.0 Revenue $589.0593.0 Y/Y Growth 42%44% Y/Y Growth 37%38% Operating Loss $9.0$8.0 Operating Loss $25.0$21.0 Operating Margin 7%6% Operating Margin 4% EPS $0.03$0.02 EPS $0.09$0.08 Note: These forward looking statements were provided by us on
Slide 28: Long-Term Model
Long-Term Model Long-Term 2018 2019 2020 Model Non-GAAP Gross Margin 78 % 78 % 78 % 75% 77% Sales & Marketing 48 % 52 % 46 % 27% 29% % of revenue) Research & Development 27 % 27 % 21 % 18% 20% % of revenue) General & Administrative 31 % 23 % 18 % 8% 10% % of revenue) Non-GAAP Operating 3
Slide 29: Why We Win
Why We Win Innovation is a key differentiator Large TAM with multiple growth vectors Why We Win Significant large customer growth Efficient business model
Slide 30: Q&A
Q&A Matthew Prince Michelle Zatlyn Jen Taylor Thomas Seifert Chief Executive Officer President & Chief Chief Product Officer Chief Financial Officer Operating Officer
Slide 31: Appendix
Appendix
Slide 32: Definitions
Definitions Paying Customers. We believe our ability to grow the number of paying customers on our platform provides a key indicator of growth of our business and our future business opportunities. We define a paying customer as a person or entity who has generated revenue during the quarter, exclud
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation GAAP to Non-GAAP Reconciliation