Cloudflare (NET) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 3, 2023 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Phil Winslow

[abrupt start] Matthew Prince, Co-Founder and CEO; Michelle Zatlyn, Co-Founder, President and COO, and Thomas Seifert, CFO. By now, everyone should have access to our earnings announcement. This announcement, as well as our supplemental financial information, may be found on our investor relations website.

As a reminder, we will be making forward-looking statements during today's discussion, including, but not limited to, our customers, vendors, and partners, operations, and future financial performance, our anticipated product launches and timing and market potential of those products, our anticipated future financial and operating performance and our expectations regarding future macroeconomic conditions. These statements and other comments are not guarantees of future performance and are subject to risks and uncertainties, much of which is beyond our control. Our actual results may differ significantly from those projected or suggested in any of our forward-looking statements. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more complete discussion of the risks and uncertainties that could impact our future operating results and financial condition, please see our filings with the SEC as well as in today's earnings press release.

Unless otherwise noted, all numbers we talk about today, other than revenue, will be on an adjusted non-GAAP basis. You may find a reconciliation of GAAP to non-GAAP financial measures that are included in our earnings release on our Investor Relations website. For historical periods, a GAAP to non-GAAP reconciliation can be found in a supplemental financial information referenced a few moments ago.

We would also like to inform you that we will be participating in Stifel's Tech Executive Summit on August 29th, and the Goldman Sachs Communacopia and Technology Conference on September 6th.

Now, I'd like to turn the call over to Matthew.

Matthew Prince

Thank you, Phil. We had a strong quarter in spite of continued macroeconomic uncertainty. In Q2, we achieved revenue of $308.5 million, up 32% year-over-year. We added 196 new large customers, those that pay us more than a $100,000 per year and now have 2,352 large customers, up 34% year-over-year.

Our focus on go-to-market improvements is already paying off. After we saw sales cycles increase 20% in Q1, disciplined around deals had them return to levels closer to what we saw last year. While our customers and prospects continue to be very careful around their IT spend, our improved execution led to a record quarter in new ACV bookings.