Cloudflare, Inc. (NET) CEO Matthew Prince Presents at Jefferies Software Conference (Transcript)

Cloudflare, Inc. (NYSE:NET) Jefferies Software Conference Call Summary Company Overview - Company: Cloudflare, Inc. - Industry: Internet security and performance services - Participants: Matthew Prince (Co-Founder and CEO), Brent Thill (Jefferies) Key Points Company Vision and Strategy - Cloudflare aims to create a more efficient, reliable, secure, and private internet, reflecting on the original design flaws of the internet [3] - The company is focused on enhancing online activities, ensuring that services are faster and more secure, which is expected to keep the team busy for years to come [3] Economic Outlook - The mood at recent conferences, particularly in Europe, is pessimistic, with expectations of a challenging economic environment ahead [6] - Cloudflare experienced its hardest quarter in Q1 2022 since the onset of COVID-19, indicating potential pipeline issues for companies with longer sales cycles [6][7] Market Positioning - Cloudflare is positioned as a "must-have" service for companies, especially in light of increasing cyber threats and the growing importance of internet services [9] - The company is seen as a low-cost leader with high ROI, which is advantageous in a difficult economic climate [9] Supply Chain and Hardware Issues - Current supply chain challenges are causing hardware vendors to charge more and extend delivery times, which may drive customers towards Cloudflare's services [11][12] - Cloudflare's ability to adapt quickly to market changes is highlighted as a competitive advantage [7] Financial Strategy - Cloudflare is focused on maintaining high growth rates (over 40%) while aiming for breakeven cash flow, indicating a commitment to reinvest in the business rather than prioritize short-term margins [14] - The company emphasizes transparency and adaptability in its operations, preparing for potential economic hardships [14][16] M&A Activity - Cloudflare has a cautious approach to mergers and acquisitions, preferring to maintain its culture and technology integrity [19] - The recent acquisition of Area 1 is seen as a strategic fit, enhancing Cloudflare's email security offerings and threat intelligence capabilities [20][21] Go-to-Market Strategy - Cloudflare has significantly increased its presence in the Fortune 1000, growing from 10% to approximately 26% [24] - The company focuses on investing behind demand rather than ahead of it, ensuring that sales and product development align with customer needs [25][26] Future Aspirations - Cloudflare aims to be the connective fabric between various cloud providers rather than competing directly with them, positioning itself as a critical infrastructure component for internet services [28][29][30] Conclusion - Cloudflare is navigating a challenging economic landscape while maintaining a strong market position and commitment to innovation, with a focus on long-term growth and customer-centric strategies [9][14][16]