Listening to the call (not done yet), but the main theme from the opening is SECURITY, SECURITY, SECURITY. There is a lot to it, but I wanted to point out the Russia/Ukraine piece. This seems like a big feather that their security sales teams can use to help close deals in the future! Not to mention an awesome thing for a company to do.
"I wanted to close by talking about what we’re seeing in Russia and Ukraine. I mentioned the region at the end of the last earnings call. A number of you reached out to say a theme out of place at the time.
Unfortunately, it proved pressure. At Cloudflare, our global network serves as an early warning sensor for what’s happening across the Internet. In the month leading up to Russia invasion, we saw characteristics cyber probing and other warning signs that were similar to what we’ve seen in Georgia and Crimea years earlier. Concerned, we’ve briefed Western government and offered our services to critical infrastructure providers and government institutions in Ukraine well before the physical invasion began.
Many organizations there took us up on our offer of protection. One of the stories of the war has been the relative lack of cyberattacks. That’s not exactly accurate. There have been attacks.
However, the number that have been successful are thankfully few. I’m proud of the role that Cloudflare has played to that end. In Russia, Belarus, and the Russian-occupied regions of Ukraine. We terminated all users tied to sanction parties and put additional checks in place for new customers signing up for our services.
The region, including Ukraine, represents less than 1% of revenue. So we do not anticipate meaningful financial impact to our business, but we are conservatively reserving for the worst case, just like we did at the beginning of COVID. One surprising thing that happened in the quarter was that our 188.8.131.52 app rose to No. 1 in the Russian app stores.
We build that app and give it away to consumers for free as the world’s largest testbed for a key component of our zero trust solution. It turned out in what was an increasingly thoughtful network environment inside Russia. Citizens there wanting to see what was really going on, installed the app in order to access Western media. Now we won’t make any money on this.
So some of you may wonder why am I telling you about it during the earnings call. Because it turns out doing the right thing and being there when some on the Internet needs us has always been core to Cloudflare and has always turned out to be good business for us over the long term. It’s why I love my job. Successfully operating inside the hostile network environment that is Russia today makes our mobile app better for our enterprise zero trust customers.
Ensuring Ukrainian critical infrastructure stays online means we can stand up to the biggest nation state-sponsored attacks for our largest government, financial services, and other off-targeted customers, and briefing government on what’s about to happen proves the power and unique insight we get from our global network. We’re in the trust business. We always have been. And in Q1, we built a lot of trust in a lot of quarters.
Even in what I believe will prove to have been the hardest quarter for the industry since Q1 of 2020. Trust is the secret to why we continue to grow paying customers in a record pace. It’s why we received 133,000 job applications and saw attrition actually ticked down, while many others are struggling to hire. And while we continue to have a seat at the table in conversations around the future regulation of the Internet alongside today’s check giants.
We will be there as the Internet needs us in Ukraine, Russia, and everywhere else."
Link to full transcript