Cloudflare Q3, some notes

Slower $100k/yrCust Grw and missed Revenue est.stock price up 10%?
Missed Q4 revenue guide estimate ( not revenue est. as stated above), Silviocast is correct in the next post. Thanks.

Opening remarks by Mathew Prince, Founder CEO

“206 new large customers, those that pay us more than $100,000 per year, and now have 2,558 large customers, up 34% year-over-year.”

“we added a record number of net new customers year-over-year spending more than both $500,000 and $1 million per year with Cloudflare. Our dollar-based net retention ticked up 1% to 116%. “

Sales Team progress: “During the quarter, the pipeline generated by this new cohort was 1.6x higher than those brought on at the same time a year earlier. These new account executives achieved more than 130% of their activity goals for the quarter. “…”they’re still ramping”.

“we are, a connectivity cloud. Connectivity means we measure ourselves by connecting people and things together. Cloud means the batteries are included. It scales with you. It’s programmable, has consistent security built in, it’s intelligent and learns from your usage and others to optimize for outcomes better than you could on your own.”

…”A U.S. government cabinet level agency within the executive branch, signed a one-year $2 million contract. Cloudflare’s replacing three point solution vendors, including a 20-year old incumbent solution. We’re providing a unified application security for 600 U.S. government applications. They were drawn to Cloudflare’s modern architecture, rate of innovation, robust network and ability to reduce complexity by consolidating multiple point solutions into a single pane of glass.”.

It’s still a future story that raises share price IMO. They are showing great efficincies, due to their early decision to build out Points of Presence- likely that’s keeping the market invested here.

Revenue growth rate +32% Gross margin 79%

I’m holding my 12% position because I’d rather keep my money in a company that, in my opinion, is ahead of the adoption curve than one that has an adoption curve that is dependent on, again IMO, less sizable tailwinds. I have more confidence in the success of a company that addressing a mega-trend.

For what it’s worth,



Wasn’t the top of guide range 331m and they reported 335?


We (the collective board) came down pretty harshly on them for blaming their sales team in that last call or two, myself included. I have to give them credit for turning that ship here especially in this economic climate. They’re coming out of the penalty box for me.