Some exciting remarks from Thomas Seifert, CFO of Cloudflare (NET) regarding NET’s Enterprise Customer Momentum as compared to SMB’s, that I had previously understood to be NET’s primary target market (aprox. 13:30 of audio). In addition, the CFO makes some significant remarks regarding the growth in NET’s growth in China near the end of the audio.

Exerpt From NET Mgt Presentation at Cowen Technology Conference
June 1, 2021

Thomas Seifert, CFO of Cloudflare
“…So when Cloudflare got started now almost 11 years ago in October, it focused on the long tail of the market. So small and medium-sized businesses developers our first go-to-market models were what we call pay-as-you-go models, customers gave a credit card, and we charged them $220 a month and then later $200 a month for the services we offered. And only later came, our enterprise go-to-market. Today this is the majority of our business and our fastest growing business. And if you go more specifically into enterprise and look at what we call our large enterprise customers, and we define those as customers that pay us more than a $100,000 a year, this is now 50%, a little bit more than 50% of our revenue.
And if you break down the large customers and say, let’s look at customers that give us more than $500,000 or even more than a $1 million a year, the larger the cohort that the faster the growth. So our largest cohort saw a $1 million plus customers has been growing north of 70% consistently over the last seven quarters. And we think this will continue that way. We announced our first $10 million ACV customer in the third quarter of last year.
By now – where the couple of customers that are in this range of high single-digit million dollars of ACV per year. And if you go back over time, we seem to make a step function change in terms customer size from $50,000 to $100,000 for the first $500,000 customer to the first $1 million customer to the first $10 million customer. So we are right at that brink currently. So enterprise momentum has been extremely strong and has been driving a lot of the growth that we have seen over there, not only at the last eight quarters, but I would say in the last four years.”
-NET’s Growth in China-
Thomas Seifert, CFO
Without any doubt, China is an important part of the overall go-to-market in our story. That’s a big part of Internet and Internet consumption, Internet users. We started very early to develop our footprint in China in relationship with Baidu that carried us to their current date. With Baidu, we had about selecting more than 20 cities in China that served that had our equipment and provided our services. And that already made us very unique because we are able to offer this as one consistent network, one control plane regardless of whether you’re doing business in China, outside of China or into China, one consistent offering, one network.
We are involving now in our approach there and moving from Baidu into a relationship with JD. In this process of transition that we’ll do a couple of things, but it will significantly increase our footprint in China itself. So I said with Baidu, we were in about slightly more than 20 cities in China. With JD we are going to get to more than 50 cities in China by the end of this year and then additional 100 cities, so in the two years there after. So we’ll be in about a 150 cities in China.
We are today in more than 200 cities worldwide in more than 100 countries. So getting to 150 cities in China will be a really big step. It’s important from a variety of perspectives that it gets us closer to the eyeballs that [indiscernible] connect. As we said before, minimize this latency with anything that once connect, but it also allows us to have a much better handle on how granular and how local we can be managing data residency and data sovereignty issues.
Shaul Eyal (interviewer/reporter)
And still I think important time with TAM maybe Thomas, just kind of that Chinese contribution because at times investors kind of tend to freak about it, when they hear China given some of the headline news?
Thomas Seifert, CFO
So far it has been a rather stable relationship and in terms of exposure, there’s no revenue concentration class. We are still within normal limits. I would say 50% of our revenue happens outside of North America. So that’s pretty substantial for a company of our size, but it’s pretty much 50-50 between Europe and Asia in general. And then as China is just a sub-part of our Asia business. So it’s important from a footprint and from a presence perspective, it has not reached any critical concentration from a dollar perspective at all.…