Cloudflare, Inc.

Thank you for standing by. My name is Greg and I will be your conference operator today. At this time, I would like to welcome everyone to today's CloudFlare Q3 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Phil Winslow. Phil?

Thank you for joining us today to discuss Cloudflare's financial results for the third quarter of 2025. With me on the call, we have Matthew Prince, co-founder and CEO, Michelle Zeitlin, co-founder and president, 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 websites. 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 the 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 uncertainty, 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 the supplemental financial information referenced a few months ago. We would also like to inform you that we will be participating in RBC's Global Technology, Internet, Media, and Telecommunications Conference on November 18th and Needham's 6th Annual Tech Week on November 24th. Now with that, I'd like to turn the call over to Matthew.

Thank you, Phil. We had an extremely strong Q3. We achieved revenue of $562 million, up 30.7% year over year. Great companies innovate and execute. And I think we owe our reacceleration of revenue growth to doing both of these things very well. We now have 4,009 large customers, those that pay us more than $100,000 per year, a 23% increase year over year. Revenue contribution from large customers grew 42% year over year, contributing in total 73% of our revenue during the quarter, up from 67% in the third quarter last year. Our dollar-based net retention was 119%. of five percentage points quarter over quarter. Our gross margin was 75.3% within our long-term target range of 75 to 77%. We delivered an operating profit of $85.9 million, representing an operating margin of 15.3%. And we generated strong free cash flows of $75 million during the quarter, again, exceeding expectations. Our go-to-market transformation, evolving from purely product-led growth to true enterprise sales, continues to truck along. Growth in net capacity of our sales force grew at its fastest pace year-over-year in more than two years. Sales productivity increased year-over-year for the seventh consecutive quarter. Closed rates picked up notably both year-over-year and quarter-to-quarter. Bookings from partner-initiated opportunities doubled year-over-year. Gross retention levels increased year-over-year and quarter-to-quarter, and new pipeline attainment again exceeded our expectations. Across the company, the team is firing on all cylinders. One bit of disappointing news is that CJ Desai is going to be leading CloudFlare. CJ called me some time ago to talk about an opportunity he'd been approached to be the CEO of an exceptional public technology company. He was torn because he loved his team, the work, and the mission at Cloudflare. But since his first job in technology over 25 years ago, he dreamed one day of being the CEO of a great public company. We talked through the opportunity, his career goals, and what's great and not so great about being a public company CEO. In the end, while I'm sad to see him go, I'm excited for him to get to helm his own ship. I wanted to give CJ an opportunity to say something on this call. in some ways, as practice for as many earnings calls to come. CJ?