Cloudflare, Inc.

Hello and welcome to the Cloudflare fourth quarter 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 would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Phil Winslow. You may begin.

Thank you for joining us today to discuss Cloudflare's financial results for the fourth 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 website. 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 financial 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 our supplemental financial information referenced a few months ago. We would also like to inform you that we will be participating in Barrett's Silicon Slopes Conference on February 26th and Morgan Stanley's Technology Media and Telecom Conference on March 3rd. Now, I'd like to turn the call over to Matthew. Thank you, Phil.

We had a terrific quarter. We achieved $614.5 million in revenue, up 34% year-over-year. We now have 4,298 customers paying us more than $100,000 per year, up 23% year-over-year. Revenue from these large customers grew 42% year-over-year, contributing 73% of our revenue in the quarter, up from 69% in the fourth quarter last year. Our dollar-based net retention was 120%, up 1% quarter-over-quarter and 9% year-over-year. Our gross margin was 74.9%, just below our long-term target range of 75% to 77%. We delivered operating profit of $89.6 million, representing an operating margin of 14.6%. And we generated strong free cash flow of $99.4 million during the quarter, again, exceeding expectations. We blew away our previous record for new ACV in the quarter with strong year over year and quarter over quarter acceleration. In Q4, new ACV book grew nearly 50% year over year, making it not only a record quarter in absolute ACV dollars, but also the fastest growth rate we've delivered since 2021. We've talked for the last two years about our journey from product-led growth to true enterprise sales. I'm proud to report our go-to-market engine is firing on all cylinders. Some highlights. Global sales productivity increased year over year for the eighth consecutive quarter, surpassing our all-time high productivity set back in Q4 of 2021. And we believe there's still significant headroom. Year over year growth in net sales capacity increased at the fastest pace since 2022. Our sales team achieved the highest quota attainment we've seen in the last four years. For the fifth consecutive quarter, we added a record number of customers that spent over $1 million per year. And after starting the year signing our largest total contract value deal in Cloudflare's history of $130 million over five years, this quarter we closed the largest annual contract value deal in our history, $42.5 million per year. This momentum today is the cumulative result of two years of effort to retool our go-to-market team to match our already world-class engineering and product teams. We've long been a place where the best engineers came to earn their stripes, The team Mark Anderson has built deserves credit for making Cloudflare a destination where the best salespeople now know they can come and win. Speaking of winning, let me highlight some of our customer wins in the quarter. A leading AI company expanded their relationship with Cloudflare, signing a two-year, $85 million pool of funds contract for our full platform, selecting Cloudflare as their single long-term infrastructure provider with 100% traffic allocation. Following a rigorous RFP, they selected Cloudflare over major hyperscalers, not just for our unified stack and rapid innovation, but also for our strategic neutrality. This win underscores a growing trend. The most sophisticated AI companies are choosing Cloudflare as their mission-critical, independent platform to connect, protect, and build the future of the AI-driven internet. Another leading AI company expanded their relationship with Cloudflare, signing a one-year $5.4 million contract for our workers developer platform and application services. What's most compelling about this win is that it was a classic build versus buy scenario against the hyperscalers. In an industry where being first matters, our ready-to-deploy developer platform provided the agility and speed to market they couldn't find elsewhere. With Cloudflare, this customer is now able to manage heavy global traffic with five nines availability. This deal is a testament to our shift from being just a vendor to instead being a strategic co-innovation partner for the world's most sophisticated AI companies. A Fortune 100 technology company expanded their relationship with Cloudflare, signing a three-year, $5.8 million contract representing a notable upsell from their initial engagement with us in mid-2025. As a leader in AI, this customer operates under a strict mandate for global resiliency, requiring a multi-vendor architecture to ensure zero downtime for their application performance. We beat out the competition not on price, but rather on performance and engineering innovation. A Fortune 500 technology company expanded their relationship with Cloudflare, signing a two-year, $45 million pool of funds contract. While this customer leverages hyperscalers for their primary infrastructure, They found those providers unable to manage the complexity of global third-party applications at scale. They chose Cloudflare to displace a long-time incumbent, not only for the extensibility of our workers developer platform and our superior application services, but for our ability to fill critical gaps in the hyperscaler model, underscoring Cloudflare's role as a necessary fabric for secure, performant multi-cloud operations. A major international consumer goods company expanded their relationship with Cloudflare, signing a three and a half year, $6.6 million contract for application services and our workers developer platform. For years, this company relied on a fragmented architecture of multiple legacy vendors, which created significant operational complexity and gaps in their security. Despite an incumbent offering significant discounts to keep the business, This customer chose Cloudflare because of our next generation architecture and workers developer platform, which allowed them to customize their edge traffic. We didn't just replace three incumbents. We replaced a legacy mindset, proving once again that when you give developers the best tools, the entire enterprise follows. A European Global 2000 technology company expanded their relationship to Cloudflare, signing a three-year, $5.8 million pool of funds contract to provide seamless access to our entire platform. We signed our first deal with this customer back in February. After quickly realizing the power of Cloudflare's platform, they came back to us looking to move from a small variable commitment to a deep strategic partnership. Unlike their legacy incumbents, Our combination of best of breed security and our workers developer platform enables sophisticated automation to manage their global infrastructure and greater flexibility to innovate at scale. It's early days with this customer and we're already in discussions regarding AI crawl control. A large United States government entity expanded their relationship to Cloudflare, signing a two and a half year, $2.2 million contract for our Zero Trust portfolio, including Access, Gateway, DLP, CASB, and email security. We solved complex compliance requirements that the first generation Zero Trust incumbent we displaced could only handle manually and demonstrated our ability to address their most sophisticated use cases that neither a hyperscaler nor the incumbent could solve. After seeing Cloudflare in action, their security team told us they were, quote, shook by the simplicity, automation capabilities, and power of our platform. A US media company signed a three-year, $3.1 million contract for AI crawl control, along with application services and workers. This customer was facing a massive increase in AI scraping, which was crushing their network and driving up infrastructure costs. They chose Cloudflare to gain visibility into which AI models are consuming their data, allowing them to protect and eventually monetize their unique content. By leveraging Cloudflare workers to replace years of complex technical debt from an incumbent, they were able to migrate massive internet properties into production in just two weeks. This deal proves that as AI accelerates, Cloudflare is the partner of choice for companies looking to protect their IP while improving performance, reducing operational costs, and enhancing their security postures. So what's the trend across all these wins? I think first, Vendors are once again being sorted between nice-to-haves and must-haves. The quantitative metrics and qualitative wins this quarter again demonstrates that Cloudflare is squarely in the must-have bucket as a non-negotiable linchpin of the modern technology stack. Second, we are seeing the shift to AI and agents drive more demand for Cloudflare services. What we're witnessing is a fundamental replatforming of the internet. AI is driving a paradigm shift in how software is both created and consumed. And that is turning out to be the biggest tailwind for Cloudflare's network and workers developer platform. If you look at the last 30 plus years of the internet and software ecosystem, they were built for human consumption, people in seats and clicks. Now the agentic internet is emerging and we can already see its trends. If humans looked at five sites when they were making a decision, agents might look at 5,000. If humans had to fall back on generalized software and interfaces, agents allow for infinite custom ability of every software application for every need. If humans follow a common circadian rhythm to work, agents never need to sleep. Agents, in other words, are the ultimate infrastructure multiplier. In turn, they are reshaping the very economics of software. The industry is transitioning from a business model defined by seat licenses to one where the winners are those providing the compute, connectivity, and rails and guardrails for these new digital workers at scale. Cloudflare was built for this moment. We are uniquely architected to capture value on both sides of the agentic interactions. That means we win when AI applications are built on Cloudflare workers, but we also win just from the increased usage of all of our products and agentic internet drives. Let me explain. When the cost of generating code drops to near zero, the volume of new applications explodes. It's not a coincidence that most so-called vibe coding platforms are either built on Cloudflare workers or have us as their preferred deployment target. We exited 2025 with more than 4.5 million human developers active on our platform. It's a lot more if we count their agents. Developers are using workers to run autonomous logic across our global network, containers for sandboxes and AI gateway to manage inference with caching, rate limiting, and observability. AI usage is even driving adoption of our zero trust platform to ensure the data is compartmentalized and access granted in limited and controlled ways. And it's not just established developers. I'm proud that we're ranked the number one cloud platform in the latest Stack Overflow survey for developers learning to code. But the opportunity extends beyond just the developers building on workers. We're seeing agentic workloads generate an order of magnitude more outbound requests to the web than traditional user-driven applications. Over the month of January alone, the number of weekly requests generated by AI agents more than doubled across the Cloudflare network. This is driving increased demand for our whole platform. This is where Cloudflare's scale becomes our moat. With more than 20% of the web already sitting behind Cloudflare's network, we are effectively the global control plane for the agentic internet. That's creating a number of new growth opportunities both with our traditional business as well as what we've begun calling act four, helping invent the future business model of the internet. If AI agents are the new users of the internet, Cloudflare is the platform they run on and the network they pass through. This creates a virtuous flywheel. More agents drive more code execution on our workers developer platform, which in turn drives more demand for CloudFlare's performance, security, and networking services. At scale, this compounds powerfully. Given the opportunity we have ahead and how effectively and efficiently our team is executing on it, I wouldn't trade places with any CEO of any other company, public or private. But just to keep things grounded, let me turn it over to Thomas to walk through our financials. Thomas, take it away.