Cloudflare, Inc.

Ladies and gentlemen, thank you for standing by and welcome to CloudFare's second quarter 2026 earnings conference 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 at that time, simply press star, then the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. I would now like to turn the conference over to Phil Winslow. Phil, please go ahead.

Thank you for joining us today to discuss Cloudflare's financial results for the second quarter of 2026. With me on the call, we have Matthew Prince, co-founder and CEO, Michelle Zatlyn, 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 the supplemental financial information referenced a few moments ago. We would also like to inform you that we will be participating in Staples Tech Executive Summit on August 24th and Goldman Sachs' Communicopia and Technology Conference on September 9th. Now with that, I'd like to turn the call over to Matthew.

Thank you, Phil. We had an extremely strong second quarter. We achieved revenue of $696.1 million, up 36% year over year. We now have 4,698 customers paying us more than $100,000 per year, a 27% increase year over year. We added a record number of these large customers, 986 net additions year over year, the most we have ever added over 12 months in our history. Our dollar-based net retention was 120% of 2% quarter over quarter and up 6% year over year. Our gross margin was 73.1%, improving sequentially for the first time in eight quarters. We delivered operating profit of $96.1 million, representing a non-GAAP operating margin of 13.8%. And we generated free cash flow of $56.4 million during the quarter, up 69% year over year. The strong momentum we've been seeing for some time in our business continued to build in the second quarter. Some highlights. Sales productivity increased year-over-year for the 10th consecutive quarter. New customer bookings increased at the fastest rate in more than five years. New pipeline generation continues to accelerate, again growing sequentially at its fastest pace in five years. We added more than 80,000 paying customers this quarter, driving 74% year-over-year paying customer growth. For some context, We had as many paying customers this quarter as we had in total when we went public in Q3 of 2019. We had nearly 1,000 large customers year over year. We also set a record for year over year net additions across every large customer tier, from $100,000 to over $5 million in annualized revenue. and we ended the quarter with more than 7.4 million developers on our platform. That's nearly 2 million developers in Q2 alone, surpassing the 1.5 million we added during all of 2025. It's clear that the agentic future needs a new kind of cloud. Developers are flocking to CloudFlare because our workers developer platform gives them what they need to build that agentic future. were the fastest, were the most secure, and the most cost-effective place to build, deploy, and scale agents and the code they generate. At CloudFlare, what we continue to prove is that when you build a company the right way, you can grow and innovate while executing and profiting. We have the network, we have the platform, we have the culture of innovation, we have the business momentum, we have the disciplined execution, we're in the right moment in time, and we are keeping our foot firmly on the gas. This is the winning formula that we know works. It's the same one that has propelled Cloudflare into the pole position to lead the next phase of the Internet in the age of agentic AI. That's a good segue to discuss some of our wins in the quarter. A leading digital native media company expanded their relationship with Cloudflare, signing a five-year, $31.8 million contract for application services and zero trust. To combat aggressive scraping and accelerate global performance, This customer chose Cloudflare for our best-in-breed edge capabilities and operational velocity. Despite competitive pressure to consolidate spend with their incumbent hyperscaler, this customer's long-term commitment is a proof point that when performance and security are non-negotiable, enterprises choose Cloudflare's unified platform. A global 2,000 European technology company expanded their relationship with Cloudflare, signing a three-year, $11 million contract for application services and zero trust, with our developer platform seeded for future AI workloads. After years of acquisitions resulted in a fragmented IT footprint, this customer chose Cloudflare to eliminate a stack of five incumbent legacy point solutions, with up to seven targeted on their long-term roadmap. In favor of our single, unified platform as the foundation for their entire organization to build on. A large U.S. federal agency expanded their relationship with CloudFlare, signing a five-year, $7.7 million contract for Magic Transit and Network Firewall. After a legacy provider's outage locked over 100,000 users out of a mission-critical system for days, the agency urgently sought greater resilience and real-time control. CloudFlare slashed the customer's global rule change time from a one-week SLA down to just 30 seconds. They've also cut hardware costs by blocking unwanted traffic at the edge and have already shut down an entire data center. As an existing application security customer already, this agency can now run their network and application security on one unified platform, demanding CloudFlare as the front door for all their internet traffic. A rapidly growing generative AI company signed a one-year, $7.5 million pool of funds contract for our developer platform. Its customers' workloads pull an enormous volume of images and video. At that scale, a hyperscaler's egress tax would break the economics and create vendor lock-in, limiting their choice of inference tools and GPUs. Their engineering team evaluated multiple providers and chose CloudFlare as the only one that pairs a zero-egress model with the reliability, scale, and comprehensive capabilities of an enterprise-grade platform. By structuring this as a pool of funds deal, the customer can solve their immediate storage needs while retaining the flexibility to expand across our entire developer platform. A rapidly growing technology company in APAC expanded their relationship with Cloudflare, signing a one-year, $4 million pool of funds contract for our workers' developer platform. This deal accelerates a powerful partnership, building on an $8.7 million application services contract signed just last quarter. In only one year, this customer has standardized on Cloudflare end-to-end, from application security and zero trust to now our developer platform, directing every request, through a CloudFlare worker and using KV and durable objects as the routing and tenant configuration layer for their entire platform. They chose CloudFlare over their incumbent hyperscaler to avoid added latency, proving the flywheel of our unified offering. Once performance and security run on CloudFlare, our developer platform becomes the natural foundation for the next layer of any company's staff. Thank you so much for joining us. and our single pane of glass management that is so easy the customer expects to run our services with roughly one-third the steps. This is exactly the type of security consolidation we see accelerating. Enterprises retiring fragmented point solutions in favor of Cloudflare's blazing fast, easy-to-use and unified platform. A Fortune 1000 technology company expanded their relationship with Cloudflare, signing an 18-month contract 15.9 million dollar contract for application services and our workers developer platform. This customer serves hundreds of thousands of businesses which requires an architecture that can act as their global front door for security and performance without adding latency. By standardizing on Cloudflare over legacy alternatives, they eliminated multi-product complexity and secured long-term operational predictability as they build an AI-first customer platform. Thank you for watching. They chose to build on CloudFlare over legacy hyperscalers and point solution competitors because of our built-in threat intelligence that actively prevents computer abuse, rapid pace of innovation, and the ability to deliver FedRank compliance. This win also shows how the most sophisticated AI builders are increasingly selecting CloudFlare as the agent cloud of the future. These customers and others like them are increasingly choosing CloudFlare because we don't just keep up with change, we drive it. Thank you for joining us. With the web shifting from human-driven browsing to AI answer engines and agent-driven commerce, we are witnessing a fundamental rewrite of the Internet for machine-to-machine traffic. CloudFlare is positioned at the center of this paradigm shift, building the scalable infrastructure, the controls, the developer tools, and the payment rails to power the agentic Internet. Just since the start of Q3, we've celebrated innovation in this area, from Content Independence Day to Agent Week, which is happening right now. During these, we unveiled the key building blocks for a two-sided agentic marketplace. Modernization Gateway allows our customers to sell any resource behind Cloudflare, whether it's a web page, an API, a data set, or an MCP tool. This will empower new business models that will define the next generation of the Internet. In addition, we announced Wallet, which will offer a way for buyers to pay autonomously through their agents. and Cloudflare.pay, which will provide merchants and buyers an agent-friendly means to identify themselves and establish trust. Not only are we building the foundational elements for agented commerce to succeed, we also believe AI companies and content owners should thrive together. That's why we recently announced a first-of-its-kind research pilot with OpenAI that we believe may help pave the way to a sustainable ecosystem of content creators and AI companies. Over the coming months, we'll announce more ways that AI companies, content creators, and businesses large and small can thrive together. The business model of the Internet is changing, and there is no company better positioned to define its future than CloudFlare. It's an incredibly exciting time. That seems like a good spot to turn it over to Thomas to talk about the financials. Thomas, take it away.