Cloudflare (NET) 6 May 222022 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Cloudflare's First Quarter 2021 Earnings Call. [Operator Instructions]. Thank you. Jayson Noland, Head of Investor Relations, you may begin your conference.

Thank you for joining us to discuss Cloudflare's financial results for the first quarter of 2022. call, Co-Founder, Matthew Thomas President the CEO; Co-Founder Seifert, on Zatlyn, Michelle and me we Prince, have and CFO. With COO; and announcement. everyone now, should access our By have earnings to financial This information, Investor announcement, website. as as our Relations may found on well be our supplemental

control, financial a and forward-looking during future the anticipated loss rate, statements future risks customers. and cash products, flow, performance, launches paying including, extent non-GAAP operating those pandemic subject be the potential rather non-GAAP financial customers not shares the and gross loss, today's economic are but limited guarantees which including, customers, future of markets. revenue, vendors timing comments adverse conditions tax These making the outstanding, to, performance, and and of are not beyond performance, performance, impact not but company's margin, domestic in the limited our we'll operating and of to, uncertainty and net of and some non-GAAP general of anticipated global non-GAAP reminder, net to are retention large per discussion, non-GAAP or income our and As statements expense, free but other the partners market net income operations duration dollar-based and product expenses, COVID-XX or share,

you update call. any Our undertake views actual and results rely as These obligation after no these not statements. forward-looking in statements the statements this projected significantly forward-looking as in from suggested may We representing today, should differ on or future. apply of to those our them

future current today, XXX. reflected press the will financial than financials please and Exchange prior revenue, on Unless non-GAAP in For noted, about talk other otherwise are under all be as release. ASC Securities the an well see uncertainties our a basis. and operating we adjusted more period impact All numbers risks earnings of discussed with our condition, discussion and today's as Commission, filings that and results complete could

on You Relations financial GAAP reconciliation release to Investor our may earnings our a website. non-GAAP find of measures in

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growing year, we larger more million $X Our representing spending Those growing over year million year, with spending partners those than $X largest us. customers per now and XX We revenue. And with a to highly customer over X% a year-over-year. $XXX,XXX year-over-year, XX% customers larger. get have continue and no diversified, yet, and over spending XX% remain of

retention XXX% new points of year-over-year. expand with dollar-based net record in motion XXX a to and hitting the basis quarter, up land continues Our improve,

target XXX these hallmark trusted network even single in gross of New consolidating XX.X%, And in achieved quarter behind of always an for we has in our of customers, products together, margin basis customer above them time. us offering continued the business. margin that the gross products to up them all Efficiency vendor bundles the reducing key the services been target work That has selectively of points modern our interest with solutions, providing same times, a of and at continues saving competitors' and money year-over-year. while a to number XX% the a range opportunity expansion. increased inflationary our be affords and they been need them seamlessly to XX%, to vendors

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zero We opportunity our like contract trust are with of zero vehicles. more trust than these believe million there this They significant worth more manage Alto use is and head-to-head Cloudflare's cases, with $XXX,XXX going to year. win fleet XX approach rates Networks A expand European signed IoT of we seeing Palo more do. customer. to and more, help We're and a per Zscaler global automotive their more adopted company and we Fortune XXX when and

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this. any make money on won't we Now

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Thank everyone to and us. you you, for Matthew, thank joining

strength revenue in momentum quarter guidance QX, We delivered of exceeding our with high of fourth a the continued the the from business. and areas end strong multiple the

Turning traction was continued perspective, enterprise adoption and first The to strong our quarter a strength to growth the in our increased increased of $XXX.X portfolio with driven revenue year-over-year increased XX% base. revenue. From U.S. million. and for and revenue customer internationally. revenue by geographic product XX% XX% in represented revenue saw of The APAC we XX% increased both XX% XX% continued year-over-year. XX% of in and the revenue and year-over-year. EMEA QX, represented of year-over-year. represented Total U.S.

our We are in repeat geography EMEA to as accelerate and this highest see quarter. see pleased growth continue to APAC growth

We exited the We sequentially. XXX%, contributed X,XXX our an XXX quarter XX% with large XXX,XXX or large XXX of see large increase representing customer Significant addition to the rate year-over-year. customers paying increase increase large customers, metrics. retention customers, basis an to XX% Turning ended of a customers expansion year-over-year with to points customer representing record representing the an again pleased year We in increase of an net were revenue quarter. of contribution dollar-based from sequentially. of

continue additional our go-to-market forward Day efforts, week. which our insights see We enterprise next to broad-based providing during look we strength to across Investor

Moving to gross margin.

First quarter X% with revenue CapEx the in consistent quarter. quarter. last was first represented gross Network margin XX.X%, of

forward, CapEx level to to and XX% Going purchase we of be decisions expect see to variability quarter-to-quarter revenue strategic continue expect XX% given XXXX. fiscal for network to of some

operating to expenses. Turning

of $XX the employees We our total X% expenses had a of percentage First and quarter X,XXX $XX.X were year-over-year the decreased of end expenses year. as percentage decreased expenses We and same strong sequentially basis points to improving was an $X.X quarter. the saw a a of for G&A or same stayed million X% decreased profitability percentage we sequentially sequentially to approximately R&D at were in quarter another here number of breakeven employees to last and to the staying margin first achieving where continued number decreased our in QX And million last revenue quarter into as XX% period quarter. to quarter $XX.X the of front bringing to XX% year-over-year, quarter. flat and to Operating operating operating the of consecutive million decreased from XX% and of strength revenue operating XXX and hiring million sequentially Research with increased our operating the as as a intend in XX% year-over-year. marketing compared XX% from for a at year. G&A operating and line the XX%. $X.X third in Sales quarter with revenue expenses were loss X% of same increased saw the reinvest X% the quarter from opportunity business to quarter. leverage in million year. as enormous our last same profit. XX% revenue in of the revenue we and in operating marketing was last development reminder, quarter expenses the back grow percentage in address Sales year. XX% total the us. decreased income excess

Turning income sheet. to and net the balance

compared period to a quarter payment of the income $XX.X or the ended We XX% was $XX.X available-for-sale primarily in Our million. first XX% withholding last compared million last expense The cash, in revenue, tax cash net $X.X $X.X decrease or million approximately or or share flow flow of same revenue was million first million. same revenue $X.XX. X% net flow year. in quarter the $XX.X million to the in the revenue first $X.X cash of per year. cash securities. million in of billion $XX was and cash in of unique negative Operating related was period XX% negative was quarter equivalents Tax the negative for or with Free income to of $X.X quarter

of increase in RPO, first return XX% cash year-over-year. we As in and this some variability or mentioned XX% at the in see quarter, XXXX, to sequentially year. flow to obligations, was total of expect half we cash half continue Remaining of free XX% to positive RPO Current second million, $XXX flow of RPO. to last representing but expected an the performance came

Turning to guidance.

contribute impact As the is than guidance on in which second acquisition X% profitability we to is less full and and closed year. in Area revenue April X the the expected reflected both dilutive Matthew to quarter mentioned, on X,

the parties less in users with all we to Additionally, than to Russia, sanction first represented in quarter, tied relationships revenue. impact a X% which also ended

revenue the XX% the second year-over-year. in of we to representing $XXX.X expect For million range an of $XXX.X million, quarter, increase

of operating range Area an loss, the million $X expect to including in X, million. We $X

share expect of We to per loss a breakeven. $X.XX net

quarter, XXX For we modeling purposes, shares net million be we positive count if loss. report basic share we XXX expect for a report net if income please share our fully that second note diluted million in to the the

$X.X We of expect a expense million. tax

million, For the million full year $XXX increase XX% of revenue XX% in to an we XXXX, expect of representing range $XXX to the year-over-year.

income approximately over million to $X.XX operating the million, $XX expect in range in for period common to income expect we the million and of XXX share We the $X.XX, per net year that full range assuming of outstanding. $XX shares

deeper results We expense I, very look to tax dedication. was closing, employees great delivering quarter. Day for forward another second and of expect million. continued our these to our We Investor hosting strong a In again, their thank $X.X for for it poll that, where want questions. for on And we'll updates do our and open recent opportunity. to questions. Operator, our Thursday, acquisitions dive like and well I'd it up please on as market as progress with portfolio product financial next a

Instructions]. [Operator

Markets. of RBC Hedberg question with first Matt Your Capital

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Sure.

what have that recommendations intelligent products. seen and traffic over typically additional we systems we can is their once see what on the network, across is customer I our think that make

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we I us like products additional Here's recommendations our you that sorts on getting very been Would customers think good intelligent adopt you see. it?" And have with platform. what at so to of to those help

what I see more more going broader bundle forward, we've into in do think us about you'll and our is licenses. calls, as earnings together talked previous services much

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I using that of of problems think solve going you're many service, can set forward. where can be piece start that our so growth recommendations, making different we we of for that are think customers really big products, continue intelligent once we broad will and And that, sort site-wide make sense. unique have a to those licenses that our in we I

more incredible I innovation to that to moving forward. Not are our should back to That working, and there only into mind, expansion keep features add wanted you the the but that D&R every engine available strategy too. sell plays tie products quarter. to in

a And out worth the of for you really Very a you. pointing Anything that or number? then helpful as there quarter, customer new new robust from accounting record, strong generation, customer both as in driver mentioned.

suggested went out have XX,XXX that Yes. work, I your critique note we don't now that mean early to customers. your but

the XX,XXX and new the across are in now we at customers paying customers actually quarter, over customers platform. quarter, paying in the fact, In XXX,XXX added

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Your comes Joel next Truist. Fishbein with question of line from the

companies has how months. Matthew, are that the has take flowing. traffic that trending what's several and Internet down been positioned cloud-centric Internet been on Fantastic reported I'd have execution other happening Cloudflare to again. past and love just of traffic a over your how your couple get is

Yes.

We haven't that. seen

growth. I think continued been has it

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wanted, Appreciate it. I you. thank than More was great. That but

Your line Thill next with from the Brent comes Jefferies. of question

Matthew, think, one your the you've Can you of synergies just the when Area the think go-to-market the several talk next the And Also, among unique I lane maybe think and you outside for that you that core quarters? over acquisition, X gone. through then unveils you is a kind suite, about and talk can just other how to that? you

Yes.

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those we stop. in that's can content links, malicious any So

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was comprehensive. That very

of the from line James comes Sandler. Fish question next with Piper Your

Plan products there. seems Transit, dollar wave Match quarter as little more are I bit hear and growth a like it especially doing, wanted Teams driving are Nice largest these about to the like the still. Magic X

many rate Offices a talking any I'm Additionally, of quarter? progress these how about of that solutions And how some X way customers here? wave is of penetration has Cloudflare for there think this are to using

Yes.

about wave would characterize say Magic that think Transit, Firewall, products do Magic we that have little I would differently. I complement a solutions, our of Isolation, all content, that bit X really about products. traditional I more like infrastructure. and it like and Gateway So products And the are some Browser we protecting users. They're protecting all and protecting which your have Access then

but exact they are those of terms within are they you growing sort think both cases, somewhat that's they who are an different and the actually the slightly for in products. that true with go different products. to so But very way And I they And think in I X. that from those organization buyer those and timing pumped perspective, well. some And into -- is of a wave market we

think replacing network the the I we've adoption for a protection seen services. And of product. so traditional lot DDoS That really strong Magic is Transit

of product think than a any the as traffic in which just I of fact the think to possible it's can possible I which we strength that particular -- use sort is -- solution. stand box-based carriers -- of more that opportunity. And starting that much are as in well, through really exciting because front we're getting

to existing really user-based first think coming both traditional product, sell our us access are between but products, customers a and our also products and of to the then those, who natural able there's And on customers. products seeing I extension the those dovetail for good firewall very those those for together. really for we're adoption to well products be

in for what well, continues like. very really look Cloudflare that to Offices terms think it's progress early of will although I

hardware is are. Cloudflare of based interconnect. announced to ahead at I some landlords networks. we we more think that we invite our measuring of us That are us today And on I that product much the success the that, and generates, out us We what that trending to that are of to is where within think based allow network region deployed and the we've of than would product every that directly that I say and have, on the that of their in expectations the the we quarter, measuring starting willingness it are that build for Offices. in or success revenue facilities deploying, rather the into providers

Credit Winslow comes line Phil next of from the Your with Suisse. question

RX. on to in quarter. wanted Congrats another great Workers focus on and I

some pretty about there, significant Matthew. You talked wins

in talked sort is the it of et about, you you've a adoption, are of or One How takes sort RX? right pace about in long things of the to about anything think developer platform adoption also of cetera. of rate now? sort and velocity And when thinking time is broader how Workers it of of terms a and there the of too, escape get surprising sort where sort you stand of platform we just sort you call of

Sure.

going on And develop exciting over which next closed think week, can course well. platform on, for next all RX very week from And different to be rolling really first as So beta of week. a the I a open a but we really Workers' developers ways beta as progress surprises have mentioned, to is to that all, of out focus is Cloudflare part we're we'll have Platform of as of very focused Week, around much the I the various what the products. some an

I platforms, them and that years. XX between developer for think if you reach really takes to X study escape velocity,

in so late that Workers on to continuing we're was launched it. so curve. And develop We're XXXX,

surprised where box. realizing if I to thing a public something seeing the where and of power within do I we is them. both a Workers, change organization that The once is team of The sophisticated really they're incredibly is teams is Australian that companies we continents, of with cloud, with and it's have. that in that that think have very we by very mentioned works that network, of major software think go that's that they you're chose collaboration sees the product. work. them, with found they we're will that with team, Workers, lot has like and they a sophisticated and they as to a that expect trying With the to team traditional technology objects prepared something of development fact, big the that And continue very remarks, they And developer like problems durable with getting about real-time was the at jobs again, a also it think that what for that, ton do just thing same do well-received can examples with me that's examples other And Workers. almost a Workers the out that take how the places across more using I social the sophisticated in done. solution software doing very X excited engineering one I true company, and to what excites the build that multiple was,

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Keith the next Your from question comes line Morgan of Stanley. Weiss with

to detail weapon Matt, Weiss. pressures, pressures. again mentioned Keith what against cost pricing for opportunity a and use allowed gross who more against who to the on on these both you competitors and as Cloudflare -- has resist the cost you front? customers or pricing vulnerable Can Wilson Matt are It's margins to

is I think our core. efficiency just at

to our possible. so be has network as always get designed be And a to to as been such able in way efficient

And we so do. services allowed deliver that to the that has us

I just that how ourselves, chased. not think seen the we of vendors, we and and more sometimes get it's we that's never some have traditional compared with business CDN-type have

it returns the delivery, really selling And compelling very that, if that so a you're drive incredibly intelligence, into security, you're diminishing. little turns just where, are selling use -- is bit you're selling if if which think if the that built faster case. ability that you're I to out bit the Whereas being has a selling network,

lose said the beginning. think of first be forced from from think Cloudflare, always us beginning, also I we price. that of the I tenants And that Cloudflare the efficient on never one was to

we everyone this as and either share so can to they other and out again, And been. time cloud or in I that, out well can forward be continue to efficient who hold a think, we've are can time raise as not vendors save they ways especially other customers, IT taking I delivering many money products, high-margin trying taking from vendors hard where how share looking how for budgets pushing are as and I figure are where even prices, on is as figure both think hardware existing that vendors to think their having their

it's is to key the are we continue I think So story. to days. our who And been since story at efficiency Cloudflare. key our be that's that a of It hallmark I will to earliest think

can maybe kind on one gross And this the for off those expect to this for Thomas. show of you details. strategy Awesome. in Thank margin we When numbers.

by you in numbers. what sure not showing I'm the mean up

service, to one I up that network. at traffic the have And testament in digest the been flat that decrease of to to mote, our of network the competitive where every ability freedom of demand that, scale think able growth growth significant to the margin, we that to every we gross able because add of network. the our of elasticity significant city been a And to, Matthew freedom of been to reiterate because I that able the elasticity manage that city. supply are have products and think every just server decrease manage server cost -- want running to in I is that we we revenue your is a already regardless add, complete I that every flexibility that are alluded and all of this and the think world the on digest just at and to the

to you digest So would slightly stable and every been that have that We've that to see gross today. already measure revenue-wise, that at I up growth in traffic-wise, look think you tremendous metric that margins. seen product-wise, able

already I to think a testament that. it's

Your comes of line from the Breen Blair. next William with James question

Just sort that of point a little on bit.

income managing maximize line, So the expansion an to here couple you from then standpoint. are a or of revenue? kind basically plus breakeven operating non-GAAP million just And to sort a just of minus of

presence, build out access to of maybe that some have network, deeper of go does right you multinationals because to more that more now point you the As don't enable that? of you into

Jim. Sure,

can. consistent we we on there's be wrong breakeven to putting share, did a towards, per than if the as if the to into mean we very going margin else said to continue quickly money grow that we something something should possible. as business guiding showed operating that as to hold because grow So that been previous as back at rates I we're the call at nowhere earnings close we would other business think that that that I can our that saying positive we we've on massively are

I delivering consistent very there's that think has I that, that been think changed don't And a so we're breakeven we we've operating And towards think doing anything that on that in strategy. margin. about are managing again, message. I

In the -- mean, that over XXX terms countries POPs, already of the we're well I in world. around think I

us, has public, that I that -- POP in it's think not went certainly when to adopting them multinationals ever the presence look And of at think standing way we our I look think rely been the that since that some on in companies massive, highlighting of are companies and we're if that that these our the you the network, multinational almost all case. examples, us. it's

to build of about I and and number is a Thomas of I the our certain just powerful up. which network it it order efficiency certain requests. out alluded of rather to, because in actually It our more thing takes over a of of than servers both our time the driving drives amount as that design of POPs we think cost is counterintuitively, because network down that the process

that other and that bandwidth, variable around means server, is like can work by that with we and out networking network the are any our because anywhere drive as to usage of is ISPs the of various cost than more part is the any of service things world so side powerful handle the business. amount on So expand and the able actually make we to CapEx that have eyeball interconnect What anything that our and networks for continue driven our request, hard software it your to we're directly else. done your co-location down costs

what whatever get is a and pop we our And we ability to if effectively our darn to deliver to and possible. think are be to because the snorkels ocean the little decomposing our as in there, that, bit we future the necessary efficiently continue order continue bottom of network cost in the can by more And efficiency for reason need dive putting going expand. able a so services somewhere in as do I to to the that's to

comes the question next of Stifel. with Borg line from Your Adam

you've win XXXX thinking you seen Accenture, with and federal about just vertical. Matthew there provide some on opportunity opportunities fed the for see. in broadly. the just the federal you but how could just ramp Obviously, Maybe I hoping just with joint the that traction on more you're an curious update

Yes. our with to opportunity we'll Federal we that and word is a that. We waiting up agency kind line get that federal from today have us. to thumbs big unlock the agency just actually we continue approved. in overall [indiscernible] sponsoring are for think of got

we being done that's at a going that everything do, think DMV. bit the and all we So like little We've can it's well.

anyone confident a DMV for hopefully wait that You've to listening number to later. that And got just want get of called. of get But sooner we're kind is will than us. your use it called if in, federal lot agencies to there's

working with can we well not hopefully, Accenture see and So other to meet requirement. is as continued partners, as significant interest. That back holding from we've that us

something the of that the us Identity, our quarter the infrastructure team, Infrastructure or up was recommended U.S. with received to I I companies securing utilities, back We that, built have the the is would to that stepping and I with adopt quickly us. as by number trusted are saying think of infrastructure, in was think have come well what's of energy the understand they partnership from ask launched, actually that honored of for protecting is sort incredibly the possible. well United that, really calls speaks hospitals, federal in to White as including I the people as thing of we that in amount help, who Act. the The that going the that Protection House trust C-level any in Ping Ukraine, CrowdStrike, equivalent myself, Critical and really in States, the government. on as

enormous within think we of have government. So amount an goodwill I that the

we behind I And that. we'll enormous and able to our now, deliver day continue are any formally is call to opportunity goodwill. and us. FedRAMP the to an think announce That that there number, think is on will hopefully, moving be that forward DMV process

question next Alex Needham. Henderson from Your comes the of with line

the stuff. that the and into off, obviously, continuing ask growth you've was which needed as to reporters data job I a well Russia. It's important couple infrastructure, First But I the XX%. question wanted us around asked well points XX%, is ahead in flow to really you there in maybe total. done your as really give Ukrainian deliver could protecting around I on Internet you a Western great to both really traffic up is change to access traffic, guys of the of the the wanted news compliment coding The what question on the marketplace, And earlier. think

that us API XXX% update same traffic last and traffic in terms user to suggests in accelerating ultimately growth, growth and domain something of which in to excess which domain, traffic, there's is part protecting of of that XXX%, what that over a and rates guys do, very from domain my terms key the on high the optimizing you traffic. obviously you doubled you more can along So has of of where over of months are than lines, in rate XX carrying? the what percentage you're And it's Internet the its of second, understanding

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our them Yes, team that and online as Alex, been at stays X.X.X.X to for continue the working the of much has nights been that, may Ukrainian services have I able I I'm the team of sure beginning. allow quarter out. like Internet and make thank be for world lot really you first appreciate tireless And to kudos proud our calling something that's have it to of free where done, to they happening. to a a of the It's what's infrastructure you not where all, parts that that in of people that think the access to see

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places. some of the are is that think look percentage for number One us. behind that at XX% top million that is we And what around today. in proxies other I websites

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our I during think that's of of easier bigger API a it's API, seeing have For strong API, delivering, I'd companies very think I passes are that one traffic. And protection the a And quite -- that Cloudflare, is seen been updated to think that all than same that. all customer doing forward. to I API week, build the customers of strong way going really of good Workers of at a today schema the of And seen make to to validate going this that. going where is that. that, developers an is that suite. is are developers exactly bunch help the sort and we're but from there no more is we next a through it's API Workers interest has Platform and that I some more and In and really growth the time, things that and that things its great that adoption an traffic and sure be big for to announced sent we're that think We've our is last Those we've piece able protocols, network customer bigger that correct. being say understand thing is and Week, on Workers. story examples being that API the the from that for quarter, trend Again, that API,

just it will If why averages? give reaccelerating faster India X update us at start Can company in and the that a additional throw question could eclipse I China. isn't And rate? traffic on to when an you

the from are. I So think growth China, precisely I broken don't rates the we've traffic and and don't what out know India

Yes, question, that revenue a was Matt.

From a revenue perspective.

So that from regions those interesting different are both another. one again, us. I to very that are think They're

selling a ISP have great in our to to market model very seen is finding as selling both done there. success I And a continue Indian what interconnect job expand with we to India. the well able of a at think we've In partners. services and lot as into to always been worked we've customers, ways complicated that with China,

been partner so And with Baidu. a have long-time we

in Cloud. -- complicated think JD going again, extremely I that both that in Western that partnership operating to case, is recent partner China. are a We be with for well. And more in is any And it company

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think I in continue those both success. of but and at we to own So markets complications, see are operate have their

question, more Operator, take please? can X we

Certainly.

last of Evercore. with Your line the Amit question Daryanani from comes

have Perfect. them well. at I X the guess I'll ask I time. as same

recession talk Europe this in was you in First and of hoping a could concern America. off, just I about growing

clarify, can also recession is from operating And for So to rates patterns any your deal may? quarter? or the closing into buying you perspective, What profit you of customers' revenue Just the team seeing in just any context, operating? that anything? your are sales embedded how risk in is if deals, you shift how or impact if from from guide M&A your then and an June impact is that

the then Sure. and close can second. the first with I'll Thomas out question, take

way seeing a this aside and QX out most lived through, definitely though, the a tech them. service the is all books positioned risk I I sure can't in a I existing the a in we We're imagine are what than deployed since must-have. saves there are. that to We're will as offering think is of solutions that complicated real a even like, that for As the What way need forward. think service we when customers XXXX. customers there but money a of I -- quarter is inflationary company nice going we service that environment we're that have think We've better And And said, recession the we which be their which is a companies such can history situation that are. I certainly offering turn to that. network a from make that, that have, concerns around is written, that I like over not a

world. what saw going having was so quarter come in in And many we actually the in was us. them what But concern that fires to was over cases, on the definitely

XX that want vendors, instead turning fact in a are beginning and time across put the spend we we that it are so are continues from us, COVID, concern make provide think like bundled what want to extremely that critical able find that well them time, like what work. economic I like to lot money are of customers all and their save to again, consolidate our different lot is, place. are we to integrated positioned we But we're Internet time to are over to legacy to of me, challenging there. there's to we behind they there out solutions services time approach, a spending fact think of what that's saying And the feels it you. sure as where I the the times, And and They have that over

come. might many was may next So I quarter I over think be that for think challenging to a already be well I for what and -- for that, companies. very what companies think it us challenging a what positions the -- period period was

thoughtful Ukraine we your to of Russia, approach it standard prudent exposure when trying and addressing the to guidance came Belarus. followed I And our be and question, to think

mentioned less So Area prepared of year. I X% reflected well for it's for profitability. revenue, for X for and than full true was quarter headwind in acquisition in contribution dilutive But impact revenue And -- guidance but quarter, issued we guidance, on also is year. we we that also both second the also that the that the the X% both the quarter year. as as as for reflected the the remarks, for rest than of already for the true in we and the And less a is current first said this the in the

in guidance reflected the are we all So gave.

time like remarks. the turn for questions. the all to That's we call CEO, for I'd to Matthew Prince, have back closing

our This providing what a watched challenging made online, at having in Customer as to our team for proud Day, of looking appreciate have many the of that lot forward announcements. seeing really world week with incredibly really a Innovation of stayed and the be in for Platform of up events and our Ukrainian has taken any to Cloudflare New is place. of Cloudflare I it's the quarter and sure York, stand which Investor It's what I'm the expecting because work really you see for I'm number world much. tuned been we've employees. is a ahead. to people really was Day that all could the busy network great you of customers. that announce Weeks, I one and all all features. can happening going which challenge week a infrastructure next our a that's stay Week, also to our of us, we're Thank of so appreciate

today's joining. you concludes conference call. Thank This for

disconnect. now may You