Cloudflare, Inc. (NET) 2022 Q2 法說會逐字稿

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cloudflare Second Quarter 2022 Earnings Call. (Operator Instructions) Thank you.

各位下午好。我叫 Emma，今天將擔任各位的電話會議接線員。此刻，我謹代表公司歡迎各位參加 Cloudflare 2022 年第二季財報電話會議。（接線員指示）謝謝。

Jayson Noland, VP of Investor Relations. You may begin your conference.

投資人關係副總裁 Jayson Noland。您可以開始會議。

Thank you for joining us to discuss Cloudflare's financial results for the second quarter of 2022. With me on the call, we have Matthew Prince, Co-Founder and CEO; Michelle Zatlyn, Co-Founder President and COO; and Thomas Seifert, CFO.

感謝各位加入我們，一同討論 Cloudflare 2022 年第二季的財務結果。今天與我一同參與電話會議的有：共同創辦人暨執行長 Matthew Prince；共同創辦人、總裁暨營運長 Michelle Zatlyn；以及財務長 Thomas Seifert。

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.

截至目前，各位應已可取得我們的財報公告。該公告以及我們的補充財務資訊，可於我們的投資人關係網站查閱。

As a reminder, we'll be making forward-looking statements during today's discussion, including, but not limited to, our customers, vendors and partners operations and future financial performance; anticipated product launches and the timing and market potential of those products, the company's anticipated future revenue, financial performance, operating performance, non-GAAP gross margin, non-GAAP net income or loss, non-GAAP net income or loss per share, shares outstanding, non-GAAP operating expenses, free cash flow, non-GAAP tax expense, dollar-based net retention rate, paying customers and large customers.

提醒各位，在今天的討論中我們將作出前瞻性陳述，包括但不限於：我們的客戶、供應商與合作夥伴之營運及未來財務表現；預期的產品發表以及該等產品的時程與市場潛力；公司預期的未來營收、財務表現、營運表現、非 GAAP 毛利率、非 GAAP 淨利或淨損、非 GAAP 每股淨利或淨損、流通在外股數、非 GAAP 營業費用、自由現金流、非 GAAP 所得稅費用、以美元計價的淨留存率、付費客戶以及大型客戶。

These statements and other comments are not guarantees of future performance but rather are subject to risks and uncertainties, some of which are beyond our control, including, but not limited to, challenging general economic conditions, including inflation, rising interest rates and other impacts of the ongoing COVID-19 pandemic and Russia-Ukraine conflict. Our actual results may differ significantly from those projected or suggested in any 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 Securities and Exchange Commission as well as in today's earnings press release.

上述陳述及其他評論並非對未來表現的保證，而是受到風險與不確定性影響，其中部分超出我們的控制範圍，包括但不限於：具挑戰性的整體經濟情勢（包含通膨、利率上升），以及持續中的 COVID-19 疫情與俄烏衝突所帶來的其他影響。我們的實際結果可能與任何前瞻性陳述中所預測或暗示者有重大差異。這些前瞻性陳述僅適用於今日，您不應將其視為我們未來的觀點。我們不承擔於本次電話會議後更新這些陳述的任何義務。關於可能影響我們未來營運結果與財務狀況之風險與不確定性的更完整討論，請參閱我們向美國證券交易委員會（SEC）提交的文件，以及今日的財報新聞稿。

Unless otherwise noted, all numbers we talk about today other than revenue will be on an adjusted non-GAAP basis. All current and prior period financials discussed are reflected under ASC 606. You may find a reconciliation of GAAP to non-GAAP financial measures in our earnings release on our Investor Relations website. For historical periods, our GAAP to non-GAAP reconciliation can be found in the supplemental financial information referenced a few moments ago.

除非另有說明，今天我們討論的所有數字（營收除外）皆以調整後的非 GAAP 基礎呈現。所討論之本期及前期財務數據皆依 ASC 606 反映。您可在我們投資人關係網站上的財報新聞稿中，找到 GAAP 與非 GAAP 財務衡量指標之調節表。就歷史期間而言，我們的 GAAP 與非 GAAP 調節表可於稍早提及的補充財務資訊中查閱。

We would also like to inform you that we will be participating in the Stifel Tech Executive Summit on August 30, the Deutsche Bank Technology Conference on September 1 and the Piper Sandler Growth Frontiers Conference on September 13.

我們也想告知各位，我們將參與 8 月 30 日的 Stifel Tech Executive Summit、9 月 1 日的 Deutsche Bank Technology Conference，以及 9 月 13 日的 Piper Sandler Growth Frontiers Conference。

Now I'd like to turn the call over to Matthew.

現在我想把電話交給 Matthew。

Thank you, Jayson. Even with the increased economic uncertainty, we had a very strong quarter. In Q2, we achieved revenue of $234 million, up 54% year-over-year. We added a record 212 new large customers, those paying us more than $100,000 per year, and now have 1,749 customers over this threshold. These large customers now represent 60% of our revenue, up from 50% 6 quarters ago. This trend illustrates how large, established enterprises increasingly form the foundation of Cloudflare's business. In fact, today, 29% of the Fortune 1000 are already paying Cloudflare customers, a nearly threefold increase over when we went public less than 3 years ago.

謝謝你，Jayson。即使經濟不確定性增加，我們仍交出非常強勁的一季。第二季我們達成 2.34 億美元營收，年增 54%。我們新增了創紀錄的 212 家大型客戶（即每年付費超過 10 萬美元的客戶），目前超過此門檻的客戶數已達 1,749 家。這些大型客戶目前占我們營收的 60%，高於 6 個季度前的 50%。此一趨勢顯示，大型且成熟的企業正日益成為 Cloudflare 業務的基石。事實上，截至今日，《財富》1000 大企業中已有 29% 是 Cloudflare 的付費客戶，較我們不到 3 年前上市時幾乎成長了近三倍。

Our dollar-based net retention remained strong at 126%, down 1% over last quarter. While there may be some noise in this number from quarter-to-quarter, we won't be satisfied until it's above 130% and best of breed among the companies we consider peers.

我們以美元計價的淨留存率仍維持強勁，為 126%，較上季下降 1%。雖然此數字在季度之間可能會有些雜訊波動，但在其高於 130%，並成為我們視為同業的公司中「同級最佳」之前，我們不會滿足。

Our gross margin remained strong at 78.9%, up 90 basis points year-over-year and still over our long-term target of 75% to 77%. Our operating margin was right at breakeven, which continues to be our plan so long as we can deliver strong growth. What I'm watching closely is our free cash flow margin. It showed significant improvement quarter-over-quarter, and we continue to forecast it will be positive in the second half of the year.

我們的毛利率仍然強勁，為 78.9%，年增 90 個基點，且仍高於我們 75% 至 77% 的長期目標。我們的營業利益率正好打平，只要我們能交付強勁成長，這仍將是我們的計畫。我密切關注的是自由現金流利益率。它較上季顯著改善，我們也持續預測其將在今年下半年轉為正值。

On our last earnings call, I got a lot of raised eyebrows from many of you when I said Q1 of 2022 would prove to be the hardest quarter for our industry since Q1 of 2020. It didn't make me particularly popular around the CEO club, where the first rule of recession is not to talk about recession. However, transparency has always been one of Cloudflare's core values, so I'm going to call it like I see it. In that spirit, let me share some more details of what we saw and are seeing.

在上一次財報電話會議上，當我表示 2022 年第一季將證明是自 2020 年第一季以來我們產業最艱難的一季時，許多人都對此感到驚訝。這讓我在 CEO 俱樂部裡並不特別受歡迎，因為衰退的第一條規則就是不要談衰退。然而，透明一直是 Cloudflare 的核心價值之一，所以我會依我所見直言不諱。本著這樣的精神，讓我分享更多我們所看到、以及正在看到的細節。

In Q1, our pipeline generation slowed, sales cycles extended, and customers took longer to pay their bills. We watched those metrics closely throughout Q2 and saw them all at least stabilized. They're not where we throw up hooray yet, but the metrics are trending in the right direction. Given our visibility early into the economic downturn, we rapidly adjusted our go-to-market message. We shifted our messaging to focus on ROI, helping customers save money and consolidating spend from multiple point solution vendors behind Cloudflare's broad platform.

在第一季，我們的商機管線生成放緩、銷售週期拉長，且客戶付款所需時間變久。我們在第二季全程密切追蹤這些指標，並看到它們至少都已趨於穩定。它們還不到讓我們歡呼的程度，但指標正朝正確方向發展。鑑於我們在經濟下行初期就具備能見度，我們迅速調整了市場進入（go-to-market）訊息。我們將訊息重點轉向投資報酬率（ROI），協助客戶省錢，並把原本分散在多家單點解決方案供應商的支出，整合到 Cloudflare 的廣泛平台之下。

Messages about saving money and using fewer vendors didn't particularly resonate a year ago, but they do today. Having a broad platform to solve so many customers' problems while at the same time saving the money is a superpower in times like these. As I look at our wins in the first half of the year, I believe it's fair to say that it's harder today than it was a year ago to sign up a new customer, but it's gotten easier to talk to our broad set of existing customers about doing more with us. And customers are leaning forward to hear about how we can save the money, reduce their IT complexity, all while increasing their security, performance and reliability.

關於省錢與減少供應商數量的訊息，在一年前並不特別能引起共鳴，但在今天卻能。擁有一個廣泛的平台，能同時解決眾多客戶問題並節省成本，在這樣的時期是一種超能力。回顧我們上半年贏得的案子，我認為可以公平地說：相較一年前，今天要簽下新客戶更難了，但與我們廣泛的既有客戶群溝通、讓他們與我們做得更多，反而變得更容易。而客戶也更積極想了解我們如何幫他們省錢、降低 IT 複雜度，同時提升其安全性、效能與可靠性。

I'm not a member of the National Board of Economic Advisors, so I'm not the person to say whether we're in a recession or not, how bad it may be or how quickly we may rebound. But I am the CEO of Cloudflare. And while our business remains strong, I believe this is a time for prudence and caution. The metaphor I've been using with our team is to talk about the different conditions you may face driving a car on the road. A year ago, we could see for miles and the road was clear, so it made sense to open up the throttle. Today, we find ourselves in what my grandmother used to call it tule fog. The road ahead is less certain, so it makes sense to keep our hands on the wheel, our eyes on the road and let up a bit on the accelerator.

我不是國家經濟顧問委員會的成員，因此我不是適合判斷我們是否正處於衰退、衰退會有多嚴重或我們會多快反彈的人。但我是 Cloudflare 的執行長。雖然我們的業務仍然強勁，我認為現在是審慎與保守的時刻。我一直用來與團隊溝通的比喻，是談開車上路可能遇到的不同路況。一年前，我們能看見數英里遠，路況清晰，因此加大油門是合理的。今天，我們發現自己身處我祖母過去稱之為 tule fog 的濃霧之中。前方道路更不確定，因此更合理的做法是雙手握緊方向盤、眼睛盯著路面，並稍微放鬆油門。

Whether we're in one or not, recessions (expletive). They hurt everyone. No company is recession-proof. But some are more recession-resilient than others. Some things I know are universally true. No matter how bad this recession may get, companies aren't going to abandon the Internet. They're not going to give up on the cloud and go back to on-premise boxes and packaged software. Hackers aren't going to stop hacking, so cybersecurity will remain a must-have, not a nice to have. And we're already seeing evidence of all of this with our gross renewal rate in every region for the first half of the year, hitting all-time highs since we went public. We are not recession-proof, but I wouldn't trade places with any other CEO right now.

不論我們是否正處於衰退，衰退（髒話）。它會傷害所有人。沒有任何公司能完全不受衰退影響。但有些公司比其他公司更能抵禦衰退。有些事情我知道是普遍成立的：不管這次衰退變得多糟，企業不會放棄網際網路；他們不會放棄雲端、回到地端（on-premise）的硬體設備與套裝軟體；駭客也不會停止攻擊，因此資安仍將是必需品，而非可有可無。而我們已在各地區上半年每一個地區的總續約率上看到證據，自我們上市以來皆創下歷史新高。我們不是不受衰退影響，但此刻我不會想與任何其他 CEO 交換位置。

Personally, if I think back, my career has been defined by recessions. I think a lot of people's are. Recessions have always been hard, but they're also formative moments to focus and ultimately improve. In 2000, as the first dotcom bubble burst, the law firm I was supposed to go work for said they didn't need any more securities lawyers, but they could probably find a spot for me in their bankruptcy practice. At just that time, you reflect on whether watching companies implode was what I wanted to do with the rest of my life and pivoted to become an entrepreneur.

就我個人而言，回頭看，我的職涯幾乎是由一次次衰退所形塑。我想很多人的也是如此。衰退一直都很艱難，但它們同時也是促使人專注並最終改善的關鍵時刻。2000 年，第一波網路泡沫破裂時，我原本要去任職的律師事務所說他們不再需要更多證券律師，但或許可以在他們的破產業務部門替我找個位置。就在那個時候，你會反思：看著公司崩解是否是我想用餘生去做的事，於是我轉而成為一名創業者。

14 years ago, in 2008, at the onset of the last global recession, Google pulled their full-time offers for all their summer interns, which included my co-founder at Cloudflare, Michelle Zatlyn. If that hadn't happened, Cloudflare would have never been born. At the same time, I learned what a margin call was and, simply embarrassingly, literally had to borrow money from my mom to pay my rent. That's when I got an extremely personal lesson on the importance of free cash flow, and it's why I'm ensuring right now in this uncertain time that Cloudflare is prioritizing being free cash flow positive.

14 年前，也就是 2008 年，在上一波全球衰退剛開始時，Google 撤回了所有暑期實習生的全職錄用通知，其中就包括我在 Cloudflare 的共同創辦人 Michelle Zatlyn。若不是發生那件事，Cloudflare 就不會誕生。同一時間，我也學到了什麼是追繳保證金（margin call），而且說來慚愧，我真的得向我媽媽借錢來付房租。那時我得到了一堂極其切身的課：自由現金流的重要性。也因此，在這個充滿不確定性的時刻，我正確保 Cloudflare 把「自由現金流轉正」列為優先事項。

Tough times force you to reevaluate everything you've done and become better. It's why the best companies come out of tough times even stronger than they went in. So maybe it's a bit masochistic but I'm looking forward to have Cloudflare get even better during some of the tough times for the global economy that seem likely ahead. Hands on the wheel, eyes on the road, letting up a bit on the accelerator.

艱難時期會迫使你重新檢視自己做過的一切，並變得更好。這也是為什麼最優秀的公司往往能在艱難時期結束後變得比進入艱難時期之前更強。所以也許有點自虐，但我期待 Cloudflare 能在未來看似可能到來的全球經濟逆風中變得更好。雙手握緊方向盤、眼睛盯著前方道路，油門稍微收一點。

With that background and to avoid being too much of a bummer, let's talk about some great customer wins in the quarter. A Fortune 500 retailer in Europe signed a $1 million 3-year deal for multiple Cloudflare products. They wanted to reduce their operational complexity by replacing a number of point solutions with Cloudflare's broad platform. We became their web application firewall, content delivery network, bot management system and a number of other application protection services with our easy-to-manage platforms. Having proven success protecting their infrastructure, we're now talking to them about expanding to be their Zero Trust provider, too.

有了上述背景，為了避免氣氛太沉重，我們來談談本季一些很棒的客戶勝利。一家歐洲的《財富》500 強零售商簽下了為期 3 年、總額 100 萬美元的合約，採用多項 Cloudflare 產品。他們希望以 Cloudflare 的廣泛平台取代多個點狀解決方案，以降低營運複雜度。我們成為他們的 Web 應用程式防火牆、內容傳遞網路、機器人管理系統，以及多項其他應用程式防護服務，並以我們易於管理的平台提供服務。在成功證明能保護其基礎設施之後，我們現在也正與他們洽談擴大合作，成為他們的 Zero Trust 供應商。

A Fortune 500 energy company signed a $784,000 3-year deal. They had been using Zscaler. They found Cloudflare solutions easier to use, more performant and integrate it across their full security control point. As I said last quarter, we like our win rates when we go head-to-head with Zscaler and Palo Alto Networks because our product is better and can scale to meet the needs of complex organizations like this one. And while we're still relatively new to this Zero Trust space, we're going head-to-head against them more and more often.

一家《財富》500 強能源公司簽下了為期 3 年、總額 78.4 萬美元的合約。他們原本使用 Zscaler。他們發現 Cloudflare 的解決方案更容易使用、效能更好，並且能整合到他們完整的安全控管點之中。正如我上季所說，當我們與 Zscaler 和 Palo Alto Networks 正面交鋒時，我們很喜歡自己的勝率，因為我們的產品更好，且能擴展以滿足像這家公司這樣複雜組織的需求。雖然我們在 Zero Trust 領域仍相對較新，但我們與他們正面競爭的情況正變得越來越頻繁。

Yet another Fortune 500 industrial company signed a $1.3 million 5-year upsell agreement. This customer first adopted Cloudflare in Q1 of 2022 and is already seeing ways they can use more of our platform. What's also notable is this is an example of us increasingly working with channel partners. We believe channel sales are especially important in the Zero Trust space. And in Q2, we successfully signed up half of Zscaler's top channel partners as new Cloudflare partners.

另一家《財富》500 強工業公司簽下了總額 130 萬美元、為期 5 年的加購（upsell）協議。這位客戶在 2022 年第一季首次採用 Cloudflare，現在已經看到更多使用我們平台的方式。同樣值得注意的是，這也是我們日益與通路夥伴合作的例子。我們相信通路銷售在 Zero Trust 領域尤其重要。而在第二季，我們成功讓 Zscaler 的前十大通路夥伴中有一半成為新的 Cloudflare 夥伴。

The State of Arizona expanded their use of our platform, signing a $770,000 1-year expansion deal. Arizona has been a long time Cloudflare customer and continues to expand the use of our platform as we launch new products. I still remember their first PO with us from several years back, which specified the address and method of shipping of our products as if we are a hardware vendor. We shipped them T-shirts, not hardware, and they have continued to grow with us ever since.

亞利桑那州擴大了對我們平台的使用，簽下了為期 1 年、總額 77 萬美元的擴充合約。亞利桑那州長期以來一直是 Cloudflare 的客戶，並隨著我們推出新產品持續擴大對平台的使用。我仍記得他們幾年前給我們的第一張採購單（PO），上面把我們當成硬體供應商一樣，指定了產品的地址與出貨方式。我們寄給他們的是 T 恤，不是硬體，而他們從那之後就一路與我們共同成長。

One of the world's largest advertising conglomerates signed a $1.7 million 1-year deal. They originally came to us last quarter under an attack that originated out of Russia. Seeing the power of our platform, this quarter, they expanded their engagement. This was yet another competitive Zero Trust deal against other leading Zero Trust vendors. Like we're hearing over and over again, this customer chose Cloudflare because of the strength of our broad platform and our ease of use. In the words of their Head of Cloud, with Cloudflare everything works, there are no issues.

全球最大的廣告集團之一簽下了為期 1 年、總額 170 萬美元的合約。他們在上一季因遭遇源自俄羅斯的攻擊而找上我們。看到我們平台的威力後，本季他們擴大了合作。這又是一筆與其他領先 Zero Trust 供應商競爭的 Zero Trust 交易。正如我們一再聽到的，這位客戶選擇 Cloudflare，是因為我們廣泛平台的實力以及易用性。用他們雲端負責人的話說，使用 Cloudflare 一切都能運作，沒有任何問題。

One of the largest online recruiting firms signed a $5.5 million 3-year deal, they were an extremely technical buyer who put our entire platform to its paces. In the end, they demonstrated for themselves that we were, by far, the best of breed. This is also an example of how increasingly we're seeing executives bring Cloudflare to their new workplaces. In this case, the buyer knew us from his previous position and was our champion when he moved jobs and was promoted. In his words, you don't get fired for buying Cloudflare.

最大的線上招募公司之一簽下了為期 3 年、總額 550 萬美元的合約；他們是非常技術導向的買方，對我們整個平台進行了全面測試。最終，他們親自驗證我們無疑是同類最佳（best of breed）。這也顯示我們越來越常看到高階主管把 Cloudflare 帶到他們新的工作場所。在這個案例中，買方在前一份工作就認識我們；當他轉職並獲得升遷後，成為推動採用我們的關鍵倡議者。用他的話說，買 Cloudflare 不會讓你丟工作。

Workers continues to gain traction among developers. Last earnings call, I talked about the importance of building Workers into other platforms as the best shortcut to developer adoption. In Q2, we signed deals with one of the largest e-commerce platform, one of the fastest-growing web development platform and a next-generation database platform to embed Workers as a service as a preferred development environment. These deals represent hundreds of thousands of dollars in guaranteed revenue with upside as usage grows. But more importantly, we believe they are the fastest path to catalyzing a robust ecosystem around Cloudflare Workers and exposing its power to the broad community of developers.

Workers 持續在開發者之間獲得動能。在上次財報電話會議中，我談到把 Workers 建到其他平台中，是促進開發者採用的最佳捷徑。在第二季，我們與最大的電商平台之一、成長最快的 Web 開發平台之一，以及新一代資料庫平台簽署合作，將 Workers 以服務形式嵌入，作為偏好的開發環境。這些交易代表了數十萬美元的保證收入，並且隨著使用量成長還有上行空間。但更重要的是，我們相信這是催化 Cloudflare Workers 周邊健全生態系、並向廣大開發者社群展現其能力的最快途徑。

Another interesting thing of note from the quarter is we're increasingly seeing other security companies adopting Cloudflare as the best-of-breed solution. It's incredibly affirming when your peers choose your product. A public security compliance vendor, a leading endpoint security provider and one of the largest data security vendors all signed multiyear contracts each worth more than $700,000. Even our direct competitors often use Cloudflare for DDoS mitigation and other services where we are the clear leader. This recognition by our peers of our best-of-breed products continues to validate why I'm confident Cloudflare will continue to grow even stronger through the tough economic times that may be ahead.

本季另一個值得注意的有趣現象是，我們越來越常看到其他資安公司採用 Cloudflare 作為同類最佳解決方案。當同業選擇你的產品時，這非常令人振奮。一家上市的安全合規供應商、一家領先的端點安全供應商，以及最大的資料安全供應商之一，都各自簽下了多年期合約，每份合約價值都超過 70 萬美元。甚至我們的直接競爭對手也經常使用 Cloudflare 來做 DDoS 緩解以及其他我們明顯領先的服務。這種來自同業對我們同類最佳產品的肯定，持續驗證了為什麼我有信心 Cloudflare 即使面對可能到來的艱難經濟環境，仍會持續變得更強並成長。

One last thing in the spirit of transparency before I turn it over to Thomas. We had a bug in our billing system related to how we expire unused credits for pay-as-you-go customers. Before we went public for good accounting reasons, we put in place a policy where we expired unused credits after 3 years. That system triggered for the first time earlier this year. Unfortunately, a bug in it caused our systems to report a spike in total paying customers last quarter. The revenue involved is not material, less than $160,000, and that it caused us to over-report the number of paying customers last quarter. The correct numbers are 148,184 in Q1 and 151,803 in Q2. Our pay-as-you-go business is only 11% of our revenue today, but we believe it's important to continue to invest in it in order to serve the entire market and protect our client. I'm embarrassed by the mistake, and we've fixed the bug and put in place checks designed to catch any similar errors in the future. I don't like it when we make mistakes. But I do think it's important we be transparent and own them when we do, which is why I insisted on addressing this today. It also leaves more fun topics for Thomas.

在我把時間交給 Thomas 之前，基於透明原則再補充最後一件事。我們的計費系統在「如何讓按量計費（pay-as-you-go）客戶的未使用點數到期」這件事上出現了一個 bug。出於良好的會計原因，在我們上市之前就制定了一項政策：未使用點數在 3 年後到期。該系統在今年稍早第一次被觸發。不幸的是，其中的 bug 造成我們的系統在上一季回報「總付費客戶數」出現一次性飆升。涉及的營收並不重大，少於 16 萬美元，但它確實導致我們在上一季高估了付費客戶數。正確數字為：第一季 148,184，第二季 151,803。我們的按量計費業務目前僅占營收的 11%，但我們認為持續投資它很重要，才能服務整個市場並保護我們的客戶。我對這個錯誤感到很尷尬；我們已修復該 bug，並建立了檢查機制，以在未來捕捉任何類似錯誤。我不喜歡我們犯錯。但我也認為，當我們犯錯時，保持透明並承擔責任很重要，這也是我堅持今天要提及此事的原因。也讓 Thomas 可以多談一些更有趣的主題。

With that, I'll hand it off to Thomas to walk through the financials. Thomas, take it away.

接下來，我把時間交給 Thomas 來帶大家看財務表現。Thomas，交給你了。

Thank you, Matthew, and thank you to everyone for joining us. We delivered another strong quarter driven by strength in our large customers with a record number of large customer additions as we continue to build our expansion engine. Our success in the first half of this year reflects the investments in our innovation and large enterprise go-to-market initiatives as well as the benefits of operating a durable, subscription-based revenue model.

謝謝你，Matthew，也謝謝各位今天加入我們。我們又交出了一個強勁的季度表現，主要由大型客戶的強勢需求所帶動；同時，新增大型客戶數量創下紀錄，我們也持續打造擴張引擎。今年上半年取得的成果，反映了我們在創新與大型企業市場拓展（go-to-market）計畫上的投資，以及營運一個具韌性、以訂閱為基礎的營收模式所帶來的效益。

Turning to revenue. Total revenue for the second quarter increased 54% year-over-year to $234.5 million. The growth in revenue was driven by strong adoption of our product portfolios and continued traction with our enterprise customer base. Area 1, the e-mail security company we acquired in April, contributed less than 1% of revenue.

接著看營收。第二季總營收年增 54%，達到 2.345 億美元。營收成長主要來自我們產品組合的強勁採用，以及在企業客戶基礎上持續取得進展。我們於 4 月收購的電子郵件安全公司 Area 1，對營收的貢獻不到 1%。

From a geographic perspective, we saw continued strength in both the U.S. and internationally. The U.S. represented 53% of revenue and increased 35% year-over-year. EMEA represented 26% of revenue and increased 54% year-over-year. APAC represented 14% of revenue and increased 43% year-over-year. We are pleased to see growth continue to accelerate in APAC.

從地理區域來看，我們在美國與國際市場都持續展現強勁表現。美國占營收 53%，年增 35%。EMEA 占營收 26%，年增 54%。APAC 占營收 14%，年增 43%。我們很高興看到 APAC 的成長持續加速。

Turning to our customer metrics. In the second quarter, we had 151,800 paying customers, representing an increase of 20% year-over-year. We saw a higher level of churn due in part to pay-as-you-go customers shifting down to our free customer tier. As our business continues to move up market, the total revenue contribution from our pay-as-you-go business which largely reflects SMB continues to decline, representing 11% of revenue in the second quarter, down from 14% in 2021 as disclosed at our Investor Day in May.

接著談我們的客戶指標。第二季我們有 151,800 名付費客戶，年增 20%。我們看到較高的流失率，部分原因是按量計費（pay-as-you-go）客戶下移至我們的免費客戶層級。隨著我們的業務持續往中大型市場（up market）發展，按量計費業務（主要反映中小企業 SMB）的總營收貢獻持續下降；第二季占營收 11%，低於我們在 5 月投資人日所揭露的 2021 年 14%。

Turning to large customers. We ended the quarter with 1,749 large customers, representing an increase of 61% year-over-year, and a record addition of 212 large customers in the quarter. We were pleased to see large customer revenue contribution increase again sequentially. We continue to move up market, shipping products and features that are enterprise grade, and that is reflected in our large customer cohorts consistently increasing size and revenue contribution. Significant expansion from our large customers contributed to a dollar-based net retention of 126%, representing a decrease of 100 basis points sequentially and an increase of 200 basis points year-over-year. While we expect DNR to continue to trend upward over time, we expect some variability quarter-to-quarter.

接著談大型客戶。我們在季末共有 1,749 家大型客戶，年增 61%，且本季新增 212 家大型客戶，創下單季新增紀錄。我們很高興看到大型客戶的營收貢獻再次呈現季增。我們持續往中大型市場發展，推出具備企業級（enterprise grade）的產品與功能，這也反映在我們的大型客戶群組（cohorts）規模與營收貢獻持續擴大。大型客戶的顯著擴張帶動以美元計價的淨留存率（dollar-based net retention，DNR）達到 126%，較前一季下降 100 個基點，但較去年同期上升 200 個基點。雖然我們預期 DNR 隨時間推移將持續走升，但也預期各季之間會有一定波動。

Moving to gross margin. Second quarter gross margin was 78.9%, representing an increase of 20 basis points sequentially. Network CapEx represented 13% of revenue in the second quarter. We continue to expect some level of quarter-to-quarter variability given strategic purchase decisions and continue to expect network CapEx to be 12% to 14% of revenue for fiscal 2022.

接著談毛利率。第二季毛利率為 78.9%，較前一季增加 20 個基點。網路資本支出（Network CapEx）占第二季營收 13%。鑑於策略性採購決策，我們仍預期各季之間會有一定程度的波動，並持續預期 2022 會計年度的網路 CapEx 將占營收 12% 至 14%。

Turning to operating expenses. Second quarter operating expenses as a percentage of revenue increased 3% sequentially and decreased 2% year-over-year to 79%. We had another strong hiring quarter, where we saw our total number of employees increase 49% year-over-year, bringing our total number of employees to approximately 3,060 at the end of the quarter. As we look forward into the second half of 2022, we plan to slow the velocity of hiring given global macroeconomic uncertainty. We also see an opportunity to raise the bar on new higher additions given dislocations in the market.

接著談營運費用。第二季營運費用占營收比重較前一季上升 3%，較去年同期下降 2% 至 79%。本季招募表現依然強勁，員工總數年增 49%，使季末員工總數約達 3,060 人。展望 2022 年下半年，考量全球總體經濟不確定性，我們計畫放緩招募速度。同時，鑑於市場出現錯位（dislocations），我們也看到提高新進人才招募門檻的機會。

Sales and marketing expenses were $103.9 million for the quarter. Sales and marketing as a percentage of revenue increased 2% sequentially and decreased to 44% from 45% in the same quarter last year. Research and development expenses were $46.2 million in the quarter. R&D as a percentage of revenue increased 1% sequentially and stayed flat from 20% in the same quarter last year.

本季銷售與行銷費用為 1.039 億美元。銷售與行銷費用占營收比重較前一季上升 2%，並由去年同期的 45% 降至 44%。本季研發費用為 4,620 萬美元。研發費用占營收比重較前一季上升 1%，且與去年同期的 20% 持平。

General and administrative expenses was $35.8 million for the quarter. G&A as a percentage of revenue stayed flat sequentially and decreased to 15% from 16% in the same quarter last year. Operating loss was $891,000 compared to an operating loss of $4 million in the same period last year. Second quarter operating margin was negative 0.4%, improving 220 basis points year-over-year. If not for our acquisition and continued investment in Area 1, we would have been operating profit positive.

本季一般與行政費用為 3,580 萬美元。G&A 占營收比重與前一季持平，並由去年同期的 16% 降至 15%。營業損失為 89.1 萬美元，相較去年同期營業損失 400 萬美元。第二季營業利益率為負 0.4%，年增改善 220 個基點。若非我們收購並持續投資 Area 1，我們本可達成營業利益轉正。

Turning to net income and the balance sheet. Our net income in the quarter was $312,000 or net income per share of $0.00. Tax expense for the quarter were $793,000. We ended the second quarter with $1.6 billion in cash, cash equivalents and available-for-sale securities. Free cash flow was negative $4.4 million in the second quarter or 2% of revenue compared to a negative $9.8 million or 6% of revenue in the same period last year. Operating cash flow was $38.3 million in the second quarter or 16% of revenue compared to $7.5 million or 5% of revenue in the same period last year.

接著談淨利與資產負債表。本季淨利為 31.2 萬美元，或每股淨利 0.00 美元。本季所得稅費用為 79.3 萬美元。第二季末我們持有 16 億美元的現金、約當現金與可供出售證券。第二季自由現金流為負 440 萬美元，或占營收 2%，相較去年同期為負 980 萬美元或占營收 6%。第二季營運現金流為 3,830 萬美元，或占營收 16%，相較去年同期為 750 萬美元或占營收 5%。

We will be diligent in balancing operational discipline moving forward. We have a heightened focus on free cash flow while maintaining profitability at or near breakeven with continued investment to address the enormous opportunity in front of us. As mentioned in prior quarters, we continue to expect to return to positive free cash flow in the second half of 2022. Remaining performance obligations, or RPO, came in at $760 million, representing an increase of 10% sequentially and 57% year-over-year. Current RPO was 76% of total RPO.

未來我們將審慎在營運紀律與成長之間取得平衡。我們在維持獲利能力達到或接近損益兩平的同時，將更聚焦於自由現金流，並持續投資以掌握眼前龐大的機會。如同前幾季所提，我們仍預期在 2022 年下半年恢復正向自由現金流。剩餘履約義務（remaining performance obligations，RPO）為 7.60 億美元，較前一季增加 10%，年增 57%。其中，當期 RPO 占總 RPO 的 76%。

Before we move to guidance for the third quarter and full year, I would like to provide additional color on our expectations in light of the uncertainty in the macroeconomic environment. Similar to the early days of COVID, we performed rigorous analysis to understand both the risks and opportunities in the current environment. However, while COVID particularly affected a narrow set of industries, the current challenges impact a broader set of verticals, which is why we believe it's important for us to be more prudent in this quarter's guidance.

在我們進入第三季與全年財測之前，我想就宏觀經濟環境不確定性下的預期補充更多說明。類似 COVID 初期，我們進行了嚴謹分析，以了解當前環境中的風險與機會。然而，COVID 尤其影響的是較狹窄的一組產業，而目前的挑戰影響更廣泛的垂直領域（verticals），因此我們認為在本季財測上採取更審慎的態度很重要。

Headwinds from foreign exchange have also accelerated. And with our product portfolio priced in U.S. dollars, our products are becoming more expensive internationally. And while we haven't seen a material change in our customers' behavior to date, we are seeing elongated sales cycles at the high end of our business. We are cognizant of the increasingly cautious environment and have factored this into our outlook.

外匯帶來的逆風也在加速。由於我們的產品組合以美元計價，我們的產品在國際市場上正變得更昂貴。雖然截至目前我們尚未看到客戶行為出現重大變化，但在我們業務的高端市場，我們確實看到銷售週期拉長。我們意識到環境正變得更加謹慎，並已將此納入我們的展望。

For the third quarter, we expect revenue in the range of $250 million to $251 million, representing an increase of 45% to 46% year-over-year. We expect operating income in the range of $0 million to $1 million. We expect net income per share of breakeven to $0.01, assuming approximately 342 million common shares outstanding. We expect a tax expense of $1.9 million. For the full year 2022, we expect revenue in the range of $968 million to $972 million, representing an increase of 47% to 48% year-over-year. We expect operating income for the full year in the range of $7 million to $11 million. We expect net income per share over that period in the range of $0.03 to $0.04, assuming approximately 343 million common shares outstanding. We expect a tax expense of $6.4 million.

就第三季而言，我們預期營收介於 2.50 億至 2.51 億美元，年增 45% 至 46%。我們預期營業利益介於 0 至 100 萬美元。我們預期每股淨利介於損益兩平至 0.01 美元，假設流通在外普通股約 3.42 億股。我們預期所得稅費用為 190 萬美元。就 2022 全年而言，我們預期營收介於 9.68 億至 9.72 億美元，年增 47% 至 48%。我們預期全年營業利益介於 700 萬至 1,100 萬美元。我們預期該期間每股淨利介於 0.03 至 0.04 美元，假設流通在外普通股約 3.43 億股。我們預期所得稅費用為 640 萬美元。

We are fortunate to be uniquely positioned as a provider of mission-critical services to our customers. And while there are challenges in the economy, we remain excited about the opportunity in front of us. We'd like to thank the Cloudflare employees for their continued dedication and resiliency in delivering exceptional service to our customers, partners and communities.

我們很幸運，作為向客戶提供關鍵任務（mission-critical）服務的供應商，我們具備獨特的定位。儘管經濟面臨挑戰，我們仍對眼前的機會感到振奮。我們也要感謝 Cloudflare 員工持續的投入與韌性，為我們的客戶、合作夥伴與社群提供卓越服務。

And with that, I'd like to open it up for questions. Operator, please pull for questions.

接下來，我想開放提問。接線員，請開始接聽提問。

(Operator Instructions) Your first question comes from the line of Matt Hedberg with RBC Capital Markets.

（接線員指示）第一個問題來自 RBC Capital Markets 的 Matt Hedberg。

Great. Congrats on the results in a tough environment. Maybe Thomas, for you, Matthew had a lot of helpful commentary, and I think we appreciate the candor. You mentioned longer sales cycles, but you still increased your full year guide by $13 million or more than the $7 million Q2 beat. Can you talk a little bit more about specifically how you thought about levels, embedding levels of conservatism? And are you assuming things kind of stay the same or maybe gets worse from here?

很好。在艱難的環境下，恭喜你們的成績。Thomas，或許這題給你：Matthew 提供了很多有幫助的評論，我想我們也很感謝你們的坦率。你提到銷售週期變長，但你們仍把全年指引上調了 1,300 萬美元，甚至高於第二季超預期的 700 萬美元。你能否更具體談談你們如何思考這些水位、如何在其中嵌入保守假設？以及你們是假設情況大致維持不變，還是從現在起可能變得更糟？

Yes. We looked at a lot of different factors impacting guidance this year, and you picked up some already. So we continue to see elongated sales cycles at the high end of our business, that is especially in the $0.5 million to $1 million bucket, and we expect that to continue.

是的。我們在今年的財測中考量了許多不同因素，你已經點出其中一些。我們確實持續看到在業務高端的銷售週期拉長，特別是在 50 萬至 100 萬美元的區間（bucket），而且我們預期這種情況會持續。

We saw also that our European business was the second best-performing region this quarter, and we've seen deterioration of performance, especially in Europe over the first and second quarter. So we expect that the trend, for sure, not to improve. We also see across the board, I think that companies are, like us, becoming more cautious in how they approach the business and things that are discussed twice in order to make sure that, that has only been done once. So we have not factored in our guidance that things would improve from here on moving forward, and perform rigorous analysis across verticals, across various regions and customer cohorts. And that's why you see a more prudent and more cautious guide for the third quarter and the end of the year.

我們也看到本季歐洲業務是表現第二好的區域，但我們在第一季與第二季期間已看到表現惡化，尤其是在歐洲。因此我們預期這個趨勢肯定不會改善。我們也看到整體而言，我認為各家公司和我們一樣，在經營方式上變得更謹慎，許多事情會被討論兩次，以確保原本只做一次的事不會出錯。因此，我們在指引中並未納入未來情況會改善的假設，而是針對各垂直領域、各地區與不同客戶群組進行嚴謹分析。這也是為什麼你會看到我們對第三季以及年底給出更審慎、更保守的指引。

Got it. That makes sense. And then maybe just one for Matthew. The wins that you called out in Workers are exciting. I guess I'm wondering, is there an opportunity in maybe more challenged economic times for customers to start to use Workers in even more creative and maybe cost-effective higher ROI ways than they would have otherwise done so, if like you said, the road was kind of clear ahead and no clouds or fog in front of us?

了解。這很有道理。接著可能再問 Matthew 一題。你在 Workers 提到的那些勝利案例很令人振奮。我在想的是，在可能更具挑戰的經濟時期，客戶是否有機會開始以更具創意、也可能更具成本效益、ROI 更高的方式來使用 Workers——相較於在你所說的那種前方道路很清晰、我們面前沒有烏雲或迷霧的情況下，他們原本可能不會這麼做？

Yes. I think one of the really powerful things about Workers is its efficiency. And so a workload, an equivalent workload running on Workers versus running on any of the sort of traditional public clouds, the AWSs, or Google Cloud or Microsoft Azure, is typically significantly less expensive to run. And the technical work in order to make that happen is part of the magic of what Workers delivers. And so we are definitely seeing especially in either new startups or people who are really realizing that they've got to make money go further.

是的。我認為 Workers 非常強大的一點在於它的效率。因此，同等的工作負載在 Workers 上運行，相較於在任何傳統公有雲（AWS、Google Cloud 或 Microsoft Azure）上運行，通常成本會顯著更低。而為了實現這一點所需的技術工作，正是 Workers 所帶來的魔法之一。所以我們確實看到，特別是在新創公司，或是那些真正意識到必須讓資金更耐用的人身上。

The days of just wildly spending on your cloud bill, I think, are behind us. And there are many different ways, both with Workers as well as just some of our standard products, that if you put us in front of your typical public cloud, we can often save you quite a bit of money. And so again, I think that, that was a message that didn't really resonate very much a year ago, where everyone was just -- it seemed my money was free and people were throwing it at any problem that was out there. But I think in these particular environments where people are trying to figure out how to stretch a dollar even further, Workers and Cloudflare's platform as a whole is very effective at helping people save money.

我認為，那種在雲端帳單上毫無節制地花錢的日子已經過去了。而且有很多不同的方法，不論是透過 Workers，或是我們的一些標準產品，只要把我們放在你典型的公有雲前面，我們往往就能幫你省下不少錢。所以再一次，我認為那是一個在一年前並不太能引起共鳴的訊息，當時大家似乎——錢是免費的一樣，人們把錢砸向任何出現的問題。但我認為在這種人們試圖把每一塊錢用得更久的環境裡，Workers 以及 Cloudflare 的整體平台，在幫助人們省錢方面非常有效。

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

下一個問題來自 Piper Sandler 的 James Fish。

Actually, intra-quarter was an interesting release from you guys that you talked about the Cloudflare One partner, program and Matthew in your prepared remarks, you mentioned taking some of your competitors top channel partners. Can you go over some of the details that you expect in terms of how this program is going to work for you guys? Is it solely focused on security? And how this is going to impact your indirect mix and profitability over the next couple of years?

其實，你們在季中發布的一個消息很有意思，你們談到了 Cloudflare One 夥伴計畫；而且 Matthew，你在事先準備的發言中提到拿下了一些競爭對手的頂級通路夥伴。你能否說明一下你預期這個計畫將如何運作的一些細節？它是否只聚焦在資安？以及它將如何在未來幾年影響你們的間接銷售占比與獲利能力？

Yes. I think that from the early days of Cloudflare, we explored various partner programs. And the challenge was that for a lot of our early products took 5 minutes to sign up, and they just worked out of the box, and so there wasn't a lot of value to add as a value-added reseller. And so while we had what I would call fairly standard success for the SaaS industry in working with partners. I don't think our products really facilitated getting the most out of the partner ecosystem. And especially, if all a partner is an order taker, then that's not a lot of value.

是的。我認為從 Cloudflare 早期開始，我們就探索過各種夥伴計畫。挑戰在於，我們早期的許多產品只要 5 分鐘就能註冊，而且開箱即用，因此作為加值型經銷商其實沒有太多可加值的空間。所以，雖然我們在與夥伴合作方面，達到了我所稱的 SaaS 產業相當標準的成功程度，但我不認為我們的產品真的有助於充分發揮夥伴生態系的效益。尤其是，如果夥伴只是個接單者，那價值就不大。

I think a handful of things have happened. One is that our products have gotten more complicated, and the ability to customize them in various ways has become much richer. So for example, with Workers, what we're seeing from a partner like IBM is that they can actually develop their own intellectual property for a particular industry vertical. Deploy, that on Workers and then sell that same IP over and over again. That's great for them. It really drives their services revenue, and it's great for us because it means that we are getting more leverage in what we're able to deliver through partners.

我認為有幾件事發生了。第一，我們的產品變得更複雜，而以各種方式進行客製化的能力也變得更豐富。舉例來說，在 Workers 上，我們從像 IBM 這樣的夥伴看到的是，他們其實可以針對特定產業垂直領域開發自己的智慧財產。把它部署在 Workers 上，然後把同一套 IP 一次又一次地銷售。這對他們很棒，能真正帶動他們的服務營收；對我們也很棒，因為這代表我們能透過夥伴在交付能力上取得更大的槓桿。

The second thing is that I think we saw with Zscaler that their success with a handful of partners in selling Zero Trust products was really successful. Those products take more work to actually implement and deploy within an organization. It's not a 5-minute setup. And so in that case, that's an area where we are able to work with partners. And in particular, we're very much following the playbook. And when we talk to the partners that are selling Zero Trust services, they all want to have more solutions in their basket to be able to bring to customers. Because in a lot of cases, the kind of previous Zero Trust solution either suffered from a lack of ability to scale, real performance bottlenecks, not having the total global coverage that global companies need, and Cloudflare addresses all of those things extremely well. So I think that, that's an opportunity for us.

第二件事是，我認為我們從 Zscaler 看到，他們透過少數幾個夥伴銷售 Zero Trust 產品的成功非常顯著。那些產品在組織內實際導入與部署需要更多工作，並不是 5 分鐘就能完成的設定。因此在那種情況下，這就是我們能與夥伴合作的領域。特別是，我們非常遵循那套作法。當我們與銷售 Zero Trust 服務的夥伴交談時，他們都希望籃子裡能有更多解決方案帶給客戶。因為在很多情況下，先前那類 Zero Trust 解決方案要嘛缺乏擴展能力、存在真正的效能瓶頸、或無法提供全球企業所需的完整全球覆蓋，而 Cloudflare 在這些方面都能非常好地解決。所以我認為，這對我們是一個機會。

In terms of profitability, I think the good news is that these more complex products tend to actually be the highest margin products that we have. And so as we were designing the program, we thought that we could have it be both margin accretive to Cloudflare while also still being very attractive to the potential partners that are bringing that to market. And so I think that this is an area that we're watching very carefully. I think it's a part that is -- we're going to continue to invest in. It actually is also one of the hidden benefits of us acquiring Area 1 is they had a lot more experience with the channel and with partners. And so working with the team there to really design that program has been great, and the reception from partners has been terrific. So I think it's a win-win for us and for our partners.

就獲利能力而言，我認為好消息是，這些更複雜的產品往往其實是我們毛利最高的產品。因此在設計這個計畫時，我們認為它可以同時對 Cloudflare 的毛利具有增益效果，同時也仍然對把它推向市場的潛在夥伴非常有吸引力。所以我認為這是我們非常密切關注的一個領域，也是——我們會持續投資的一部分。其實，這也是我們收購 Area 1 的一個隱藏好處：他們在通路與夥伴方面有更多經驗。因此與那邊的團隊合作來真正設計這個計畫非常棒，而夥伴的反應也非常好。所以我認為這對我們和我們的夥伴而言是雙贏。

Very helpful, Matthew. Last one for me there is a big government quarter coming up here. And obviously, you guys have just some integrated relationship. I guess what are you seeing on the government agency side and that FedRAMP program?

非常有幫助，Matthew。我最後一題是，接下來會有一個政府業務的大季度。而且很明顯你們和政府端有一些整合式的關係。我想問的是，你們在政府機關端以及 FedRAMP 計畫方面看到了什麼？

Yes. I appreciate it. We are -- it's like being in line with the DMV. The -- we've pulled our number and are just waiting for it to come up for us to get our FedRAMP certification. And so we expect that we'll have very positive news for that next quarter. But we're basically at number -- we're #84 and it's showing #83 on the sort of red number accounting board at the DMV.

是的。謝謝。我們——這就像在 DMV 排隊一樣。我們——已經抽了號碼牌，正在等輪到我們取得 FedRAMP 認證。所以我們預期下個季度會有非常正面的消息。但基本上我們現在的號碼是——我們是第 84 號，而 DMV 那種紅色號碼顯示板上顯示的是第 83 號。

So that's positive. We see across the board, not just with federal, but the example that I gave in the State of Arizona, we're seeing a lot more people adopt Cloudflare services in that government space. And so I think that, that continues to be a place where we have very strong relationships. And as we continue to get the various certifications, it will allow us to go even faster.

所以這是正面的。我們看到整體而言，不只是聯邦層級，還包括我舉的亞利桑那州的例子，我們看到有更多人正在政府領域採用 Cloudflare 服務。因此我認為，那仍然是我們擁有非常強大關係的一個領域。而且隨著我們持續取得各種認證，將使我們能夠更快地推進。

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

下一個問題來自 Needham & Co. 的 Alex Henderson。

I was hoping that you could talk a little bit about the context of the commentary around economic conditions. It's pretty obvious to the entire planet, the economies globally are decelerating. And particularly, Europe is under a lot of duress. But your initial comments was sort of that you saw that start to really manifest in 1Q and then it actually improved somewhat or at least stabilized in 2Q, yet you sound a lot more cautious on your thought process and so forth. And I'm wondering if there's a little bit of a disconnect between those 2, the tone of those 2. It doesn't sound like your business has rolled at all and sequentially gotten worse or more tense. But on the other side of the coin, you sound like you're being much more conservative in your outlook. So can you parse between those 2 a little bit?

我希望你能談談你們對經濟狀況評論的背景脈絡。對全世界來說都很明顯，全球經濟正在放緩。尤其是歐洲承受很大壓力。但你們一開始的評論有點像是，你們看到這在 1Q 開始真正顯現，然後在 2Q 其實有所改善，或至少穩定下來；然而你們在思考過程等方面聽起來又更為謹慎。我想知道這兩者的語氣之間是否有些落差。聽起來你們的業務並沒有下滑，按季也沒有變得更糟或更緊張。但另一方面，你們的展望聽起來又更保守。你能否把這兩者之間的差異再解析一下？

Yes, Alex. Yes, I think that. What we see is that the environment has gotten harder. And I think we saw the first signals of that actually going back to December of 2021, and they really started to manifest in various ways, slowdown of pipeline slowdown of customers paying their bills in Q1 of this year. And we talked about that on the last quarter earnings call. And I think some people were questioning why would we do that?

是的，Alex。是的，我認為——我們看到的是環境變得更艱難。我想我們其實早在 2021 年 12 月就看到第一個訊號，而它們在今年 Q1 以各種方式開始顯現，例如銷售管線放緩、客戶付款變慢。我們在上一季的財報電話會議上談過這件事。我想有些人當時在質疑我們為什麼要這麼說？

What I think we've been able to do, though, because we saw that, we acknowledged it. We didn't pretend like everything was normal, was really a just to take advantage of the situation. And so I think one of the real powers of Cloudflare's business is the diversity of our customer sets, both on a geography and also industry basis, the diversity of our products, and that allows us to have multiple levers to be able to continue to deliver even when the times get tough.

不過我認為，我們之所以能做到的是，因為我們看到了、也承認了它；我們沒有假裝一切正常，而是真正去利用這個情勢。因此我認為 Cloudflare 業務的一個真正力量在於我們客戶組合的多樣性——不論是地理分布或產業別——以及我們產品的多樣性；這讓我們擁有多個槓桿，即使在艱難時期也能持續交付成果。

And I think if you go back to the COVID quarters, and that was definitely a time where we had to adjust how we went to market, what we did, what types of customers we focused on. We really transitioned from being a business-driven primarily from getting new logos to one that developed a real expertise in how to go to our existing customers and sell them more. And I think there are a lot of analogies that are similar to the sort of adjustments that we've made that allowed us to have a quarter like this.

而且我認為，如果你回顧 COVID 的那些季度，那確實是一段我們必須調整我們如何進入市場、我們做什麼、以及我們聚焦哪些類型客戶的時期。我們確實從一個主要靠取得新客戶標誌（new logos）所驅動的業務，轉型為一個在如何面向既有客戶並向他們銷售更多產品方面建立了真正專業能力的業務。我認為，我們所做的那類調整有很多相似的類比，而正是這些調整讓我們能夠交出像這一季這樣的成績。

But make no mistake, we're still in what my grandmother would call a tule fog, we've still got to go out and do the work every day of filling up the wheelbarrow with new leads, sifting through it to look for what's going to be the most promising and being able to deliver. But what I like about our business is, again, its diversity across customer types, customer sizes, products, ways that we can go to market. And I think our team has done a good job of adapting to what is a much more difficult situation today than it was a year ago.

但千萬別誤會，我們仍然處在我祖母會稱之為「tule fog（濃霧）」的環境裡；我們每天仍得出門做功課：把新的潛在客戶線索裝滿手推車，從中篩選出最有希望的，並且能夠交付成果。但我喜歡我們業務的一點是——再次強調——我們在客戶類型、客戶規模、產品，以及我們進入市場的方式上都非常多元。我認為，我們的團隊在適應當前這個比一年前困難得多的局勢方面做得很好。

Alex, maybe one additional point. I pointed that out in my script, but -- and I didn't mention it in the previous answer. What we do feel is our also currency headwinds, especially in Europe. So even if the economic activity for us in terms of deal volume would be the same we see the headwinds from a currency perspective in Europe, but also in other parts of the world, Japan, for example, that we need to digest.

Alex，或許再補充一點。我在講稿裡提到過，但——我在前一個回答裡沒有提到。我們確實感受到匯率逆風，尤其是在歐洲。所以即便就我們而言、以交易量來看經濟活動維持不變，我們仍會在歐洲、以及世界其他地區（例如日本）從匯率角度看到逆風，這些都是我們需要消化的。

Yes. That actually leads me to the second question that I wanted to ask is the European environment is particularly onerous with 20% currency translation headwinds in EMEA or inflation, rising interest rates, think of England just raise rates 0.5% today in fact. And given that environment, they're struggling with huge price increases, particularly on systems in local -- in dollars plus the currency translation and their budgets are fairly flat.

是的。這其實引出了我想問的第二個問題：歐洲的環境特別嚴峻，EMEA 有 20% 的匯率換算逆風，再加上通膨、升息——例如英國今天就把利率上調了 0.5%。在那樣的環境下，他們正面臨巨大的價格上漲壓力，特別是系統方面——以當地貨幣計價——換成美元後再加上匯率換算影響，而他們的預算又相當持平。

Now my understanding is there seems to be a separation between companies that are selling relatively low-priced/high-value technologies and companies are selling high-ticket technologies. Can you talk about whether you're aggressively low priced? And the fact that you're a lower ticket upfront gives you a big advantage in that geography because of that characteristic and whether you're seeing more pressure on the higher value with the higher, bigger ticket transactions? Because I think ultimately, that seems to be the dividing rod between who wins and loses in Europe.

我目前的理解是，似乎在銷售相對低價／高價值技術的公司，與銷售高單價技術的公司之間出現了分化。你能談談你們是否採取積極的低價策略嗎？以及你們前期單筆金額較低這一點，是否因為這個特性而在該地區帶來很大的優勢？另外，你們是否看到在更高價值、較大單筆交易上承受更多壓力？因為我認為最終這似乎就是決定誰能在歐洲勝出、誰會落敗的分水嶺。

Well, I think it's certainly a benefit that our products are mission-critical. But even then, in the high end and bigger ACV deals, decision takes longer. That's where you see the elongated sales cycles.

嗯，我認為我們的產品屬於關鍵任務（mission-critical），這當然是一個優勢。但即便如此，在高端、較大 ACV 的交易上，決策確實需要更長時間。那就是你會看到銷售週期拉長的地方。

The second factor in our favor is that gross margin is one of the strong points of the business model. When we deploy that web and we always talked a bit audit it as a strategic weapon where it makes sense. So that doesn't mean price cutting. We try to be strategic and accommodating where we think it makes sense to build business relationship and business but we're using our margin to accommodate for that without any doubt.

第二個對我們有利的因素是，毛利率是我們商業模式的強項之一。當我們運用這個槓桿時——我們也一直把它視為在合適情況下可作為策略性武器——這並不代表削價競爭。我們會在我們認為有意義、能建立商業關係與業務的地方，採取策略性且具彈性的做法；但毫無疑問，我們確實是在運用我們的毛利空間來做出這些讓步。

Your next question comes from the line of Shaul Eyal with Cowen.

下一個問題來自 Cowen 的 Shaul Eyal。

Congrats on a set of results. Matthew, the first question for you. So lots of discussions throughout the quarter, maybe some chatter around your crypto exposure potential implications. Maybe a good opportunity here to address Cloudflare's exposure, maybe current thinking on this vertical, given the changing dynamics we've seen in recent months.

恭喜這一組業績。Matthew，第一個問題想請教你。本季有很多討論，可能也有一些關於你們加密貨幣曝險及其潛在影響的傳聞。或許這是個好機會，請你談談 Cloudflare 的曝險情況，以及在過去幾個月我們看到的動態變化下，你們目前對這個垂直領域的看法。

Sure. I mean, I think that we have customers that are in that space, including a number of the large exchanges. But I don't think that there are any of them, that would crack being a top-10 customer. And I think as a whole, I don't know the exact exposure, Thomas will may be able to add to it. But I will say that it's not significant enough that it has been brought up as a big risk item internally.

當然。我的意思是，我們確實有一些客戶在那個領域，包括多家大型交易所。但我不認為其中任何一家會進入我們前十大客戶。我想整體而言，我不清楚確切的曝險比例，Thomas 也許可以補充。不過我可以說，這個曝險並不顯著到會在內部被視為一個重大的風險項目。

So I think that we have always had -- I mean, I personally have never -- there's a lot of religion around the crypto space, where people are either hyperly pro crypto or hyperly against crypto. I feel like I'm the only kind of agnostic on crypto, where I don't think we have bet heavily on it. But at the same time, we would definitely make sure that if there are things that emerge from it, that we're in a position to take advantage of those. But that has not been a meaningful headwind to us.

所以我認為，我們一直以來——我的意思是，就我個人而言——我從來沒有……加密貨幣領域有很多「信仰」色彩，人們不是極度支持，就是極度反對。我覺得我可能是少數對加密貨幣保持不可知論（agnostic）的人：我們並沒有在這上面下重注；但同時，如果有一些從中浮現的新事物，我們也一定會確保自己處於能夠把握機會的位置。不過這並沒有對我們造成實質性的逆風。

Yes. And maybe some color. Our exposure to crypto was less than was single -- mid-single digits in percent of revenue, up under 5% for the second quarter. And so not a big -- an interesting part in terms of the size and the amount of customers but not a big exposure to revenue.

是的，再補充一些背景。我們對加密貨幣的曝險在營收占比上低於單位數——大約是中個位數以下，第二季低於 5%。所以就客戶數量與規模而言是個有趣的部分，但就營收而言並不是很大的曝險。

Understood. And Thomas, maybe one for you, a question on elongated sales cycle. I know it's a bit tricky it differs from customer to customer. But maybe can you generalize for us how long -- how much are these cycles being elongated? Are we talking 2 weeks, 3 weeks, more than that? How could we be thinking about it? The world elevated is a very, very general term.

了解。Thomas，可能也想問你一題，關於銷售週期拉長。我知道這有點難，因為不同客戶差異很大。但你能否幫我們概括一下，這些週期大概拉長了多久？我們是在談 2 週、3 週，還是更久？我們應該怎麼看待？「拉長」這個詞非常、非常籠統。

Well, I would say for the main part of our business, we are still far below 90 days from a pure cycle perspective. So when we talk about elongated sales cycles, it's in the upper end of our cohorts where you look at the bucket, $500,000 to $1 million of ACV where it's moving out. But there, it's moving out by weeks, not by days.

嗯，我會說，就我們業務的主要部分而言，從純粹週期的角度看，我們仍然遠低於 90 天。所以當我們談到銷售週期拉長時，主要是在我們客群分層的高端區間——例如你看年約經常性收入（ACV）在 50 萬到 100 萬美元的那個區間——那裡的確在往後移。但在那裡，延後是以「週」為單位，而不是以「天」為單位。

(Operator Instructions) Your next question comes from the line of Fatima Boolani with Citi.

（接線員指示）下一個問題來自 Citi 的 Fatima Boolani。

Matthew or Thomas, jump all for either one of you. Thinking about the shift to pay as you go customers, some of your observations and commentary around elongating deal cycles that you just addressed. I'm curious if you can just sort of take a step back and bifurcate for us how new logo land purchasing and procurement behavior has changed versus expansion or installed base expansion customer behavior has changed over the last 3 months? And maybe if you can help contextualize this or put this under the lens of your product pillars whether there is more or less usage or slower adoption of certain pillars versus others and certainly against the hardware supply chain constraint backdrop that we're in right now?

Matthew 或 Thomas，兩位都可以回答。談到向隨用隨付（pay as you go）客戶的轉變，以及你們剛才提到的交易週期拉長的一些觀察與評論。我想請你們稍微退一步，幫我們把「新客戶標誌（new logo）落地」的採購與採購流程行為，與「擴張／既有客戶基礎擴張」的客戶行為，在過去 3 個月裡的變化做個區分。另外，也請你們從產品支柱（product pillars）的角度幫我們脈絡化：是否某些支柱的使用更多或更少、或採用更慢或更快？並且也請放在我們目前所處的硬體供應鏈限制背景下來看。

Sure. So as I said in the prepared remarks, I think that it has gotten harder to sign up a new logo since the beginning of the year, but it's actually gotten easier to talk to our existing customers about using more of their platform -- more of our platforms in order to solve the problems that they have. And so I think that, that where we benefit is because we have such a broad product portfolio that allows us even in these times where signing up new logos is hard, we can go to our existing customers and have a conversation about how we can simplify their IT stack, how we can save them money, how we can make them more secure. And I think that, that's attractive.

好的。如同我在事先準備的發言中所說，我認為自年初以來，簽下新的客戶標誌變得更難了；但實際上，與既有客戶討論如何使用更多他們的平台——更多我們的平台——來解決他們的問題，反而變得更容易。因此我認為，我們受益之處在於我們擁有非常廣泛的產品組合：即使在這種簽新客戶很難的時期，我們仍能去找既有客戶，討論我們如何簡化他們的 IT 技術堆疊、如何幫他們省錢、如何讓他們更安全。我認為這很有吸引力。

So we're still signing up plenty of new logos. But I think that on balance, it has definitely gotten harder to sign up new logos and it has gotten easier to have conversations about expanding usage of our platform and especially adopting different products that are part of our platform.

所以我們仍然簽下了很多新的客戶標誌。但整體而言，簽新客戶確實變得更難，而就擴大我們平台使用量、尤其是採用我們平台中不同產品的對話，則變得更容易。

In terms of what products are or how the mix of products is changing, I think security continues to be top of mind that I think that there was real kind of concern around when the Russian invasion of Ukraine happened that there would be attacks that went out from Russia in retaliation against Western companies. That actually did not materialize in Q1, the way I think a lot of people thought it would. But we started to see more of that start to materialize in Q2. It's still -- I wouldn't call it a trend yet, but we're seeing more companies come under attack and turning to us when that happens. And so I think this is an environment where security products do very well. And across our security portfolio, we're seeing strength.

至於哪些產品、或產品組合如何變化，我認為安全性仍然是最優先的考量。我想在俄羅斯入侵烏克蘭發生時，市場確實有一種擔憂：俄羅斯會以報復西方企業的方式發動攻擊。這在第一季並沒有像很多人預期的那樣發生。但我們在第二季開始看到更多這類情況開始浮現。這仍然——我不會說它已經是一個趨勢——但我們確實看到更多公司遭到攻擊，並在發生時轉向我們。因此我認為在這樣的環境下，安全產品表現會非常好。而在我們整個安全產品組合中，我們都看到強勁動能。

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

您的下一個問題來自 Truist 的 Joel Fishbein。

Matthew, at Analyst Day, you talked about acts in these large markets that Cloudflare is to go after, notwithstanding the macro environment, current macro environment. Is there anything that has changed in your philosophy about these big markets? And maybe you can just give us an update on these acts or large markets and where you're positioned maybe specifically around R2 and the big data that you have going on right now?

Matthew，在分析師日上，您談到在目前的總體環境（宏觀環境）之下，Cloudflare 仍將在這些大型市場展開行動（acts）並加以攻佔。您對這些大型市場的理念有任何改變嗎？另外，能否請您更新一下這些行動或大型市場的進展，以及你們目前的佈局情況，或許可以特別談談 R2，以及你們現在正在推進的大數據相關工作？

Yes. So we think of Cloudflare as stacking multiple adoption S curves on behind another, and so our first act were how do we protect the infrastructure of customers around the world. And it is incredible to see how we've been able to do that successfully where today, more than 20% of all websites use our infrastructure.

是的。我們把 Cloudflare 視為在一條又一條的採用 S 曲線上層層堆疊，因此我們的第一個行動是：如何保護全球客戶的基礎設施。看到我們能夠成功做到這一點令人難以置信——如今，超過 20% 的所有網站都使用我們的基礎設施。

We're continuing to sell those products, but I think that where we are earlier in that S curve is with our Zero Trust products, and we're able to go to all of those people who had adopted our application security products and now say, "Hey, we can help you with Zero Trust as well." And I think that, that is the big act that we're focusing on right now.

我們仍在持續銷售這些產品，但我認為我們在那條 S 曲線上仍較早的部分，是我們的 Zero Trust（零信任）產品；我們能夠對所有已採用我們應用程式安全產品的客戶說：「嘿，我們也能協助你們導入零信任。」我認為這就是我們目前正在聚焦的重大行動。

Act 3 for us, which I think will really start to hit in a material way around revenue in 3 to 5 years is really around Workers, and I think we have been very pleasantly surprised how that adoption has happened faster and sooner and earlier than we expected. R2, which is our object store and our Amazon S3 competitor went into public beta last quarter, and we expect that it will go into GA right at the end of Q3. And so I think that, that's an opportunity for us to do more and we continue to invest in it. And again, we think that the real durable nature of Cloudflare is that we're able to continue to stack these acts one behind another behind another.

對我們而言的第三個行動，我認為會在 3 到 5 年內以實質方式開始對營收產生影響，主要圍繞在 Workers。我們非常驚喜地發現，這項採用的速度比我們預期更快、更早。R2 是我們的物件儲存服務，也是 Amazon S3 的競品，上季已進入公開測試（public beta），我們預期會在第三季末正式全面推出（GA）。因此我認為這對我們而言是能做得更多的機會，我們也會持續投入。再次強調，我們認為 Cloudflare 真正具備長期韌性的原因在於：我們能夠把這些行動一個接一個地持續堆疊起來。

Your next question comes from the line of Hamza Fodderwala with Morgan Stanley.

您的下一個問題來自 Morgan Stanley 的 Hamza Fodderwala。

Matthew, maybe a question on the security angle for you. You talked a lot about having larger platform conversations with your existing customers. Can you comment on when you talk to CIOs, CISOs at these customers, what is their willingness to really want to transform and modernize their existing security architectures versus perhaps continuing to refresh their existing on-premise date?

Matthew，我想從安全的角度問您一個問題。您談到與既有客戶進行更多大型平台層級的對話。當您與這些客戶的 CIO、CISO 交流時，他們在「真正想要轉型並現代化既有安全架構」方面的意願如何？相較之下，他們是否更傾向於持續更新既有的本地端（on-premise）資料（date）？

Yes. I mean I think Morgan Stanley is a great Cloudflare customer, and we have a terrific relationship with the CIO team over there, and it's definitely an organization that has been willing to embrace change. And we -- I think that that's a big piece. And I think that most organizations today understand that they have to make that change, and they're very willing to have that conversation.

是的。我認為 Morgan Stanley 是 Cloudflare 很棒的客戶，我們與那邊的 CIO 團隊關係非常好，而且那是一個願意擁抱變革的組織。我們——我認為這是很重要的一部分。我也認為如今大多數組織都明白他們必須做出改變，而且非常願意進行這樣的對話。

I think the thing that has changed to some extent is even those organizations that thought they could continue to invest in on-premise hardware are finding the current situation very difficult, where if you want to get a new firewall today, the lead times can be 9 months before you get it. And at the same time, the firewall vendors are raising their prices.

我認為某種程度上改變的是：即便是那些原本以為可以持續投資本地端硬體的組織，也發現目前的情況非常困難。比如說，如果你今天想買一台新的防火牆，交期可能要 9 個月才拿得到。同時，防火牆供應商也在調漲價格。

And so I think that a lot of -- in the results, a lot of the sort of that RPO you saw in the traditional firewall vendors was people basically holding their place in line. But it's not a way to make customers happy, telling them they have to pay more and then delaying when the product is going to be there. And so even for some of the organizations that traditionally had said, "We don't believe in the cloud or we don't believe in moving in this direction," I think that, that tune is starting to change, and it's becoming very much the minority opinion that you can solve these problems with on-premise hardware.

因此我認為——從結果來看，你在傳統防火牆供應商那裡看到的很多那種 RPO，本質上是人們在排隊卡位。但這不是讓客戶滿意的方法：一方面告訴他們要付更多錢，另一方面又延後產品交付時間。所以即便對一些過去傳統上會說「我們不相信雲端」或「我們不相信要往這個方向走」的組織，我認為這種說法也開始改變；而且「可以用本地端硬體解決這些問題」正逐漸成為非常少數的觀點。

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

您的下一個問題來自 Stifel 的 Adam Borg。

Maybe just for Thomas, I think you talked in the script about being more judicious and slowing hiring in the back half of the year. And maybe I was hoping you could talk a little bit more about which areas are still prioritized in terms of hiring and which ones you're kind of slowing a bit more?

我想問 Thomas。您在講稿中提到，下半年會更審慎並放緩招募。能否再多談一些：哪些領域在招募上仍是優先事項？哪些領域你們會放慢一些？

Yes. So we pulled quite a bit employee headcount wise in the second quarter. We said we take the velocity down quite a bit. And we still prioritize go-to-market open positions and protecting people moving into the second half. So the slowdown is in G&A and some of their R&D functions, but go-to-market is still going to continue to hire.

好的。我們在第二季的人員編制（headcount）拉升了不少。我們也說過會把增速（velocity）降下來不少。我們仍然優先補足 go-to-market（市場拓展/銷售）端的職缺，並在進入下半年時持續保護（留住/保障）相關人員。因此放緩主要發生在 G&A（一般與行政）以及部分研發（R&D）職能，但 go-to-market 仍會持續招募。

Your next question comes from the line of Andrew Nowinski with Wells Fargo.

您的下一個問題來自 Wells Fargo 的 Andrew Nowinski。

Great. Maybe just follow-up question on the operating income for the year. Your loss in Q2 is actually better than your guidance. I think you just said you're slowing hiring in the second half of the year. So I assume the reason you lowered your operating income for the full year fiscal '22 was due to the Area 1 acquisition. And if so, could you just pull that out? Maybe tell us what your organic revenue and operating income would have been outside of that acquisition?

很好。我想追問一下今年的營業利益（operating income）。你們第二季的虧損其實優於指引；而且我想你剛才也說下半年會放緩招募。所以我推測你們下調 2022 會計年度全年營業利益，原因是 Area 1 的收購案。如果是這樣，能否把它剔除？也就是告訴我們：若不含該收購，你們的有機營收與營業利益會是多少？

Yes. I don't want to give more -- much more specific than the color we gave on our -- in our script. But it is true with a couple of moving parts without the continued investment in Area 1, we would have been operating margin positive probably more in the single-digit/mid-digit million range for the second quarter.

是的。我不想比我們在——在講稿中所提供的說明再更具體。不過確實如此：如果沒有持續對 Area 1 的投資，第二季我們的營業利潤率（operating margin）大概會轉正，金額可能落在數百萬美元的個位數到中位數區間。

And I assume the operating guidance for the year would have gone up in absence of that acquisition then?

那我是否可以理解為：如果沒有那筆收購，全年營業利益指引就會上調？

We gave guidance for the quarter that took into account a lot of variables, and I am not going to parcel out now with the specific impact if Area 1 would have been -- if we hadn't done that acquisition. So the guidance is an holistic picture on many things that move, and you should take it as that.

我們給出的季度指引已納入許多變數，我現在不會把 Area 1 的具體影響拆分出來，去假設如果我們沒有做那筆收購會如何。因此，這份指引是對許多會變動事項的整體呈現，你應該以此角度來看待。

Your next question comes from the line of Trevor Walsh with JMP Securities.

您的下一個問題來自 JMP Securities 的 Trevor Walsh。

Matthew, maybe a quick one for you around your comments around DNR. You mentioned your aspirational goal of 130%. What do you think is -- how do you get there? Is it kind of a function kind of where you're right now based on macroeconomics and just what's going on in terms of budgets? Or is there something internally that you guys are looking to maybe change and/or kind of refocus efforts on in order to drive that number up?

Matthew，我想就您對 DNR 的評論快速問一題。您提到你們的理想目標是 130%。您認為要如何達到？這主要是因為目前的宏觀經濟與預算狀況所致，導致你們現在的水準如此？還是你們內部正在考慮做一些調整與/或重新聚焦，以推動這個數字上升？

Yes. I think that it really is for us about how we bundle products together. Today, 29% of the Fortune 1000 are already Cloudflare customers. If you fast forward with that, I think that a very significant percentage of the Fortune 1000 are in the customers. And so what we really want to focus on is how do we get them to use more of our platform, and what I think is unique about Cloudflare is we've already got the products in place where we can have those customers adopt our more and more our platform.

是的。我認為對我們而言，關鍵在於如何把產品打包在一起。今天，《財富》1000 大企業中已有 29% 是 Cloudflare 客戶。若往前推進，我認為《財富》1000 大企業中會有非常高的比例成為我們的客戶。因此我們真正想聚焦的是：如何讓他們使用我們平台的更多功能。而我認為 Cloudflare 的獨特之處在於，我們已經把產品準備到位，讓這些客戶能夠在我們的平台上採用越來越多的服務。

There is not a single customer that uses every single feature of Cloudflare's platform today in terms of a contracted customer. And so I think that's where we really see that growing. And I think that's a very healthy way to expand spend with customers is to become more and more critical. What we want to be is the network that the Fortune 1000 relies on for connecting to the Internet, making sure that they're secure, making sure that their employees have the best experience possible and making sure that no matter what happens, they're always going to be online.

目前就已簽約的客戶而言，沒有任何一位客戶使用了 Cloudflare 平台的每一項功能。因此我認為這就是我們看到成長的地方。我也認為，以這種方式擴大客戶支出是非常健康的——也就是讓我們變得越來越關鍵。我們希望成為《財富》1000 大企業所依賴的網路：用來連接網際網路、確保安全、確保員工擁有最佳體驗，並確保無論發生什麼事，他們都能一直在線。

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

您的下一個問題來自 William Blair 的 James Breen。

Can you just talk a little bit about the CapEx was up a bit this quarter, a little bit higher than the guidance for the year, the range for the year. And how you think about that spending going forward? And maybe some of the puts and takes on cash flow relative to top line growth and where are areas where you can generate cash without too greatly impacting the top line?

能否談一下本季資本支出（CapEx）略有上升，且略高於全年指引區間的情況？以及你們如何看待未來的支出？另外，就現金流相對於營收成長而言，有哪些拉鋸因素？以及有哪些領域可以在不對營收端造成太大影響的前提下產生現金？

Maybe I could start it on CapEx. I mean we're going to stay within the range that we guided for the year. We said before, you will see variability quarter-to-quarter just in terms of how we purchase, where we see opportunity to pull in spend and make sure that we maneuver ourselves smartly around the supply chain disruptions you see. This is pretty much driving the variability quarter-to-quarter, but we will stay within the range we guided for the year.

我先從資本支出談起。我們會維持在我們對全年所給出的區間內。我們之前也說過，你會看到季度之間的波動，主要取決於我們的採購節奏、以及在看到機會時提前支出，並確保我們能夠在你所看到的供應鏈中斷情況下更聰明地調度與因應。這基本上就是造成季度間波動的原因，但我們會維持在全年指引的區間內。

From a free cash flow perspective, we said we have a lot of levers at hand. One of the biggest levers is moving to annual billing for our large customers. We are, from a company history perspective, coming from a pay-as-you-go business where people gave us a credit card even at the beginning of the second quarter, the majority of our revenue was monthly billing. So we've made first strides into that direction of annual billing. And there is a lot of opportunities still in front of us. So this, I would say, is the biggest lever, but we run a pretty holistic cash conversion project across the company that looks into literally anything that can positively impact free cash flow generation. And it's a cross-functional project, and it's -- we're making good progress, and you saw that already reflected in the second quarter numbers.

從自由現金流的角度來看，我們說過手上有很多槓桿可以運用。其中最大的槓桿之一，是把大型客戶改為年度計費。從公司歷史來看，我們是從隨用隨付（pay-as-you-go）的業務模式起家，客戶甚至在第二季一開始就用信用卡付款，而我們的大部分營收都是按月計費。因此，我們已經朝年度計費邁出了第一步，而且前方仍有很多機會。所以我會說這是最大的槓桿；但我們也在全公司推動一個相當全面的現金轉換專案，幾乎檢視任何能對自由現金流產生正面影響的事情。這是一個跨部門的專案，我們——進展良好，而你也已經在第二季的數字中看到反映。

Your next question comes from the line of Gray Powell with BTIG.

下一個問題來自 BTIG 的 Gray Powell。

All right. Great. Congratulations for the -- on the strong results. So yes, Matt, you called out the Fortune 500 energy company where you replace Zscaler. And then you talked about some other similar wins. I just want to make sure I have it correct. Are those mainly on the [VT&A] side with Cloudflare Access? Or were there some gateway wins as well? And then maybe can you just drill into a little bit more and talk about like why you want. Is it more on price technology or a combination of those?

好的。很棒。恭喜——取得強勁的成果。所以是這樣，Matt，你提到那家《財富》500 大的能源公司，你們取代了 Zscaler。然後你也談到一些其他類似的勝利。我只是想確認我理解正確：那些主要是發生在 [VT&A] 這一側、也就是使用 Cloudflare Access 嗎？還是也有一些閘道（gateway）方面的勝利？另外，你能不能再深入一點談談你們為什麼能贏？是價格、技術，還是兩者的組合？

Yes. So when we sell our Zero Trust solutions, we really believe that the pieces all fit together. And so those are typically wins -- sometimes somebody will just -- will just adopt one portion of the solution, but we really like to sell that holistic solution and see how all of the pieces fit together.

是的。所以當我們銷售零信任（Zero Trust）解決方案時，我們真的相信各個組件是相互契合的。因此這些通常是贏單——有時候客戶只會——只採用解決方案中的某一部分，但我們更喜歡銷售整體性的解決方案，並看到所有組件如何彼此配合。

In terms of where we win, I think what we hear from the space is that our products are significantly more performant. We have a much more holistic solution where we can protect mobile devices in a way that a lot of the other providers can't. We can work across the geographies. When I was, this time last year, traveling in Africa using our products they worked great, whereas most people in the space don't have that broad of a network that can deliver that.

就我們在哪裡取勝而言，我認為我們從市場上聽到的是，我們的產品效能顯著更好。我們有更全面的解決方案，能以許多其他供應商做不到的方式保護行動裝置。我們可以跨地理區域運作。去年這個時候我在非洲旅行使用我們的產品，運作得非常好；而多數同業並沒有那麼廣泛的網路能提供那樣的交付能力。

And I think that we are just able to scale much more significantly. We have literally 2 orders of magnitude, more capacity to be able to handle the forward proxy traffic across us than any of the other providers in the space. And I think that, that's why we've been able to display some companies that have used -- that have tried to adopt Zscaler and found it less user-friendly and that it generated a lot of IT support tickets. But that's really not our focus. Our focus is going after all of the on-premise firewalls and hardware and VPNs that exist in the universe. And so I think they can be successful and we can be successful, but I think we have a better product. And over time, I think that will help us win.

而且我認為我們的擴展能力也顯著更強。我們在處理經由我們的正向代理（forward proxy）流量方面，實際上擁有比同業高出整整 2 個數量級的容量。我想這也是為什麼我們能夠取代一些公司——那些公司曾經——嘗試採用 Zscaler，卻發現它較不易用，並且產生了大量 IT 支援工單。但那其實不是我們的重點。我們的重點是瞄準宇宙中所有存在的地端（on-premise）防火牆、硬體與 VPN。因此我認為他們可以成功、我們也可以成功，但我認為我們有更好的產品。隨著時間推移，我想這會幫助我們贏得更多案子。

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

今天最後一個問題來自 Jefferies 的 Brent Thill。

Matthew, on Area 1, I know it's early, but can you give us an update of what you're seeing there? And I guess, again, on the last question, can I squeeze one in at the end?

Matthew，關於 Area 1，我知道現在還早，但你能給我們一個更新，談談你們在那邊看到的情況嗎？另外，我想——再回到上一個問題，我可以最後再塞一個問題嗎？

The Area 1 tech is amazing. So the product, we're seeing really great wins from very large customers. And we think of that product as being a gateway to help with people on their Zero Trust journey. If you think about e-mail, the nature of it is it enumerates the employee directory of an organization, and it very much then helps us sell the other Zero Trust products that we have, and so that conversation is going well.

Area 1 的技術非常驚人。所以就產品而言，我們看到來自非常大型客戶的很棒贏單。我們把那個產品視為協助客戶踏上零信任旅程的一個入口（gateway）。如果你想想電子郵件，它的本質會列舉出一個組織的員工目錄，而這也很大程度上幫助我們銷售其他我們擁有的零信任產品，因此這方面的對話進展得很順利。

It's also a conversation that is going well in terms of talking to our existing customers. It turns out everybody has got a fishing problem. It is for most of our customers, 1 click to sign up and test whether or not Area 1 can result in that. And so we're seeing $1 million-plus wins that close in oftentimes in a matter of days or a short number of weeks, which is just -- because we can just prove how successful that is.

同時，與我們既有客戶的對話也進展得很順利。結果發現每個人都有釣魚（phishing）問題。對我們大多數客戶而言，只要點一下就能註冊並測試 Area 1 是否能帶來效果。因此我們看到超過 100 萬美元的贏單，往往在幾天或短短幾週內就能成交，這就是——因為我們可以直接證明它有多成功。

I think beyond that, everyone has helped us in a number of other ways. One, as I mentioned earlier, is that they had a much more sophisticated channel program, which has now helped develop our channel program, and I think we're really thankful for that team being on board. And then the third, which I think you'll hear us talk about more going forward is that they have a really world-class threat intelligence team. And that, I think, will turn into more products across our entire platform. And because I like your brand, I'll let you have on e more question.

我想除此之外，他們也在其他幾個方面幫了我們很多。第一，如我先前提到的，他們有更成熟的通路（channel）計畫，現在也幫助我們發展了我們的通路計畫，我們非常感謝那個團隊加入。第三點，我想你們之後會聽到我們談更多的是，他們擁有世界級的威脅情報團隊。我認為這將會轉化為我們整個平台上的更多產品。而且因為我喜歡你們的品牌，我就讓你再多問一個問題。

I appreciate that. You've had the crystal ball and everyone appreciates your candor, and I think you were the first one to come out and say, hey, things are going a little different than they felt. I was just trying to understand, when you look at the perspective of what's happening now, you mentioned things have stabilized. I mean I just want to make sure we understand from your perspective, it hasn't gotten worse. It's come in that your -- the stabilization trend that you're seeing, have you seen that extend into July and the rest of the summer? What's your sense of kind of the trajectory from where things came in, where are you at now?

我很感謝。你一直像有水晶球一樣，大家也都很欣賞你的坦率；我想你是第一個站出來說，嘿，事情跟大家感覺的不太一樣。我只是想了解，從你看現在正在發生的事情的角度，你提到情況已經穩定下來。我的意思是，我只是想確認從你的角度來看，情況並沒有變得更糟。你所看到的那個穩定趨勢，有沒有延續到 7 月以及整個夏天？你對於整體走勢的感覺是什麼——從當時的落點到現在，你們處於什麼位置？

Yes, you got me in trouble with a lot of my peers at your conference, where I said that the economy was not as rosy as people think, and I think you've heard a lot of those folks echo those comments now in Q2.

是的，你在你們的會議上讓我在很多同業面前惹上麻煩，因為我說經濟並沒有大家想的那麼樂觀，而我想你現在也在第二季聽到很多人呼應那些評論了。

Let me be clear. I think that the economy is still in really rough shape. And I don't know -- and again, I'm not a member of the -- I'm not an economist. But from what we hear from customers, customers are really still suffering, And the economy, I wouldn't say that the economy itself has stabilized.

我講清楚一點。我認為經濟仍然處於非常艱困的狀態。而我不知道——再說一次，我不是——我不是經濟學家。但從我們從客戶那裡聽到的情況來看，客戶仍然在受苦。而就經濟本身而言，我不會說經濟已經穩定下來。

What I would say is we have had the flexibility in our business to be able to adapt to a very difficult environment. That environment continues to be difficult, and I think it will be difficult at least through the rest of the year. But being able to deliver products that deliver real value, have an incredible ROI, can save customers' money and are must haves, not nice to haves, puts us in an incredibly powerful position. And as I said in the prepared remarks, I would not trade places with any other CEO.

我會說的是，我們的業務具備彈性，能夠適應非常困難的環境。那個環境仍然困難，我認為至少在今年剩下的時間都會很困難。但能夠交付真正有價值的產品、具備驚人的投資報酬率（ROI）、能為客戶省錢，而且是必需品而非可有可無的東西，讓我們處於極其有利的位置。正如我在事先準備的發言中所說，我不會想跟任何其他 CEO 交換位置。

This concludes our Q&A portion of the call. Matthew Prince, I turn the call back to you.

本次電話會議的問答部分到此結束。Matthew Prince，我把電話交回給你。

So I'd like to, first of all, thank a bunch of the students from the Berkeley School of Music to let us use some of their new and original songs for the hold music going in. So hope for those of you who tuned in the call early, hope you appreciated that. I also want to thank the analysts for actually asking Thomas some questions this time. Usually, I can get all the questions. Thanks to our team and all of our customers. We've got our hands on the wheel, our eyes on the road, and we'll see you all back here next quarter.

所以我想，首先要感謝伯克利音樂學院（Berkeley School of Music）的一群學生，讓我們使用他們一些新的原創歌曲作為等待音樂。因此希望那些提早撥入會議的各位，希望你們喜歡。我也想感謝分析師這次真的問了 Thomas 一些問題。通常所有問題都會落到我身上。也感謝我們的團隊以及所有客戶。我們雙手握著方向盤、眼睛看著前方道路，我們下個季度再在這裡見。

This concludes today's conference call. Thank you for attending. You may now disconnect.

今天的電話會議到此結束。感謝各位參與。您現在可以掛線。