Cloudflare Inc (NET) 2023 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Cloudflare Q1 2023 Earnings Conference Call. (Operator Instructions) And please be advised that this call is being recorded. (Operator Instructions)

女士們先生們，下午好，歡迎來到 Cloudflare 2023 年第一季度收益電話會議。 （操作員說明）請注意，此通話正在錄音中。 （操作員說明）

And now I'd like to turn the call over to Mr. Phil Winslow, Vice President of Strategic Finance, Treasury and Investor Relations. Please go ahead, sir.

現在我想把電話轉給戰略財務、財務和投資者關係副總裁菲爾溫斯洛先生。請繼續，先生。

Thank you for joining us to discuss Cloudflare's financial results for the first quarter of 2023. With me on the call, we have Matthew Prince, Co-Founder and CEO; Michelle Zatlyn, Co-Founder, President and COO; and Thomas Seifert, CFO. By now, everyone should have access to our earnings announcement. This announcement as well as our supplemental financial information may be found on our Investor Relations website.

感謝您與我們一起討論 Cloudflare 2023 年第一季度的財務業績。與我通話的還有聯合創始人兼首席執行官 Matthew Prince； Michelle Zatlyn，聯合創始人、總裁兼首席運營官；和首席財務官 Thomas Seifert。到現在為止，每個人都應該可以看到我們的收益公告。本公告以及我們的補充財務信息可在我們的投資者關係網站上找到。

As a reminder, we will be making forward-looking statements during today's discussion, including, but not limited to, our customers', vendors' and partners' operations and future financial performance, our anticipated product launches and the timing and market potential of those products, our anticipated future financial and operating performance, and our expectations regarding future macroeconomic conditions. These statements and other comments are not guarantees of future performance and are subject to risks and uncertainties, much of which is beyond our control. Our actual results may differ significantly from those projected or suggested in any of our forward-looking statements.

提醒一下，我們將在今天的討論中做出前瞻性陳述，包括但不限於我們的客戶、供應商和合作夥伴的運營和未來財務業績、我們預期的產品發布以及這些產品的發佈時間和市場潛力產品、我們預期的未來財務和經營業績以及我們對未來宏觀經濟狀況的預期。這些陳述和其他評論不是對未來業績的保證，並受風險和不確定性的影響，其中大部分是我們無法控制的。我們的實際結果可能與我們任何前瞻性陳述中預測或建議的結果大不相同。

These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more complete discussion of the risks and uncertainties that could impact our future operating results and financial condition, please see our filings with the SEC as well as in today's earnings press release.

這些前瞻性陳述適用於今天，您不應依賴它們代表我們未來的觀點。我們沒有義務在本次電話會議後更新這些聲明。有關可能影響我們未來經營業績和財務狀況的風險和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提交的文件以及今天的收益新聞稿。

Unless otherwise noted, all numbers we talk about today, other than revenue, will be on an adjusted non-GAAP basis. You'll find a reconciliation of GAAP to non-GAAP financial measures that are included in our earnings release on our Investor Relations website. For historical periods, a GAAP to non-GAAP reconciliation can be found in the supplemental financial information referenced a few moments ago.

除非另有說明，否則我們今天談論的所有數字（收入除外）都將基於調整後的非 GAAP 基礎。您會在我們的投資者關係網站上的收益發布中找到 GAAP 與非 GAAP 財務指標的對賬。對於歷史時期，可以在剛才引用的補充財務信息中找到 GAAP 與非 GAAP 對賬。

We would also like to inform you that we will be participating in MoffettNathanson's inaugural TMT Conference on May 17 and Jefferies 2023 Software Conference on May 31.

我們還想通知您，我們將參加 5 月 17 日的 MoffettNathanson 首屆 TMT 大會和 5 月 31 日的 Jefferies 2023 軟件大會。

Now before wrapping up, we are excited to host our Investor Day on Thursday, May 4, which is being held in conjunction with our user conference, Cloudflare Connect in New York City. A live webcast will also be accessible from our Investor Relations website.

在結束之前，我們很高興在 5 月 4 日星期四舉辦我們的投資者日，該日與我們在紐約市舉行的用戶會議 Cloudflare Connect 一起舉行。還可以從我們的投資者關係網站訪問實時網絡廣播。

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

現在，我想把電話轉給馬修。

Thank you, Phil. Q1 was a quarter of contrast. We achieved revenue of $290.2 million, up 37% year-over-year. Our gross margin was 77.8%, again, above our long-term target range of 75% to 77% and up from 77.4% last quarter. During the quarter, we added 114 new large customers, those that pay us more than $100,000 per year and now have 2,156 large customers, up 40% year-over-year. Our dollar-based net retention fell to 117%, down 5% quarter-over-quarter. Importantly, we did not see elevated churn across our broad customer base. Instead, we saw a slower expansion from existing customers. More on that in a second.

謝謝你，菲爾。 Q1 是對比度的四分之一。我們實現了 2.902 億美元的收入，同比增長 37%。我們的毛利率為 77.8%，再次高於我們 75% 至 77% 的長期目標範圍，高於上一季度的 77.4%。在本季度，我們增加了 114 個新的大客戶，這些客戶每年向我們支付超過 100,000 美元，現在有 2,156 個大客戶，同比增長 40%。我們基於美元的淨保留率下降至 117%，環比下降 5%。重要的是，我們沒有看到廣大客戶群的流失率上升。相反，我們看到現有客戶的擴張速度較慢。稍後會詳細介紹。

Throughout this quarter of contrast, we saw tailwinds and headwinds. The reacceleration of our new business pipeline during the second half of 2022 continued again this quarter, and we meaningfully exceeded our pipeline plan for the second quarter in a row. Our win rate against the competition remained at record high levels, and renewal rates were consistent with the high levels experienced over the previous 4 quarters. Those were all positive signs.

在整個這個季度的對比中，我們看到了順風和逆風。 2022 年下半年我們新業務管道的重新加速在本季度再次繼續，我們連續第二個季度顯著超出了我們的管道計劃。我們對競爭對手的勝率保持在歷史最高水平，續約率與前 4 個季度的高水平一致。這些都是積極的跡象。

On the flip side, the quarter saw new challenges, macroeconomic uncertainty, which intensified over the course of Q1 with every failing bank resulted in a material lengthening of sales cycles, a significant decline in close rates, even as win rates held strong and an extreme back-end weighting to the quarter. To give you some sense, almost half of the new business closed in the last 2 weeks of the quarter, which is very nonlinear for us. All of these factors put pressure on growth. The quarter most reminded me of Q1 of 2020 when businesses were paralyzingly nervous about the impact of COVID-19.

另一方面，本季度出現了新的挑戰，宏觀經濟的不確定性在第一季度加劇，每家倒閉的銀行都導致銷售週期大幅延長，成交率顯著下降，即使贏率保持強勁且極端後端加權到季度。為了給你一些感覺，幾乎一半的新業務在本季度的最後兩週關閉，這對我們來說是非常非線性的。所有這些因素都對增長造成壓力。這個季度最讓我想起 2020 年第一季度，當時企業對 COVID-19 的影響極度緊張。

I think this parallel shows how with uncertainty in the economy, companies are closely watching their own businesses before committing to new spending. Thankfully, we continue to be a must-have, not a nice to have. And most of the deals we expected to close did, just later than we expected. I'm proud of our team's ability to sail through the rough seas that characterize Q1.

我認為這種平行關係表明，在經濟不確定的情況下，公司在投入新支出之前會密切關注自己的業務。值得慶幸的是，我們仍然是必備品，而不是擁有品。我們預期完成的大部分交易都完成了，只是比我們預期的要晚。我為我們的團隊能夠在 Q1 的波濤洶湧的大海中航行而感到自豪。

Although the current economy poses uncertainty for nearly every business in the near term, as Mark Hawkins and our Board likes to say, when the going gets tough, the tough get profitable, and we are tough. We have our hands firmly on the tiller of our business and are able to adjust to rapidly evolving market conditions in order to deliver operating profit of $19.4 million, representing a record operating margin of 6.7%. Furthermore, in spite of tougher collections in the quarter, particularly in the month of March, we generated $13.9 million of free cash flow, representing a free cash flow margin of 5%.

儘管當前的經濟在短期內對幾乎所有企業都造成了不確定性，正如馬克霍金斯和我們的董事會喜歡說的那樣，當形勢變得艱難時，艱難的人會盈利，而我們也很堅強。我們牢牢掌控著我們的業務，能夠適應快速變化的市場條件，以實現 1,940 萬美元的營業利潤，營業利潤率達到創紀錄的 6.7%。此外，儘管本季度收款困難，尤其是 3 月份，我們還是產生了 1390 萬美元的自由現金流，自由現金流利潤率為 5%。

We continue to be on track to be free cash flow positive for 2023. As we navigate through the challenging macroeconomic seas facing our industry, this period of external uncertainty presents us with a perfect opportunity to be internally reflective, identifying areas of improvement within our business and taking proactive steps to create an even more successful and productive organization. As I take stock, we are not limited by the size of our market for our products, we are not limited by our ability to innovate, we are not limited by pipeline opportunity, and we are not limited by sales capacity. So what are we limited by?

我們繼續有望在 2023 年實現正自由現金流。當我們在行業面臨的充滿挑戰的宏觀經濟海洋中航行時，這段外部不確定性為我們提供了一個絕佳的機會來進行內部反思，確定我們業務中需要改進的領域並採取積極措施創建一個更加成功和高效的組織。在我盤點時，我們不受產品市場規模的限制，不受創新能力的限制，不受渠道機會的限制，不受銷售能力的限制。那麼我們受到什麼限制呢？

As I said last quarter, Marc Boroditsky, our new President of Revenue, has dug into retooling our go-to-market efforts and identified significant opportunities to improve the efficiency and performance of our sales teams. Although we've won 1/3 of the Fortune 500 customers, if we're honest with ourselves, we saw a lot of our success with our enterprise customers because our products were so good and solved real problems that every big company faces. That allowed many on our sales team to succeed largely by just taking orders. When the fish are jumping right in the boat, you don't need to be a very good fishermen.

正如我在上個季度所說，我們的新任收入總裁 Marc Boroditsky 已經深入研究重組我們的上市工作，並發現了提高銷售團隊效率和績效的重要機會。雖然我們贏得了 1/3 的財富 500 強客戶，但如果我們對自己說實話，我們在企業客戶中看到了很多成功，因為我們的產品非常好，解決了每個大公司面臨的實際問題。這讓我們的銷售團隊中的許多人主要通過接受訂單就取得了成功。當魚在船上跳躍時，你不需要成為一個非常好的漁夫。

But at the risk of mixing watering metaphors, as the tide goes out, you get a clear view who's not wearing shorts. The macroeconomic environment has gotten harder, and we're seeing that some on our team aren't dressed for work. Digging in with Marc, we've identified more than 100 people on our sales team who have consistently missed expectations. Simply put, a significant percentage of our sales force has been repeatedly underperforming based on measurable performance targets and critical KPIs. That's obviously a problem.

但冒著混合澆水隱喻的風險，隨著潮水退去，你會清楚地看到誰沒有穿短褲。宏觀經濟環境變得更加艱難，我們看到我們團隊中的一些人穿著不適合工作。通過深入了解 Marc，我們發現我們的銷售團隊中有 100 多人一直沒有達到預期。簡而言之，根據可衡量的績效目標和關鍵 KPI，我們的銷售人員中有很大一部分一再表現不佳。這顯然是個問題。

But it's won in this environment with a particularly available and actionable solution. We are now in the process of quickly rotating out those members of our team who have been underperforming and bringing in new talent with salespeople who have a proven track record of success, grit and a strong cultural fit.

但在這種環境下，它憑藉特別可用且可操作的解決方案贏得了勝利。我們現在正在快速輪換我們團隊中表現不佳的成員，並引進新的人才以及具有成功記錄、勇氣和強烈文化契合度的銷售人員。

To give you some sense, these 100-plus people contributed approximately 4% of annualized new business sold over the last year. So we're optimistic we can make this team upgrade without significantly impacting sales capacity. While team upgrades are always hard, this is a uniquely good time for us to do this. A year ago, the tech labor market was extremely tight. Today, there is an abundance of talent eager to work at Cloudflare. In Q1, we received more than 0.25 million applicants, approximately 40% of which were for sales positions.

為了給你一些感覺，這 100 多人貢獻了去年新業務銷售額的大約 4%。所以我們很樂觀，我們可以在不顯著影響銷售能力的情況下升級這個團隊。雖然團隊升級總是很困難，但現在是我們這樣做的絕佳時機。一年前，技術勞動力市場非常緊張。如今，有大量人才渴望在 Cloudflare 工作。第一季度，我們收到了超過 25 萬名申請者，其中約 40% 是銷售職位。

That's more applications than we received in all of 2021. In addition to the volume, the caliber of the applicants we're receiving is higher than we've seen at any point in our history, especially for go-to-market positions. While other companies are laying off, we're going to be bringing on great people with proven track records to raise the capability of our enterprise go-to-market team.

這比我們在 2021 年全年收到的申請都多。除了數量之外，我們收到的申請人的素質也比我們歷史上任何時候都高，尤其是在上市職位方面。在其他公司裁員的同時，我們將聘請具有良好業績記錄的優秀人才，以提高我們企業上市團隊的能力。

We've always had a culture of high performance at Cloudflare. However, with the value of hindsight, I think we and most other businesses got a bit soft during the COVID crisis around performance management. That was understandable at the time, but that time is over. The work we do is vitally important for the healthy functioning of the Internet. The opportunity ahead of us is massive. We have amazing people on our team who are executing every day to realize that opportunity, and we have an incredibly long line of other proven talented people looking to step in to fill the position where some of our current team aren't living up to expectations.

在 Cloudflare，我們一直有一種追求高性能的文化。然而，事後看來，我認為我們和大多數其他企業在圍繞績效管理的 COVID 危機期間變得有點軟弱。這在當時是可以理解的，但那個時代已經過去了。我們所做的工作對於 Internet 的健康運行至關重要。我們面前的機會是巨大的。我們的團隊中有很棒的人，他們每天都在執行以實現這一機會，而且我們還有一大批其他經過驗證的人才希望介入以填補我們現有團隊中一些人沒有達到預期的職位.

Our pace of innovation is not slowing down. Now more than ever, it's paramount we continue to innovate and develop unique offerings that deliver value to our customers and differentiate us from the competition. We are great at that. I want every dollar we put into Cloudflare to be more productive at driving revenue, profit and shareholder value. Innovation is a long-term competitive advantage, but productivity is too. Taking action to address inefficiencies in our go-to-market organization now will enable us to better capture new opportunities and expand our customer base and do so even more productively, profitably and predictably than before.

我們的創新步伐並未放緩。現在比以往任何時候都更重要的是，我們繼續創新和開發獨特的產品，為我們的客戶創造價值，並使我們在競爭中脫穎而出。我們很擅長這一點。我希望我們投入 Cloudflare 的每一美元都能更有效地推動收入、利潤和股東價值。創新是一項長期的競爭優勢，但生產力也是如此。現在採取行動解決我們進入市場組織的低效率問題將使我們能夠更好地抓住新機會並擴大我們的客戶群，並且比以前更高效、更有利可圖和更可預測。

While I've talked about our team that's underperforming, that's only half the story. Our top salespeople are terrific. On average, the top 15% of our sellers have achieved 129% of quota over the last 4 quarters. They're incredibly consistent at bringing in new logos, expanding current customers and delivering results and approximately 27% of them started within the last 18 months. We know that if we hire the right people, they can ramp quickly and be successful with a full bag of products we handle.

雖然我談到了我們表現不佳的團隊，但這只是故事的一半。我們的頂級銷售人員非常棒。在過去的 4 個季度中，我們排名前 15% 的賣家平均完成了 129% 的配額。他們在引進新標誌、擴大現有客戶和交付成果方面表現得令人難以置信，其中大約 27% 是在過去 18 個月內開始的。我們知道，如果我們僱用合適的人，他們可以迅速成長並通過我們處理的一整套產品取得成功。

In that spirit, let me tell you about some of the deals our top performers closed this quarter. A Fortune 500 media company expanded their relationship with Cloudflare, signing a 3-year $840,000 deal and bringing their total annual spend to $2.1 million. A customer of our application performance and security services since 2017, this company expanded into our Zero Trust portfolio with access and browser isolation for thousands of its contractors, displacing 2 Zero Trust competitors and even turning down 3 licenses from one of them. Cloudflare's products not only performed better than the competition during evaluation but we were the only company that could deliver on the complex requirements needed. This contract is only the tip of the iceberg with the customer, which plans to potentially roll Zero Trust out to all their tens of thousands of employees.

本著這種精神，讓我告訴您本季度我們表現最好的公司完成的一些交易。一家財富 500 強媒體公司擴大了與 Cloudflare 的關係，簽署了一份為期 3 年 840,000 美元的協議，使他們的年度總支出達到 210 萬美元。自 2017 年以來，該公司一直是我們應用程序性能和安全服務的客戶，該公司擴展到我們的零信任產品組合，為其數千名承包商提供訪問和瀏覽器隔離，取代了 2 家零信任競爭對手，甚至拒絕了其中一家的 3 個許可證。 Cloudflare 的產品不僅在評估期間表現優於競爭對手，而且我們是唯一一家能夠滿足所需複雜要求的公司。這份合同只是與客戶的冰山一角，該客戶計劃可能將零信任推廣到其數万名員工。

Responding to our descaler campaign, a leading e-commerce technology company in Europe expanded their relationship with Cloudflare signing a 3-year $780,000 deal. The company is going all in on Cloudflare One, Gateway, Access, CASB, DLP and Magic WAN. They were drawn to Cloudflare's platform as a unified pane of glass to consolidate their security modernization and network transformation needs, with Magic WAN as a key competitive differentiator versus first-generation Zero Trust competitors.

為了響應我們的除垢劑活動，歐洲一家領先的電子商務技術公司擴大了與 Cloudflare 的關係，簽署了一項為期 3 年、價值 780,000 美元的交易。該公司正全力投入 Cloudflare One、Gateway、Access、CASB、DLP 和 Magic WAN。他們被 Cloudflare 的平台作為統一管理平台所吸引，以整合他們的安全現代化和網絡轉型需求，而 Magic WAN 是與第一代零信任競爭對手相比的關鍵競爭優勢。

A global industrial machinery manufacturer expanded their relationship with us by signing a 3-year $648,000 deal. The company was looking to modernize their security infrastructure and is also going all in on Cloudflare One with Access, Gateway, Area 1 and Magic WAN, displacing multiple competitors. They appreciate being able to consolidate vendors, reduce costs and increase flexibility with Cloudflare's platform.

一家全球工業機械製造商與我們簽署了一項為期 3 年、價值 648,000 美元的交易，從而擴大了與我們的關係。該公司正在尋求對其安全基礎設施進行現代化改造，並且還全力投入 Cloudflare One，包括 Access、Gateway、Area 1 和 Magic WAN，以取代多個競爭對手。他們很高興能夠通過 Cloudflare 的平台整合供應商、降低成本並提高靈活性。

A Fortune 1000 SaaS company expanded their relationship with Cloudflare signing a 3-year $8.4 million deal. The company recognized Cloudflare's unique position as a neutral super cloud to manage and strengthen their application security posture and accelerated SaaS platform performance across AWS, GCP and their private data center environment. Additionally, no other solution could compete with our data localization suite to simplify the customer's global regulatory and compliance requirements. A leading IoT security company expanded their relationship with us, signing 2 3-year deals for a combined $4.2 million, one for its commercial business and a FedRAMP one for its government business.

一家財富 1000 強 SaaS 公司擴大了與 Cloudflare 的關係，簽署了一份為期 3 年 840 萬美元的交易。該公司認識到 Cloudflare 作為中立超級雲的獨特地位，可以管理和加強他們的應用程序安全狀況，並加速跨 AWS、GCP 及其私有數據中心環境的 SaaS 平台性能。此外，在簡化客戶的全球監管和合規要求方面，沒有其他解決方案可以與我們的數據本地化套件競爭。一家領先的物聯網安全公司擴大了與我們的關係，簽署了 2 項為期 3 年的交易，總價值 420 萬美元，一項用於其商業業務，一項用於其政府業務的 FedRAMP。

The company has been a Cloudflare customer since 2020 using core application services and Cloudflare Tunnel for IoT devices. Drawn to our pace of innovation, this customer bought into the Cloudflare platform vision, now using over 25 products across core application services, Zero Trust and our developer platform, including R2, our object store and durable objects, combat high egress fees from AWS. They plan to use Cloudflare's FedRAMP authorization to scale operations on both commercial and federal sides of their business and increase their security posture.

自 2020 年以來，該公司一直是 Cloudflare 的客戶，使用核心應用程序服務和用於物聯網設備的 Cloudflare 隧道。被我們的創新步伐所吸引，該客戶購買了 Cloudflare 平台願景，現在在核心應用程序服務、零信任和我們的開發人員平台（包括 R2、我們的對象存儲和持久對象）中使用超過 25 種產品，以對抗來自 AWS 的高額出口費用。他們計劃使用 Cloudflare 的 FedRAMP 授權來擴展其業務的商業和聯邦方面的運營，並提高他們的安全態勢。

A Fortune 1000 retailer signed a $1.3 million 46-month contract for Cloudflare's core application services to displace their existing vendor. They also added R2. The company has been dissatisfied with the unpredictability of their bills and bot-related issues from the current vendor and wanted to switch to Cloudflare, knowing our universal approach to protecting all traffic and our platform ease of use were top of the industry.

一家財富 1000 強零售商簽署了一份價值 130 萬美元、為期 46 個月的合同，以獲取 Cloudflare 的核心應用程序服務，以取代他們現有的供應商。他們還添加了 R2。該公司一直對當前供應商的賬單和機器人相關問題的不可預測性感到不滿，並希望切換到 Cloudflare，因為他們知道我們保護所有流量的通用方法和我們的平台易用性是行業領先的。

A leading gaming company expanded their relationship with Cloudflare, moving from a pay-as-you-go customer spending $200 a month to a contracted customer signing a 1-year $388,000 deal for R2, Workers and application services. The company was looking for a more scalable platform for storage and outperformance that would support their exponential growth. The customer realized that by moving to R2, they could eliminate egress fees they were incurring from the competitor, easily integrate with S3 APIs and centralized management. In particular, they were impressed with R2's lower latency and better throughput as well as how R2 tightly integrates with Workers and our core application services.

一家領先的遊戲公司擴大了與 Cloudflare 的關係，從每月花費 200 美元的現收現付客戶轉變為簽訂 1 年 388,000 美元 R2、Workers 和應用程序服務協議的簽約客戶。該公司一直在尋找一個可擴展性更強的存儲平台，以支持其指數級增長。客戶意識到，通過遷移到 R2，他們可以消除從競爭對手那裡產生的出口費用，輕鬆地與 S3 API 集成和集中管理。特別是，他們對 R2 的更低延遲和更好的吞吐量以及 R2 如何與 Workers 和我們的核心應用程序服務緊密集成印象深刻。

Traction among developers continues to be strong. We now have 4.92 million Workers applications running on our platform, up 146% over the last 6 months. 33,000 paying customers have activated R2 and are storing more than 7 petabytes of data, up 25% quarter-over-quarter. AI companies, large and small, continue to build on Cloudflare at a breakneck pace. When we ask them why, they cite our neutral position, rapid innovation and modern, nimble development environment. One last month called us "The first cloud infrastructure company built for the age of AI." I like the ring of that.

開發商之間的牽引力繼續強勁。我們現在有 492 萬個 Workers 應用程序在我們的平台上運行，比過去 6 個月增長了 146%。 33,000 名付費客戶激活了 R2，並存儲了超過 7 PB 的數據，環比增長 25%。大大小小的 AI 公司繼續以極快的速度在 Cloudflare 上構建。當我們問他們為什麼時，他們引用了我們的中立立場、快速創新和現代、靈活的開發環境。上個月有人稱我們為“第一家為人工智能時代打造的雲基礎設施公司”。我喜歡那個戒指。

And I'm extremely excited about our upcoming announcement at Developer Week next month. We'll announce a lot around how we support AI and make any developer more productive. We are the best in the industry at innovation and we're making the changes we need to make and investing in our team to be the best in the industry of sales, too.

我對我們即將在下個月的開發者周上發布的公告感到非常興奮。我們將就我們如何支持 AI 並提高開發人員的工作效率發布很多內容。我們在創新方面是業內最好的，我們正在做出我們需要做出的改變，並投資於我們的團隊，以成為銷售行業中最好的。

As I step back and think about what was a challenging quarter, I'm struck by our opportunity. We are not limited by the market for our products. We are not limited by innovation. We are not limited by pipeline opportunity. We are not limited by our ability to recruit. And we are not even limited by sales capacity. Instead, we are limited by our go-to-market performance. That's something we can fix, and we are committed to turning the current macroeconomic headwinds into a catalyst for positive change in growth at Cloudflare by investing in our top talent, refocusing on performance management and elevating the productivity of our team to seize the opportunity we have ahead, which we all know is massive.

當我退後一步思考這是一個充滿挑戰的季度時，我為我們的機會感到震驚。我們不受產品市場的限制。我們不受創新的限制。我們不受管道機會的限制。我們不受招聘能力的限制。我們甚至不受銷售能力的限制。相反，我們受到上市表現的限制。這是我們可以解決的問題，我們致力於通過投資於我們的頂尖人才、重新關注績效管理和提高我們團隊的生產力來抓住我們擁有的機會，將當前的宏觀經濟逆風轉化為推動 Cloudflare 積極增長的催化劑未來，我們都知道這是巨大的。

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

有了這個，我會把它交給托馬斯來完成財務。托馬斯，把它拿走。

Thank you, Matthew, and thank you to everyone for joining us. In the first quarter, we continue to witness a challenging business environment, which deteriorated significantly in March when negative headlines emerged related to SVB, the broadening banking crisis and the worsening macroeconomic outlook. With intensifying business uncertainty, companies became increasingly cautious in more deeply scrutinized field, which impacted numerous areas of our business, including a material lengthening of sales cycles, delays in collections and the significant back-end weighting in the linearity for the quarter.

謝謝你，馬修，感謝大家加入我們。在第一季度，我們繼續見證充滿挑戰的商業環境，3 月份出現了與 SVB 相關的負面新聞、不斷擴大的銀行業危機和惡化的宏觀經濟前景，導致商業環境顯著惡化。隨著業務不確定性的加劇，公司在更深入審查的領域變得越來越謹慎，這影響了我們業務的許多領域，包括銷售週期的實質性延長、收款延遲以及本季度線性的顯著後端權重。

For some further context, technology, e-commerce and financial services our largest end customer verticals by revenue. Also, these headwinds to revenue growth that impacted Cloudflare outside of our control, we remain committed to controlling what we can control, and that is to focus on building great products that customers need while also maintaining our strong commitment to being fiscally responsible and remaining good stewards of investors' capital. As such, we delivered a record quarter in terms of operating profit and operating margin and significantly outperformed on free cash flow. We also continue to prudently allocate capital with a focus on maximizing shareholder value.

對於進一步的背景，技術、電子商務和金融服務是我們按收入計算最大的終端客戶垂直行業。此外，這些影響 Cloudflare 的收入增長逆風超出了我們的控制範圍，我們仍然致力於控制我們可以控制的東西，即專注於構建客戶需要的優質產品，同時保持我們對財務負責和保持良好狀態的堅定承諾投資者資本的管家。因此，我們在營業利潤和營業利潤率方面創造了創紀錄的季度，並且在自由現金流方面表現出色。我們還繼續審慎分配資本，重點關注股東價值最大化。

Turning to revenue. Total revenue for the first quarter increased 37% year-over-year to $290.2 million. New pipeline growth again remained strong in the first quarter, exceeding our internal plan for the second consecutive quarter in continuing the trend of accelerating growth in new pipeline generation for a third consecutive quarter. However, the significant incremental caution exhibited by customers resulted in a pronounced decline in our close rate and an extreme back-end weighting of ACV bookings during the first quarter, both of which were primarily impacted by the aforementioned longer sales cycles.

談到收入。第一季度總收入同比增長 37% 至 2.902 億美元。第一季度新管線增長再次保持強勁，連續第二個季度超過我們的內部計劃，繼續保持新管線發電量連續第三個季度加速增長的趨勢。然而，客戶表現出的顯著增量謹慎導致我們的成交率明顯下降，並且第一季度 ACV 預訂的後端權重極端偏高，這兩者主要受到上述較長銷售週期的影響。

More specifically, our average sales cycle during the first quarter was 27% longer than the average of the previous 4 quarters. Sales cycles increased most significantly in expansion deals with our contracted customers, which were 49% longer than the average of the previous 4 quarters. However, our win rates against the competition remain high.

更具體地說，我們第一季度的平均銷售週期比前四個季度的平均水平長 27%。與我們簽約客戶的擴展交易中，銷售週期增長最為顯著，比前 4 個季度的平均水平長 49%。然而，我們對競爭對手的勝率仍然很高。

From a geographic perspective, the U.S. represented 53% of revenue and increased 37% year-over-year. EMEA represented 27% of revenue and increased 40% year-over-year. APAC represented 13% of revenue and increased 31% year-over-year.

從地理角度來看，美國占收入的 53%，同比增長 37%。 EMEA 佔收入的 27%，同比增長 40%。亞太地區佔收入的 13%，同比增長 31%。

Turning to our customer metrics. In the first quarter, we had 168,159 paying customers, representing an increase of 13% year-over-year. Turning to large customers. We ended the quarter with 2,156 large customers, representing an increase of 40% year-over-year and an addition of 114 large customers in the quarter. Our dollar-based net retention rate was 117% during the first quarter, representing a decrease of 500 basis points sequentially and a decrease of 10 percentage points year-over-year.

轉向我們的客戶指標。第一季度，我們擁有 168,159 名付費客戶，同比增長 13%。轉向大客戶。本季度末，我們擁有 2,156 家大客戶，同比增長 40%，本季度新增 114 家大客戶。我們在第一季度以美元為基礎的淨保留率為 117%，環比下降 500 個基點，同比下降 10 個百分點。

We've not experienced elevated churn rate as renewal rates in the first quarter were consistent with the levels experienced on average over the previous 4 quarters, which was an all-time high for the company. Instead, similar to the fourth quarter of last year, the decline in D&R was again primarily driven by delayed expansion with our larger customers.

我們沒有經歷過更高的客戶流失率，因為第一季度的續訂率與前 4 個季度的平均水平一致，這是公司的歷史最高水平。相反，與去年第四季度類似，D&R 的下降再次主要是由於我們的大客戶擴張延遲所致。

Moving to gross margin. First quarter gross margin was 77.8%, representing an increase of 40 basis points sequentially and a decrease of 90 basis points year-over-year. Network CapEx represented 5% of revenue in the first quarter. For fiscal 2023, we continue to expect network CapEx to be 11% to 13% of revenue.

轉向毛利率。第一季度毛利率為 77.8%，環比上升 40 個基點，同比下降 90 個基點。網絡資本支出佔第一季度收入的 5%。對於 2023 財年，我們繼續預計網絡資本支出將佔收入的 11% 至 13%。

Turning to operating expenses. We understand that a crucial aspect of our success is our commitment to being responsive to near-term changes in market conditions and adjusting our operations accordingly without compromising the long-term opportunity ahead of us, which we all know is massive. We again took proactive measures during the first quarter to improve operational efficiency and effectively manage spending.

轉向運營費用。我們明白，我們成功的一個關鍵方面是我們致力於對市場條件的近期變化做出反應，並相應地調整我們的運營，而不損害我們面前的長期機會，我們都知道這是巨大的。我們在第一季度再次採取積極措施，以提高運營效率並有效管理支出。

As a result of these actions, first quarter operating expenses as a percentage of revenue remained consistent sequentially and decreased 5% year-over-year to 71%. Our total number of employees increased 23% year-over-year, bringing our total headcount to approximately 3,390 at the end of the quarter. We will continue to pace hiring for the year based on market conditions.

由於採取了這些措施，第一季度運營費用佔收入的百分比與上一季度保持一致，同比下降 5% 至 71%。我們的員工總數同比增長 23%，使我們的總人數在本季度末達到約 3,390 人。我們將繼續根據市場情況調整今年的招聘速度。

Sales and marketing expenses were $120.6 million for the quarter. Sales and marketing as a percentage of revenue increased by 1% sequentially and remained consistent at 42% compared to the same quarter last year. Research and development expenses were $51.3 million in the quarter. R&D as a percentage of revenue remained consistent sequentially and decreased to 18% from 19% in the same quarter last year.

本季度的銷售和營銷費用為 1.206 億美元。銷售和營銷佔收入的百分比環比增長 1%，與去年同期相比保持在 42%。本季度的研發費用為 5130 萬美元。研發佔收入的百分比環比保持一致，從去年同期的 19% 降至 18%。

General and administrative expenses were $34.6 million for the quarter. G&A as a percentage of revenue remained consistent sequentially and decreased to 12% from 15% in the same quarter last year. Operating income was $19.4 million compared to an operating income of $4.9 million in the same period last year. First quarter operating margin was 6.7%, an increase of 440 basis points year-over-year. These results highlight the efficiency and elasticity of our business model, which remain key elements of Cloudflare success.

本季度的一般和行政費用為 3460 萬美元。 G&A 佔收入的百分比與上一季度保持一致，從去年同期的 15% 降至 12%。營業收入為 1940 萬美元，而去年同期的營業收入為 490 萬美元。第一季度營業利潤率為 6.7%，同比增長 440 個基點。這些結果突出了我們業務模型的效率和彈性，這仍然是 Cloudflare 成功的關鍵要素。

Turning to net income and the balance sheet. Our net income in the quarter was $27.2 million or a diluted net income per share of $0.08. During the first quarter, we initiated a tax planning strategies, and we were able to successfully reduce cash taxes related to (inaudible) and other taxes. As a result, tax expense for the quarter was $3.9 million. We ended the first quarter with $1.7 billion in cash, cash equivalents and available for sale securities. Free cash flow was $13.9 million for the first quarter or 5% of revenue compared to negative $64.4 million or 30% of revenue in the same period last year. Remaining performance obligations, or RPO, came in $959 million, representing an increase of 6% sequentially and 39% year-over-year. Current RPO was 75% of total RPO.

轉向淨收入和資產負債表。我們本季度的淨收入為 2720 萬美元，即每股攤薄淨收入為 0.08 美元。在第一季度，我們啟動了一項稅收籌劃戰略，我們成功地減少了與（聽不清）和其他稅收相關的現金稅。因此，本季度的稅收支出為 390 萬美元。第一季度結束時，我們擁有 17 億美元的現金、現金等價物和可供出售證券。第一季度自由現金流為 1390 萬美元，佔收入的 5%，而去年同期為負 6440 萬美元，佔收入的 30%。剩餘履約義務（RPO）為 9.59 億美元，環比增長 6%，同比增長 39%。當前 RPO 佔總 RPO 的 75%。

Before moving to guidance for the second quarter and full year, I would like to begin with our expectations and the provisions we have factored into guidance. Last quarter, we highlighted our expectation for sales cycles to continue to lengthen for both the first quarter and full year 2023. However, the level of elongation experienced in the first quarter was unprecedented and far surpassed our forecast entering the year, pressuring revenue growth. As a result, for the second quarter, despite the continued reacceleration of our new pipeline generation and our high win rate against the competition, we've assumed sales cycles to remain at the elevated levels experienced during the first quarter and have, therefore, also assumed close rates remain at continued low levels.

在轉向第二季度和全年的指導之前，我想先談談我們的期望和我們已經納入指導的規定。上個季度，我們強調了我們對第一季度和 2023 年全年銷售週期將繼續延長的預期。但是，第一季度的延長程度是前所未有的，遠遠超過了我們今年的預測，給收入增長帶來了壓力。因此，對於第二季度，儘管我們的新一代產品線繼續加速，而且我們在競爭中的獲勝率很高，但我們假設銷售週期將保持在第一季度的高水平，因此，假設收盤價保持在持續的低水平。

From a linearity perspective, we have assumed a continued back-end weighting of ACV booked and have, therefore, incorporated minimal in-period revenue recognition for the second quarter. Also, we believe that currently depressed close rates and elongated sale cycles are temporary in nature, we cannot predict when the increasing caution is exhibited by the customers during the first quarter will recover. As such, we have assumed these headwinds, which identified in the month of March will persist through the end of the fiscal year.

從線性的角度來看，我們假設 ACV 的後端權重持續增加，因此在第二季度納入了最小的期間內收入確認。此外，我們認為目前低迷的成交率和延長的銷售週期本質上是暫時的，我們無法預測客戶在第一季度表現出的日益謹慎的態度何時會恢復。因此，我們假設這些在 3 月份確定的逆風將持續到本財年末。

Now turning to guidance. For the second quarter, we expect revenue in the range of $305 million to $306 million, representing an increase of 30% year-over-year. (technical difficulty) operating income in the range of $14 million to $15 million, and we expect diluted net income per share of $0.07 to $0.08, assuming approximately 345 million common shares outstanding. Due to our aforementioned tax planning strategies, we expect an effective tax rate of 6%.

現在轉向指導。對於第二季度，我們預計收入在 3.05 億美元至 3.06 億美元之間，同比增長 30%。 （技術難度）營業收入在 1400 萬美元至 1500 萬美元之間，我們預計每股攤薄後淨收入為 0.07 美元至 0.08 美元，假設流通在外的普通股約為 3.45 億股。由於我們上述的稅收籌劃策略，我們預計有效稅率為 6%。

For the full year 2023, we expect revenue in the range of $1.28 billion to $1.284 billion, representing an increase of 31% year-over-year at the midpoint. We expect operating income for the full year in the range of $73 million to $77 million, and we expect diluted net income per share over that period in the range of $0.34 to $0.35 assuming approximately 345 million common shares outstanding. We expect an effective tax rate of 9% for 2023.

對於 2023 年全年，我們預計收入在 12.8 億美元至 12.84 億美元之間，按中點計算同比增長 31%。我們預計全年營業收入在 7300 萬美元至 7700 萬美元之間，我們預計該期間每股攤薄淨收入在 0.34 美元至 0.35 美元之間，假設發行在外的普通股約為 3.45 億股。我們預計 2023 年的有效稅率為 9%。

After having achieved positive free cash flow in the second half of last year and again during the first quarter of this year, we continue to anticipate being free cash flow positive for the full year 2023. For modeling purposes, we expect free cash flow to trend upward on an ongoing basis but anticipate near-term variability in our free cash flow generation with the second quarter anticipated to be lower than the first quarter due to the timing of capital expenditures and other payables.

在去年下半年和今年第一季度實現正自由現金流後，我們繼續預計 2023 年全年自由現金流為正。出於建模目的，我們預計自由現金流呈趨勢持續上升，但預計我們的自由現金流產生的短期變化，由於資本支出和其他應付款項的時間安排，第二季度預計將低於第一季度。

In closing, we remain confident in the enormous opportunity ahead of us as well as the elasticity and durability of our operating model. We are focused on becoming even more efficient and more productive, not just during the currently challenging macroeconomic backdrop, but also because operational efficiency is a long-term competitive advantage. I'd also like to thank our employees for their continued dedication to our mission, customers and partners. And with that, I'd like to open it up for questions. Operator, please poll for questions.

最後，我們對擺在我們面前的巨大機遇以及我們運營模式的彈性和持久性充滿信心。我們專注於提高效率和生產力，這不僅是在當前充滿挑戰的宏觀經濟背景下，還因為運營效率是一項長期競爭優勢。我還要感謝我們的員工對我們的使命、客戶和合作夥伴的持續奉獻。有了這個，我想打開它來提問。接線員，請投票提問。

(Operator Instructions)

（操作員說明）

We'll go first this afternoon to Sterling Auty of MoffettNathanson. .

今天下午我們先去 MoffettNathanson 的 Sterling Auty。 .

I think the big question is around the guidance. I think coming out of last quarter, the perception was that the guidance was actually aggressive and you kind of alluded to the close rates that you had factored in. Now with the changes that you've seen and especially in light of the sales changes you're looking to make, what are the elements that investors can look to see the confidence in being able to deliver on the revised outlook?

我認為最大的問題在於指南。我認為從上個季度開始，人們的看法是指導實際上是激進的，你有點暗示你已經考慮到的收盤價。現在隨著你所看到的變化，特別是考慮到銷售變化，你正在尋求做出，投資者可以查看哪些要素來看到能夠實現修訂後的前景的信心？

Yes. Maybe I get started here. Remember, when we gave guidance during the last quarter, we actually said -- the first and second quarters are more challenging than the later half of the year. We looked at close rates and assumed that what we had seen in the third and fourth quarter of last year, a elongation would continue. But the deteriorating environment surprised us. We saw sales cycles really elongate far beyond our forecast up to 27% on average and then the expansion business, as I said before, close to 50%. So those were material differences in the assumptions we had at the beginning of this year.

是的。也許我從這裡開始。請記住，當我們在上個季度給出指導時，我們實際上說過——第一季度和第二季度比下半年更具挑戰性。我們查看了收盤價並假設我們在去年第三和第四季度看到的情況會繼續延長。但惡化的環境讓我們感到驚訝。我們看到銷售週期確實比我們的預測平均延長了 27%，然後正如我之前所說，擴張業務接近 50%。所以這些是我們在今年年初所做的假設的重大差異。

I think we took this into account and adjusted guidance now carefully also assuming that the linearity deterioration we've seen in the first quarter would continue for the second quarter. Specifically, we have assumed hardly any revenue recognition from in-quarter ACV generation. So this, I think, is prudent in light of what we have seen. You heard from Matthew that the salespeople that are impacted by this measure contributed very little in terms of our overall ACV generation to the current results. So we think there is more upside in this transition than there is downside in terms of performance and positive impact on sales capacity moving forward.

我認為我們考慮到了這一點並現在仔細調整了指引，同時假設我們在第一季度看到的線性惡化將持續到第二季度。具體來說，我們幾乎沒有假設季度 ACV 生成產生任何收入。因此，我認為，根據我們所看到的情況，這是謹慎的做法。您從 Matthew 那裡聽說，受此措施影響的銷售人員對我們的整體 ACV 生成對當前結果的貢獻很小。因此，我們認為，就業績和對未來銷售能力的積極影響而言，這種轉變的好處多於壞處。

The good thing to point out, however, is again, that the improvement in pipeline that we have now seen over consecutive quarters has continued in the first quarter. So as Matthew mentioned, it's not a limitation of opportunity, we will see in sales cycles extend but not pipeline slowing down. So on that was a very encouraging time. But I think the results are prudently now reflected in the guidance and the deterioration we've seen in the first quarter, especially from a sales cycle perspective, had material impact on how we think about the rest of the year. .

然而，值得再次指出的是，我們現在看到的連續幾個季度的管道改善在第一季度仍在繼續。因此，正如 Matthew 提到的，這不是機會的限制，我們將看到銷售週期延長而不是管道放緩。所以那是一段非常鼓舞人心的時光。但我認為結果現在已謹慎地反映在指導中，我們在第一季度看到的惡化，尤其是從銷售週期的角度來看，對我們對今年剩餘時間的看法產生了重大影響。 .

Understood. And maybe one quick follow-up for Matthew. Can you just characterize for us the traction in the AI opportunity in particular to give us one example. But when you look at it as a whole, how are you seeing it track? And what should we think about the expansion opportunities from that customer base through the rest of the year?

明白了。也許馬修的一個快速跟進。您能否為我們描述一下人工智能機會的吸引力，特別是給我們舉一個例子。但是，當您從整體上看它時，您如何看待它的軌跡？在今年餘下的時間裡，我們應該如何看待該客戶群的擴張機會？

Yes, Sterling. The AI is something that I think surprised us last quarter in terms of the positive impact when it continues to surprise us. We've seen the revenue that's coming from AI companies just quarter-over-quarter have substantial growth north of 20% quarter-over-quarter growth from the large AI companies that use us. And it's not just 1 or 2, but from large to small. What we're hearing from AI companies is that as they look to who they're going to use for their infrastructure and they can start with a clean slate, that Cloudflare is a part of that and that we're helping them go fast, compete, get the most efficiency, be able to protect themselves from some of the significant cybersecurity and fraud risks that they face. .

是的，斯特林。就積極影響而言，我認為人工智能在上個季度讓我們感到驚訝，而它繼續讓我們感到驚訝。我們已經看到來自人工智能公司的收入環比大幅增長，超過使用我們的大型人工智能公司的環比增長 20%。而且不是只有1、2個，而是從大到小。我們從人工智能公司那裡聽到的是，當他們考慮將誰用於他們的基礎設施並且他們可以從頭開始時，Cloudflare 是其中的一部分，我們正在幫助他們快速前進，競爭，獲得最高效率，能夠保護自己免受他們面臨的一些重大網絡安全和欺詐風險。 .

And that continues to be something that is delivering really positive results for us. I think you're going to see us during our developer week next month in May, highlight some of these customer stories and highlight ways that AI companies are using Cloudflare in order to push that innovation forward. So I think that, that has continued to be a real positive for us, and that has only accelerated from even Q4.

這仍然是為我們帶來真正積極成果的事情。我認為您將在下個月 5 月的開發者周期間見到我們，重點介紹其中一些客戶案例，並重點介紹 AI 公司使用 Cloudflare 推動創新的方式。所以我認為，這對我們來說仍然是一個真正的積極因素，而且甚至從第四季度開始加速。

(Operator Instructions)

（操作員說明）

We'll go next now to Thomas Blakey of KeyBanc.

接下來我們將介紹 KeyBanc 的 Thomas Blakey。

Tom Blakey here, KeyBanc. It sounds like there's a lot of pent-up demand, no gross churn and pipeline making new records. Maybe it's for Matthew. You talk about it -- these are critical needs in terms of access and security but not so much a nice to have. What are these customers explaining to you that there waiting on maybe looking for sort of some indicators in terms of like how long this pause will kind of take to thaw out Matthew? That would be my first question.

Tom Blakey 在這裡，KeyBanc。聽起來有很多被壓抑的需求，沒有總流失和管道創造新記錄。也許是為了馬修。你談論它 - 這些是訪問和安全方面的關鍵需求，但並不是一件好事。這些客戶向您解釋了什麼，他們正在等待，也許正在尋找一些指標，比如這種停頓需要多長時間才能讓 Matthew 解凍？那將是我的第一個問題。

Yes. I think that everyone continues to communicate to us that they are -- that they want to continue to invest with us. I think what we're seeing from IT organizations is that they're all looking very critically at their budgets and asking themselves what projects can they delay versus what projects do they have to invest in. So we continue to see when companies are under duress, when they're under attack, that those deals are closing extremely quickly. But some of the times where people are initiating a new large project around moving to a Zero Trust environment or something else that would be a larger initiative that the sales cycles on those projects are extending beyond where they were before.

是的。我認為每個人都繼續向我們傳達他們是——他們想繼續與我們一起投資。我認為我們從 IT 組織中看到的是，他們都非常批判地審視自己的預算，並自問他們可以推遲哪些項目以及他們必須投資哪些項目。因此我們繼續看到公司何時處於壓力之下，當他們受到攻擊時，這些交易會非常迅速地完成。但是，有時人們會圍繞遷移到零信任環境或其他更大的計劃啟動一個新的大型項目，這些項目的銷售週期會超出以前的範圍。

I think one of the things that's unique about Cloudflare is even with the extended sales cycles, our sales cycles tend to, on average, be significantly faster than the peers in our industry. And so back in early 2022, we were among the first to call the slowdown in the economy because we could see the sales cycles slow down. That -- they picked back up, but then again, are slowing down right now. I think we tend to see that earlier than some of our peers. And I think that one of the things that has always characterized how we think about our business is real prudence as we look forward. So no one is telling us that projects are getting canceled in any significant way.

我認為 Cloudflare 的獨特之處之一是即使銷售週期延長，我們的銷售週期平均而言也往往明顯快於我們行業的同行。回到 2022 年初，我們是第一批宣布經濟放緩的人之一，因為我們可以看到銷售週期放緩。那 - 他們回升了，但話又說回來，現在正在放緩。我認為我們傾向於比我們的一些同行更早地看到這一點。而且我認為，我們對業務的看法一直是我們的特點之一，那就是我們對未來的審慎態度。所以沒有人告訴我們項目正在以任何重大方式被取消。

But people are saying budgets are tight, we're being more cautious, and that is taking our sales cycles to be longer than we have historically seen and longer even than the elevation that we saw through the back half of 2022. So we're trying to be very prudent about how we think about this. But customers continue to tell us they're not switching to another competitor. They're not -- we haven't seen any elevation in loss rates to the competition. Quite the opposite. People are saying we want to invest with you, we're just being cautious with our IT spend, and that's causing everyone to measure twice before they cut once.

但是人們說預算緊張，我們更加謹慎，這使得我們的銷售週期比我們以往看到的要長，甚至比我們在 2022 年下半年看到的提升還要長。所以我們試圖對我們如何看待這個問題非常謹慎。但客戶繼續告訴我們他們不會轉向另一個競爭對手。他們不是——我們沒有看到競爭對手的損失率有任何提高。恰恰相反。人們說我們想和你一起投資，我們只是對我們的 IT 支出持謹慎態度，這導致每個人在削減一次之前都要衡量兩次。

All right. That's helpful, Matthew. And maybe as a follow-up, a perfect segue actually to the conservativeness of this guide. It sounds like it's increasingly conservative. I'd love to hear, maybe from Thomas, in terms of maybe any indications of what he's seeing from numbers coming in, in April. It's been a month from the end of March, and just kind of trying to gauge in terms of when we could even get back to this 130% long-term governor would be helpful, Thomas.

好的。這很有幫助，馬修。也許作為後續行動，實際上是本指南保守性的完美轉折。聽起來越來越保守了。我很想听聽，也許是托馬斯，關於他從 4 月份的數據中看到的任何跡象。距離 3 月底已經過去了一個月，Thomas，只是試圖衡量我們何時才能回到這個 130% 的長期州長會有所幫助。

We -- there -- the early indication on the second quarter do not indicate a material change neither to the negative, nor to the positive. So we are cruising along. But no indication that it gets materially better. But as I said, no indications that it's deteriorating either.

我們 - 那裡 - 第二季度的早期跡象表明既沒有消極也沒有積極的實質性變化。所以我們正在巡航。但沒有跡象表明它在實質上變得更好。但正如我所說，也沒有跡象表明它正在惡化。

We go next now to Brent Thill at Jefferies.

接下來我們去 Jefferies 的 Brent Thill。

Matthew, just on the sales side, when you think about what's happening with the new head of revenue and ultimately kind of the -- what happens when you change out -- I mean, I guess, how confident are you that there isn't a longer transition on the existing team? What's giving you that view that this current team is kind of in place, you've got the right fit, and this is maybe more internal execution than external forces?

Matthew，就銷售方面而言，當你考慮新的收入主管發生了什麼，最終有點——當你改變時會發生什麼——我的意思是，我想，你有多自信沒有現有團隊的過渡時間更長？是什麼讓你認為目前的團隊已經到位，你已經找到合適的人選，這可能更多的是內部執行而不是外部力量？

Well, I think it's a combination of both of those things, if we're honest. I think that the fact that the macro economy has gotten harder exposed some of the weaknesses in some of the sellers on our team. When things were cruising along in 2021, again, you didn't have to be a really disciplined seller in order to be successful at Cloudflare. And I think that, that, combined with some of the -- what happened during COVID, combined with our hesitancy in terms of what the opportunity costs were in terms of replacing people when the tech employment market was overheating, all combined to have us get to a place where we just had a number of people on our team who weren't performing.

好吧，老實說，我認為這是兩者的結合。我認為宏觀經濟變得更加艱難的事實暴露了我們團隊中一些賣家的一些弱點。當事情在 2021 年順風順水時，再次強調，您不必成為一個非常自律的賣家才能在 Cloudflare 取得成功。而且我認為，結合 COVID 期間發生的一些事情，結合我們對技術就業市場過熱時更換人員的機會成本的猶豫，所有這些結合起來讓我們得到到一個地方，我們的團隊中只有一些人表現不佳。

And I think Marc has done an incredible job at really identifying specifically who those people are and starting the process of moving those people off. What I see, though, is that if you look at our top sellers, they are enjoying incredible success and where the lowest performing sellers decelerated substantially during the macroeconomic slowdown, the top sellers on our team have seen around a 1% decrease in their productivity. And so what that indicates to me is that with new leaders like Marc who are on board and some of the lieutenants that he is bringing on and the incredible talent which is applying to Cloudflare. Again, 0.25 million people applied to work for us in Q1. I don't know of any other SaaS company that is seeing that volume of talent that is out there.

而且我認為 Marc 在真正具體地識別這些人是誰並開始讓這些人離開的過程方面做得非常出色。不過，我看到的是，如果你看看我們的頂級賣家，他們正在享受令人難以置信的成功，而在宏觀經濟放緩期間表現最差的賣家大幅減速，我們團隊中的頂級賣家的生產力下降了大約 1% .因此，這對我來說表明，像 Marc 這樣的新領導人已經加入，他帶來了一些副手，以及適用於 Cloudflare 的令人難以置信的人才。同樣，第一季度有 25 萬人申請為我們工作。我不知道還有哪家 SaaS 公司能看到如此多的人才。

People want to come work for us. The people who are successful at Cloudflare can be extremely productive and can do well themselves as sellers. And I think Marc is bringing in a focus and a discipline which is going to pay off. And the thing that's, I think, very encouraging is, as we look at the people that we can replace that -- that they are contributing such a small percentage in terms of our capacity that we actually think that this will -- any type of change like this obviously has -- is something that we want to do very humanely and we want to be very thoughtful about taking care of the team that we have.

人們想來為我們工作。在 Cloudflare 取得成功的人可以非常高效，並且可以作為賣家做得很好。而且我認為 Marc 帶來了一個重點和一個紀律，這將得到回報。我認為，非常令人鼓舞的是，當我們審視我們可以取代的人時——他們在我們的能力方面貢獻的比例如此之小，以至於我們實際上認為這將——任何類型的像這樣的改變顯然已經發生了——這是我們想要非常人道地做的事情，我們想要非常周到地照顧我們擁有的團隊。

But we think that as we transition that team out we're going to not only increase the performance of our high performers but bring on new performers that give us much higher performing capacity, and Marc, I think is doing an incredible job at not only identifying who has to be moved out. But boy, when I talk to the people that we're hiring to replace those people, I just get incredibly excited by what they are able to deliver to us.

但我們認為，隨著我們將團隊移出，我們不僅會提高高績效人員的績效，還會帶來新的績效人員，從而提高我們的績效能力，而我認為 Marc 不僅在確定誰必須被搬走。但是，天啊，當我與我們正在僱用的人員交談時，我對他們能夠為我們提供的東西感到非常興奮。

And just a quick follow-up for Thomas. It looks like, if I'm looking at this right, the number of net new enterprise accounts was the lowest you've seen in 2 years at 114 sequentially. So I guess it seems like you saw it across both enterprise and SMB is kind of the way to frame it, that even -- there wasn't one sector that stayed stronger.

只是對 Thomas 的快速跟進。看起來，如果我正確地看的話，淨新企業賬戶的數量是 2 年來最低的，連續 114 個。所以我想你似乎在企業和 SMB 中都看到了它，這是一種構建它的方式，甚至 - 沒有一個行業保持強勁。

I think that read is correct.

我認為閱讀是正確的。

We go next now to Matt Hedberg of RBC Capital Markets.

接下來我們請到 RBC Capital Markets 的 Matt Hedberg。

Maybe a follow-up to that last question from Brent. A comment on the pay-as-you-go side of your business. Is that being impacted by macro sort of more or less the same as the enterprise? .

也許是布倫特最後一個問題的後續行動。對您業務的現收現付方面的評論。受宏觀影響是否與企業或多或少相同？ .

I think that what we're seeing is, again, weakness across the entire space. Pay as you go, remember, is a relatively small percentage of our overall business, less than 15% of revenue. So it doesn't move the needle one direction or another. But we definitely are seeing that there is a lower rate of upgrade. But at the same time, we are not seeing that there is a lower rate of downgrade. What I am excited by is the developer traction that we're seeing across our business.

我認為我們再次看到整個領域的弱點。請記住，現收現付在我們整體業務中所佔的比例相對較小，不到收入的 15%。所以它不會將針頭朝一個方向或另一個方向移動。但我們肯定會看到升級速度較低。但與此同時，我們並沒有看到降級率降低。讓我感到興奮的是我們在整個業務中看到的開發者牽引力。

The fact that we're closing in on 5 million applications running across the platform. That -- the majority of those are coming from pay-as-you-go developers. And that continues to be a pipeline where we see lots of success. We also have examples like the one that cited in the prepared remarks, where we had a customer that was paying us $200 a month that we identify, worked with and were able to upgrade to an enterprise customer spending hundreds of thousands of dollars a year with us.

事實上，我們正在關閉跨平台運行的 500 萬個應用程序。那——其中大部分來自現收現付的開發人員。這仍然是我們看到很多成功的管道。我們也有像準備好的評論中引用的例子，我們有一個客戶每月支付 200 美元，我們確定，與之合作並能夠升級為每年花費數十萬美元的企業客戶我們。

So pay-as-you-go continues to pay lots of dividends. But I think that the same conservativeness where people are just watching their budgets much more carefully shows up across the entire space. And that -- and we don't see a significant difference at the low end of our business versus the high end of the business.

因此，現收現付繼續支付大量紅利。但我認為，在整個領域，人們只是更仔細地關注他們的預算，這種保守性也會出現。而且 - 我們沒有看到我們業務的低端與業務的高端有顯著差異。

Got it. And then, Thomas, with the reduced '23 outlook, 31.5%, I think in the midpoint, that's below sort of the implied 5-year, $5 billion target that you guys talked about a couple of quarters ago. Just any thoughts on -- does this environment change your thought process on getting to that $5 billion in 5 years? Or maybe just some updated thoughts on that?

知道了。然後，Thomas，隨著 23 年前景的下調，我認為在中點，這低於你們幾個季度前談到的 5 年 50 億美元的隱含目標。關於 - 這種環境是否會改變您在 5 年內達到 50 億美元的思維過程？或者也許只是對此的一些最新想法？

As Matthew rightfully pointed out, the market is not limiting. It's limiting us and the opportunity is not limiting us. There are some headwinds now. They will be temporary in nature, but they don't take away from the enormous opportunity that is in front of us. So it doesn't change our thinking around where this journey is going to take us.

正如馬修正確指出的那樣，市場並沒有限制。它限制了我們，機會並沒有限制我們。現在有一些不利因素。它們本質上是暫時的，但不會剝奪擺在我們面前的巨大機遇。所以它不會改變我們對這段旅程將帶我們去向的想法。

We go next now to Keith Weiss of Morgan Stanley.

接下來我們請摩根士丹利的 Keith Weiss 發言。

I think I'm a little dense here. I'm not quite getting what happened in the quarter. When I think through like some of the explanations that you guys are giving, the banking crisis was in the first 2 weeks of March. You guys tend to have a pretty linear business. So like I would have expected the comment to be we only closed like 15% of our business in the last 2 weeks, if that was what the impact was. And then like with the salespeople, if they hadn't been productive for a while, there's nothing really incremental there.

我覺得我在這裡有點密集。我不太明白這個季度發生了什麼。當我仔細考慮你們給出的一些解釋時，銀行業危機發生在 3 月的前兩週。你們往往有一個非常線性的業務。所以就像我預料的那樣，評論是我們在過去兩週內只關閉了大約 15% 的業務，如果那是影響的話。然後就像銷售人員一樣，如果他們有一段時間沒有生產力，那裡就沒有真正的增量。

And you guys have been -- and Matthew, you called out a weaker macro last year, and you were one of the earlier ones to say, hey, listen, it is an (inaudible) environment out there, but you guys were able to operate really effectively all throughout 2022, and you bring to market a really good ROI focus and a really good cost like value proposition, like I don't quite get what changed in Q1 in the timeframe in which it changed?

你們一直 - Matthew，你們去年提出了一個較弱的宏，你們是較早的人之一，嘿，聽著，這是一個（聽不清的）環境，但你們能夠在整個 2022 年都真正有效地運作，並且您將非常好的投資回報率重點和非常好的成本價值主張推向市場，就像我不太了解第一季度在變化的時間範圍內發生了什麼變化？

Keith, I think that as we've put a floodlight on it, the biggest thing that changed is sales cycle length, more than 25%. And so that pushed back a lot of what was happening in the quarter. We would typically see about half of our business close in the last month of the quarter. I think the fact that you had the uncertainty around the bank. And again, it wasn't just customers of SVB or Credit Suisse, but it was entire spaces where purchasing departments really said -- I mean they got very nervous regardless of who they were banking with.

基思，我認為當我們把泛光燈放在它上面時，最大的變化是銷售週期長度，超過 25%。因此，這推遲了本季度發生的很多事情。我們通常會看到大約一半的業務在本季度的最後一個月關閉。我認為你在銀行周圍存在不確定性。再一次，不僅僅是 SVB 或瑞士信貸的客戶，而是採購部門真正說的整個空間——我的意思是，無論與誰進行銀行業務，他們都會非常緊張。

And we just saw more companies push pause on that. That pushed a lot of our business into the last half of March and it pushed some of our business outside of the -- of closing within the quarter. And so what we don't know is whether March is the new reality, in which case, again, I think we want to be very prudent as how we think about the business going forward or if the world will snap back fairly quickly.

我們只是看到更多的公司暫停了這一點。這將我們的很多業務推到了 3 月下半月，並將我們的一些業務推到了本季度之外。因此，我們不知道 3 月是否是新的現實，在這種情況下，我認為我們要非常謹慎地考慮我們如何看待未來的業務，或者世界是否會迅速恢復。

The early reads that we're seeing are not that we're -- again, it doesn't feel like it's getting significantly worse, but we don't also see things getting significantly better. But that, again, as we've sort of shone a floodlight on what was it that changed -- what changed is a material change in the length of the sales cycles, the win rates didn't change, but the close rates did.

我們看到的早期讀物並不是我們——再說一次，感覺情況並沒有變得更糟，但我們也沒有看到情況明顯好轉。但是，再一次，當我們用泛光燈照亮發生了什麼變化時——改變的是銷售週期長度的實質性變化，贏率沒有變化，但成交率發生了變化。

Got it. It was -- you guys mentioned that you saw that in both small customers and large customers. Were there any product families that sustained better or worse than others? Was there any variance on that side of the equation?

知道了。這是——你們提到你們在小客戶和大客戶中都看到了這一點。是否有任何產品系列比其他產品系列更好或更差？等式的那一邊有什麼差異嗎？

I think we continue to have extremely fast close rate when someone is under duress. So when they see that there is a problem and they need -- and they need to address it. I think -- and that doesn't change quarter-over-quarter for, I think, obvious reasons. We are able to respond very quickly, and someone's offline, we bring them back online. And those deals close often a matter of hours. The things that -- other things that showed a lot of promise in the quarter were things like R2, where we're increasingly seeing large customers bring over larger and larger data sets.

我認為當有人受到脅迫時，我們會繼續保持極快的關閉率。因此，當他們發現存在問題並且他們需要 - 他們需要解決問題時。我認為 - 我認為，由於顯而易見的原因，這並沒有隨季度變化。我們能夠非常快速地做出響應，並且有人離線，我們將他們帶回在線狀態。這些交易通常在幾個小時內完成。其他在本季度表現出很大希望的事情是 R2，我們越來越多地看到大客戶帶來越來越大的數據集。

But across the board, we were saying that anything that requires sort of a larger IT commitment, customers were again measuring twice before they cut once, and there was a material increase in sales cycles. What I think is different about us and a lot of other companies is that we see things faster because even with the 25% increase in sales cycles, we're still significantly faster sales cycles than most other SaaS companies. And so I think we see things earlier, and what we don't know again is that they a radical change to how procurement departments are thinking about IT spending.

但總的來說，我們說任何需要更大 IT 承諾的事情，客戶在削減一次之前再次測量兩次，並且銷售週期顯著增加。我認為我們與許多其他公司的不同之處在於，我們看到事物的速度更快，因為即使銷售週期增加了 25%，我們的銷售週期仍然明顯快於大多數其他 SaaS 公司。因此，我認為我們更早地看到了事情，我們再次不知道的是，它們徹底改變了採購部門對 IT 支出的思考方式。

That is what we are trying to be prudent around when we think about guidance. Or is it something that was just a short-term effect of sort of the anxiety in March around the banking sector? And I think that this quarter -- this next quarter will prove out which direction that goes. But we want to be extremely prudent and cautious as we think about things going forward.

這就是我們在考慮指導時要謹慎的做法。或者這只是 3 月份圍繞銀行業的某種焦慮的短期影響？我認為這個季度 - 下個季度將證明它的發展方向。但是我們在考慮未來的事情時要非常謹慎和謹慎。

We go next now to James Fish at Piper Sandler.

接下來我們去 Piper Sandler 的 James Fish。

On gross margins you are holding above your long-term average as well. And Matthew, you actually just talked about the fact that these larger commitments are taking longer. Is there a thought process here to maybe just try to get that and land a little bit smaller and maybe offer higher discounts kind of near term to try to land smaller deals here?

在毛利率方面，您也保持在長期平均水平之上。 Matthew，你實際上剛剛談到了這些更大的承諾需要更長的時間這一事實。這裡是否有一個思考過程，也許只是試圖獲得它並著陸一點點，並且可能在短期內提供更高的折扣以嘗試在這里達成較小的交易？

I think we're -- I think that's always been part of our playbook. And I think that what we are able to do because of the broad set of products that we have is find lots of different ways into a customer's account. And so that is, I think, a -- that's something that we're able to do, and I think we can maintain gross margins that are within our 75% to 77% target range. I think it's a mistake for us to dramatically take that gross margin rate down over time. But I think that we can actually bundle and discount and go after even small deals because of the margin profile that we have and then use the engineering that we have in order to deliver still the gross margins that we expect.

我認為我們 - 我認為這一直是我們劇本的一部分。而且我認為，由於我們擁有廣泛的產品，我們能夠做的是找到許多不同的方式進入客戶的帳戶。因此，我認為，這是我們能夠做到的事情，我認為我們可以將毛利率維持在 75% 至 77% 的目標範圍內。我認為隨著時間的推移大幅降低毛利率對我們來說是一個錯誤。但我認為，由於我們擁有的利潤率狀況，我們實際上可以捆綁和打折甚至進行小額交易，然後使用我們擁有的工程技術來實現我們預期的毛利率。

So we're not changing what our gross margin targets are. We are not losing deals on price. And we've been able to continue to be extremely competitive and deliver an extremely high ROI while also delivering software gross margins.

所以我們不會改變我們的毛利率目標。我們不會在價格上失去交易。我們已經能夠繼續保持極具競爭力並提供極高的投資回報率，同時還提供軟件毛利率。

Makes sense. And Thomas, I appreciate all the details around sales cycles lengthening. But on the close rates, is there a way to think about the magnitude difference you're seeing here? And how much worse could it get for you guys? Is this kind of the bottom potentially of close rates that you're assuming? Or could it get another step lower from here?

說得通。托馬斯，我很欣賞有關銷售週期延長的所有細節。但是關於收盤價，有沒有辦法考慮你在這裡看到的幅度差異？對你們來說，情況會變得更糟嗎？這是您假設的收盤價的底部嗎？或者它可以從這裡再降低一步嗎？

We always say we are prudent about when we talk about our guidance. I think we try to be prudent for this quarter. We tried to take into account what we have seen in the first quarter. And we're thoughtful around how we build improvement or non-improvement in those variables. So we -- the nonlinearity we saw in the quarter was significant. We have not incorporated any significant improvement. As I said in the second quarter, we have not assumed any significant revenue recognition from ACV during the second quarter.

當我們談論我們的指導時，我們總是說我們是謹慎的。我認為我們在本季度盡量保持謹慎。我們試圖考慮我們在第一季度看到的情況。我們深思熟慮如何在這些變量中建立改進或不改進。所以我們 - 我們在本季度看到的非線性非常重要。我們沒有納入任何重大改進。正如我在第二季度所說，我們沒有假設第二季度 ACV 的任何重大收入確認。

So I think we have been a lot of thoughtful about how we looked at the outlook. I just want to reiterate what Matthew said. When we started this year, we start to talk from our perspective. At that point, we set the guidance for the first quarter, especially is probably more challenging than for the remainder of the year. That's how thing -- I think how we framed it. If you look at the first quarter, we came into a range of our guidance slightly off the midpoint in -- primarily because of the nonlinearity of the first quarter.

所以我認為我們對如何看待前景進行了深思熟慮。我只想重申馬修所說的話。今年開始的時候，我們就開始從我們的角度來談。那時，我們為第一季度設定了指導方針，尤其是可能比今年剩餘時間更具挑戰性。這就是事情 - 我認為我們是如何構建它的。如果你看一下第一季度，我們的指導範圍略微偏離中點——主要是因為第一季度的非線性。

What impacted the forward-looking guidance is that elongation of sales cycles. And that is -- so you push a wave of ACV further out. And we looked at that wave, and we have not assumed that it's going to pull in significantly over the course of the year. So I thought we have been thoughtful about how we put the guidance together.

影響前瞻性指導的是銷售週期的延長。那就是——所以你把一波 ACV 推得更遠。我們看著那波浪潮，我們沒有假設它會在一年中顯著拉動。所以我認為我們對如何將指南放在一起進行了深思熟慮。

We go next now to Joel Fishbein at Truist.

我們現在去 Truist 的 Joel Fishbein。

Matthew, just one for you and really appreciate the color on the change you're making a go-to-market efficiency, but I wanted to ask about some of the partnerships that you've established with some of the global SIs like Accenture and Shields Up and to see if you've seen any change in that go-to-market? And maybe just give us an update on how those are factoring.

Matthew，只給你一個，非常感謝你為提高上市效率所做的改變，但我想問一下你與埃森哲和埃森哲等全球 SI 建立的一些合作夥伴關係Shields Up 看看您是否發現上市過程中有任何變化？也許只是向我們提供有關這些因素如何分解的最新信息。

I think that we're still in the early days of that, but encouraging. We were able to win a federal deal, which continues to expand in partnership with Accenture. And that has given them confidence to take us to market in a number of other partnership and global deals. I think that Marc has been great in terms of bringing real focus on partnerships and thinking about what are the parts of the market that we want to serve directly versus what are the parts of the market that we want to serve with partners. And I think as we have these early wins, that begets our ability to win more with the large global systems integrators and other large partners.

我認為我們仍處於早期階段，但令人鼓舞。我們贏得了一項聯邦協議，該協議繼續與埃森哲合作擴大。這讓他們有信心將我們推向市場，參與其他一些合作夥伴關係和全球交易。我認為 Marc 在真正關注合作夥伴關係以及思考我們希望直接服務的市場部分與我們希望與合作夥伴一起服務的市場部分方面表現出色。我認為，由於我們擁有這些早期的勝利，這使我們有能力與大型全球系統集成商和其他大型合作夥伴一起贏得更多。

They're seeing the same thing that we are. When we talk -- when I talk to them, they're seeing very much a conservatism around IT spend. That, I think, is less pronounced in the security space. And so I think that there is more willingness and eagerness to work with us. But when we talk to the systems integrators and other large partners, especially at the high end of the market, I think that they are reflecting the same sort of conservatism of measure multiple times before you cut that they're seeing from their customers.

他們看到的和我們一樣。當我們交談時——當我與他們交談時，他們發現 IT 支出非常保守。我認為，這在安全領域不太明顯。因此，我認為有更多的意願和渴望與我們合作。但是當我們與系統集成商和其他大型合作夥伴交談時，尤其是在高端市場，我認為他們在你削減他們從客戶那裡看到的之前多次反映出同樣的保守措施。

And I think that it continues to be a large opportunity and something that, especially in Zero Trust and Workers we're seeing that we can deliver more with them. But I think that, that is a place where we've actually seen IT shops look at ways of making sure that they're being as optimal as possible.

而且我認為這仍然是一個巨大的機會，尤其是在零信任和工人方面，我們看到我們可以與他們一起提供更多。但我認為，這是我們實際看到 IT 商店尋找確保它們盡可能最佳的方法的地方。

Just as a quick follow-up. Are the deal sizes they are generally bigger than your normal size since you're landing it seems like to be larger organizations with these partners?

就像快速跟進一樣。交易規模是否通常大於您的正常規模，因為您登陸這些合作夥伴似乎是更大的組織？

Yes. They tend to be larger than the average deal. But we land $10 million-plus deals on our own as well. I think over time, you'll see us, again, work more closely with those SIs and other partners to deliver some of the larger deals and make sure that we can make inroads into more accounts and use them as a way to help integrate larger solutions together. So again, I think it's something that is a priority for us. I think we have the early wins, but now we need to continue to scale those programs.

是的。它們往往比平均交易更大。但我們自己也達成了超過 1000 萬美元的交易。我想隨著時間的推移，你會再次看到我們與那些 SI 和其他合作夥伴更緊密地合作，以交付一些更大的交易，並確保我們能夠進入更多的客戶，並將它們用作幫助整合更大的客戶的一種方式一起解決。因此，我再次認為這是我們的優先事項。我認為我們取得了早期的勝利，但現在我們需要繼續擴大這些項目的規模。

We'll take our final question today from Mark Murphy of JPMorgan.

我們今天將接受摩根大通的馬克墨菲的最後一個問題。

Thomas, were bookings more heavily impacted on the CDN side of the business or the security side or perhaps elsewhere?

Thomas，預訂對業務的 CDN 方面或安全方面或其他方面的影響更大嗎？

We never talk about CDN. I would say, I come back to what Matthew said. If customers are in difficult situations under duress, we onboard fast. Those products tend to be security products. And so if there's a statement at all, product-wise is that security product suites are doing better than the application services.

我們從不談論 CDN。我會說，我回到馬修所說的。如果客戶在脅迫下處於困難境地，我們會迅速上船。這些產品往往是安全產品。因此，如果有任何聲明，產品方面就是安全產品套件比應用程序服務做得更好。

Okay. Understood. And then, Matthew, when you look back on it, and I think Brent asked about this a bit earlier, but the change in Head of Sales position last November, the goal was to introduce more rigor and discipline. I think you acknowledged at the time that those changes can take time. I'm curious to what extent you might have actually seen disruptions from sales org changes, whether it be account mapping or territory assignments or commission structures or anything along those lines, which you could look at and say, well, this might actually stabilize a little later in the year.

好的。明白了。然後，馬修，當你回顧它時，我想布倫特早些時候問過這個問題，但去年 11 月銷售主管職位的變化，目標是引入更多的嚴謹和紀律。我想你當時承認這些改變需要時間。我很好奇您實際上在多大程度上看到了銷售組織變化帶來的干擾，無論是客戶映射、區域分配或佣金結構還是類似的任何東西，您可以看看並說，好吧，這實際上可能會穩定一個今年晚些時候。

Yes. I understand that, that would be handy if we could point to that. I don't think that that's what we're seeing right now. I think that we have actually seen our top sellers be more productive. I think that the changes that Marc is putting in place really are starting with these changes now. And that obviously does introduce uncertainties. We think we have our handle around that. I think we've planned that extremely well.

是的。我明白，如果我們能指出這一點，那會很方便。我認為這不是我們現在所看到的。我認為我們實際上已經看到我們的暢銷產品更有效率。我認為 Marc 正在實施的變革確實是從這些變革開始的。這顯然會帶來不確定性。我們認為我們可以解決這個問題。我認為我們已經計劃得非常好。

And again, I think that as we look out at the caliber and quality of the people who we can bring on board and how we can invest in our top performers today, just getting our sales performance to look much more like a normal distribution than what today is much more of a bimodal distribution is an extremely effective way for us to reaccelerate the growth that we have. And so the changes that Marc is making are the right changes. Our team, the highest performing individual contributors and managers on our team are leaning forward and e-mailing me every day about how great it is to have an additional amount of rigor and discipline.

再一次，我認為，當我們關注我們可以招募的人員的才能和質量，以及我們如何投資於我們今天表現最好的人時，只要讓我們的銷售業績看起來更像正態分佈，而不是什麼今天更多的是雙峰分佈，這是我們重新加速增長的一種極其有效的方式。因此，馬克所做的改變是正確的改變。我們的團隊、我們團隊中表現最好的個人貢獻者和經理每天都向前傾身並通過電子郵件告訴我，擁有更多的嚴謹和紀律是多麼偉大。

There may be bumps along the road. These transitions do take time. But I think we are on the right path. Marc is the right person. Across our team the feedback that we're getting is extremely positive. And again, we're not limited by the market for our products. We're not limited by innovation. We're not limited by pipeline. We're not even limited really by sales capacity even as we transition people off of our team.

路上可能會有顛簸。這些轉變確實需要時間。但我認為我們走在正確的道路上。馬克是合適的人選。在我們的團隊中，我們得到的反饋非常積極。同樣，我們不受產品市場的限制。我們不受創新的限制。我們不受管道的限制。即使我們將人員從我們的團隊中轉移出來，我們甚至不受銷售能力的限制。

And so that gives me a lot of confidence going forward that while we will continue to see pressure from the macroeconomic conditions over the next year, I am -- I really am excited for as we have our sales engine match our innovation engine, what we're going to be able to deliver as a company.

因此，這給了我很大的信心，儘管明年我們將繼續看到宏觀經濟狀況帶來的壓力，但我真的很興奮，因為我們的銷售引擎與我們的創新引擎相匹配，我們將能夠作為一家公司交付。

Thank you. And ladies and gentlemen, that is all the time we have for your questions this afternoon. I'd like to turn the conference back over to Mr. Prince for any closing comments.

謝謝。女士們，先生們，這就是我們今天下午所有的時間來回答你們的問題。我想將會議轉回給普林斯先生，聽取任何閉幕評論。

Thank you so much. Really appreciate everybody tuning in for the call. This has definitely been a quarter of contrast but it is an incredible opportunity for us to continue to make Cloudflare a better company.

太感謝了。非常感謝大家撥通電話。這絕對是四分之一的對比，但對我們來說，這是一個難得的機會，可以繼續讓 Cloudflare 成為一家更好的公司。

I appreciate all of the hard work from all of our team. We are excited for the quarter ahead. I hope to see many of you at our Investor Day on May 4, and make sure to tune in the following week for Developer Week. There are a number of incredible announcements coming. Thank you so much.

我感謝我們所有團隊的辛勤工作。我們對未來一個季度感到興奮。我希望在 5 月 4 日的投資者日見到你們中的許多人，並確保在下週的開發者周上收看。即將發布許多令人難以置信的公告。太感謝了。

Thank you, Mr. Prince. Ladies and gentlemen, that will conclude the Cloudflare Q1 2023 earnings call. Again, we'd like to thank you all so much for joining us and wish you all a great evening. Goodbye.

謝謝您，普林斯先生。女士們，先生們，Cloudflare 2023 年第一季度財報電話會議到此結束。再次感謝大家的加入，祝大家度過一個愉快的夜晚。再見。