Cloudflare Inc (NET) 2023 Q2 法說會逐字稿

Thanks for joining us today to discuss Cloudflare's financial results for the second 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.

感謝您今天加入我們討論 Cloudflare 2023 年第二季度的財務業績。與我一起參加電話會議的還有聯合創始人兼首席執行官 Matthew Prince；米歇爾·扎特林 (Michelle Zatlyn)，聯合創始人、總裁兼首席運營官；還有首席財務官托馬斯·塞弗特。現在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以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 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以及未來的財務業績；我們預期的產品發布以及這些產品的時間和市場潛力，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並不是對未來業績的保證，並且存在風險和不確定性，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存在很大差異。

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.

這些前瞻性陳述從今天起適用，您不應依賴它們來代表我們未來的觀點。我們不承擔在本次電話會議後更新這些聲明的義務。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 SEC 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 may find a reconciliation of GAAP to non-GAAP financial measures that are included in our earnings release on our Investor Relations website. For historical periods, a GAAP to non-GAAP reconciliation can be found in the supplemental financial information referenced a few moments ago.

除非另有說明，我們今天討論的所有數字（除收入外）都將基於調整後的非公認會計原則（non-GAAP）基礎上。您可以在我們的投資者關係網站上的收益發布中找到 GAAP 與非 GAAP 財務指標的調節表。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 調節表。

We would also like to inform you that we will be participating in Stifel's Tech Executive Summit on August 29 and the Goldman Sachs Communacopia & Technology Conference on September 6.

我們還想通知您，我們將參加 8 月 29 日舉行的 Stifel 技術高管峰會和 9 月 6 日舉行的高盛 Communacopia 和技術會議。

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

現在我想把電話轉給馬修。

Thank you, Phil. We had a strong quarter in spite of continued macroeconomic uncertainty. In Q2, we achieved revenue of $308.5 million, up 32% year-over-year. We added 196 new large customers, those that pay us more than $100,000 per year, and now have 2,352 large customers, up 34% year-over-year.

謝謝你，菲爾。儘管宏觀經濟持續存在不確定性，但我們的季度業績表現強勁。第二季度，我們實現收入 3.085 億美元，同比增長 32%。我們新增了 196 個大客戶，即每年向我們支付超過 10 萬美元的大客戶，目前大客戶數量為 2,352 個，同比增長 34%。

Our focus on go-to-market improvement is already paying off. After we saw sales cycles increase 20% in Q1, discipline around deals had them returned to levels closer to what we saw last year. While our customers and prospects continue to be very careful around their IT spend, our improved execution led to a record quarter in new ACV bookings.

我們對進入市場改進的關注已經得到回報。在我們看到第一季度銷售週期增長 20% 後，圍繞交易的紀律使銷售週期恢復到接近去年的水平。雖然我們的客戶和潛在客戶繼續非常謹慎地對待他們的 IT 支出，但我們改進的執行力導致新 ACV 預訂量創下了季度記錄。

My sense, talking to customers, is that while the macro environment is still challenging, it has stabilized. And for the first time in several quarters, sentiment among IT buyers does not appear to be getting worse. Our dollar-based net retention ticked down to 115%, down 2% quarter-over-quarter. Dollar-based net retention is a lagging indicator, so it will be slower to reflect the go-to-market improvements we are seeing.

通過與客戶交談，我的感覺是，雖然宏觀環境仍然充滿挑戰，但已經穩定下來。 IT 買家的情緒似乎沒有惡化，這是幾個季度以來的第一次。我們以美元計算的淨留存率下降至 115%，環比下降 2%。基於美元的淨留存率是一個滯後指標，因此反映我們所看到的進入市場的改善的速度會較慢。

It's also important to note that we did not see any new competitive pressure or churn throughout the quarter. Instead, the lower dollar-based net retention is due to slower expansion from some of our existing customers. We expect that our focus on go-to-market operational excellence will improve this metric over time.

同樣重要的是要注意，整個季度我們沒有看到任何新的競爭壓力或流失。相反，以美元計算的淨保留率較低是由於我們一些現有客戶的擴張速度較慢。我們預計，隨著時間的推移，我們對上市卓越運營的關注將改善這一指標。

Our gross margin held stable at 77.7%, still above our long-term target of 75% to 77% and in line with 77.8% last quarter. We delivered an operating profit of $20.3 million, our fourth consecutive quarter with a record operating profit. We also meaningfully outperformed on free cash flow, generating $20 million during the quarter, which represents a free cash flow margin of 6.5%. I'm proud that our team has proven we can not only execute in good times, but also be disciplined and deliver operational improvements while we're in more challenging times.

我們的毛利率穩定在 77.7%，仍高於我們 75% 至 77% 的長期目標，與上季度的 77.8% 一致。我們實現營業利潤 2,030 萬美元，連續第四個季度創下營業利潤紀錄。我們在自由現金流方面的表現也明顯優於其他公司，本季度創造了 2000 萬美元，這意味著自由現金流利潤率為 6.5%。我感到自豪的是，我們的團隊已經證明，我們不僅可以在良好的時期執行任務，而且可以在充滿挑戰的時期遵守紀律並實現運營改進。

We continue to see very strong pipeline growth. Q2 was another record for new pipeline generation. As we discussed last quarter, we made significant changes in our sales team to proactively address underperformance. That went very well, both qualitatively and quantitatively. Our top performers are invigorated. We saw a marked improvement in the average account executive productivity. At the same time, we've implemented robust onboarding, enablement and training programs. Combined with the record number of applicants we're seeing for sales roles, this makes for the right formula to build a world-class sales organization.

我們繼續看到非常強勁的管道增長。第二季度再創新管道發電記錄。正如我們上季度所討論的，我們對銷售團隊進行了重大調整，以主動解決業績不佳的問題。無論是在質量上還是在數量上，一切都進展順利。我們的頂尖員工充滿活力。我們看到客戶經理的平均生產力顯著提高。與此同時，我們實施了強大的入職、支持和培訓計劃。再加上我們看到的銷售職位申請者數量創紀錄，這為建立世界一流的銷售組織提供了正確的公式。

And our team is armed with great products to sell. Last quarter alone, Forrester recognized Area 1, our e-mail security product, as a leader. IDC recognized us as a leader for 2 reports, in Zero Trust and Network Edge Security-as-a-Service. And we were the only new vendor recognized by Gartner for secure service edge.

我們的團隊擁有出色的產品可供銷售。僅上個季度，Forrester 就將我們的電子郵件安全產品 Area 1 評為領導者。 IDC 在零信任和網絡邊緣安全即服務方面的 2 份報告中將我們評為領導者。我們是唯一一家獲得 Gartner 安全服務優勢認可的新供應商。

Our developer platform, Cloudflare Workers, continues its explosive growth. We reached 10 million active workers applications in Q2, up 250% since December and 490% year-over-year. R2 continues to grow and now stores over 13 petabytes of customer data, up 85% quarter-over-quarter. We have 44,000 distinct paying customers with R2 subscriptions, and brand-name customers are beginning to adopt it as their primary object storage solution.

我們的開發者平台 Cloudflare Workers 繼續呈爆炸式增長。第二季度，我們的活躍員工申請數量達到 1000 萬，自 12 月以來增長了 250%，同比增長了 490%。 R2 持續增長，目前存儲超過 13 PB 的客戶數據，環比增長 85%。我們有 44,000 個不同的付費客戶訂閱了 R2，並且品牌客戶開始採用它作為他們的主要對象存儲解決方案。

That seems like a good segue to introduce some other customer wins in the quarter. One of the fastest-growing generative AI companies expanded their relationship with Cloudflare, signing a 1-year $1.7 million contract, less than a year after first starting to use our platform. Like many AI companies in the space, this customer relies on a multi-cloud architecture for training and processing requests. R2 lets them unlock the best prices and performance across multiple cloud providers. In their words, "We see Cloudflare as a strategic foundational glue across all our services. Cloudflare continues to be our best strategic partner of all partners." That's great to hear for many customers, but especially fun coming from a company that's doing such cutting-edge work.

這似乎是一個很好的延續，可以在本季度引入一些其他客戶的勝利。增長最快的生成人工智能公司之一擴大了與 Cloudflare 的關係，簽署了一份為期 1 年、價值 170 萬美元的合同，距離首次開始使用我們的平台不到一年。與該領域的許多人工智能公司一樣，該客戶依賴多雲架構來進行培訓和處理請求。 R2 讓他們能夠跨多個雲提供商獲得最佳價格和性能。用他們的話來說，“我們將 Cloudflare 視為我們所有服務的戰略基礎粘合劑。Cloudflare 仍然是我們所有合作夥伴中的最佳戰略合作夥伴。”對於許多客戶來說，聽到這樣的消息真是太棒了，尤其是來自一家從事如此前沿工作的公司。

These days feel like membership in the CEO club is predicated on saying AI as many times as possible in your earnings call script. I have to confess, I still find it a bit awkward. When we first pitched Cloudflare to venture capitalist back in 2010, at one point, I described as, "The first AI-powered security company for the cloud." The eye rolls around the table were so intense that I'm still a bit scared. But more than a decade later, here we are. And by our estimates, Cloudflare is the most commonly used cloud provider across the leading AI startups. They're using R2 to help arbitrage the lowest GPU cost to train their models. They're using our security tools themselves powered by AI or what our team would prefer to call machine learning to protect their own AI systems. And increasingly, they're using the edge of our network to perform inference. We are continuing to invest in this area and believe that we are uniquely positioned to win the inference market, which we believe will be substantially larger than the AI training market.

如今，CEO 俱樂部的會員資格似乎取決於在財報電話會議腳本中盡可能多地提及人工智能。我必須承認，我還是覺得有點尷尬。 2010 年，當我們第一次向風險投資家推銷 Cloudflare 時，我曾將其描述為“第一家基於人工智能的雲安全公司”。桌子周圍的白眼如此激烈，我還是有點害怕。但十多年後，我們來了。根據我們的估計，Cloudflare 是領先的人工智能初創公司中最常用的雲提供商。他們使用 R2 來幫助套利最低的 GPU 成本來訓練他們的模型。他們正在使用我們由人工智能驅動的安全工具，或者我們的團隊更願意稱之為機器學習的工具來保護他們自己的人工智能係統。他們越來越多地使用我們網絡的邊緣來執行推理。我們將繼續在這一領域進行投資，並相信我們擁有獨特的優勢來贏得推理市場，我們相信該市場將比人工智能培訓市場大得多。

In Q2, we held our developer week, highlighting 10 major announcements and features to extend Cloudflare Workers as the preeminent developer platform for the leading AI companies. Q3 will feature our annual birthday week, and we have a lot more in store to provide the picks and shovels to enable AI companies to build the future.

在第二季度，我們舉辦了開發者周，重點介紹了 10 項重大公告和功能，旨在將 Cloudflare Workers 擴展為領先 AI 公司的卓越開發者平台。第三季度將是我們一年一度的生日週，我們還準備了更多的東西來提供鎬和鏟子，使人工智能公司能夠建設未來。

Beyond AI, Cloudflare's Zero Trust solutions were another big winner in Q2. A Fortune 500 technology services company expanded their relationship with Cloudflare, signing a 3-year $7.2 million contract for $25,000 Zero Trust fee. That brought their annual spend with us to over $5 million. They first became a customer in Q3 last year using our application security products. Six months into the deployment, one of their senior executives said, "Cloudflare is like magic, and brought us into an ongoing competitive Zero Trust proof of concept." Cloudflare's Access and Gateway products were chosen over first-generation Zero Trust competitors due to our rate of innovation and ability to consolidate all their security onto a single pane of glass.

除了 AI 之外，Cloudflare 的零信任解決方案是第二季度的另一個大贏家。一家財富 500 強技術服務公司擴大了與 Cloudflare 的關係，以 25,000 美元的零信任費簽署了一份為期 3 年、價值 720 萬美元的合同。這使得他們每年在我們這裡的支出超過 500 萬美元。他們在去年第三季度首次成為使用我們的應用程序安全產品的客戶。部署六個月後，他們的一位高級管理人員表示：“Cloudflare 就像魔法一樣，讓我們​​進入了持續競爭的零信任概念驗證。” Cloudflare 的訪問和網關產品之所以被選中，是因為我們的創新速度以及將所有安全性整合到單一管理平台上的能力，而不是第一代零信任競爭對手。

One of the largest online recruiting platform expanded their relationship with Cloudflare, signing a 25-month $2.4 million contract and bringing their annual spend over $5 million. With more than 90% of their employees remote, they were looking for a comprehensive Zero Trust solution and evaluated us against every leading vendor in the market.

最大的在線招聘平台之一擴大了與 Cloudflare 的關係，簽署了一份為期 25 個月、價值 240 萬美元的合同，使他們的年度支出超過 500 萬美元。由於超過 90% 的員工處於遠程辦公狀態，他們正在尋找全面的零信任解決方案，並針對市場上每個領先的供應商對我們進行了評估。

They decided to go all in on Cloudflare with 15,000 seats for Access, Gateway, CASB, data loss prevention, browser isolation and Area 1 Email Security. I'm especially proud of how quickly we were able to onboard them, less than a month to fully replace their first-generation Zero Trust vendor. That's awesome.

他們決定全力投入 Cloudflare，擁有 15,000 個席位，用於訪問、網關、CASB、數據丟失防護、瀏覽器隔離和 Area 1 電子郵件安全。我特別自豪的是我們能夠如此迅速地加入他們，不到一個月就完全取代了他們的第一代零信任供應商。棒極了。

An Australian technology company expanded their relationship with Cloudflare, signing a 1-year $2.2 million contract, bringing their total spend with us to over $5 million. This customer started out on our pay-as-you-go plan in 2016. This quarter, they signed a Zero Trust deal to protect their expanding workforce. They're also broadening their use of Cloudflare's developer platform with both R2 and Durable Objects.

一家澳大利亞科技公司擴大了與 Cloudflare 的關係，簽署了一份為期 1 年 220 萬美元的合同，使他們與我們的總支出超過 500 萬美元。該客戶於 2016 年開始實施我們的即用即付計劃。本季度，他們簽署了零信任協議，以保護其不斷擴大的員工隊伍。他們還通過 R2 和 Durable Objects 擴大了 Cloudflare 開發者平台的使用範圍。

Sticking down under, a leading Australian health care provider expanded their relationship with us, signing a 3-year $2.8 million contract. We are replacing their hodgepodge of first-generation Zero Trust vendors with 12,000 seats of Access, Gateway, browser isolation, CASB, data loss protection and Area 1 Email security. This is another example of a customer looking to consolidate vendors and choosing Cloudflare for their holistic network security solution.

一家領先的澳大利亞醫療保健提供商堅持不懈地擴大了與我們的關係，簽署了一份為期 3 年、價值 280 萬美元的合同。我們正在用 12,000 個訪問席位、網關、瀏覽器隔離、CASB、數據丟失保護和 Area 1 電子郵件安全取代他們的第一代零信任供應商大雜燴。這是客戶希望整合供應商並選擇 Cloudflare 作為其整體網絡安全解決方案的另一個例子。

Here's another cool one. A Fortune 500 social network expanded their relationship with Cloudflare, signing a 3-year $2.4 million contract. They initially became a customer a year ago, building on top of Workers and using our global network to authenticate the security of one of their messaging products. They approached us again, looking to add increased privacy onto another product with our privacy gateway solution. They view Cloudflare as a leader in privacy based on our co-development of the Oblivious HTTP standard. And they admire us as one of the only other companies that truly understand scale. As privacy is increasingly top of mind, we believe there will be more and more of these sort of strategically beneficial relationships.

這是另一個很酷的。財富 500 強社交網絡擴大了與 Cloudflare 的關係，簽署了一份為期 3 年 240 萬美元的合同。他們最初在一年前成為客戶，建立在 Workers 之上，並使用我們的全球網絡來驗證他們的消息傳遞產品的安全性。他們再次聯繫我們，希望通過我們的隱私網關解決方案在另一款產品上增加更多的隱私功能。基於我們共同開發的 Oblivious HTTP 標準，他們將 Cloudflare 視為隱私領域的領導者。他們欽佩我們是少數真正了解規模的公司之一。隨著隱私越來越受到人們的重視，我們相信將會有越來越多的這種具有戰略意義的有益關係。

I think I've only said AI 11 times so far, putting me way behind Satya. So let me end with one more AI customer win. Another generative AI company expanded their relationship with us, signing a 3-year $1.3 million contract. They came to us for our developer platform, signing up as a pay-as-you-go customer. Because their developers loved us test, they approached us about a security need and signed a deal to use our application security and Zero Trust products. They're only 100 seats, but they're growing like crazy and building Cloudflare deep into their whole stack.

我想到目前為止我只說過 AI 11 次，遠遠落後於 Satya。最後，讓我以又一位人工智能客戶的勝利作為結束語。另一家生成人工智能公司擴大了與我們的關係，簽署了一份為期 3 年、價值 130 萬美元的合同。他們來到我們這裡尋求我們的開發者平台，並註冊為即用即付客戶。因為他們的開發人員喜歡我們的測試，所以他們向我們詢問安全需求，並簽署了使用我們的應用程序安全和零信任產品的協議。他們只有 100 個席位，但他們正在瘋狂增長，並將 Cloudflare 深入到他們的整個堆棧中。

Whether you're a Fortune 500 industrial company that use us for application security and are now hiring AI developers to use our Workers' platform to drive innovation across your business or you're a 100% AI startup that started using our developer platform and then realized you can get the same security as the biggest Fortune 500 companies, that's what's really unique about Cloudflare. We've built the cloud that connects the world securely, reliably and efficiently.

無論您是財富500 強工業公司，使用我們的應用程序安全性，現在正在招聘人工智能開發人員使用我們的Workers 平台來推動整個企業的創新，還是您是一家100% 人工智能初創公司，開始使用我們的開發人員平台，然後意識到您可以獲得與最大的財富 500 強公司相同的安全性，這就是 Cloudflare 的真正獨特之處。我們構建了安全、可靠、高效連接世界的雲。

With that, I'll turn it over to Thomas. Thomas, take it away.

有了這個，我會把它交給托馬斯。托馬斯，把它拿走。

Thank you, Matthew, and thank you to everyone for joining us. During the second quarter, I'm pleased to share that we've seen improvements in terms of the impacts from the external challenges that we highlighted last quarter. Specifically, also still somewhat elevated from historical levels, sales cycles shortened in part due to the implementation of more efficient processes and tactics.

謝謝你，馬修，也感謝大家加入我們。在第二季度，我很高興與大家分享，我們看到上季度強調的外部挑戰的影響有所改善。具體而言，銷售週期的縮短部分歸因於更高效的流程和策略的實施，與歷史水平相比仍然有所提高。

Our pipeline close rates have also shown improvement as we continue to refine our go-to-market strategies and operations. Furthermore, we observed a notable uptick in collections on our accounts receivable, which we believe reflects a rebound in customer confidence and financial stability.

隨著我們不斷完善我們的上市策略和運營，我們的管道成交率也有所改善。此外，我們觀察到應收賬款收款顯著增加，我們認為這反映了客戶信心和財務穩定性的反彈。

We also continue to maintain our strong commitment to being fiscally responsible and active good stewards of investors' capital. We delivered our fourth consecutive quarter of record operating profit. We also prudently allocated capital with a focus on maximizing shareholder value by taking action to retire our 2025 convertible notes during the second quarter.

我們還繼續恪守對財政負責和積極管理投資者資本的堅定承諾。我們連續第四個季度實現創紀錄的營業利潤。我們還審慎地分配了資本，重點是通過在第二季度淘汰我們的 2025 年可轉換票據來實現股東價值最大化。

Turning to revenue. Total revenue for the second quarter increased 32% year-over-year to $308.5 million. From a geographic perspective, the U.S. represented 53% of revenue and increased 30% year-over-year. EMEA represented 27% of revenue and increased 38% year-over-year. APAC represented 13% of revenue and increased 23% year-over-year.

轉向收入。第二季度總收入同比增長 32% 至 3.085 億美元。從地域角度來看，美國占收入的 53%，同比增長 30%。歐洲、中東和非洲地區佔收入的 27%，同比增長 38%。亞太地區佔收入的 13%，同比增長 23%。

We were pleased to see notable performance in the EMEA and APAC regions with both achieving record new ACV bookings in the second quarter. The strength in APAC was primarily driven by large customer deals, and we are seeing security become an even higher priority in EMEA, given the geopolitical situation in the region.

我們很高興看到歐洲、中東和非洲和亞太地區表現出色，第二季度 ACV 新預訂量均創歷史新高。亞太地區的實力主要是由大客戶交易推動的，考慮到該地區的地緣政治局勢，我們看到安全性在歐洲、中東和非洲地區變得更加重要。

Turning to our customer metrics. In the second quarter, we had 174,129 paying customers representing an increase of 15% year-over-year. We ended the quarter with 2,352 large customers, representing an increase of 34% year-over-year and an addition of 196 large customers in the quarter. In fact, we added a record number of customers spending more than $500,000 on an annualized basis with Cloudflare. And the second quarter was also one of our highest quarterly additions of customers spending more than $1 million annually, including our largest Zero Trust contract to date.

轉向我們的客戶指標。第二季度，我們有174,129名付費客戶，同比增長15%。截至本季度末，我們擁有 2,352 家大客戶，同比增長 34%，本季度新增 196 家大客戶。事實上，我們每年在 Cloudflare 上支出超過 500,000 美元的客戶數量創下了紀錄。第二季度也是我們每年支出超過 100 萬美元的客戶增加最多的季度之一，其中包括我們迄今為止最大的零信任合同。

Our dollar-based net retention rate was 115% during the second quarter, representing a decrease of 200 basis points sequentially. Importantly, renewal rates in the second quarter were consistent with the quarterly average in 2022, which was an all-time high for the company. Instead, similar to the last 2 quarters, the decline in DNR was again primarily driven by slower expansion in our larger customer cohorts. We calculate DNR by comparing the annualized revenue from paying customers 4 quarters prior to the annualized revenue from the same set of customers in the most recent quarter. As a result, this will be a lagging indicator of Cloudflare's underlying business trends. Based on our visibility, we believe the deceleration in DNR is nearing a bottom.

第二季度，我們以美元計算的淨保留率為 115%，比上一季度下降了 200 個基點。重要的是，第二季度的續訂率與 2022 年的季度平均水平一致，這是該公司的歷史最高水平。相反，與過去兩個季度類似，DNR 的下降再次主要是由於我們較大客戶群的擴張放緩所致。我們通過比較前 4 個季度的付費客戶的年化收入與最近一個季度的同一組客戶的年化收入來計算 DNR。因此，這將成為 Cloudflare 基本業務趨勢的滯後指標。根據我們的能見度，我們認為 DNR 的減速已接近底部。

Moving to gross margin. Second quarter gross margin was 77.7%, representing a decrease of 10 basis points sequentially and a decrease of 120 basis points year-over-year. Network CapEx represented 11% of revenue in the second quarter. For fiscal 2023, we now expect network CapEx to be 10% to 12% of revenue, underscoring the scalability and efficiency of our network even as we onboard new workloads, including AI.

轉向毛利率。第二季度毛利率為77.7%，環比下降10個基點，同比下降120個基點。第二季度網絡資本支出佔收入的 11%。對於 2023 財年，我們現在預計網絡資本支出將佔收入的 10% 至 12%，這突顯了我們網絡的可擴展性和效率，即使我們引入了包括人工智能在內的新工作負載。

Turning to the operating expenses. Second quarter operating expenses as a percentage of revenue remained consistent sequentially and decreased by 8% year-over-year to 71%. Our total number of employees increased 11% year-over-year, bringing our total headcount to 3,389 at the end of the quarter. During the second quarter, we address consistently low-performing sales capacity with a focus on upgrading our customer-facing talent to improve growth, increase productivity and drive long-term success we will continue to pace hiring for the year based on market conditions and remain committed to raising the bar on new hire additions given talent opportunities available in the market.

轉向運營費用。第二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 8% 至 71%。我們的員工總數同比增長 11%，季度末總人數達到 3,389 人。在第二季度，我們解決了持續表現不佳的銷售能力問題，重點是提升面向客戶的人才，以促進增長、提高生產力並推動長期成功，我們將繼續根據市場狀況調整今年的招聘速度，並保持鑑於市場上存在的人才機會，致力於提高新聘用人員的標準。

Sales and marketing expenses were $125.4 million for the quarter. Sales and marketing as a percentage of revenue decreased by 1% sequentially and decreased to 41% from 44% in the same quarter last year. Research and development expenses were $53 million in the quarter. R&D as a percentage of revenue decreased by 1% sequentially and decreased to 17% from 20% in the same quarter last year. G&A expenses were $41 million for the quarter. G&A as a percentage of revenue increased 1% sequentially and decreased to 13% from 15% in the same quarter last year.

該季度的銷售和營銷費用為 1.254 億美元。銷售和營銷佔收入的百分比環比下降 1%，從去年同期的 44% 降至 41%。該季度的研發費用為 5300 萬美元。研發佔收入的百分比環比下降 1%，從去年同期的 20% 降至 17%。該季度的一般管理費用為 4100 萬美元。 G&A 佔收入的百分比環比增長 1%，從去年同期的 15% 下降至 13%。

Operating income was $20.3 million compared to an operating loss of $891,000 in the same period last year. Second quarter operating margin was 6.6%, an increase of 700 basis points year-over-year. These results highlight our continued focus on becoming more efficient and more productive, not just during the currently uncertain macroeconomic backdrop, but also because operational efficiency is a long-term competitive advantage.

營業收入為 2,030 萬美元，而去年同期營業虧損為 891,000 美元。第二季度營業利潤率為 6.6%，同比增長 700 個基點。這些結果凸顯了我們對提高效率和生產力的持續關注，不僅是在當前不確定的宏觀經濟背景下，而且還因為運營效率是一項長期競爭優勢。

Turning to net income and the balance sheet. Our net income in the quarter was $33.7 million or a diluted net income per share of $0.10. We ended the second quarter with $1.6 billion in cash, cash equivalents and available-for-sale securities. Free cash flow of $20 million in the second quarter or 6% of revenue compared to negative $4.4 million or 2% of revenue in the same period last year. Remaining performance obligations, or RPO, came in at $1 billion, representing an increase of 8% sequentially and 36% year-over-year. Current RPO was 75% of total RPO.

轉向淨利潤和資產負債表。我們本季度的淨利潤為 3370 萬美元，攤薄後每股淨利潤為 0.10 美元。截至第二季度末，我們擁有 16 億美元的現金、現金等價物和可供出售證券。第二季度自由現金流為 2000 萬美元，佔收入的 6%，而去年同期為負 440 萬美元，佔收入的 2%。剩餘履約義務 (RPO) 為 10 億美元，環比增長 8%，同比增長 36%。當前 RPO 是總 RPO 的 75%。

Before moving to guidance for the third quarter and full year, I would like to begin with our expectations and the provisions we have factored into this outlook. Despite being encouraged by the forward progress we delivered during the second quarter in terms of shortening sales cycles and improving close rates, mixed macroeconomic data points serve as a reminder that we are operating in a business environment that showing signs of stabilization continues to be challenging to predict. As a result, we remain prudent and cautious in our outlook for the second half of the year, and we are fully committed to continuing to adapt our tactics and strategies in response to these external variables.

在討論第三季度和全年的指導之前，我想首先介紹一下我們的預期以及我們在這一展望中考慮的規定。儘管我們對第二季度在縮短銷售週期和提高成交率方面取得的進展感到鼓舞，但好壞參半的宏觀經濟數據點提醒我們，我們所處的商業環境顯示出穩定的跡象，這仍然對我們的業務構成挑戰。預測。因此，我們對下半年的前景保持審慎和謹慎，並致力於繼續調整策略和策略以應對這些外部變量。

Now turning to guidance. For the third quarter, we expect revenue in the range of $330 million to $331 million, representing an increase of 30% year-over-year. We expect operating income in the range of $20 million to $21 million, and we expect diluted net income per share of $0.10, assuming approximately 347 million shares outstanding. We expect an effective tax rate of 11%.

現在轉向指導。我們預計第三季度收入在 3.3 億美元至 3.31 億美元之間，同比增長 30%。我們預計營業收入在 2000 萬美元至 2100 萬美元之間，假設已發行股票約為 3.47 億股，我們預計攤薄後每股淨利潤為 0.10 美元。我們預計有效稅率為 11%。

For the full year 2023, we expect revenue in the range of $1.283 billion to $1.287 billion, representing an increase of 32% year-over-year. We expect operating income for the full year in the range of $81 million to $85 million. And we expect diluted net income per share over that period to be $0.37, assuming approximately 345 million shares outstanding. We expect an effective tax rate of 9% for 2023.

2023 年全年，我們預計收入在 12.83 億美元至 12.87 億美元之間，同比增長 32%。我們預計全年營業收入在 8100 萬美元至 8500 萬美元之間。假設流通股數量約為 3.45 億股，我們預計該期間攤薄後每股淨利潤將為 0.37 美元。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 both the first and second quarters of this year, we anticipate generating significant free cash flow for the full year 2023. For modeling purposes, we continue to expect free cash flow to trend upward on an ongoing basis, but anticipate variability in our free cash flow generation quarter-to-quarter.

在去年下半年以及今年第一季度和第二季度實現正自由現金流之後，我們預計 2023 年全年將產生大量自由現金流。出於建模目的，我們繼續預計自由現金流持續呈上升趨勢，但預計我們的自由現金流產生每季度都會發生變化。

In closing, our team remains committed to driving operational excellence, ensuring long-term growth and delivering significant shareholder value. I'd like to thank our employees for their continued dedication to our mission, customers and partners. And to our shareholders, we greatly value your continued support.

最後，我們的團隊仍然致力於推動卓越運營，確保長期增長並提供顯著的股東價值。我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。對於我們的股東，我們非常重視您的持續支持。

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

說到這裡，我想開放提問。接線員，請投票詢問問題。

(Operator Instructions). And we will take our first question from Shaul Eyal with TD Cowen.

（操作員說明）。我們將回答 Shaul Eyal 和 TD Cowen 提出的第一個問題。

Matthew, can you talk about some of your displacement activity this quarter? And maybe my second part of the question will be, do you see AI as accelerating your displacements and win rates?

馬修，您能談談本季度您的一些流離失所活動嗎？也許我的問題的第二部分是，你認為人工智能會加速你的位移和獲勝率嗎？

Yes, Shaul, I really appreciate the question. And we've had a lot of noise on the line from the operator. So hopefully, we can get things muted. Apologies for that. So I think that when we look at displacement, it really is across 3 different parts of our business. So the first area is our traditional application security business. And in that space, we continue to displace a number of traditional hardware vendors, the people who are providing web application firewalls, load balancers, funding various services that people had in those areas. We also see point cloud solutions that are doing just one of those things getting displaced by us, where we can very much pick up a significant amount of their business. And that's been the case for quite some time.

是的，Shaul，我真的很感激這個問題。我們在線路上收到了來自接線員的大量噪音。所以希望我們能夠讓事情變得安靜。對此表示歉意。所以我認為，當我們考慮位移時，它確實涉及我們業務的三個不同部分。所以第一個領域是我們傳統的應用安全業務。在這個領域，我們繼續取代許多傳統的硬件供應商，這些供應商提供網絡應用程序防火牆、負載平衡器，並為人們在這些領域提供的各種服務提供資金。我們還看到點雲解決方案正在被我們取代，這些解決方案只是做這些事情之一，我們可以在其中接替他們的大量業務。這種情況已經持續相當長一段時間了。

The second part of our business, which is our Zero Trust business. The first is sort of the front door of your business, the second is kind of the backdoor of your business. The Zero Trust business is about protecting employees and data. In that case, we're more and more going head-to-head with the other first-generation Zero Trust providers, so the Zscalers, Palo Alto Networks, Cisco umbrellas of the world. And again, we really like our win rates in this space. And in a number of the examples that I cited, we were specifically either in competitive solutions there or in some cases, where we were actually doing takeouts of people who have made that on the first generation of Zero Trust providers wanted to upgrade to us for better ROI, a much better user experience, much faster, more performing network. And I think that, that's one of the areas that I'm the most excited about.

我們業務的第二部分是我們的零信任業務。第一個是您企業的前門，第二個是您企業的後門。零信任業務旨在保護員工和數據。在這種情況下，我們越來越多地與其他第一代零信任提供商正面交鋒，例如 Zscalers、Palo Alto Networks、Cisco 全球保護傘。再說一次，我們真的很喜歡這個領域的勝率。在我引用的許多例子中，我們特別是在競爭解決方案中，或者在某些情況下，我們實際上是在對那些在第一代零信任提供商上做到這一點的人進行外賣，希望升級到我們更好的投資回報率、更好的用戶體驗、更快、性能更強的網絡。我認為這是我最興奮的領域之一。

The third area is really our Workers business, which is our developer platform. And in that space, it really depends on what's going on. Increasingly, we're doing takeouts from object store where people are moving data off of more traditional object stores on to R2, which is our object store. But a lot of times, we're are also just moving individual applications or individual functions to us. And so it's not a complete displacement. Oftentimes, people will use us alongside a more traditional hyperscale public cloud, but we can see that working together.

第三個領域實際上是我們的 Workers 業務，這是我們的開發者平台。在那個空間中，這實際上取決於正在發生的事情。我們越來越多地從對象存儲中取出數據，人們將數據從更傳統的對象存儲轉移到 R2（我們的對象存儲）上。但很多時候，我們也只是將單個應用程序或單個功能轉移給我們。所以這並不是一個完全的位移。通常，人們會將我們與更傳統的超大規模公共雲一起使用，但我們可以看到它們一起工作。

In the AI space, in particular, I think that -- again, it's such a new space that I don't know that we're displacing people as much as we're just helping AI companies get what they need. And the two big areas around that are first around training, where GPU scarcity is significant and the cost with the traditional hyperscale public cloud and moving data to wherever there's cheap GPU capacity or even available GPU capacity makes it cost prohibitive. And so R2, because we don't charge for egress, has been just a real boon for a lot of AI companies to be able to adopt wherever they can find the cheapest GPU at any moment in time.

特別是在人工智能領域，我認為，這是一個如此新的領域，我不知道我們正在取代人們，而我們只是在幫助人工智能公司獲得他們所需要的東西。圍繞這兩個大領域首先是圍繞訓練，其中 GPU 嚴重短缺，而傳統超大規模公共雲的成本以及將數據移動到任何有廉價 GPU 容量甚至可用 GPU 容量的地方都使其成本過高。因此，R2，因為我們不收取出口費用，對於許多人工智能公司來說是一個真正的福音，讓他們能夠在任何時候隨時隨地找到最便宜的 GPU 來採用。

And that, again, has been an area where a lot of that growth has come from.

這也是大部分增長來自的領域。

And then increasingly, we think that the inference market is really going to be fought between 2 areas. One is going to be on your device itself. If you have a driverless car, you don't want when a ball is bouncing down the street and the kid is chasing after it. For that decision on whether or not to put on the brakes, you have to go out to the network. Now you want that to live in the car itself. And so a lot of inference and models can be run on devices. But we think if they're not run on devices, if they have -- if they're too large, if they need too much capacity from either a GPU or memory or network access space, in those cases, it's going to make sense to run it in the network itself. And in that sense, Cloudflare is uniquely positioned to win in that inference market for those models that make sense, not to run on the device themselves, the more complicated models that make sense to run in -- out at the edge of the network, and that's exactly what we're starting to see from more and more of these really innovative AI start-ups.

然後，我們越來越認為推理市場實際上將在兩個領域之間展開爭奪。其中之一將位於您的設備本身上。如果你有一輛無人駕駛汽車，你不希望看到一個球在街上彈跳而孩子在追它。為了決定是否踩剎車，你必須連接網絡。現在你想讓它住在車裡。因此很多推理和模型都可以在設備上運行。但我們認為，如果它們不在設備上運行，如果它們太大，如果它們需要 GPU、內存或網絡訪問空間提供太多容量，在這些情況下，這將是有意義的在網絡本身中運行它。從這個意義上說，Cloudflare 具有獨特的優勢，可以在推理市場中贏得那些有意義的模型，而不是在設備本身上運行，更複雜的模型在網絡邊緣運行是有意義的，這正是我們從越來越多的真正創新的人工智能初創企業中看到的。

And we will take our next question from Matt Hedberg with RBC Capital Markets.

我們將回答加拿大皇家銀行資本市場公司馬特·赫德伯格 (Matt Hedberg) 提出的下一個問題。

Great. Thomas, I had a question for you. Obviously, good results this quarter, and there was a lot of optimism in your portion of the prepared remarks. You talked about sort of like better win rates, shorter deal cycles, et cetera. When I look though at sort of the sequential growth for Q3 and Q4, it's a bit higher than what we saw in the first half. I just -- what are some of those main factors that are giving you sort of increased optimism for the second half? And does guidance assume the macro stay constant or maybe even improve a little bit?

偉大的。托馬斯，我有個問題想問你。顯然，本季度取得了良好的業績，並且您在準備好的講話中充滿了樂觀情緒。您談到了更好的獲勝率、更短的交易週期等等。當我查看第三季度和第四季度的連續增長時，它比我們上半年看到的要高一些。我只是——哪些主要因素讓你對下半年更加樂觀？指導意見是否假設宏觀經濟保持不變，甚至可能有所改善？

Well, thank you, Matt. We saw the first data points that what you called made me be a bit more optimistic. We think -- we still think we need to apply a good portion of cautions to our outlook. One data point doesn't really make a trend. At this point, we do not assume that the macroeconomic environment is improving significantly. We still see significant mixed macroeconomic data points that we factored into our guidance. And then therefore, as we said, prudent and cautious, not over-interpreting just on one data point.

嗯，謝謝你，馬特。我們看到了第一個數據點，你所說的讓我更加樂觀了。我們認為——我們仍然認為我們需要對我們的前景持謹慎態度。一個數據點並不能真正形成一種趨勢。目前，我們並不認為宏觀經濟環境正在顯著改善。我們仍然看到我們將宏觀經濟數據點納入我們的指導中。因此，正如我們所說，要謹慎、謹慎，不要僅僅對一個數據點進行過度解讀。

Got it. That's helpful. Maybe just a quick follow-up. Sort of double clicking on the strength that you saw this quarter. There was a lot of conversations about shorter sales cycles, better win rates. Have you noticed any quantifiable benefit from your new CRO mark as he's come onboard and maybe improved through the sales focus?

知道了。這很有幫助。也許只是快速跟進。雙擊您在本季度看到的實力。有很多關於更短的銷售週期、更高的獲勝率的討論。您是否注意到新 CRO 標誌的加入帶來了任何可量化的好處，並且可能通過銷售重點而得到改善？

We are making good progress, both in terms of restructuring our team, in terms of adapting our tactics and strategies, how we move up market. But you have to remind -- remember that bringing on new people takes ramp time, a little bit shorter in the mid-market, a little bit longer in the enterprise segment. We have not seen most of those improvements yet, and we do not expect to see them over the course of the remainder of this year. So we are making really good progress, but we have been cautious in terms of what we factored in, in the guidance we've given for the second half.

我們在團隊重組、戰術和戰略調整以及市場升級方面都取得了良好進展。但你必須提醒——記住，引進新人需要一定的時間，在中端市場要短一點，在企業領域要長一點。我們還沒有看到其中的大部分改進，並且我們預計在今年剩餘時間內也不會看到它們。因此，我們正在取得非常好的進展，但我們在下半年給出的指導中所考慮的因素一直保持謹慎。

We will take our next question from Trevor Walsh with JMP Securities.

我們將回答 JMP 證券特雷弗·沃爾什 (Trevor Walsh) 提出的下一個問題。

Great. Maybe, Matthew, just for you first. A lot of the comments around AI seems to focus more around the developer piece and Workers specifically, which you kind of have as your -- part of your act 3. Does that become more something accelerated into more of an act 2 for that part of the platform? Can you just maybe talk a little bit about kind of the changes of the game from that perspective?

偉大的。也許，馬修，首先是為了你。關於人工智能的很多評論似乎更多地集中在開發者部分和具體的工作人員上，你可以將其作為你的第三幕的一部分。這是否會變得更像是加速到第二幕的那部分？該平台？您能否從這個角度談談遊戲的一些變化？

Sure. Thanks, Trevor. I think that -- I mean, I think the order of the acts is pretty -- I would still say act 1 is application security, act 2 is Zero Trust and act 3 is Workers. But I would say that we have been very pleasantly surprised at how quickly the Workers' platform is taking off. But we are not, at this time, optimizing that platform for how can we bring as many dollars out of it as possible. We think that studying developer platforms across history, what we've seen is what you really need is adoption.

當然。謝謝，特雷弗。我認為——我的意思是，我認為行為的順序很好——我仍然會說行為 1 是應用程序安全，行為 2 是零信任，行為 3 是工作人員。但我想說，我們對工人平台的起飛速度感到非常驚喜。但目前我們並沒有優化該平台，以了解如何從中獲得盡可能多的收益。我們認為，通過研究歷史上的開發者平台，我們發現真正需要的是採用。

And so what I'm encouraged by is that every single day when new companies are starting, when new trends take off like AI had, that people are turning to this. And I think it's -- I don't think that this is a flash in the pan. This isn't a polyester kind of new wardrobe that is going to look good for a little while, but quickly fade. This is something that's real. And we're seeing that more and more companies, more and more experienced developers are turning to the Workers' platform in order to be able to deliver something that they can't get from the traditional hyperscale public cloud.

因此，令我感到鼓舞的是，每天當新公司成立時，當新趨勢像人工智能一樣起飛時，人們都會轉向這一點。我認為這並不是曇花一現。這不是一種聚酯纖維的新衣櫥，它會暫時看起來不錯，但很快就會褪色。這是真實的事情。我們看到越來越多的公司、越來越多經驗豐富的開發人員正在轉向 Workers 平台，以便能夠提供他們無法從傳統超大規模公共雲中獲得的東西。

And so I think that any great work of a fiction or otherwise, the -- some of the excitement often comes in the later chapters. And so I don't want to diminish it by saying that it's act 3, but I -- and I think there's a huge opportunity there. But I also don't want to lose the fact that we had many customers this year really dive into our act 2 products, and we're making incredible gains in that space as well. So I think we've got a really exciting second and third act.

所以我認為任何偉大的小說或其他作品，一些令人興奮的事情往往會出現在後面的章節中。所以我不想通過說這是第三幕來削弱它，但我 - 我認為那裡有一個巨大的機會。但我也不想失去這樣一個事實：今年我們有很多客戶真正投入到我們的第二幕產品中，而且我們也在該領域取得了令人難以置信的收益。所以我認為我們有一個非常令人興奮的第二幕和第三幕。

Awesome. I appreciate the color. Maybe just a quick follow-up for Thomas. Of the 196 large customers that you added in the quarter, could you maybe provide a little bit of color around? Are those current customers crossing into that threshold? Or is there a preponderance or even like an even split of new customers kind of just landing of that size? Can you just give us maybe a general sense of kind of where that pool of customers is coming from?

驚人的。我很欣賞它的顏色。也許只是托馬斯的快速跟進。在本季度添加的 196 個大客戶中，您能否提供一些信息？那些當前的客戶是否跨入了這個門檻？或者是否有大量甚至均勻分佈的新客戶剛剛登陸這種規模？您能否讓我們大致了解一下該客戶群的來源？

In the past, it was pretty even, 50-50 between new customer sign-ons the defender expansions. I would say in the last quarter, specifically, we have probably a larger share of new customers signing up right beyond the $1 million range. So it shifted slightly away from expansion into a new logo sign-on.

過去，新客戶登錄與防御者擴展之間的比例相當均勻，為 50-50。具體來說，我想說的是，在上個季度，我們可能有更大比例的新客戶簽約金額超出了 100 萬美元的範圍。因此，它稍微從擴展轉向新的徽標登錄。

And we will take our next question from Jonathan Ho with William Blair.

我們將回答 Jonathan Ho 和 William Blair 提出的下一個問題。

This is John Weidemoyer for Jonathan. I'd like to get some clarification, if I could, on -- and better understand your net retention rate. If I understood you correctly, you had indicated in your prepared remarks that the retention rate is a lagging indicator that should benefit from your go-to-market and sales replacement initiatives and such. But then I believe you also said that was impacted by large -- by largest customer cohorts. I wouldn't expect large customers to be quite as impacted. I wouldn't think that large customers would be impacted so much by your sales or go-to-market because their existing customers or most -- a lot of them would be. Could you help me understand what -- how that would impact retention rate and what kind of some of the moving parts are there?

我是喬納森的約翰·韋德莫耶。如果可以的話，我想得到一些澄清——並更好地了解您的淨保留率。如果我理解正確的話，您在準備好的評論中指出，保留率是一個滯後指標，應該受益於您的上市和銷售替代舉措等。但我相信你也說過這受到了最大的客戶群體的影響。我預計大客戶不會受到如此大的影響。我不認為大客戶會受到你的銷售或進入市場的影響如此之大，因為他們的現有客戶或大多數 - 他們中的很多人都會受到影響。您能否幫助我了解這將如何影響保留率以及存在哪些類型的活動部件？

Right. Well, just to make sure, the expansion rate stayed high. Expansion in the large customer cohort was a little bit lagging. That is what we already saw in the prior quarter. It's also one of the reasons for my previous answer that the large customer growth was pretty much coming more biased towards new logos than it was coming from expansion.

正確的。好吧，只是為了確保擴張率保持在高位。大型客戶群的擴張有點滯後。這就是我們在上一季度已經看到的情況。這也是我之前回答的原因之一，即大量客戶的增長幾乎更多地偏向於新徽標，而不是來自擴張。

Expansion, as I said in my prepared remarks, as far as the lagging indicator because it's pretty much a look back to the 4 prior quarters. That is what you compare to the new sign-ons. So any movement we see in an existing quarter will take time to show up in DNR. We see -- we think we are seeing broadening of the DNR development. So we are quite hopeful we'll move that upwards to where -- and beyond where we came from. But because we are so conservative in how we measure DNR, it's an all-in across all customer cohorts. It's very much a lagging indicator. So it will take a while before all the improvement that we are initiating in getting expansion going again will show up in DNR.

正如我在準備好的發言中所說，就滯後指標而言，擴張是因為它幾乎是對前 4 個季度的回顧。這就是您與新登錄的比較。因此，我們在現有季度看到的任何變動都需要一段時間才能在 DNR 中體現出來。我們看到——我們認為我們正在看到 DNR 發展的擴大。因此，我們非常希望能夠將其提升到原來的水平，並超越我們原來的水平。但由於我們在衡量 DNR 方面非常保守，因此它是所有客戶群體的綜合指標。這是一個非常滯後的指標。因此，我們為再次擴張而發起的所有改進還需要一段時間才能在 DNR 中體現出來。

Okay. And if I could just ask for -- you mentioned that some of these initiatives, you wouldn't expect to see the new sales folks and whatnot being fully productive through the end of the year, that makes sense. Can you talk about your progress on the implementation of the sales processes kind of when -- where you might think you're like halfway done, fully done at what point in time? And have you identified further process improvements since our last talk a quarter ago?

好的。如果我可以要求 - 你提到其中一些舉措，你不會期望看到新的銷售人員和其他人在年底之前完全富有成效，這是有道理的。您能談談您在銷售流程實施方面的進展嗎？您可能認為自己已經完成了一半，但在什麼時間點完全完成了？自從我們上一次談話一個季度前以來，您是否確定了進一步的流程改進？

Yes. So I'll take that. I think that Mark is doing a really great job looking across the organization. I think one of the things that we really highlighted last quarter was that we had some underperformance across the org. And we addressed that. What I was -- that's -- I, over the course of the last 3 months, have kept very careful sort of my fingers on the pulse of the organization, met with a ton of our team. And what I'm hearing from the team is that they're super invigorated. They appreciate the additional training and enablement that we've implemented, and that we're seeing our sales team get the tools that they need in order to make sure that they can close great deals.

是的。所以我會接受的。我認為馬克在整個組織中做得非常出色。我認為上個季度我們真正強調的一件事是我們整個組織的表現不佳。我們解決了這個問題。在過去的三個月裡，我一直非常小心地把握組織的脈搏，會見了我們團隊的很多人。我從團隊那裡聽到的是，他們非常有活力。他們讚賞我們實施的額外培訓和支持，並且我們看到我們的銷售團隊獲得了他們所需的工具，以確保他們能夠達成偉大的交易。

And we, again, still have a very strong pipeline. And I think that what you'll see is that, that gets reflected as we have those new reps that are coming on, as we do more enablement with our existing reps. And that, I think, is something that's very bullish for what we have going forward.

我們仍然擁有非常強大的管道。我認為你會看到的是，當我們有新的代表加入時，當我們對現有代表進行更多支持時，這一點就會得到反映。我認為，這對我們未來的發展非常樂觀。

We will take our next question from Brent Thill with Jefferies.

我們將接受 Jefferies 的布倫特·希爾 (Brent Thill) 提出的下一個問題。

Matthew, if you take your crystal ball out in the second half of the year, I'm just curious if you feel things are starting to slowly improve. It seems like a lot of your security peers are starting to see some decay. And perhaps you're gaining some share here relative to your architecture and the platform. I'm curious if you can kind of maybe stitch the back half together in how you see it at a 40,000-foot view.

馬修，如果你在下半年拿出你的水晶球，我只是好奇你是否覺得事情開始慢慢好轉。看起來很多安全同行都開始出現一些衰退。也許您正在獲得一些與您的架構和平台相關的份額。我很好奇你是否可以將後半部分縫合在一起，就像你在 40,000 英尺的高度上看到的那樣。

Yes. I don't know how accurate my crystal ball is. But I think that -- I want to say that it feels like things are improving. It feels like things are plateauing. Q1 was really hard. The fact that we had in 1 quarter sales cycles increase 20% was a very big and frightening occurrence. And I think that we were pretty early in earnings seasons call that there was a real concern across IT buyers, but that got reflected by many companies that came after us. What we saw in Q2 was that sales cycles returned back to be more in line with what we were seeing last year in 2022. 2022 was still elevated in the several years prior to that.

是的。我不知道我的水晶球有多準確。但我認為——我想說的是，感覺事情正在改善。感覺事情正在趨於穩定。 Q1真的很難。事實上，我們在 1 季度的銷售週期中增長了 20%，這是一個非常大且可怕的事件。我認為，我們在財報季的早期就曾表示，IT 買家確實存在擔憂，但我們之後的許多公司都反映了這一點。我們在第二季度看到的是，銷售週期在 2022 年恢復到與我們去年看到的更加一致。2022 年在此之前的幾年中仍然處於較高水平。

So what it feels like to me is that we're in for a grind. And not Cloudflare in particular, but across the entire economy. And that grind is going to be hard, but I think it is actually serving us quite well because it's forcing us towards operational excellence. And across our entire team, people are digging in, they're working hard and they're making sure that every process is as efficient as possible.

所以我的感覺是我們正陷入困境。不是特別是 Cloudflare，而是整個經濟。這種磨練會很艱難，但我認為它實際上對我們很有幫助，因為它迫使我們實現卓越運營。在我們整個團隊中，人們都在努力工作，並確保每個流程都盡可能高效。

And I think that you're right. One of the things that is unique about us versus a number of others is, as we look at our products that we've been able to achieve very high gross margins, I think that's the best -- one of the best indicators that we have a really differentiated platform. And as customers are looking for ways to consolidate their vendors to find how to get more ROI out of everything they're doing, they are turning to us. And our team is ready, and we have the right products. And so I think the grind that's ahead is actually something that is going to be hard, but it's something that I think I'm looking forward to. And we're going to become a better company as a result of it.

我認為你是對的。與其他許多公司相比，我們的獨特之處之一是，當我們審視我們的產品時，我們已經能夠實現非常高的毛利率，我認為這是最好的——我們擁有的最好指標之一一個真正差異化的平台。當客戶正在尋找整合供應商的方法，以找到如何從他們所做的一切中獲得更多投資回報時，他們開始向我們求助。我們的團隊已準備就緒，並且我們擁有合適的產品。所以我認為前面的磨練實際上會很困難，但我認為這是我期待的事情。我們將因此成為一家更好的公司。

We will take our next question from Keith Weiss with Morgan Stanley.

我們將回答摩根士丹利基思·韋斯 (Keith Weiss) 提出的下一個問題。

Definitely, glad to hear things are stabilizing. Matt, I wanted to dig into the comment that you made, both in the press release and the conference, call about Workers and then Cloudflare being a really good platform for inference. Can you talk to us about sort of the underlying technical why -- of why you think -- it's still pretty early days with these technologies, and we're also trying to figure out kind of how inference plays out over time. So I think your view would be helpful to the overall kind of industry conversation as well as the Cloudflare conversation on why you guys are well positioned.

當然，很高興聽到事情正在穩定下來。 Matt，我想深入探討您在新聞稿和會議中發表的評論，呼籲 Workers，然後 Cloudflare 是一個非常好的推理平台。你能和我們談談一些潛在的技術原因嗎？為什麼你認為這些技術還處於早期階段，我們也在試圖弄清楚隨著時間的推移，推理是如何發揮作用的。因此，我認為您的觀點將對整個行業對話以及 Cloudflare 關於你們為何處於有利位置的對話有所幫助。

And then the follow-up is for Thomas. Whenever we hear inference, we're thinking that this is a GPU-intensive and compute-intensive type stuff and typically lower gross margin. It sounds like you're pretty comfortable that this isn't impacting the gross margins in the near term. Is that just because it's still relatively early days and relatively small volumes? Or should we be thinking that this could -- as this ramp, this could potentially have a gross margin impact over time?

接下來是托馬斯的後續行動。每當我們聽到推理時，我們都會認為這是 GPU 密集型和計算密集型類型的東西，通常毛利率較低。聽起來您對這不會影響短期內的毛利率感到非常滿意。這僅僅是因為它還處於相對早期階段並且數量相對較小嗎？或者我們是否應該認為，隨著時間的推移，隨著時間的推移，這可能會對毛利率產生影響？

Yes. So Keith, I appreciate both the questions. They're really, really important to understand, the advantages that we have in this space. So first of all, what are the challenges with inference? And I think there are really two. One seems like a bigger deal, and it's probably actually not as big a deal. And the other, it doesn't seem like it's a big deal, but it is a really big deal. And in both, I think that they shape how we think the inference market is going to work out.

是的。基思，我很欣賞這兩個問題。了解我們在這個領域的優勢非常非常重要。首先，推理面臨哪些挑戰？我認為確實有兩個。一個看起來是一件大事，但實際上可能沒什麼大不了的。而另外一個，看似沒什麼大不了的事，其實卻是一件大事。我認為，在這兩者中，它們塑造了我們對推理市場的運作方式的看法。

So the one that kind of feels like it's a bigger deal is around performance, which is that if you're playing with the various generative AI companies, if you're trying to do something, that wait time between when you submit a query and when you get back a response, that's going to become a bigger and bigger differentiator between different AI platforms. And so anything that you can do in order to make that performance as fast as possible is advantageous. And one of the ways to do that is to move the actual inference as close as possible to the person who's requesting it.

因此，感覺更重要的是性能，也就是說，如果你正在與各種生成人工智能公司合作，如果你試圖做某事，那麼在你提交查詢和執行之間的等待時間當你得到回應時，這將成為不同人工智能平台之間越來越大的區別。因此，為了盡可能快地實現該性能，您可以採取的任何措施都是有利的。實現這一目標的方法之一是將實際推論盡可能靠近提出請求的人。

And so again, we think that inference will primarily be done on device or very close to where the end user is inside the network. We won't get -- again, if the ball is bouncing across the street, you want that inference to be done on the device, on the driverless car itself. So we won't win every inference task. But there will be a lot that makes sense to be running in the network where we have, again, almost infinite network capacity, almost infinite storage and memory and very, very significant CPU and GPU resources to be able to run those inference tasks.

同樣，我們認為推理將主要在設備上或非常接近最終用戶在網絡內的位置進行。我們不會再得到——如果球在街道上彈跳，你希望在設備上、在無人駕駛汽車本身上完成推斷。所以我們不會贏得每一個推理任務。但是，在網絡中運行很多東西是有意義的，我們擁有幾乎無限的網絡容量、幾乎無限的存儲和內存以及非常非常重要的 CPU 和 GPU 資源來運行這些推理任務。

That I actually think will be a lot lesser of the 2 advantages for us. The larger one, which again doesn't feel like it is a big a deal, but we're already seeing it play out some of the regulatory efforts that are happening around the world is that a lot of times for the inference tasks, the data that's there is very private. And people -- and governments want that to stay as close to the actual end user as possible.

我實際上認為這對我們來說是兩個優勢中較小的一個。更大的一個，再次感覺這沒什麼大不了的，但我們已經看到它在世界各地發生的一些監管工作中發揮作用，很多時候對於推理任務，那裡的數據非常私密。人們和政府希望它盡可能接近實際的最終用戶。

So we've already seen action in Italy that has restricted the use of certain AI tools because it sends data out of the country. What Cloudflare can uniquely do, because we're positioned across more than 250 cities worldwide when the vast majority of countries worldwide, is that we can actually process that information locally. So again, we think that on device, we're very close to where the user is on Cloudflare's network. It's is going to be the place where inference is going to take place.

因此，我們已經看到意大利採取了限制某些人工智能工具使用的行動，因為它將數據發送到國外。 Cloudflare 的獨特之處在於，我們的業務遍及全球 250 多個城市，而全球絕大多數國家/地區的業務遍及全球，因此我們實際上可以在本地處理這些信息。因此，我們再次認為，在設備上，我們非常接近用戶在 Cloudflare 網絡上的位置。這將是進行推理的地方。

I'll tell you a quick stab at your second question as well, and then hand it off to Thomas for anything that he would add. I think the thins that's...

我也會快速回答您的第二個問題，然後將其交給托馬斯，讓他補充任何內容。我認為那些事情是...

I'll ask like one clarification. So in that world view, it sounds like you think we're going to see more kind of smaller open source and distribution of a lot of very small models versus like a world view that everything is going to come up into a big GPT or random model over time. Is that correct?

我會問一個澄清。因此，在這種世界觀中，聽起來你認為我們將看到更多更小的開源和許多非常小的模型的分佈，而不是像一切都會出現在大 GPT 或隨機中的世界觀隨著時間的推移模型。那是對的嗎？

Not necessarily, but we run enough capacity out of the edge of our network that we can run fairly large, I mean very, very, very large models out at our network. And what I think is a little bit confusing is most of -- if you're trying to do the training of the models, then having the absolute latest, greatest GPU, the H-100 from NVIDIA right now, there's a lot of constraint in getting those chips. But there's actually a sweet spot for inference tasks, which isn't necessarily at the absolute cutting edge of the models.

不一定，但我們在網絡邊緣運行了足夠的容量，可以在我們的網絡中運行相當大的模型，我的意思是非常非常大的模型。我認為有點令人困惑的是——如果你想訓練模型，那麼擁有絕對最新、最好的 GPU，即 NVIDIA 的 H-100，就會有很多限制獲得這些籌碼。但實際上推理任務有一個最佳點，它不一定處於模型的絕對前沿。

And so Cloudflare is not the right place to actually process the training of models. That makes much more sense to do in a more traditional, centralized data center model, much like -- much of the traditional hyperscale public clouds. And in those cases, you have to have the latest, greatest GPUs. But when you're doing inference, again, a lot of that is going to run on your device and a lot of that is also going to run inside the network. And we're going to be able to, with a much lower CapEx spend, leverage the edge of our network in order to be able to do that processing extremely efficiently. And maybe we don't need the H-100, maybe we can live with an A100 or whatever it is, again, a generation or two behind, but that's also the difference between training and inference. An inference doesn't need necessarily the latest greatest GPU. Does that make sense?

因此，Cloudflare 並不是實際處理模型訓練的正確位置。在更傳統的集中式數據中心模型中，這更有意義，就像傳統的超大規模公共雲一樣。在這些情況下，您必須擁有最新、最好的 GPU。但是，當您再次進行推理時，其中很多將在您的設備上運行，其中很多也將在網絡內部運行。我們將能夠以低得多的資本支出，利用我們網絡的邊緣，以便能夠極其高效地進行處理。也許我們不需要 H-100，也許我們可以使用 A100 或其他什麼，同樣落後一兩代，但這也是訓練和推理之間的區別。推理不一定需要最新最好的 GPU。那有意義嗎？

Yes, it's super helpful.

是的，這非常有幫助。

Keith, what I would add is I always remind people to truly understand the competitive mode of Cloudflare and the efficiency of their -- the business model. You have to start with a network and how it's efficiently targeted using off-the-shelf hardware, completely integrated homogeneous software effect that allows you to run every product on every server in every location. So you have this now massive globally distributed network that is not only efficiently designed to handle large volumes of data, but also large volumes of simultaneous requests. And that makes it already today very well suited for inference tasks, which by nature often involve processing request simultaneously, so -- and it requires less computational power than training model.

Keith，我要補充的是，我總是提醒人們真正了解 Cloudflare 的競爭模式及其商業模式的效率。您必須從網絡開始，以及如何使用現成的硬件有效地定位網絡，完全集成的同質軟件效果使您可以在每個位置的每個服務器上運行每個產品。因此，您現在擁有這個龐大的全球分佈式網絡，它不僅可以有效地設計來處理大量數據，而且還可以處理大量並發請求。這使得它今天已經非常適合推理任務，這些任務本質上通常涉及同時處理請求，因此，它比訓練模型需要更少的計算能力。

So I think the architecture of the network itself puts us in this really advantageous position. And that's why we are so confident that the business model is going to hold, and it's one of the reasons why we're able to even get a CapEx ratio down for the year despite the fact that AI workloads are putting -- are being put more and more on our network. So you really -- as I always say, go back and really understand the efficient architecture of the network itself, and you'll find the answer there.

所以我認為網絡本身的架構使我們處於非常有利的位置。這就是為什麼我們對業務模式將持續下去充滿信心，這也是為什麼我們能夠降低今年的資本支出比率，儘管人工智能工作負載正在減少我們的網絡上的內容越來越多。所以你真的——正如我常說的那樣，回去真正理解網絡本身的高效架構，你就會在那裡找到答案。

And we will take our next question from Andrew Nowinski with Wells Fargo.

我們將回答富國銀行安德魯·諾溫斯基 (Andrew Nowinski) 提出的下一個問題。

I wanted to shift gears and ask about Zero Trust. Is there any more details you could provide on that record Zero Trust contract you talked about? And whether that was a displacement of another vendor and maybe why they selected Cloudflare? And then I have a quick follow-up.

我想換個話題，詢問零信任問題。您是否可以提供有關您談到的零信任記錄記錄的更多詳細信息？這是否是另一家供應商的替代，也許他們選擇 Cloudflare 的原因？然後我會進行快速跟進。

Sure. I think that in almost all of the Zero Trust deals that we see, we are at least in competition with some of the first-generation Zero Trust vendors. In many of them, it's -- there's an incumbent vendor, and we are displacing them. Usually, when that happens, it's because the usability of the existing Zero Trust vendor has been really bad. It's crazy that with some of the leading Zero Trust vendors, if you try to use your laptop when you're on a United Airlines WiFi flight that the captive portal on United Airlines doesn't work. That's obviously unaccepted -- maybe that was acceptable in the pandemic when no one was traveling. But now that people are traveling, that's something that just doesn't hold up anymore.

當然。我認為，在我們看到的幾乎所有零信任交易中，我們至少正在與一些第一代零信任供應商競爭。在其中許多公司中，有一個現任供應商，而我們正在取代他們。通常，發生這種情況是因為現有零信任供應商的可用性非常糟糕。令人瘋狂的是，對於一些領先的零信任供應商來說，如果您在乘坐聯合航空 WiFi 航班時嘗試使用筆記本電腦，聯合航空的強制門戶將無法工作。這顯然是不可接受的——也許在大流行期間沒有人旅行的情況下這是可以接受的。但現在人們開始旅行，這種想法就不再有效了。

And so I think the thing that has been an advantage of Cloudflare is that because we almost think of ourselves at times as a consumer company and we have a Zero Trust product that you can download to your phone right now and use, it's 1.1.1.1, that is running on so many millions of devices. And as we work with device manufacturers to actually build our network directly into their application, those things give us the visibility to be able to focus on performance, to be able to focus on end-user experience and to be able to directly replace oftentimes what have been those sort of first-generation Zero Trust vendors that frankly don't have the same user experience and the same performance. And so in many of these cases -- in all the cases, we're at least competing with the other more traditional Zero Trust vendors. And in many cases now, we're displacing them.

因此，我認為 Cloudflare 的優勢在於，因為我們有時幾乎將自己視為一家消費者公司，並且我們有一個零信任產品，您可以立即下載到手機上並使用，它是 1.1.1.1 ，它正在數百萬台設備上運行。當我們與設備製造商合作，將我們的網絡直接構建到他們的應用程序中時，這些東西使我們能夠關注性能，能夠關注最終用戶體驗，並能夠直接替換經常使用的網絡。坦率地說，這些第一代零信任供應商沒有相同的用戶體驗和相同的性能。因此，在許多這樣的情況下——在所有情況下，我們至少是在與其他更傳統的零信任供應商競爭。現在在很多情況下，我們正在取代他們。

That's great. And then as a follow-up, I think most people assume that Microsoft's new Entrust solutions will be targeted at that SMB sector at the lower end of the market. But that is a market that I think Cloudflare can also serve. So I'm just wondering what you're seeing in terms of competition with the new Entrust solutions?

那太棒了。接下來，我認為大多數人都認為微軟新的 Entrust 解決方案將針對低端市場的中小型企業部門。但我認為 Cloudflare 也可以服務這個市場。所以我只是想知道您在與新的 Entrust 解決方案的競爭方面看到了什麼？

Yes, that's my sense of how Microsoft is thinking about this. And in fact, Microsoft has long been a really great partner of ours. And specifically, and even their announcements of this, we looked for ways to actually highlight the part of the market that's the SMB market. But we're not satisfied just winning the SMB market. We're winning some of the largest enterprises. And I think that's the biggest enterprises that have the most interest here.

是的，這就是我對微軟的看法。事實上，微軟長期以來一直是我們非常好的合作夥伴。具體來說，甚至在他們宣布這一點時，我們也在尋找方法來真正突出中小企業市場。但我們並不滿足於僅僅贏得中小企業市場。我們正在贏得一些最大的企業。我認為最大的企業在這裡最感興趣。

And so I think Microsoft has been a great partner to Cloudflare. We're directly integrated into their Edge browser. The network that we have delivers them very unique benefits, but we also respect them as a competitor. And so I think what we have as an advantage is that network, a network that they use themselves. But it's something where, over time, I think their entry into the market has just validated the market. It's defined it. And we look forward to competing in the places that we do and cooperating in the other places where we don't. And what we see is that what customers really want is a network provider that can protect your front door and your back door.

因此，我認為 Microsoft 一直是 Cloudflare 的優秀合作夥伴。我們直接集成到他們的 Edge 瀏覽器中。我們擁有的網絡為他們帶來了非常獨特的優勢，但我們也將他們視為競爭對手。所以我認為我們的優勢是網絡，他們自己使用的網絡。但隨著時間的推移，我認為他們進入市場只是驗證了市場。已經定義好了。我們期待在我們從事的領域進行競爭，並在我們不從事的領域進行合作。我們看到的是，客戶真正想要的是一個可以保護您的前門和後門的網絡提供商。

What customers really understand is that there's a reason that we have accountants and auditors, and those are separate things. And that -- what customers really want is they want a solution that works across not just one vendor's products, but the entire IT stack. And I think that's what we see time and time again as the reason why customers are selecting Cloudflare Zero Trust solutions.

客戶真正理解的是，我們擁有會計師和審計師是有原因的，而這些是不同的事情。客戶真正想要的是他們想要一種不僅適用於某個供應商的產品，而且適用於整個 IT 堆棧的解決方案。我認為這就是我們一次又一次看到客戶選擇 Cloudflare 零信任解決方案的原因。

And we will take our next question from Mark Murphy with JPMorgan.

我們將回答摩根大通的馬克·墨菲提出的下一個問題。

Matthew, can you elaborate on your vision for how Cloudflare can protect companies from leaking sensitive data out and maybe having some of that land inside a generative AI model? What kind of opportunity do you see? And since that traffic to Microsoft and open AI is so tremendous in that area and you have the partnerships there that you've mentioned, is there a role you can play directly to try to help control some of the data flows in that Azure Open AI service?

Matthew，您能否詳細說明一下您對 Cloudflare 如何保護公司免遭洩露敏感數據以及可能將其中一些數據納入生成 AI 模型的願景？您看到什麼樣的機會？由於該領域的 Microsoft 和開放 AI 流量非常巨大，並且您在那裡擁有您提到的合作夥伴關係，您是否可以直接發揮作用來幫助控制 Azure 開放 AI 中的某些數據流服務？

Yes. I think that this is an area that we really listened to what customers' concerns were and built a product that specifically addresses the concern that you're highlighting because it's one that is on the mind of just about every GC and CISO that's out there. And that is whether they're telling their employers or not, the best data is that almost half of workers at -- in knowledge industry companies are using AI in one way or another in their jobs. And the risk with AI is that if you send a piece of information up to one of these models, it gets incorporated in the same way that if your 2-year-old hears a bad word, it's really hard to get them to unlearn that thing. And so the key is really making sure that the data doesn't actually leave.

是的。我認為，在這個領域，我們真正傾聽了客戶的擔憂，並構建了一款專門解決您所強調的問題的產品，因為這是幾乎每個 GC 和 CISO 都在考慮的問題。這就是，無論他們是否告訴雇主，最好的數據是，知識產業公司中近一半的員工在工作中以這種或那種方式使用人工智能。人工智能的風險在於，如果你向其中一個模型發送一條信息，它就會以同樣的方式被合併，就像你兩歲的孩子聽到一個髒話一樣，很難讓他們忘記這個詞。事物。因此，關鍵是要確保數據實際上不會丟失。

And so what we've created is leveraging our existing data loss protection products, the DLP products, and making them specific to tag data in such a way that you can say, here's a piece of information, maybe it's from our marketing website. I am totally fine with that going out to the public Zero Trust -- actually, not Zero Trust, out to the public AI vendors and being able to train on that. In fact, it's great if they're trained on my marketing messages.

因此，我們創建的是利用我們現有的數據丟失保護產品（DLP 產品），並使它們特定於標記數據，這樣您就可以說，這是一條信息，也許來自我們的營銷網站。我完全同意向公眾零信任——實際上，不是零信任，向公共人工智能供應商開放並能夠對此進行培訓。事實上，如果他們接受過我的營銷信息培訓，那就太好了。

Here's another piece of information, which is much more sensitive where maybe I'm going to restrict that specifically to my own internal or sandboxed solutions that are the AI training models for that. And then maybe there's something else. That sort of cliche example is the secret formula of Coca-Cola or maybe what all of your internal pay schemes or maybe that you don't ever want to get out to anything. And so we've used our DLP solutions in order to specifically address the concern that CISOs and general counsels have about data leaking out. And what we think that, that can do is, over time, add not only those controls, but then start to add things like this particular task has a certain value, so I'm going to send that to maybe GPT 3.5 rather than GPT 4 to save money on that.

這是另一條信息，它更加敏感，也許我會專門將其限制在我自己的內部或沙盒解決方案中，這些解決方案是人工智能訓練模型。然後也許還有其他的事情。這種陳詞濫調的例子就是可口可樂的秘密配方，或者可能是你所有的內部薪酬計劃，或者可能是你不想參與任何事情。因此，我們使用 DLP 解決方案來專門解決 CISO 和總法律顧問對數據洩露的擔憂。我們認為，隨著時間的推移，不僅可以添加這些控件，還可以開始添加諸如此特定任務具有一定價值之類的內容，因此我可能會將其發送到 GPT 3.5 而不是 GPT 4 為了省錢。

And so we think that because of the position we're in, because so much of the AI universe relies on us that it puts us in a great position to not only provide the security to the AI companies, but also provide security anyone who is using AI in their business. And so we can benefit from both sides of the equation.

因此，我們認為，由於我們所處的位置，因為人工智能領域在很大程度上依賴於我們，這使我們處於有利地位，不僅可以為人工智能公司提供安全，還可以為任何參與其中的人提供安全。在他們的業務中使用人工智能。因此我們可以從等式的兩邊受益。

And we will take our final question from Alex Henderson with Needham.

我們將接受 Alex Henderson 和 Needham 提出的最後一個問題。

I was hoping you could talk a little bit about the fairly massive change in tone between the 1Q call and the current call, which highlights an improvement in pretty much every metric that you track. And specifically, maybe call out some of the differences between various geographies, whether the improvement was in large enterprise, was it also in the mid-market in the SMB market. Can you give us some granularity as to where that tone is changing? Because ultimately, you've called out the euro, one of the advanced bell weathers over the last year. And if you're seeing that change in an inflection in tone, I would love to know where it is coming from.

我希望您能談談第一季度通話和當前通話之間相當大的語氣變化，這突顯了您跟踪的幾乎每個指標的改進。具體來說，也許可以指出不同地區之間的一些差異，無論是在大型企業中，還是在中小企業市場的中端市場中。你能給我們一些關於基調發生變化的細節嗎？因為最終，你已經喊出了歐元，這是去年最先進的鐘聲之一。如果你看到語氣變化的變化，我很想知道它來自哪裡。

Yes, I'll start and then Thomas will have some more. I think that Q1 was scary because having a 20% increase in your sales cycle in a single quarter -- and we've seen sort of -- or something around that, around 20% of an increase, but over the entire course of 2022. And so when that then spiked in Q1, what we didn't know was whether that was going to -- whether we were going to be another 20% longer in sales cycles in Q2. And thankfully, that's not what happened. It came back down. But again, I wouldn't say that it's come back down to a point where we feel super optimistic about the macro. I think the macro is still very hard, and the next period of time is going to be a grind. But it is -- we didn't have the same just explosive expansion in sales cycles that I think we and a lot of other peers in the industry saw in Q1.

是的，我先開始，然後托馬斯再講一些。我認為第一季度很可怕，因為您的銷售週期在一個季度內增長了 20%，我們已經看到了類似的情況，大約有 20% 的增長，但在 2022 年整個過程中因此，當第一季度這一數字飆升時，我們不知道第二季度的銷售週期是否會再延長20%。值得慶幸的是，事實並非如此。它又下來了。但同樣，我不會說它已經回到了我們對宏觀經濟感到超級樂觀的地步。我覺得宏觀還是很辛苦的，接下來的一段時間將會是磨礪。但事實是——我們並沒有像我們和業內許多其他同行在第一季度看到的那樣，在銷售週期中出現爆炸性擴張。

And so I think that has been -- that's what led to the conservatism that we had in Q1. And I think that, that returning to something which, again, is still elevated but not -- but it's back to what we were seeing in -- more around what we're seeing in Q4, that is -- I think that's the primary driver at least from my perspective in terms of what -- maybe is what you put it as a more optimistic tone.

所以我認為這就是導致我們在第一季度出現保守主義的原因。我認為，回到仍然升高但不是的東西——但它又回到了我們所看到的——更多地圍繞我們在第四季度看到的情況，也就是說——我認為這是主要的至少從我的角度來看，驅動程序可能是你所說的更樂觀的語氣。

Any sense of -- specifically, any verticals or any categories or geographies or any size business that changed most dramatically?

有什麼感覺——具體來說，任何垂直行業、任何類別、地域或任何規模的業務發生了最大的變化？

Let me give you some more color. We saw a lot -- we saw forward improvement. We talked about this. We also saw a lot of inconsistencies in this -- in the environment that made it much harder to predict what the second half is going to carry. APAC was very promising. As we said before, we saw a lot of very large deals, especially coming from APAC. The European business was very much security-driven and very encouraging, probably because of the very specific geopolitical situation. Europe is in -- then the Americas were more muted in general. We saw very specific performance, really good performance in the Middle East, but also in South America. North America was probably more muted than anything else. Vertical-wise, there's not a lot to talk about, but it's a very consistent performance. I would say there's not one vertical that I would pick out in terms of overall underperformance.

讓我給你更多的顏色。我們看到了很多——我們看到了未來的改進。我們討論過這個。我們還看到了很多不一致的地方——在這樣的環境下，預測下半年會發生什麼變得更加困難。亞太地區非常有前途。正如我們之前所說，我們看到了很多非常大的交易，尤其是來自亞太地區的交易。歐洲業務在很大程度上是由安全驅動的，並且非常令人鼓舞，這可能是因為非常具體的地緣政治局勢。歐洲正處於——然後美洲總體上更加安靜。我們看到了非常具體的表現，在中東和南美都有非常好的表現。北美可能比其他任何地方都更加安靜。垂直方面，沒有太多可談的，但它的表現非常一致。我想說，就整體表現不佳而言，我不會挑選出任何一個垂直領域。

And ladies and gentlemen, I would now like to turn the conference back to Matthew Prince for closing remarks.

女士們、先生們，我現在想請馬修·普林斯（Matthew Prince）致閉幕詞。

I just want to take a second to thank everyone at Cloudflare. Again, as the macro environment continues to be challenging, I'm proud of how our team has stepped up and executed towards operational excellence. Everyone is working incredibly hard to help live up to our mission of helping build a better Internet. So thank you to all the Cloudflare employees, to all of our customers and all of the investors, and we really appreciate everything that you're doing for us.

我想花一點時間感謝 Cloudflare 的所有人。同樣，隨著宏觀環境繼續充滿挑戰，我對我們的團隊如何加強並執行卓越運營感到自豪。每個人都在非常努力地工作，以幫助實現我們幫助建立更好的互聯網的使命。感謝所有 Cloudflare 員工、所有客戶和所有投資者，我們非常感謝您為我們所做的一切。

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

女士們、先生們，今天的電話會議到此結束，我們感謝你們的參與。您現在可以斷開連接。