Cloudflare, Inc. (NET) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Cloudflare Q1 2020 Earnings Conference Call. (Operator Instructions)

各位女士、先生，感謝您稍候，歡迎參加 Cloudflare 2020 年第一季財報電話會議。（接線員指示）

I would now like to hand the conference over to your speaker today, Jayson Noland, Head of Investor Relations. Thank you. Please go ahead, sir.

現在我想把會議交給今天的主講人——投資人關係主管 Jayson Noland。謝謝。先生，請開始。

Thank you for joining us to discuss Cloudflare's financial results for the first quarter 2020.

感謝各位加入我們，一同討論 Cloudflare 2020 年第一季的財務結果。

With me on the call, we have Matthew Prince, Co-Founder and CEO; Michelle Zatlyn Co-Founder 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.

與我一同參與本次電話會議的有：共同創辦人兼執行長 Matthew Prince；共同創辦人兼營運長 Michelle Zatlyn；以及財務長 Thomas Seifert。到目前為止，大家應該都已取得我們的財報公告。該公告以及我們的補充財務資訊可在我們的投資人關係網站上找到。

As a reminder, we'll be making forward-looking statements during today's discussion, including, but not limited to, the impact of the COVID-19 pandemic on our and our customers, vendors and partners operations and future financial performance, anticipated product launches and the time and market potential of those products, the company's anticipated future revenue, financial performance, operating performance, non-GAAP gross margin, non-GAAP net loss from operations, non-GAAP net loss per share, shares outstanding, non-GAAP operating expenses, free cash flow, non-GAAP effective tax rate, dollar-based net retention rate, free and paying customers and large customers. These statements and other comments are not guarantees of future performance but rather are subject to risks and uncertainty, some of which are beyond our control, including, but not limited to, the extent and duration of the impact of the COVID-19 pandemic and adverse conditions in the general domestic and global economic markets.

提醒各位，在今天的討論中我們將作出前瞻性陳述，包括但不限於：COVID-19 疫情對我們以及我們客戶、供應商與合作夥伴之營運與未來財務表現的影響；預期的產品發表以及這些產品的時程與市場潛力；公司預期的未來營收、財務表現、營運表現、非 GAAP 毛利率、非 GAAP 營運淨損、非 GAAP 每股淨損、流通在外股數、非 GAAP 營運費用、自由現金流、非 GAAP 有效稅率、以美元計價的淨留存率、免費與付費客戶以及大型客戶。這些陳述及其他評論並非對未來表現的保證，而是受到風險與不確定性影響，其中部分超出我們的控制範圍，包括但不限於：COVID-19 疫情影響的程度與持續時間，以及國內與全球整體經濟市場的不利狀況。

Our actual results may differ significantly from those projected or suggested in any forward-looking statements. These forward 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.

我們的實際結果可能與任何前瞻性陳述中所預測或暗示的結果有重大差異。這些前瞻性陳述僅適用於今日，您不應將其視為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陳述的任何義務。

For a more complete discussion of the risks and uncertainties that could impact our future operating results and financial condition, please see our filings with the Securities and Exchange Commission as well as in today's earnings press release. Unless otherwise noted, all numbers we talk about today other than revenue will be on an adjusted non-GAAP basis. All current and prior period financials discussed are reflected under ASC 606. You may find a reconciliation of GAAP to non-GAAP financial measures in our earnings release on our Investor Relations website. For historical periods, a GAAP to non-GAAP reconciliation can be found in the supplemental financial information referenced a few moments ago.

如需更完整地了解可能影響我們未來營運結果與財務狀況的風險與不確定性，請參閱我們向美國證券交易委員會提交的文件，以及今日的財報新聞稿。除非另有說明，今天我們討論的所有數字（營收除外）皆以調整後的非 GAAP 基礎呈現。所討論的本期與前期財務數據皆依 ASC 606 反映。您可在我們投資人關係網站上的財報新聞稿中找到 GAAP 與非 GAAP 財務衡量指標的調節表。就歷史期間而言，GAAP 與非 GAAP 的調節可在稍早提及的補充財務資訊中找到。

We would also like to inform you that we will be virtually participating in the JPMorgan Global Tech, Media and Communications conference on May 12 through the 14th and the Baird Consumer Tech & Services conference on June 2 through the 4th.

我們也想告知各位，我們將以線上方式參與摩根大通（JPMorgan）全球科技、媒體與通訊大會（5 月 12 日至 14 日），以及 Baird 消費科技與服務大會（6 月 2 日至 4 日）。

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

現在我想把電話會議交給 Matthew。

Thank you, Jayson. Let me start by saying what feels almost awkward to say given the circumstances. We had a very strong quarter. Our Q1 revenue finished at $91 million, up 48% year-on-year. We posted a gross margin of 78%, showing the continued efficiency of our platform. We made substantial progress on our path toward profitability, realizing over 1,000 basis points of operating leverage improvement year-on-year. That's the easy part.

謝謝你，Jayson。讓我先說一句：在目前情勢下，這句話說起來幾乎有點尷尬——我們這一季表現非常強勁。我們第一季營收為 9,100 萬美元，年增 48%。我們的毛利率為 78%，顯示我們平台持續的效率。我們在邁向獲利的道路上取得重大進展，年對年實現超過 1,000 個基點的營運槓桿改善。這是比較容易的部分。

As I said in our first earnings call as a public company, we've been practicing mock earnings calls for years, to the point that they already feel like business as usual. However, as I sat down to write up these remarks, I have to confess, I struggled because what we're all living through is definitely not business as usual. So in many ways, this isn't going to be a usual earnings call.

正如我在成為上市公司後的第一次財報電話會議所說，我們多年來一直在進行模擬財報電話會議，以至於它們已經讓人覺得像是日常業務。然而，當我坐下來撰寫這些講稿時，我必須坦承，我很掙扎，因為我們正在經歷的一切絕對不是日常業務。因此在很多方面，這不會是一場一般的財報電話會議。

Settle in, buckle up. I wanted to take a bit more time to walk through 4 areas I've been focused on: our team, our platform, our business and our customers. And in particular, I wanted to give you more of a sense of what we're seeing, not just in the last quarter, but focusing on March and April as the world reacted to COVID-19.

請坐穩、繫好安全帶。我想花多一點時間，帶大家走過我所關注的 4 個面向：我們的團隊、我們的平台、我們的業務以及我們的客戶。尤其是，我想讓各位更了解我們所看到的情況，不僅是上一季，而是聚焦在 3 月與 4 月，當全世界因應 COVID-19 而做出反應之際。

First, our team. We are very fortunate that the first customer of all of Cloudflare's products is Cloudflare ourselves. We are digital natives, and we're able to use our products like Cloudflare for Teams to transition to productive and secure remote work. Our network operations center, security operations center and technical support center all continue to be fully, securely and reliably staffed 24/7. But it's not just about technology, it's also an inspiring mission that empowers a team. Cloudflare's mission is to help build a better Internet. Had this been a banking or agricultural crisis, we would likely have felt as powerless as many of our friends and colleagues at other companies do right now. But this was a crisis that caused us all worldwide to lean on the Internet more than ever before.

第一，我們的團隊。我們非常幸運，Cloudflare 所有產品的第一位客戶就是 Cloudflare 自己。我們是數位原生（digital natives），能夠使用我們的產品（例如 Cloudflare for Teams）轉換到高效率且安全的遠端工作。我們的網路營運中心、安全營運中心與技術支援中心仍持續 24/7 全面、安全且可靠地有人值守。但這不只是關於技術，也是一個能賦能團隊的鼓舞人心使命。Cloudflare 的使命是協助打造更好的網際網路。若這是一場銀行或農業危機，我們很可能會像許多在其他公司工作的朋友與同事一樣，感到無能為力。但這是一場讓全球所有人比以往任何時候都更依賴網際網路的危機。

Undoubtedly, the superheroes of this crisis are the medical professionals and scientists taking care of the sick and searching for a cure to this disease. But the faithful sidekick, the Ant Man to Captain Marvel, has been the Internet. And as one of the guardians of the Internet, I'm proud of how our team has risen to the occasion to support our customers, new and old, as they deal with unprecedented challenges.

毫無疑問，這場危機中的超級英雄是照護病患並尋找治療方法的醫療專業人員與科學家。但忠實的副手——就像《蟻人》之於《驚奇隊長》——一直是網際網路。而作為網際網路的守護者之一，我為我們的團隊在關鍵時刻挺身而出、支持新舊客戶、協助他們面對前所未有的挑戰而感到自豪。

I wanted to take this opportunity to thank all our team. You are working incredibly hard to ensure the Internet continues to function while the world had needed it more than ever before. I'm proud of how well you've all kept up our level of productivity and excellence and, most importantly, honored to see you support each other, as well as our millions of customers as we live through these challenging times together. Companies are really just collections of people and this crisis has reaffirmed to me, we have a great team.

我想藉此機會感謝我們所有的團隊成員。你們非常努力，確保在世界比以往任何時候都更需要它的時刻，網際網路仍能持續運作。我為你們每一位都能維持高水準的生產力與卓越表現感到自豪；更重要的是，很榮幸看到你們彼此支持，也支持我們數以百萬計的客戶，與我們一同度過這段艱難時期。公司其實就是人的集合，而這場危機再次讓我確認：我們擁有一支很棒的團隊。

Second, our platform. The growth in Internet traffic has been unprecedented. Across our platform, we saw as much growth in traffic in 12 weeks as we have seen in the previous 12 months. The flexibility of our platform, where every server in every city can run every Cloudflare service, has allowed us to continue to spread load and serve all our customers.

第二，我們的平台。網際網路流量的成長前所未見。在我們的平台上，我們在 12 週內看到的流量成長幅度，等同於先前 12 個月的成長。我們平台的彈性——每一座城市的每一台伺服器都能運行每一項 Cloudflare 服務——使我們得以持續分散負載並服務所有客戶。

Stress does make systems better, and our Engineering team has used this time as a way to make our platform more efficient. For instance, our firewall team released a series of improvements that shaves 40% of the processing time off every request. That means we are doing full deep packet inspection and threat analysis in a fraction of a millisecond at a tremendous scale. It also means that our network has actually gotten faster during this crisis while, at the same time, requiring less hardware.

壓力確實會讓系統變得更好，而我們的工程團隊也利用這段時間讓平台更有效率。舉例來說，我們的防火牆團隊發布了一系列改進，將每個請求的處理時間削減 40%。這意味著我們能以極大規模在不到一毫秒的一小部分時間內完成完整的深度封包檢測與威脅分析。這也意味著在這場危機期間，我們的網路實際上變得更快，同時還需要更少的硬體。

We expect these and many more innovations will pay dividends to us for years to come. One of the concerns we had early in the crisis was our supply chain. Cloudflare sources the hardware that powers our network through multiple ODM partners. These partners as well as the many component manufacturers that they rely on for parts are largely based in Asia where the virus first hit. Beginning in early January, in light of the, at the time, unnamed virus, our infrastructure teams thoroughly analyzed our supply chain, identifying potential bottlenecks. We moved up some purchases of key components we thought may become constrained. This proved prescient.

我們預期這些以及更多創新將在未來多年為我們帶來回報。我們在危機初期的一項擔憂是供應鏈。Cloudflare 透過多家 ODM 合作夥伴採購支撐我們網路的硬體。這些合作夥伴以及他們仰賴的眾多零組件製造商，多數位於病毒最早爆發的亞洲。自 1 月初起，鑑於當時尚未命名的病毒，我們的基礎設施團隊徹底分析了供應鏈，辨識潛在瓶頸。我們提前採購了一些我們認為可能會受限的關鍵零組件。事後證明這個判斷很有先見之明。

Thus far, we've been able to continue to receive the equipment we needed without meaningful delay in order to expand our network during this time of unprecedented demand. And the demand has been unprecedented. We've seen Internet traffic use nearly double through March and April versus the beginning of the year. While global traffic is still increasing, regionally, we are seeing network traffic plateau.

截至目前為止，我們仍能在沒有重大延遲的情況下持續收到擴展網路所需的設備，以因應這段前所未有的需求。而需求確實前所未有。我們看到 3 月與 4 月的網際網路流量使用量，較年初幾乎增加一倍。雖然全球流量仍在上升，但在區域層面，我們看到網路流量開始趨於持平。

Different categories of traffic have grown more than others. Demand for educational and kids content, arts and crafts and parenting content have all more than doubled. On the other hand, traffic to sites about sports scores, travel and real estate has declined. The scalability and flexibility of our unified platform, with its ability to serve our diverse customer base and distribute load globally, has served us very well.

不同類別的流量成長幅度不一。教育與兒童內容、藝術與手作以及育兒內容的需求都增加了一倍以上。另一方面，與體育比分、旅遊與房地產相關網站的流量則有所下降。我們統一平台的可擴展性與彈性——能服務多元的客戶群並在全球分配負載——對我們非常有利。

Third, our business. I've given you the Q1 highlights, but let me zoom into March and April and give you more granularity in what we're seeing. Beginning in March, we saw a modest uptick in the length of our average sales cycle. That added a few days to our closing deals. However, our average sales cycle still remains well under a quarter. And even with the modest uptick is shorter than it was just 12 months ago. Our sales in March were strong, finishing ahead of our plan. What was surprising to us was how much of March's business closed in the last week of the quarter.

第三，我們的業務。我已向各位說明第一季的重點，但讓我把焦點拉近到 3 月與 4 月，提供我們所觀察到情況的更細緻資訊。自 3 月開始，我們看到平均銷售週期的長度小幅上升，這讓我們成交交易多花了幾天時間。不過，我們的平均銷售週期仍然遠低於一個季度。即便出現這個小幅上升，仍比僅僅 12 個月前更短。3 月的銷售表現強勁，最終超出我們的計畫。令我們意外的是，3 月的業務有相當大一部分是在季度最後一週才完成成交。

Our ability to close new business has continued without a break through April. And to date, we are tracking well to our plan for new business this quarter. Our read is that much of the world took a bit of a pause for a few weeks in mid-March, while companies figured out their remote procurement processes. But once those were figured out, deals for critical services, like those Cloudflare provides our customers, got done.

我們成交新業務的能力在 4 月仍持續不間斷。迄今為止，我們本季新業務的進度追蹤結果與計畫相當一致。我們的判讀是，全球在 3 月中旬有幾週稍微按下暫停鍵，因為各家公司在摸索其遠端採購流程。但一旦這些流程理順後，像 Cloudflare 為客戶提供的這類關鍵服務之交易就能順利完成。

One more view into what the data are showing us. We track our sales pipeline closely. While many things may still impact win rates, we are encouraged that we added more new pipeline in February than in January, more in March than in February and more in April than in March. I'm proud of our team and, while the demand is there, we have no intention of slowing down.

再從數據呈現的角度補充一點。我們密切追蹤銷售管線。雖然仍有許多因素可能影響贏單率，但我們感到鼓舞的是：2 月新增的管線多於 1 月、3 月多於 2 月、4 月又多於 3 月。我為團隊感到自豪；在需求仍在的情況下，我們無意放慢腳步。

Part of the key to our success comes back to our short sales cycle and our ability to sell services without sending account or professional service teams on premise. Businesses, large and small, have an acute need for a fast, reliable, secure network now more than ever. They come to us every hour of every day, and we can have them up and running as quickly as a few hours or minutes compared to our competitors' weeks or months. And because of our short sales cycle, we can adapt quickly. As we came to understand that certain industries were going to be particularly impacted by the current crisis, we shifted our sales resources to thriving verticals, so our teams could still make their quarter.

我們成功的關鍵之一，回到我們短的銷售週期，以及無需派遣客戶經理或專業服務團隊到客戶現場就能銷售服務的能力。無論大型或小型企業，現在比以往任何時候都更迫切需要快速、可靠且安全的網路。他們每天每小時都會找上我們；相較於競爭對手需要數週或數月，我們最快只需幾小時甚至幾分鐘就能讓他們上線運作。也因為我們的銷售週期短，我們能快速調整。當我們逐步理解某些產業將特別受到當前危機影響時，我們把銷售資源轉向表現更強勁的垂直領域，讓團隊仍能達成季度目標。

One surprise for the quarter was our pay-as-you-go business. This segment is for customers who sign up with a credit card on month-to-month agreements and without talking to anyone on our sales team. Today, it's a small portion of our revenue. But it's our roots, where we started over 9 years ago, and so it's still very important to us. We were concerned this segment may be more impacted because of its exposure to small businesses and individual developers. To our surprise, last quarter, it had its strongest year-over-year growth in years, and it's continued to show strong growth in April. That won't make a big difference to our bottom line because it's a relatively small portion of our overall revenue. But I'm proud we're still there to serve the small businesses, start-ups and individual developers who need a service like Cloudflare now more than ever. Businesses of all sizes and shapes are moving online to survive, and we are helping them.

本季一個意外的亮點是我們的隨用隨付（pay-as-you-go）業務。這個區塊面向以信用卡註冊、採月付合約、且不需與我們銷售團隊任何人交談的客戶。就目前而言，它只占我們營收的一小部分。但它是我們的根基——我們在 9 年多前就是從這裡起步——因此對我們仍非常重要。我們原本擔心，因其較多曝險於小型企業與個人開發者，這個區塊可能會受到更大衝擊。出乎意料的是，上季它出現多年來最強的年增率，且在 4 月仍持續展現強勁成長。由於它在整體營收中占比相對較小，對我們的最終獲利影響不會很大。但我很自豪我們仍在這裡，服務那些現在比以往任何時候都更需要像 Cloudflare 這類服務的小型企業、新創公司與個人開發者。各種規模與型態的企業都在為了生存而加速轉向線上，而我們正在協助他們。

That's the good news, but it's not all rosy. We are seeing an uptick in request for concessions. Thomas will give you more details, but I wanted to tell you how we're thinking about those requests.

以上是好消息，但並非一片光明。我們確實看到要求讓步（concessions）的請求有所增加。Thomas 會提供更多細節，但我想先告訴各位我們如何看待這些請求。

Based on our analysis of the customer base and the industries that are most impacted, we believe the vast majority of our customers will get through this. Some, however, may need short-term help. We're using the strength of our balance sheet to help these customers in their time of need, build goodwill and, at the same time, working out beneficial terms to deepen our relationship over the long term.

根據我們對客戶基礎以及受影響最嚴重產業的分析，我們相信絕大多數客戶都能度過這段期間。不過，有些客戶可能需要短期協助。我們正運用資產負債表的強健實力，在客戶需要之際提供支持、建立善意；同時也協商對雙方有利的條款，以在長期深化彼此關係。

We are fortunate that because of the breadth of our product offerings delivered across our unified platform, we're often able to cost effectively bundle services together and help our customers replace legacy vendors. Especially now, helping customers save money and simplify their operation leads to a particularly compelling ROI.

我們很幸運，因為我們在統一平台上交付的產品組合廣泛，往往能以具成本效益的方式將服務打包，並協助客戶替換傳統（legacy）供應商。尤其在此刻，協助客戶省錢並簡化營運，會帶來特別具吸引力的投資報酬率（ROI）。

Our competition, with their narrower set of offerings, does not have this luxury. While some hardware vendors may have had a temporary bump this quarter, as CIOs scrambled to make sure they had enough firewall or VPN capacity, we believe that is short-lived. Those same CIOs are e-mailing me saying, we never want to go through something like this again.

我們的競爭對手因產品範疇較窄，無法享有這種優勢。雖然部分硬體供應商本季可能因 CIO 們急著確保防火牆或 VPN 容量足夠而出現短暫的拉抬，但我們認為那只是曇花一現。同樣的 CIO 也在寄電子郵件給我說：我們再也不想經歷一次這樣的事情。

There's a cartoon circulating that asks, who led the digital transformation at your company, CEO, CTO or COVID 19? History may well record this crisis as the last gas for on-premise network hardware. Similarly, there are a number of cloud providers that only offer limited point solutions. Our platform's strategy has positioned us well for this current moment, and we are aggressively leveraging it to take market share. We are seeing a number of new prospects engage in conversations with us to find ways of saving money by leveraging our robust, more cost-effective platform.

有一張流傳的漫畫在問：你們公司的數位轉型是由誰主導的——CEO、CTO，還是 COVID-19？歷史很可能會把這場危機記錄為本地端（on-premise）網路硬體的最後一口氣。同樣地，也有一些雲端供應商只提供有限的點狀解決方案。我們的平台策略讓我們在當下這個時刻具備良好定位，而我們正積極運用它來取得市占。我們看到不少新潛在客戶主動與我們展開對話，尋找透過我們強健且更具成本效益的平台來節省費用的方法。

To that end, as we've said before, we will continue to use our gross margin as a weapon to gain share. As an example of that, in March, we made the call to make Cloudflare for Teams, which we just launched in January, free for any business until September 1. Cloudflare for Teams solves an acute need as companies shifted to 100% remote work and their existing firewall and VPN hardware solutions couldn't keep up.

為此，正如我們先前所說，我們將持續把毛利率當作武器來爭取市占。舉例來說，3 月我們決定將 Cloudflare for Teams（我們在 1 月才剛推出）對所有企業免費提供至 9 月 1 日。Cloudflare for Teams 解決了企業轉為 100% 遠端工作時的迫切需求，因為他們既有的防火牆與 VPN 硬體解決方案無法跟上。

In the last 2 months, we've onboarded over 1,000 companies onto Cloudflare for Teams. Since we made it free, right now, they're all cost and no revenue. But we're proud of being there for businesses in their time of need. And what we've learned in the last 9 years of running Cloudflare it is that, once you're part of someone's infrastructure, you've inherently built trust, and that builds opportunity. In other words, while we feel very fortunate with our results in the short term, we remain relentlessly focused on the long term.

在過去兩個月，我們已讓超過 1,000 家公司導入 Cloudflare for Teams。自從我們將其免費提供後，目前它只有成本、沒有收入。但我們以能在企業需要之際挺身而出為榮。而我們在經營 Cloudflare 的 9 年裡學到的是：一旦你成為某個人基礎設施的一部分，你就自然建立了信任，而信任會帶來機會。換句話說，雖然我們對短期成果感到非常幸運，但我們仍然毫不鬆懈地聚焦於長期。

However, make no mistake. There will be headwinds in the short term. We are part of the broader economy and as businesses struggle and go out of business, we will lose some customers. But long term, we believe we are well positioned to be one of the few networks that will help run a large portion of the Internet.

不過，請不要誤會。短期內將會有逆風。我們是整體經濟的一部分；當企業掙扎甚至倒閉時，我們會失去一些客戶。但從長期來看，我們相信自己具備良好定位，將成為少數能協助運行網際網路相當大一部分的網路之一。

So lastly, I wanted to talk about some of our customer wins for the quarter. We had some incredible wins, like a credit reporting service that signed a 3-year deal worth $800,000 per year; a major gaming platform with a deal worth over $1 million per year; a reinsurance provider who will pay us $750,000 over 3 years to protect their network; and a U.S. government agency using a broad set of our platform's features to secure nuclear research for over $150,000 per year.

最後，我想談談本季的一些客戶贏單。我們拿下了幾個令人驚豔的案子，例如：一家信用報告服務簽下為期 3 年、每年 80 萬美元的合約；一個大型遊戲平台簽下每年超過 100 萬美元的合約；一家再保險提供商將在 3 年內支付我們 75 萬美元以保護其網路；以及一家美國政府機構使用我們平台廣泛的功能組合來保護核能研究，每年超過 15 萬美元。

But let me focus on some customers that are uniquely relevant to this moment. One of the largest telemedicine providers in the United States turned to Cloudflare as the crisis set in. They had to shift the majority of their physicians from clinics where they had legacy on-premise security hardware to their homes where, obviously, they did not.

但我想把焦點放在幾個與此刻特別相關的客戶。當危機爆發時，美國最大的遠距醫療（telemedicine）服務提供商之一轉向 Cloudflare。他們必須將大多數醫師從診所（那裡有傳統的本地端安全硬體）轉移到家中，而家中顯然沒有那些設備。

As a highly regulated industry, security of patient information is critical. They onboarded their physicians onto Cloudflare for Teams so they could keep serving patients. Here's what their CIO said about the experience, "I wish we had done this years ago after seeing how easy it was. Beautiful. This is perfect." I mean on so many levels, I love that.

作為高度受監管的產業，病患資訊的安全至關重要。他們將醫師導入 Cloudflare for Teams，以便能持續服務病患。以下是他們 CIO 對這次經驗的評語：「看到這麼容易之後，我真希望我們幾年前就做了。太美了。這太完美了。」我的意思是，從很多層面來說，我都很喜歡這句話。

A company, many of us are relying on to deliver food to our homes while we shelter in place signed a deal for over $600,000 per year in January. In March, their demand was up so much, they increased their deal by more than $500,000 per year. One of their goals was to ensure that they could decrease their dependency on Amazon Web Services. They found Cloudflare was not only faster and more robust but also significantly more cost effective. And they're using Cloudflare Workers, our edge computing platform, to solve a handful of development challenges they couldn't through any other platform.

一家我們許多人在居家避疫期間仰賴其把食物送到家中的公司，在 1 月簽下每年超過 60 萬美元的合約。到了 3 月，他們的需求大幅上升，因此把合約規模每年再增加超過 50 萬美元。他們的目標之一是確保能降低對 Amazon Web Services 的依賴。他們發現 Cloudflare 不僅更快、更強韌，而且成本效益顯著更高。此外，他們也在使用 Cloudflare Workers（我們的邊緣運算平台）來解決一些透過其他任何平台都無法解決的開發挑戰。

Beyond the customers who paid us, we're also proud of the customers doing critical work we could support through our Project Galileo initiative. Last quarter, we helped ensure fast, reliable, secure access for projects like covidnearyou.org, a project created by Harvard epidemiologists and software developers to track COVID-19 hotspots; maskaherony.com, which facilitated donation of more than 27,000 masks to medical professionals in New York City; samaritans.org, which is providing emotional support resources and suicide prevention for the millions of lonely people impacted by this crisis; beatcovid19now.org, developed by a team of Australian public health and IT researchers to track and make sense of COVID-19 symptoms; and many, many, many more. It is inspiring to our whole team that we are able to lend our technology and expertise to help the true superheroes behind this organization.

除了付費給我們的客戶之外，我們也為能透過 Project Galileo 計畫支持從事關鍵工作的客戶而感到自豪。上一季，我們協助確保像 covidnearyou.org 這樣的專案能夠快速、可靠且安全地存取；該專案由哈佛的流行病學家與軟體開發人員建立，用於追蹤 COVID-19 熱點；maskaherony.com，促成向紐約市醫療專業人員捐贈超過 27,000 個口罩；samaritans.org，為數以百萬計受此危機影響而感到孤獨的人提供情緒支持資源與自殺防治；beatcovid19now.org，由澳洲公共衛生與 IT 研究人員團隊開發，用於追蹤並理解 COVID-19 症狀；以及更多、更多、更多。能夠運用我們的技術與專業，協助這個組織背後真正的超級英雄，令我們整個團隊深受鼓舞。

Finally, this is a hard time, no doubt, and there will be headwinds even for a business like ours. But it's also replete with opportunity. My message to our team has been clear, iconic companies are born out of crisis. They take these opportunities to do 2 things: focus and invest. So we are focusing on the products and innovation that lead to the highest returns. And we are investing in building trust, hiring the greatest people and establishing ourselves for the long term. There are a small number of companies that will power the future of the Internet, and we feel very fortunate, very privileged and very lucky to be one of the Internet's guardians during this crisis. And I'm confident that will serve us well as we strive to build an iconic company over the long term.

最後，毫無疑問，這是一段艱難的時期，即使像我們這樣的企業也會面臨逆風。但同時也充滿機會。我對團隊的訊息一直很明確：標誌性的公司是在危機中誕生的。他們會把握這些機會做兩件事：聚焦與投資。因此，我們正聚焦於能帶來最高回報的產品與創新；同時，我們也在投資於建立信任、招募最優秀的人才，並為長期發展奠定基礎。未來將有少數公司驅動網際網路的發展，而在這場危機中，我們能成為網際網路的守護者之一，深感非常幸運、非常榮幸、也非常感激。我有信心，當我們致力於長期打造一家標誌性公司時，這將對我們大有助益。

With that, I'll hand it off to Thomas. Thomas, take it away.

接下來，我把時間交給 Thomas。Thomas，交給你了。

Thank you, Matthew, and thanks again to everyone for joining us.

謝謝你，Matthew，也再次感謝各位加入我們。

We continued the momentum from 2019 and delivered a strong first quarter, exceeding the high end of our revenue guidance. We believe this reflects the critical role Cloudflare plays in helping customers transform and digitize their business model. Today, I plan to review our first quarter results, discuss the impact of COVID-19, provide guidance for the second quarter and update guidance for the full year 2020.

我們延續了 2019 年的動能，並在第一季交出強勁成績，營收超越我們指引區間的上緣。我們認為，這反映了 Cloudflare 在協助客戶轉型並將其商業模式數位化方面所扮演的關鍵角色。今天，我將回顧第一季的業績，討論 COVID-19 的影響，提供第二季指引，並更新 2020 全年的指引。

Turning to our results. Total revenue for the first quarter grew 48% year-over-year to $91.3 million. The growth in revenue was driven by strong customer demand, both in terms of new logo acquisition as well as expansion within our existing customer base.

接著看我們的業績。第一季總營收年增 48%，達到 9,130 萬美元。營收成長主要由強勁的客戶需求所帶動，包含新客戶（new logo）取得，以及既有客戶群內的擴張。

As Matthew mentioned, we saw significant strength with our pay-as-you-go business. Our pay-as-you-go customers are not committed to a contract but rather are on a month-to-month subscription plan and predominantly composed of small- and medium-sized businesses. We believe the strength in this cohort during a global pandemic speaks to the value of Cloudflare's network and the durability of our business model.

如 Matthew 所提到，我們的隨用隨付（pay-as-you-go）業務展現顯著強勁表現。我們的隨用隨付客戶不需簽訂合約承諾，而是採按月訂閱方案，且主要由中小型企業構成。我們認為，在全球疫情期間，這個族群的強勁表現凸顯了 Cloudflare 網路的價值，以及我們商業模式的韌性。

To provide some additional transparency, our pay-as-you-go customers represents the strong majority of our paying customer base, while contract customers represent the strong majority of our revenue base.

為了提供更多透明度，我們的隨用隨付客戶占付費客戶基礎的絕大多數，而合約客戶則占我們營收基礎的絕大多數。

From a geographic perspective, the U.S. represented 48% of revenue and increased 44% year-over-year. Our international business represented 52% of revenue and increased 52% year-over-year. International growth was driven primarily by Europe, which increased 58% year-over-year. We started making incremental field sales investment in Europe last year behind the traction in our pay-as-you-go business. We are pleased to see those investments start to take hold, specifically in France, Germany and the U.K.

從地理區域來看，美國占營收的 48%，年增 44%。國際業務占營收的 52%，年增 52%。國際成長主要由歐洲帶動，年增 58%。去年我們因隨用隨付業務的成長動能，開始在歐洲逐步增加外勤銷售投資。我們很高興看到這些投資開始發揮成效，特別是在法國、德國與英國。

As a reminder, beginning this quarter, we shifted to revenue-based KPIs and away from billings as the basis for our KPIs. We believe this move to revenue-based KPIs better aligns with our peer group of publicly disclosed financials and our business model as we continue to scale. We provided 8 quarters of revenue-based historicals for comparison purposes, which can be referenced in this quarter's supplemental financial information document on our Investor Relations website.

提醒一下，從本季開始，我們將 KPI 轉為以營收為基礎，而不再以帳單金額（billings）作為 KPI 的基礎。我們認為，改採以營收為基礎的 KPI，能更好地與同業已公開揭露的財務指標以及我們在持續擴張下的商業模式保持一致。我們提供了 8 個季度以營收為基礎的歷史數據以供比較，可在我們投資人關係網站上本季的補充財務資訊文件中查閱。

We added approximately 250,000 total customers during the quarter to exit the quarter at roughly 2.8 million total free and paying customers, representing an increase of 40% year-over-year. We also added over 5,000 paying customers in the first quarter, bringing the total number of paying customers to over 89,000.

本季我們新增約 25 萬名總客戶，使季末總免費與付費客戶數約達 280 萬名，年增 40%。第一季我們也新增超過 5,000 名付費客戶，使付費客戶總數超過 89,000 名。

We remain focused on expansion within existing customers and growing our large enterprise customer base and ended the quarter with 556 paying customers with greater than $100,000 in annualized revenue, which is up 65% year-over-year.

我們仍專注於既有客戶的擴張並成長大型企業客戶基礎；季末年化營收超過 10 萬美元的付費客戶達 556 家，年增 65%。

Our first quarter dollar-based net retention rate was 117%, which decreased 2% sequentially and 1% year-over-year. The slight decline was largely driven by higher churn in the Asia Pacific region. Dollar-based net retention measures our ability to retain and expand revenue from existing customers in the prior year period. Our measurement is net of contraction, net of churn and excludes the benefit of 3 customers that upgrade to a paid subscription.

第一季以美元計價的淨留存率為 117%，較前一季下降 2%，較去年同期下降 1%。這個小幅下滑主要由亞太地區較高的流失率所致。以美元計價的淨留存率衡量我們在前一年同期既有客戶中保留並擴大營收的能力。我們的衡量方式已扣除縮減（contraction）與流失（churn），並排除 3 位升級為付費訂閱客戶所帶來的效益。

First quarter gross margin was 78.3%, down 40 basis points sequentially and up 150 basis points year-over-year. Network efficiency continues to be a defining strength of our business model, allowing us to absorb significantly higher rates of traffic and offer a critical solution like Cloudflare for Teams to new customers at no charge through September 1.

第一季毛利率為 78.3%，較前一季下降 40 個基點，較去年同期上升 150 個基點。網路效率仍是我們商業模式的關鍵優勢，使我們能吸收顯著更高的流量，並可在 9 月 1 日前，向新客戶免費提供像 Cloudflare for Teams 這樣的關鍵解決方案。

As we said previously, we'll use our gross margin advantage as a strategic weapon when opportunities present themselves. During this crisis, we are focused on doing the right thing for our customers today and for our business in the long term. Therefore, in second quarter, we expect to see gross margin closer to our long-term target of 75% to 77%.

如我們先前所說，當機會出現時，我們會把毛利率優勢作為策略武器。在這次危機期間，我們專注於為客戶在當下做正確的事，也為公司長期發展做正確的事。因此，在第二季，我們預期毛利率將更接近我們 75% 至 77% 的長期目標。

Turning to operating expenses. We remain focused on improving the leverage in our business while balancing investments for growth. Total operating expenses were $85.9 million for the first quarter, up 2% sequentially and 35% year-over-year. While we increased our head count by 43% year-over-year, bringing our total number of employees to 1,368 at the end of the quarter, we saw a delay in hiring and onboarding, which we expect to catch up in the current quarter.

接著看營業費用。我們仍專注於在兼顧成長投資的同時，提升業務槓桿。第一季總營業費用為 8,590 萬美元，較前一季增加 2%，較去年同期增加 35%。雖然我們的員工人數年增 43%，使季末員工總數達 1,368 人，但我們看到招募與到職（onboarding）有所延遲，預期將在本季追趕進度。

First quarter operating expenses as a percentage of revenue decreased 6% sequentially and 9% year-over-year to 94%. Sales and marketing expenses were $43.4 million for the quarter, representing a decrease of 1% sequentially and an increase of 42% year-over-year. The sequential decrease was largely due to a swift reduction in travel and discretionary marketing spend in response to the COVID-19 pandemic. Sales and marketing expenses as a percentage of revenue decreased to 48% from 49% in the first quarter last year and from 52% last quarter.

第一季營業費用占營收比重降至 94%，較前一季下降 6%，較去年同期下降 9%。本季銷售與行銷費用為 4,340 萬美元，較前一季下降 1%，較去年同期增加 42%。季比下降主要是因應 COVID-19 疫情，迅速削減差旅與可自由裁量的行銷支出所致。銷售與行銷費用占營收比重降至 48%，低於去年第一季的 49%，也低於上一季的 52%。

Research and development expenses were $20.5 million in the quarter, representing a decrease of 7% sequentially and an increase of 19% year-over-year. R&D as a percentage of revenue decreased to 22% from 28% in Q1 last year and from 26% last quarter.

本季研發費用為 2,050 萬美元，較前一季下降 7%，較去年同期增加 19%。研發費用占營收比重降至 22%，低於去年第一季的 28%，也低於上一季的 26%。

General and administrative expenses were $22 million for the quarter, representing an increase of 18% sequentially and 40% year-over-year. The sequential and year-over-year increase was primarily driven by increased head count and an increase in bad debt expense, primarily to the COVID-19 impact of $1.2 million. G&A as a percentage of revenue was 24%, representing an increase of 2% sequentially and a decrease of 1% year-over-year.

本季一般與行政費用為 2,200 萬美元，較前一季增加 18%，較去年同期增加 40%。季比與年比增加主要由員工人數增加，以及壞帳費用上升所驅動，其中主要與 COVID-19 影響相關的金額為 120 萬美元。一般與行政費用占營收比重為 24%，較前一季增加 2%，較去年同期下降 1%。

We continue to see operating leverage in the business as operating margin improved over 1,000 basis points year-over-year and 600 basis points sequentially. Operating loss was $14.4 million in the first quarter compared to $16.1 million in the same period last year.

我們持續看到業務的營運槓桿，營業利益率較去年同期改善超過 1,000 個基點，較前一季改善 600 個基點。第一季營業損失為 1,440 萬美元，去年同期為 1,610 萬美元。

Net loss in the quarter was $12.3 million or net loss per share of $0.04. Our effective tax rate for Q1 was negative 8%. We ended the first quarter with $588 million in cash, cash equivalents and available for sale securities.

本季淨損為 1,230 萬美元，或每股淨損 0.04 美元。我們第一季的有效稅率為負 8%。第一季末，我們持有的現金、約當現金及可供出售證券為 5.88 億美元。

Q1 free cash flow was negative $30.6 million or 34% of revenue compared to a negative $22.1 million or 36% of revenue in the same period last year. As we mentioned previously, we expect to see continued variability in cash flow margins due to ongoing fluctuations in working capital and the growth in our enterprise business.

第一季自由現金流為負 3,060 萬美元，或佔營收的 34%，相較於去年同期為負 2,210 萬美元，或佔營收的 36%。如同我們先前提到的，由於營運資金持續波動以及我們企業業務的成長，我們預期現金流利潤率將持續呈現波動性。

Before moving to guidance for the second quarter and the full year, I would like to begin with our expectations for COVID-19-related impacts and the associated provisions we factored into guidance. We performed rigorous analysis to understand both the risks and opportunities in the current environment. We factored into our outlook the challenges our customers have been facing, our views of current and prior trends and the customer behavior we have seen in our existing customers and pipeline. We saw a notable bifurcation across our customer base emerge during the quarter, with significant acceleration among certain customers, for example, sales cycles that would have taken a quarter or two being compressed into days given an urgent need as well as some pullback from other customers who are highly affected by COVID-related challenges, particularly those macro-sensitive industries, such as transportation, hospitality and retail. However, only approximately 8% of our business is associated with highly effective transportation, hospitality and retail industries.

在進入第二季與全年指引之前，我想先談談我們對 COVID-19 相關影響的預期，以及我們在指引中納入的相關準備。我們進行了嚴謹的分析，以了解當前環境中的風險與機會。我們在展望中納入了客戶所面臨的挑戰、我們對當前與過往趨勢的看法，以及我們在既有客戶與銷售管道中觀察到的客戶行為。本季我們看到客戶群出現明顯分化：部分客戶顯著加速，例如原本需要一到兩季的銷售週期，因迫切需求而被壓縮到數天；同時也有一些客戶因 COVID 相關挑戰而明顯縮手，尤其是那些對總體經濟敏感的產業，例如運輸、旅宿與零售。不過，與受高度影響之運輸、旅宿與零售產業相關的業務僅約佔我們業務的 8%。

During the quarter, we observed an increase on our sales cycle, which was extended by 5 days, and expect similar sales dynamics to continue and potentially worsen, leading to longer lead time deal closures. We also began to see an uptick in customer contract modification requests, which peaked in March at 133 customer requests with a notable slowdown in April. Despite the recent slowdown, our guidance assumes these requests will continue and reflect a headwind of roughly $2 million in the second quarter.

本季期間，我們觀察到銷售週期拉長，延長了 5 天，並預期類似的銷售動態將持續，且可能惡化，導致成交結案所需時間更長。我們也開始看到客戶合約修改要求增加，3 月達到高峰，共 133 件客戶請求，而 4 月則明顯放緩。儘管近期有所放緩，我們的指引仍假設這些請求將持續，並在第二季反映約 200 萬美元的不利因素。

We are committed to helping our customers through those challenging times and providing them with increased payment flexibility, often in exchange for extended contract duration. We are fortunate that our strong margin profile and balance sheet enables us to provide support to our customers in need, which we also believe will benefit our shareholders and community over the long term.

我們致力於在這些艱難時期協助客戶，並提供更大的付款彈性，通常會以延長合約期限作為交換。我們很幸運擁有強勁的利潤結構與資產負債表，使我們能夠為有需要的客戶提供支持；我們也相信，長期而言這將有利於股東與社群。

Despite these headwinds, we remain uniquely positioned as a mission-critical security and Internet performance partner for our customers. We have a large and diverse customer base, landing customers of all sizes, across every industry and all geographies, with no customer contributing more than 5% of revenue.

儘管面臨這些逆風，我們仍具備獨特定位，作為客戶在關鍵任務安全與網際網路效能方面的合作夥伴。我們擁有龐大且多元的客戶基礎，涵蓋各種規模、所有產業與各地區，且沒有任何單一客戶的營收貢獻超過 5%。

In the first quarter, we met or exceeded our new customer ACV and customer renewal targets, and our DSOs trended flat to down through the quarter. We also think it's important to point out that April has trended as planned from a net new ACV and renewals perspective. Since March, we've seen organic inbound leads double, and our customer pipeline has reached its highest level on a weekly basis.

第一季我們達成或超越新客戶 ACV 與客戶續約目標，而 DSO（應收帳款週轉天數）在本季呈現持平至下降趨勢。我們也認為重要的是指出，從淨新增 ACV 與續約的角度來看，4 月的走勢符合計畫。自 3 月以來，我們看到自然流入的潛在客戶線索倍增，而我們的客戶銷售管道在每週基礎上達到歷史最高水準。

Turning to our guidance for the second quarter. We expect revenue in the range of $93.5 million to $94.5 million, representing an increase of 39% to 40% year-over-year. We expect operating loss in the range of $20 million to $19 million. The sequential increase is primarily due to anticipated hiring and onboarding catch-up from Q1 and COVID-related provisions.

接著談第二季指引。我們預期營收介於 9,350 萬至 9,450 萬美元之間，年增 39% 至 40%。我們預期營業損失介於 2,000 萬至 1,900 萬美元之間。季增主要來自預期在第一季延後的招募與到職（onboarding）進度補回，以及 COVID 相關準備。

We expect net loss per share in the range of $0.06 to $0.05, assuming approximately 299 million common shares outstanding, and we expect an effective tax rate of a negative 1.7%.

我們預期每股淨損介於 0.06 美元至 0.05 美元之間，假設流通在外普通股約 2.99 億股，且我們預期有效稅率為負 1.7%。

In light of the rigorous analysis performed, we are pleased to reaffirm our 2020 guidance for revenue, operating loss and net loss per share despite the uncertainty in the global environment. As such, for the full year 2020, we expect revenue in the range of $389 million to $393 million, representing an increase of 36% to 37% year-over-year. As a reminder, we have a predictable subscription business with strong visibility into near-term revenue.

鑑於已完成的嚴謹分析，儘管全球環境仍充滿不確定性，我們很高興重申 2020 年營收、營業損失與每股淨損指引。因此，2020 全年我們預期營收介於 3.89 億至 3.93 億美元之間，年增 36% 至 37%。提醒一下，我們擁有可預測的訂閱型業務，對近期營收具有高度可視性。

We expect operating loss in the range of $65 million to $61 million. We expect net loss per share in the range of $0.21 to $0.19, assuming approximately 301 million common shares outstanding, and we expect an effective tax rate of a negative 4%.

我們預期營業損失介於 6,500 萬至 6,100 萬美元之間。我們預期每股淨損介於 0.21 美元至 0.19 美元之間，假設流通在外普通股約 3.01 億股，且我們預期有效稅率為負 4%。

In weighing both the headwinds and tailwinds of the current environment, we continue to remain optimistic about the demand for our offerings and our long-term opportunity. While the full impact of the macro economy from COVID-19 is still unfolding, we continue to closely monitor the business environment, and we believe our guidance is appropriately prudent.

在權衡當前環境的逆風與順風之際，我們仍對市場對我們產品與服務的需求以及我們的長期機會保持樂觀。雖然 COVID-19 對總體經濟的全面影響仍在發展中，我們將持續密切監控商業環境，並相信我們的指引已適度審慎。

In closing, as we navigate through these uncertain times, we feel very privileged to be a mission-critical pillar of our customers' operation and fortunate to be there for them when they need us most. We'd like to thank the Cloudflare employees for their continued dedication and resiliency in delivering exceptional service to our customers, partners and communities.

最後，在我們度過這些不確定的時期之際，我們深感榮幸能成為客戶營運中不可或缺的關鍵支柱，也很幸運能在他們最需要我們的時候陪伴左右。我們要感謝 Cloudflare 員工持續的投入與韌性，為客戶、合作夥伴與社群提供卓越服務。

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

接下來，我想開放提問。接線員，請開始徵詢問題。

(Operator Instructions) Your first question comes from the line of Sterling Auty from JPMorgan.

（接線員指示）第一個問題來自摩根大通（JPMorgan）的 Sterling Auty。

Yes. Listen, I know there's a ton of things that you had to get through, but one item that wasn't mentioned was you signed another noticeable partnership agreement in China during the quarter. Just wondering if you can give us some sense of what that can mean to your growth in the region moving forward?

是的。聽著，我知道你們有很多事情需要說明，但有一項沒有提到的是，你們在本季於中國又簽署了一項相當引人注目的合作夥伴協議。想請問你們能否談談，這對你們未來在該地區的成長可能意味著什麼？

Yes. Thanks, Sterling, for the question. We have been operating in China now for 5 years in partnership with Baidu. And I think what I've learned in China is that the Chinese tech community, even though it's a very big country, is a very tight-knit part of -- a very tight-knit community. And I think that what we really did over the last 5 years is prove ourselves as a good partner. And so beginning at the end of 2019, we were approached by a number of different Chinese Internet companies. We wanted to diversify the number of partners that we had in China. And we were in the fortunate position to be able to choose who we thought would be a great partner going forward. And JD Cloud really fit that bill incredibly well. And so we signed an agreement with them. It's going to take us a little bit of time for us to get that online, but I'm incredibly excited about it. We're adding 50 new cities per year to a total of 150 PoPs across China that will augment the existing network that we have with Baidu. And I think that there's a real opportunity here for us to extend what we think is very unique about Cloudflare, which was we are 1 global network that spans the entire world and allows our global customers to manage their traffic both inside and outside of Cloudflare through a single user interface.

是的。謝謝你，Sterling，這個問題。我們與百度合作在中國營運至今已 5 年。我在中國學到的是，中國的科技社群雖然身處一個非常大的國家，但其實是一個非常緊密的——非常緊密的社群。我認為我們在過去 5 年真正做到的是，證明我們是一個很好的合作夥伴。因此從 2019 年底開始，有多家不同的中國網際網路公司主動接觸我們。我們希望分散在中國的合作夥伴數量，而我們也很幸運能夠選擇我們認為未來會是很棒的合作夥伴。京東雲（JD Cloud）非常符合這個條件，因此我們與他們簽署了協議。我們需要一些時間讓它上線，但我對此非常興奮。我們將在中國每年新增 50 個城市，總計在全中國達到 150 個 PoP，這將補強我們與百度既有的網路。我認為這讓我們有真正的機會去延伸 Cloudflare 的獨特之處：我們是一個橫跨全球、覆蓋全世界的單一全球網路，讓全球客戶能透過單一使用者介面管理其在 Cloudflare 內外的流量。

So while I'm excited about this, I think it decreases the -- some of the risk that we had on China in terms of being dependent on one provider there, and I think there's a substantial amount of opportunity that this provides as the world recovers from what we're going through right now.

因此，雖然我對此感到興奮，但我認為這也降低了我們在中國方面的一些風險，因為不再只依賴單一供應商；而且我認為，隨著世界從我們目前所經歷的狀況中復甦，這將帶來相當可觀的機會。

That makes a lot of sense. And then, Thomas, one follow-up for you. Thank you for the information on the exposed industries like travel. You made the comments on the pay-as-you-go program. But a question I get a lot from investors is, how should we think about your business as you stratify it between exposure to SMB versus mid-market versus enterprise? How would you kind of characterize the business that way?

這很合理。接著，Thomas，我有一個追問，謝謝你提供關於受影響產業（例如旅遊）的資訊。你也提到了按量付費（pay-as-you-go）方案。不過投資人常問我的一個問題是：當你們把業務按 SMB（中小企業）、中型市場與企業客戶來分層時，我們應該如何看待你們的業務？你會如何用這種方式來描述你們的業務？

I think we pointed out early that we really manage our go-to-market across the broadness of the funnel we have. So there's not really a focus that shifts from small to medium to big. It's really important for the efficiency of our business model. And I think this current crisis shows how important that is to manage across this broadness of the funnel. We were surprised how resilient our pay as you go business is. And as Matthew mentioned in his part of the script, it was the strongest part -- it had the highest growth in 4 years in this segment. It shows you how important it is for us to deliver those services to small- and medium-sized companies and also developers.

我想我們很早就指出，我們的 go-to-market（市場進入策略）是橫跨我們整個漏斗的廣度來管理的。因此，並不存在從小到中到大的某種重心轉移；這對我們商業模式的效率非常重要。我認為這次危機也顯示出，管理這個廣度的漏斗有多重要。我們對按量付費業務的韌性感到驚訝。正如 Matthew 在他那段講稿中提到的，這是最強的一部分——在這個區隔中，它創下 4 年來最高的成長。這也顯示出，我們為中小型公司以及開發者提供這些服務有多重要。

So the -- it's really important that we continue to convey the message of managing across the broadness of this funnel. That is what keeps our cost of customer acquisition low, this keeps our go-to-market model efficient. And you heard it in my script, we saw significant strength in Europe in the first quarter following the investments we -- the incremental field sales investments we made at the end of last year. And that was based on the strength of our local pay-as-you-go business. So it continues to provide us the data we need in order to invest behind the demand.

因此——我們持續傳達在這個漏斗廣度上進行管理的訊息非常重要。這正是讓我們的客戶取得成本維持在低檔的原因，也讓我們的上市推廣（go-to-market）模式保持高效率。你也在我的講稿中聽到了，我們在第一季於歐洲看到顯著的強勁表現，這是在我們——去年年底所做的額外前線業務銷售投資之後。這是建立在我們當地按量付費（pay-as-you-go）業務的強勢之上。因此，它持續為我們提供所需的數據，讓我們能夠在需求端加大投資。

Your next question comes from the line of Phil Winslow from Wells Fargo.

你的下一個問題來自富國銀行（Wells Fargo）的 Phil Winslow。

Glad to hear that you're all well and I hope the same is true for your family and your broader team. Matthew, obviously, you commented on just the sheer amount of volume that's going across the Internet and your network as well, whether it be video work from home, et cetera. Wondering if you can talk about just -- you have this huge menu of solutions, has there ever been any that stand out to you seeing incremental interest whether it be your load balancing, Argo. Obviously, you mentioned Teams. Is there anything you'd highlight there based on sort of the environment that we're seeing right now?

很高興聽到你們都安好，也希望你的家人以及更廣泛的團隊同樣平安。Matthew，顯然你提到目前有大量流量正在穿越網際網路以及你們的網路，不論是居家辦公的視訊等。想請你談談——你們有非常龐大的解決方案選單，是否有任何產品特別突出、看到額外的興趣增加，例如你們的負載平衡（load balancing）、Argo。你也提到了 Teams。就我們現在看到的環境而言，有沒有什麼你會特別強調的？

I mean I think the thing that has been the real standout for this time has been Cloudflare for Teams. The -- we couldn't have, in some ways, gotten more fortunate to have announced that in January. That was a product that it was new for us. It was something that there wasn't a lot of awareness in the market for. As a result, it made it actually a very easy decision for us to say -- as we were seeing businesses struggle, for us to say, let's make that product free through September 1, and the response was really overwhelming. We signed up over 1,000 businesses to be using Cloudflare for Teams. And what was really inspiring for me is our -- we wanted to make sure that our main sales team was focused on closing the quarter and onboarding customers onto products that would generate revenue, and we saw strong demand across our entire product base. And so we had people on Thomas' finance team, on our customer support team, on our engineering team, on our product team all raising their hands around the world saying, we'll volunteer to do 30-minute onboarding sessions with literally over 1,000 businesses. And so I think that, that has raised the awareness of that product very substantially. And I think that will pay us dividends for a long time to come.

我的意思是，我認為這段時間真正最突出的，是 Cloudflare for Teams。——從某種程度上說，我們在一月宣布它，真的是再幸運不過了。那是一個對我們而言很新的產品，市場對它的認知也不高。因此，當我們看到企業在掙扎時，我們很容易就做出決定——讓這個產品免費提供到 9 月 1 日，而回應真的非常熱烈。我們讓超過 1,000 家企業註冊使用 Cloudflare for Teams。真正讓我受到鼓舞的是，我們——我們希望確保主要銷售團隊專注於完成季度結算並協助客戶導入能帶來營收的產品，而我們也看到整個產品線都有強勁需求。因此，我們看到 Thomas 的財務團隊、客戶支援團隊、工程團隊、產品團隊的人在全球各地都舉手表示願意志願投入，為超過 1,000 家企業逐一提供 30 分鐘的上線導入（onboarding）課程。我認為這大幅提升了市場對該產品的認知，而且我相信這將在很長一段時間內為我們帶來回報。

I think in terms of the products that generated revenue, if you think about what Cloudflare is, fundamentally, we're what the future of a network should look like. And that network should be resilient, it should be secure, it should be reliable. And so what we saw was that, as more and more of the world shifted to relying on the Internet in order to keep their businesses online in order to continue to do their work, a modern network is what they needed. And so that meant that load balancing, firewall, security, all of the different functions came together. And I think that what this crisis really illustrated was it really isn't about 1 product or another. Customers are looking for a suite where they can sort of say, "Hey, I don't have expertise here. I want you guys to have this." And that's why they're turning to Cloudflare. And I think that's the -- our platform strategy really has shown over Q1.

我認為就帶來營收的產品而言，如果你思考 Cloudflare 的本質，我們從根本上是在打造未來的網路應該長什麼樣子。而那樣的網路必須具備韌性（resilient）、安全（secure）、可靠（reliable）。因此我們看到，隨著世界越來越依賴網際網路來讓企業維持線上運作、持續完成工作，他們需要的是現代化的網路。這也意味著負載平衡、防火牆、安全性，以及各種不同功能需要整合在一起。我認為這次危機真正說明的是，重點其實不是某一個產品。客戶在尋找的是一套完整的組合，讓他們可以說：「嘿，我在這方面沒有專業，我希望你們來處理。」這也是他們轉向 Cloudflare 的原因。我認為——我們的平台策略在第一季確實展現了成效。

Your next question comes from the line of Heather Bellini from Goldman Sachs.

你的下一個問題來自高盛（Goldman Sachs）的 Heather Bellini。

This is Caroline on for Heather. I hope you and your families are doing well. I wanted to dive a little bit deeper into the net expansion rate, just given your diversified customer base. I'm curious how have the retention rates been trending within your -- the small mid-sized as well as enterprise customer base? And then specifically the weakness in Asia Pac, was that driven by the SMB customers? Or was there some changes in churn within the larger enterprise customers?

我是 Caroline，代替 Heather 提問。我希望你和你的家人都一切安好。我想更深入探討一下淨擴張率（net expansion rate），尤其考量到你們多元化的客戶基礎。我很好奇，在你們——中小型客戶以及企業級客戶群中，留存率（retention rates）的趨勢如何？另外，亞太地區的疲弱是由 SMB 客戶所驅動的嗎？還是大型企業客戶的流失（churn）出現了一些變化？

Yes. Thanks for the question. We -- so starting with SMB customers globally, I think that looking at our pay-as-you-go business, that is a rough proximate for our SMB customers. And I think the thing that we were, I think, pleasantly surprised by was that, globally, that segment actually had its strongest growth that we've seen in any period of time. When we have seen customers in that segment who have -- who have gone from paying customers and churn, what we're not seeing is them switching to another solution. We're seeing some instances where companies are going out of business. But again, this is a very small portion of our overall business. Even the pay as you go segment is a relatively small portion. But what we're more seeing is that they might just need some relief on their bill. And so the #1 thing that competes for our sort of pay as you go subscription business is the free version of Cloudflare's product. And so we're not losing that -- them on our platform, but we're seeing them what -- they are struggling, downgrading. That said, the expansion in the pay-as-you-go business both through new customers as well as our existing customers upgrading to becoming paying customers is the strongest that we've seen in Q1 as we've seen in several years in the past. And that was -- I think that was a very pleasant surprise. And I think what that speaks to is even small businesses are looking for ways to continue to operate, and that means more and more of them are turning to the Internet. And that has actually been a tailwind for us.

是的，謝謝你的問題。我們——先從全球 SMB 客戶開始，我認為觀察我們的按量付費（pay-as-you-go）業務，可以作為 SMB 客戶的一個粗略替代指標。我想讓我們——我想讓我們感到驚喜的是，全球而言，這個區隔其實出現了我們在任何期間所見過的最強成長。當我們看到該區隔中的客戶——從付費客戶流失（churn）時，我們並沒有看到他們改用其他解決方案。我們看到的是某些情況下公司倒閉。但同樣地，這只占我們整體業務非常小的一部分。即使按量付費區隔本身也相對較小。但我們更多看到的是，他們可能只是需要帳單上的一些緩衝。因此，與我們按量付費訂閱業務競爭的第一大因素，是 Cloudflare 產品的免費版本。所以我們並不是在平台上失去他們——我們看到的是他們在艱難之下選擇降級（downgrading）。話雖如此，按量付費業務的擴張——不論是新客戶，或是既有客戶升級成為付費客戶——在第一季的強度，是我們過去幾年所見最強的。這——我認為是非常令人驚喜的。我認為這反映出，即便是小型企業也在尋找持續營運的方法，而這意味著越來越多企業轉向網際網路。這對我們而言其實形成了順風（tailwind）。

In terms of Asia, I think that we're -- we had just some churn from some customers that, again, were impacted by various factors of what was going on in Asia. Again, though, I think there's nothing systemic to that. And in those cases, it's -- I think that we see that is a region that we're excited about going forward. So definitely it was not an exposure to the SMB market, which is what drove the weakness in Asia.

至於亞洲，我認為我們——有一些客戶出現流失（churn），同樣地，是受到亞洲當時各種因素影響。不過我認為那並沒有系統性問題。而在那些案例中——我認為我們仍然對該區域的未來感到興奮。所以，推動亞洲疲弱的因素絕對不是對 SMB 市場的曝險。

Yes. Let me give you some additional -- let me give you some additional color because I think it's very important that the first time we saw a revenue-based DNR number. The 117%, that is what you would expect from good performance in our peer group. But like them, you will see a lot -- a higher level of volatility in this measurement because larger customers don't expand their business in a perfectly linear manner. So that's why you will see some volatility there. This quarter, as you heard from Matthew, from a revenue perspective, not so much from a billing and ACV perspective, was also a bit more back-end loaded as everybody paused towards the end of March and had to figure out how new procurement processes would look like. That is certainly a reflection in there. And the churn in Asia is not really a regional topic. It's much more a vertical topic where we saw a couple of customers churn off which had a higher exposure to the verticals that are COVID-19 impacted.

是的。我再補充一些——我再補充一些背景，因為我認為這非常重要：這是我們第一次看到以營收為基礎的 DNR 數字。117% 這個水準，符合你對同業群中良好表現的預期。但和他們一樣，你會在這個衡量指標上看到更高程度的波動，因為大型客戶的業務擴張並不是完全線性的。因此你會看到一些波動。本季，如同你從 Matthew 那裡聽到的，從營收角度來看——不那麼是從帳單（billing）與 ACV（年約合約價值）角度——也比較偏向後段（back-end loaded），因為大家在三月底都暫停了一下，必須弄清楚新的採購流程會長什麼樣子。這當然會反映在數字裡。另外，亞洲的流失其實不太是區域性的議題，更像是產業別（vertical）議題；我們看到有幾位客戶流失，而他們對受 COVID-19 影響的產業別曝險較高。

Got it. That's a very helpful color. And I guess my follow-up really is, Matthew, how do you see the competitive landscape evolving post the crisis? I mean, are you currently seeing more conversations about replacements of the legacy on-premise vendors.

了解。這些補充非常有幫助。我想我的追問是，Matthew，你如何看待危機過後競爭格局的演變？我的意思是，你們目前是否看到更多關於替換傳統本地端（legacy on-premise）供應商的對話？

For sure, we're hearing that. The -- what I'm -- there were CIOs that we've been talking to for a long time, and they are sort of like, yes, I don't know about the cloud. I'm sort of still figuring out what my strategy is going to be. I think that, that -- the current crisis has just accelerated everyone's move toward the cloud. We're seeing more and more people turning that direction. And again, I think that we're already starting to have that as a tailwind for us. And I think that will continue for quite some time to go. There are a lot of Cisco boxes out there that need to be replaced. And I think that we've got a very full product suite to be able to do that.

當然，我們確實聽到這樣的聲音。——我們——有一些 CIO 我們已經談了很久，他們有點像：是的，我對雲端還不確定，我還在摸索我的策略會是什麼。我認為——這次危機只是加速了所有人走向雲端的步伐。我們看到越來越多人朝那個方向前進。而且同樣地，我認為這已經開始成為我們的順風，我也認為這會持續相當長一段時間。市面上有很多 Cisco 的設備盒子需要被替換。我認為我們擁有非常完整的產品組合，能夠做到這件事。

We are not -- what we are not seeing is a lot of, again, competition that's pulling away our businesses. We see a very strong growth both with our existing customers and our ability to land new customers. And again, I think where we're trying to be very prudent in terms of understanding the risk is that I don't think any of us know exactly how long this is going to go on, how much it's going to impact the overall business climate. But I think inevitably, as we come out, the world is going to look different, and it's going to be a world where more and more customers are excited to use a solution like Cloudflare.

我們並沒有——我們沒有看到大量、再次強調，會把我們的業務拉走的競爭。我們看到既有客戶的成長非常強勁，同時我們也具備拿下新客戶的能力。而且我認為，我們在理解風險方面試圖非常審慎的是，我不覺得我們任何人能確切知道這會持續多久、會在多大程度上影響整體商業環境。但我認為不可避免地，當我們走出來之後，世界會看起來不一樣，而且會是一個越來越多客戶樂於使用像 Cloudflare 這樣解決方案的世界。

Your next question comes from the line of Matt Hedberg from RBC Capital Markets.

下一個問題來自 RBC Capital Markets 的 Matt Hedberg。

Great guys. Matthew, you obviously have a lot of products that can aid work-from-home trends, and you've talked about them tonight. Just wondering from a high level, can you talk more broadly about your exposure to this particular use case and how you expect to continue to invest and also benefit from this long-term trend that obviously is changing the way, I think, all of us think about work?

各位表現很棒。Matthew，你們顯然有很多產品可以協助在家工作（work-from-home）的趨勢，而且你今晚也談到了。想從較高層次請教，你能否更廣泛地談談你們在這個特定使用情境上的曝險程度，以及你們預期將如何持續投資並從這個長期趨勢中受益？這個趨勢顯然正在改變我想我們所有人對工作的看法。

Well, I think if, first of all, this is a terrible crisis. And there are -- we all have friends who have been impacted and are not able to work right now because their jobs do require them to go in, restaurant workers and nail salons and hair -- people who cut hair. But I think that what I think we're -- as a society overall fortunate about is that this didn't happen 10 years ago. And over the course of the last 10 years, we at Cloudflare and lots of other companies have built out cloud solutions that can continue to allow people to work. And I've been -- we -- Cloudflare has traditionally been very much a work-from-office culture ourselves. And I was nervous when we switched almost overnight to globally being a work-from-home culture.

我想，首先，這是一場可怕的危機。而且有——我們都有朋友受到影響，因為他們的工作確實需要到現場，所以現在無法工作，像是餐廳員工、美甲店、髮廊——剪頭髮的人。但我認為，從整體社會來看，我們幸運的一點是這件事不是發生在 10 年前。在過去 10 年裡，我們 Cloudflare 以及許多其他公司建立了雲端解決方案，讓人們仍能持續工作。而我一直——我們——Cloudflare 傳統上本身非常偏向在辦公室工作的文化。當我們幾乎一夜之間在全球轉為在家工作的文化時，我其實很緊張。

And what I've seen is incredibly encouraging that our productivity is incredibly high. We're getting work done. We're closing deals, and it feels like we've not missed the beat. And I think that, that's an illustration of what the business of the future looks like, which is how can we think about what are the best aspects of remote work and what are the best aspects of working from offices. And I think a lot of the reason why we were able to do what we did was that we had the IT systems in place to be able to support that. And a lot of those were products that we built for ourselves. And so I think having a reliable network, which is fundamentally what it is that Cloudflare provides, one that is performant, one that doesn't fail, one that is secure, no matter what, that is a foundational aspect of any work-from-home strategy. And then -- and so that is our business.

而我看到的情況非常令人振奮：我們的生產力非常高。我們把工作做完、我們在成交案子，感覺就像完全沒有漏拍。我認為這正是未來商業樣貌的一個例子：我們如何思考遠端工作的最佳面向，以及在辦公室工作的最佳面向。我認為我們之所以能做到這些，很大一部分原因是我們具備支援這種模式的 IT 系統。而其中很多其實是我們為自己打造的產品。所以我認為，擁有一個可靠的網路——這從根本上就是 Cloudflare 所提供的——一個高效能、不會故障、無論如何都安全的網路，是任何在家工作策略的基礎要素。然後——所以那就是我們的業務。

And then on top of that, the fact that we've got Cloudflare for Teams, which today is not responsible for a lot of revenue, but boy, is there a lot of interest based on what this is, I think that a solution like that is going to be a part of every company going forward when they make sure that they have the flexibility, if ever in the future 100% of their workforce has to work from home because of another outbreak or more likely because, going forward, I think that we're all going to realize that the future of work, it's going to be a mix of office and home. And I think we've got a big opportunity to play a role in that, not just by providing that foundational, secure, reliable performant network, but then to provide additional solutions on top of that, that can make working from home fast, secure and productive.

此外，我們還有 Cloudflare for Teams。它目前並沒有帶來很多營收，但天啊，基於目前的情況，市場興趣非常高。我認為這樣的解決方案，未來會成為每家公司的一部分，因為他們要確保具備彈性：如果未來因為另一波疫情爆發，或更可能的是，往後我想我們都會意識到工作的未來將是辦公室與居家混合，當 100% 的員工必須在家工作時也能運作。我認為我們有很大的機會在其中扮演角色，不只是提供那個基礎、安全、可靠且高效能的網路，還能在其上提供額外的解決方案，讓在家工作變得快速、安全且高生產力。

That's great. And then maybe as a follow-up, obviously, you have a unique perspective on China that's expanding now. I'm curious if you can talk about what you're seeing there when people go back to work. How trends of China opening up might potentially impact? And think about how the rest of the world is going to react to opening up.

很好。接著可能追問一下，你們對正在擴張的中國市場顯然有獨特的視角。我很好奇你能否談談當人們回去上班時，你們在那裡看到了什麼？中國重新開放的趨勢可能會帶來哪些影響？以及思考世界其他地區將如何對重新開放做出反應。

We have an office in Beijing. And so we were very acutely aware of this crisis, I think, maybe earlier than some other companies that might not have exposure to that region. Our team outside of China was quick to support our team inside of China. We shifted to an entirely remote work posture there. And then what's been interesting is I think it has -- while they led the way in sheltering in place and adjusting in that way, they're now also leading the way in transitioning back out. And so we have reopened our office in Beijing. We have designated that team in terms of a yellow team and a red team, which are -- which split up so that we don't have everyone in the office every day. We're practicing what are appropriate measures. And we're watching as the Chinese economy -- and not just our team, but teams around the country, are coming back online.

我們在北京有辦公室。因此我想，相較於一些可能沒有接觸該地區的公司，我們對這場危機的感受非常直接，可能也更早。我們在中國以外的團隊很快就支援了中國境內的團隊。我們在那裡轉為完全遠端工作的模式。接著有趣的是，我認為——他們在居家避難（sheltering in place）與那樣的調整上走在前面，而現在他們也在帶頭走向復工。因此我們已重新開放北京辦公室。我們把那個團隊分成黃隊與紅隊——也就是分流，讓不是每個人每天都在辦公室。我們在實施適當的措施。我們也在觀察中國經濟——不只是我們的團隊，而是全國各地的團隊——正在重新上線。

And I think that, that's part of -- China is an enormous market. And whatever the current concerns are around the virus or the current concerns around trade tension, over the long term, I think there's almost no way that we don't find a way to reengage with that country. And what I'm proud of is that we are the one network that global companies that want to be able to operate inside of China and outside of China, whether they are Chinese-based or they are based in the United States or anywhere else, we help facilitate that movement of this. And then I think, especially with the deal that we did with JD, they are really the on-the-ground logistics experts. And I think that, that creates an incredible opportunity for companies that are outside of China to work with us to be able to market through the Cloudflare network and then work with JD as a partner to actually get their goods in the hands of Chinese customers. And I think that's -- you've got to invest in things like network infrastructure well ahead of when this comes back, but all of the signals that we're seeing are that this is going to come back and is obviously going to be a real source of economic growth for the world going forward.

我認為這也是其中的一部分——中國是一個巨大的市場。不論目前對病毒的擔憂是什麼，或目前對貿易緊張的擔憂是什麼，從長期來看，我認為幾乎不可能我們不會找到方法重新與那個國家接軌。我感到自豪的是，我們是唯一一個網路，能讓希望在中國境內與境外運營的全球公司——不論它們是中國本土公司，或是位於美國或其他任何地方——我們都能協助促成這種運作與流動。然後我認為，特別是我們與京東（JD）達成的合作，他們是真正在地的物流專家。我認為這為中國以外的公司創造了極佳機會：與我們合作，透過 Cloudflare 網路進行行銷，並與京東作為合作夥伴，實際把商品交到中國消費者手中。我認為這——你必須在復甦到來之前很早就投資像網路基礎設施這樣的事情，但我們看到的所有訊號都顯示這會回來，而且顯然將成為未來全球經濟成長的一個重要來源。

Your next question comes from the line of Shaul Eyal from Oppenheimer.

下一個問題來自 Oppenheimer 的 Shaul Eyal。

Thank you. Congrats on the quarterly results. Matthew or Thomas, I know that typically, you do not provide the RPO metric officially on the call. But any color from a -- maybe even from a qualitative perspective, that will be highly appreciated. Then I have a follow-up.

謝謝。恭喜季度業績。Matthew 或 Thomas，我知道你們通常不會在電話會議上正式提供 RPO 指標。但能否提供一些補充說明——也許甚至從定性角度——我們會非常感激。然後我還有一個追問。

Yes. Normally, we don't talk about RPO, but I think given the economic backdrop, it's really to ask for some more transparency. RPO for us is well over 50% for the remaining fiscal year '20 guidance. So backlog and deferred revenue. You have to keep in mind that it's primarily our contract business. So the second large contributor then would be the renewal base in our contract business and especially in our pay-as-you-go business, which you heard from Matthew was specifically -- is exceptionally strong in the first quarter. So if you add those two together, you're probably already at 70% or slightly above. And then new ACV is literally the smallest contributor. And that's why we confidently can say, based on a 100% subscription business that the visibility we have into our -- especially near-term revenue is pretty solid.

是的。我們通常不談 RPO，但我認為在目前的經濟背景下，大家確實希望有更多透明度。就我們而言，RPO 對於 2020 財年剩餘期間的指引而言，遠高於 50%。也就是在手訂單（backlog）與遞延收入。你必須記住，這主要來自我們的合約型業務。第二個大的貢獻來源則是我們合約型業務的續約基礎，尤其是我們的按量付費（pay-as-you-go）業務——你也聽 Matthew 提到，第一季表現特別——非常強勁。所以如果把這兩者加起來，你大概已經到 70% 或略高。然後新 ACV（年度合約價值）實際上是最小的貢獻來源。這也是為什麼我們能有信心地說，基於 100% 訂閱制的業務模式，我們對——尤其是短期營收——的可見度相當穩健。

Understood. And also, when we think about those new 1,000 team businesses that joined during the quarter, if we translate this number into subscribers, what could that be like? Is it 1 million, 2 million, 3 million? Whatever color you can share with us will be greatly appreciated.

了解。另外，當我們思考本季新增加入的那 1,000 家 team 業務時，如果把這個數字換算成訂閱者（subscribers），大概會是什麼規模？是 100 萬、200 萬、300 萬？任何你能分享的補充資訊我們都會非常感激。

And also, if I can kind of sneak another one, what would you think the renewal rate as we start thinking about 2021 of those 1,000 team businesses once they convert, what this renewal rate might look like down the road?

另外，如果我可以再偷偷加問一個，當我們開始思考 2021 年時，那 1,000 家 team 業務一旦轉換之後，你認為它們的續約率（renewal rate）在未來可能會是什麼樣子？

Shaul...

Shaul……

Go ahead, Tom.

請繼續，Tom。

No, no.

不，不。

We're coordinating in our independent sheltering in place. So we're still mastering this. What I'd say is we're not -- we don't know what that 1,000 businesses is going to turn into exactly. I'm optimistic. As I said in my remarks that once you're part of somebody's infrastructure, that builds a relationship and builds trust and that will build business for us. But I think we're trying to be very conservative because we don't know exactly what that will turn into. And so I think that we're not forecasting revenue based on that right now. And I think we will know a lot more when we get to September.

我們各自在家就地避難，同時也在協調配合。所以我們還在摸索、還在掌握這件事。我想說的是，我們並不——我們還不知道那 1,000 家企業最終會具體轉化成什麼。我是樂觀的。正如我在發言中提到的，一旦你成為某個人基礎設施的一部分，就會建立關係、建立信任，進而為我們帶來業務。但我認為我們正努力保持非常保守，因為我們不確定這最終會變成什麼。因此，我們目前並沒有基於此來預測營收。我想等到 9 月時，我們會知道得更多。

Yes. Let me just underline that. We've been very conservative in our assumptions, how much revenue we will derive from this business of the remainder -- for the remainder of the year. But in general, our gross dollar retention is in the 90s across all paying customers.

是的。我想再強調一下。我們在假設上一直非常保守，關於今年剩餘期間——在今年剩餘時間內——我們將從這項業務中取得多少營收。不過整體而言，我們在所有付費客戶中的總美元留存率（gross dollar retention）都在 90% 多。

Thank you for that, Thomas. Matthew, good luck.

謝謝你，Thomas。Matthew，祝你好運。

Thank you.

謝謝。

Your next question comes from the line of Joel Fishbein from SunTrust.

下一個問題來自 SunTrust 的 Joel Fishbein。

And great execution this quarter. Matthew, I'm sorry. I have one for you. On the comments, I mean, on the -- gave us a lot of very good metrics on your guidance. I wanted to ask you, what kind of testing did you do to look at what the downside risk was? Obviously, you have most of your business is subscription, and you talked about the strong pipeline. But I'd love to hear that, and I have one quick follow-up for you as well.

本季執行得非常出色。Matthew，不好意思。我有一個問題要問你。關於你們的評論——我是說，關於——你在指引中給了我們很多非常好的指標。我想問的是，你們做了哪些測試來評估下行風險？顯然你們大部分業務是訂閱制，而且你也提到強勁的管線。但我很想聽聽這部分，我也還有一個很快的追問。

Yes. Let me start it here. I think we really -- we did not want to just assume that an automatic recovery would happen in the second quarter, so we really wanted to especially test the downside risk. And then we -- and the impact -- the uncertainty around COVID might have. So we built probabilistic models and we used Monte Carlo simulation to understand, especially our exposure to verticals and industries that suffered in the 2000 and 2008 crisis. So we modeled against those default rates. We looked at customer size. We looked at conversion rates. So -- and run, I don't know, millions of simulation runs around it really to -- and understand -- to test the downside, not wanting to assume just an automatic recovery in the second half.

是的。我先從這裡開始。我認為我們真的——我們不想只是假設第二季會自動復甦，所以我們特別想測試下行風險。然後我們——以及 COVID 帶來的影響——以及其不確定性。因此我們建立了機率模型，並使用蒙地卡羅模擬（Monte Carlo simulation）來理解，特別是我們對在 2000 年與 2008 年危機中受創的垂直領域與產業的曝險。我們依照那些違約率來建模。我們看了客戶規模。我們看了轉換率。所以——並且進行了，我不知道，數百萬次的模擬運算，來——理解——來測試下行，而不是只假設下半年會自動復甦。

Okay. And I guess as a follow-up, I guess the antithesis of that is that it will track ahead of plan. And so the -- and it sounds like the trends are that things are actually tracking a little bit better than that as far as I could -- is I guess what the message that we're supposed to have now.

好的。那我想作為追問，我想相反的情況是它會跑在計畫之前。所以——而且聽起來趨勢是，事情實際上表現得比那個還要好一些，就我所能——我想這就是我們現在應該得到的訊息。

I think there's a lot of uncertainty in front of us. We wanted to be appropriately prudent in how we think about the remainder of the year. We have more visibility in the near term, and I think that is reflected in the guidance for the second quarter, and there's some more uncertainty in the second half. And then there, especially there, we wanted to understand the downside. And I think this is prudent in a situation like this. And yes, it's prudent guidance for the remainder of the year.

我認為前方仍有很多不確定性。我們希望以適當的審慎態度來看待今年剩餘時間。我們對短期有更多能見度，我想這也反映在第二季的指引上；而下半年則有更多不確定性。尤其是在那裡，我們想了解下行情境。我認為在這種情況下這樣做是審慎的。是的，這是對今年剩餘時間相對保守、審慎的指引。

All right. And then last one for me is real quick. On the DSOs, they were flat, actually, which is good. So your customers are actually paying. I'm assuming that you're going to expect DSOs to track up as we move forward on extended payment terms?

好。那我最後一個問題很快。關於 DSO（應收帳款週轉天數），它們其實持平，這很好。所以你們的客戶確實在付款。我猜想，隨著你們提供延長付款條件往前走，你們會預期 DSO 會上升嗎？

We have been conservative in our modeling. We have not seen any uptick in April either.

我們在建模上一直很保守。我們在 4 月也沒有看到任何上升。

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

最後一個問題來自 Morgan Stanley 的 Keith Weiss。

Matthew, one for you and one for Thomas. The opportunity that you're describing around really catalyzing the shift towards security into cloud-based environment. How do you weigh the fact that a lot of people just had to double down on their incumbent vendors just because it was a crisis mode they had to pull forward firewall spending with that incumbency versus the ability to get these guys to move on a going-forward basis?

Matthew，我有一個問題問你，也有一個問 Thomas。你們所描述的機會，關於真正催化把安全性轉向雲端式環境。你們如何權衡這樣一個事實：很多人因為處於危機模式，不得不加碼既有供應商，提前拉動防火牆支出、依賴既有廠商（incumbency），相對於你們讓這些客戶在未來持續轉移的能力？

No, I think that's -- it's worth probing that. I will say that I have been spending a lot of my time talking to CIOs of very large Fortune 50 institutions. And that hasn't been what -- a concern that any of them have brought up. I think that they've made decisions to Band-Aid their way through the current crisis. But I think that it's become very clear, having lived through it that, said again, what I hear over and over again is, I never want to live through something like this again. And so the inbound interest that we're getting for our solution, especially from large customers, is substantial. And while I think that, that is a -- that's worth continuing to test and continuing to refine, it has not been a concern which has been brought up on a single call that we've talked to.

不，我認為——這個問題值得深入探討。我會說，我花了很多時間和《財富》50 大機構中非常大型的 CIO 交流，而這並不是——他們任何人提出的擔憂。我認為他們做了一些決策，用權宜之計（Band-Aid）撐過當前危機。但我認為，親身經歷之後，已經非常清楚——再說一次，我一再聽到的是：我再也不想經歷這樣的事情了。因此，我們的解決方案收到的主動詢問（inbound interest），特別是來自大型客戶的，非常可觀。雖然我認為這——值得持續驗證並持續精煉，但在我們談過的每一通電話中，這都不是被提出的擔憂。

My hunch is that in every boardroom, you're hearing people who really witness the pain and the loss of productivity that relying on on-premise hardware imposed on them. And they're saying, we need a different architecture. And right now, I think they're going to tolerate being able to switch over. I think we have the additional benefit that, because we're a subscription business, it doesn't have nearly the cash outlay that you have to have for trying to double down on hardware?

我的直覺是，在每一個董事會會議室裡，你都會聽到人們真正見證了依賴地端（on-premise）硬體所帶來的痛苦與生產力損失。他們會說，我們需要不同的架構。而且現在，我認為他們會願意接受能夠切換過去。我想我們還有一個額外好處：因為我們是訂閱制業務，它不像你試圖加碼硬體那樣需要那麼大的現金支出？

Got it. Got it. That makes a lot of sense. And Thomas for you. One of the numbers -- pretty much across the board, numbers came in ahead of guidance and ahead of expectations. One number that came in a little bit below consensus expectations was free cash flow. You talked about some accelerated hardware purchases. There's also a lot of load on the overall network. Any onetime items or anything in particular weighing on free cash flow in Q1 that we should keep in mind when we're modeling the rest of the year?

了解。了解。這很有道理。那 Thomas 我問你。幾乎全面來看，各項數字都高於指引、也高於預期。有一個數字略低於市場一致預期的是自由現金流。你提到一些加速的硬體採購。整體網路也承受很大的負載。第一季自由現金流是否有任何一次性項目，或任何特別因素在拖累，讓我們在建模今年剩餘時間時需要留意？

No. I think we are going to stay over the year with the guidance we gave. This is really trying to manage through the crisis. We also were able to save some costs by paying certain things earlier. So over the year, I think the guidance is good. And as Matthew said, we did -- the infrastructure team did an extraordinary good job, making sure that, early in the year, in January, already making sure our supply chain is protected and that weighed heavily on our cash flow in the first quarter, but that should balance out for the remainder of the year. We are well on track.

沒有。我認為我們全年會維持我們給出的指引。這主要是為了在危機中進行管理。我們也能透過提前支付某些項目來節省一些成本。所以從全年來看，我認為這個指引是好的。正如 Matthew 所說，我們——基礎設施團隊做得非常出色，確保在年初、甚至在 1 月就已經確保我們的供應鏈受到保護，而這在第一季對我們的現金流造成了較大影響，但在今年剩餘時間應該會平衡回來。我們進展非常順利。

That concludes question and answers. I turn it back to the presenters for final comments.

問答環節到此結束。我把時間交回給簡報人作最後評論。

Thank you, everyone, for tuning in. We -- I wanted just to say again how proud I am of the entire Cloudflare team. We're working under extraordinary conditions, and I'm proud of the fact that you're all helping make the Internet function. Thanks to all of the analysts who are tuned in and to all of our shareholders. I hope everyone is safe and healthy and washing your hands often. And we'll talk to you again next quarter.

感謝各位收聽。我——我想再次說，我為整個 Cloudflare 團隊感到非常自豪。我們在非常特殊的條件下工作，而我也為你們都在幫助讓網際網路正常運作這件事感到驕傲。也感謝所有收聽的分析師以及我們所有股東。希望大家都平安健康，並且勤洗手。我們下個季度再聊。

That concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以掛線。