Q1 2025 Cloudflare Inc Earnings Call Transcript
Key Points
- Cloudflare Inc (NET) achieved a revenue of $479.1 million, marking a 20% year-over-year increase.
- The company closed the quarter with 3,527 customers paying more than $100,000, a 23% increase year-over-year.
- Cloudflare Inc (NET) landed the largest contract in its history, a deal worth over $100 million.
- The company's gross margin was 77.1%, above the long-term target of 75% to 77%.
- Free cash flow was strong at $52.9 million, representing 11% of revenue.
- Dollar-based net retention was flat quarter-to-quarter at 111%, indicating no growth in customer spending.
- Gross margin decreased by 240 basis points year-over-year.
- The company faces a volatile macroeconomic environment, which adds uncertainty to future performance.
- There is increased pressure from AI-driven internet trends affecting media companies.
- Sales cycles are expected to potentially increase over time as deals become larger and more complex.
Good afternoon. My name is Aaron, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Cloudflare Q1 2025 earnings call. (Operator Instructions)
With that, I'm pleased to turn the call over to Philip Winslow, VP of Strategic Finance, Treasury and Investor Relations. Phil, please begin.
Thank you for joining us today to discuss Cloudflare's financial results for the first quarter of 2025. With me on the call, we have Matthew, Co-Founder and CEO; and Thomas Seifert, CFO. Michelle Zatlyn, Co-Founder and President, is traveling internationally and will not be available on today's call.
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. As a reminder, we will be making forward-looking statements during today's discussion, including, but not limited to, our customers, vendors, and
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