Cloudflare, Inc. (NYSE:NET) Q4 2022 Earnings Call Transcript

Matthew Prince: Yes. So Shopify has been a terrific Cloudflare customer for a number of our different products, including workers. And I think, look, we’ve talked about in previous calls is that one of the most effective ways for us to sort of turbocharge the adoption of workers is to work with other great partners that have an existing developer ecosystem. And so we were proud that Shopify has really standardized around Cloudflare workers. We’ve worked with them to make sure that we are doing the right things for the overall community that we open source, for example, the run time of workers. And I think that as you see companies like that adopt workers for their developer platform that that’s a real opportunity for us to, again, turbocharge what workers is and make sure that more and more developers are on top of it.

And what’s incredible is just watching how as again we get more reps with really talented and smart engineering teams like the team at Shopify, that’s just making the workers platform better for everyone involved. And again, we’re really proud to have them as a customer.

Shaul Eyal: Understood. And maybe back to the security side of things. Matthew, in your prepared remarks, you talked about that big security win displacement. But I’m just curious whether it also involved the e-mail security kind of the Area 1 related product?

Matthew Prince: Yes. I want to be careful that I might misspeak, but I don’t believe that Area 1 was included in that particular deal. So that’s still an expansion opportunity with that customer. We do see that e-mail security is a terrific entry into getting people to move to our Zero Trust platform. The reason why is that Zero Trust one is the first challenges is enumerating how many people are within an organization, how many seats effectively does that organization make up. And if we can get somebody to use our e-mail security product, that inherently defines that in a very natural way. And so migrating somebody from sort of our application services portfolio to our e-mail security portfolio is one click. It’s a simple DNS change.

And they don’t have to — they can continue to use any of their existing e-mail vendors, and we effectively just proxy that traffic and are able to provide additional layers and enhancement of security as well. Once we’ve done that, it then makes it a very natural step to go from the e-mail security product to the rest of our Zero Trust suite. And so that is a standard play that we run. It’s very successful. But in the case of this particular oil and gas company, it wasn’t the reason that they adopted us for Zero Trust. But hopefully, we can go the other direction as well.

Shaul Eyal: Thank you.

Operator: Next up is Joel Fishbein, Truist Securities.

Joel Fishbein: Thanks for taking my questions. Congrats to Phil as well. Matthew, for you, I want to take a step back, notwithstanding the current economic situation, I would love to just talk about the barriers to entry for Cloudflare and your top priorities for the next three years in terms of growing the business?

Matthew Prince: And Joel, by barriers to entry, do you mean for competitors competing against us or what exactly do you mean by that?

Joel Fishbein: Yes, exactly, Matthew. I think there’s a little bit of — in the investment community, there’s a little bit of thought process that it’s easy to do what you — what Cloudflare does. And as you and I both know, that’s not true. But I think it’s important for you to explain that from the perspective of how difficult it is to provide the services that you do?