So times are tougher for some, but for the most part, not in leaders in Cloud security.  Cloudflare is a great example.

While it saw some slowdown last year, it’s now accelerating again with 2 record quarters of new bookings in a row.

At ~ $1.5 Billion in ARR, it’s still growing 32% and it’s gotten pretty darn efficient, with 14% free cash flow margins now.

And the markets really like Cloudflare.  Really, really like it.  It’s trading at a stunning $36 Billion market cap, or 24x ARR!

The key?  They are seeing no slowdown at all in revenue growth from $100k+ customers.

5 Interesting Learnings:

#1.  $100k+ Customers Are Key To Growth at Scale.  Revenue There Growing a Stunning 64% (!).

Cloudflare is getting more and more enterprise, but bear in mind that’s at $1.5 Billion in ARR.  It hasn’t left its free and smaller customers behind.  But the big ones are growing fast faster by revenue at scale.  They’ve also now crossed 2,750 $100k+ customers and 100 $1m+ customers.

#2.   3,063 Employees — So About $400,000 in Revenue Per Employee

This is the age of New Efficiency.  Public SaaS and Cloud companies now average $300,000 in revenue per employee, and many of the most efficient leaders are at $400,000 or higher.  Add Cloudflare to that club.

#3.  NRR Has Come Down From 2 Years Ago, But Stable Now At 115%

Cloudflare hasn’t been immune the past 24 months from customers looking to optimize their Cloud spend, so NRR has come down from where it was 5+ quarters ago.  But it’s been stable since at 115%.

#4.  Gottom Much More Efficient — But Still in Investment and Growth Mode

Cloudflare has gotten much more efficient than where it was 2-3 years ago, like almost every SaaS and Cloud leader.  In 2021, it’s non-GAAP operating margins was -1%.  Today?  +9%.  That’s much, much more efficient.

But for now, they aren’t pushing all the way to 20%+ margins.  They’re still trading off some margin expansion to invest in growth.  And the markets are good with that.

Efficient Growth.  Just not the hyper-efficiency we see of some whose growth is slower.

#5.  48% of Revenue From Outside the U.S.

This isn’t new, but a good reminder to go as global as your product allows.

And a few other interesting learnings:

#6.  First $30m TCV New Deal and First $60m (!) Total TCV Renewal.

Cloudflare really scales into some big deals!  That $60m total TCV customer started with one $60k deal.

#7.  A $6.6 Million Dollar Deal They Just Closed — They Lost on the First RFP

A great reminder to not give up on lost deals.  You often get another chance if you’re patient!

#8.  Finally, I really like Jamin Ball’s chart of their new bookings here.  You can see Cloudflare’s re-acceleration clearly: 

Wow, Cloudflare. It doesn’t get much better.

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