Cloudflare, Inc. (NET) Earnings Call Transcript & Summary

[Presentation] All right. We are so excited for this session, for this conference and for you all joining us. For those that don't know me, my name is Matt Hedberg. I'm one of the software analysts here at RBC. And I am thrilled with the first keynote of our 2021 Virtual TMT Conference. With us today is Cloudflare. This has been a story that I've known for a long, long time. We've talked to a lot of investors about it over the years, and we're thrilled to get the 2 co-founders here to talk about sort of where Cloudflare is today and where we're going. And we'll sprinkle some fun facts here along the way. So with us today is CEO and Chair of the Board and Co-Founder, Matthew Prince; and President, COO, Director and Co-Founder, Michelle Zatlyn. So thank you all for being with us. This is going to be a fun session. So I appreciate all of you for attending.

Thanks, Matt.

Thanks for having us.

Yes, this is going to be good. This is going to be good. All right. So we're going to touch on a lot of subjects here today, so we've got a lot of ground to cover. But maybe, Matthew, I'll start with you. For those less familiar with Cloudflare, and I think most people are aware of what you guys are doing these days, can you just start out with just -- what was your mission statement when, really, the 3 of you, there was a third co-founder here, founded the company? What were those observations that you saw back in 2009, when you saw the Internet as this disruptor that it has obviously become? Walk us through some of the early days. And Michelle, certainly feel free to jump in there as well, with some of your earlier observations.

I think that -- when we, Michelle and I, met in business school, and like good business school students, I think we started by seeing an opportunity in the market. And the opportunity that we saw was that the same trend that was happening to software, where companies like Microsoft, Oracle, SAP, were turning into SaaS applications from Salesforce and many others. Same thing that was happening in the sort of hosting space, where the traditional hardware vendors like HP, Dell, EMC, Sun, were turning into AWS, Azure, Google Cloud. We saw that the same thing was going to happen to the networking space, where all of the functionality that you used to have to buy from a company like Cisco would turn into a service. And so I think, when we started, what we really saw at first was this giant market opportunity that if you could build a network that had intelligence built into it and essentially become Cisco as a service that -- like good business students, that, that would be a very big business opportunity. The challenge that we had was in order to build that network, we knew, eventually, the way that we would be successful was selling to very large enterprises and companies. But we had to start somewhere. And so we started out at the very low end of the market, the very underserved part of the market. And we actually had a free service to begin with because you had to build up that network, you had to get the intelligence flowing across that, you had to get the data flowing across it. And I think the thing that surprised us was that because we started by serving everyone, very quickly, it turned into something where we saw that there was a much bigger opportunity. And we have, time and time and time again, where we saw that there were people who literally wouldn't be able to be online any more but for Cloudflare service, journalists in Africa, human rights workers in the Middle East and Asia that were under constant threat from people launching network cyberattacks against them. And so I think that we actually came to what is today our mission, very honestly, we didn't start with it. We didn't use it as a marketing technique. We didn't -- we weren't doing it to sort of be more grandiose than we were. We started out thinking, well, there's a great business opportunity. But in the process of realizing that opportunity, I think what we realized was that our mission is really to help build a better Internet. And so today, one way of thinking of Cloudflare is that we're a time machine, or a time machine that lets the Internet go back 40 years to when the original protocols were being laid out and say, "If we all knew what it was going to become, what could we change to make it better? How could we make it more secure from the beginning? How can we make it more reliable? How can we make it faster? How can we make it more efficient so that it's accessible to anyone in the world?" And I think one of the things that we've really realized more recently is how can we actually make it more private because we think the future Internet is a more private Internet. And so that's what we're thinking about all the time at Cloudflare is, if we could redesign the Internet from day 1 to make it the network that we all wish it had been from the beginning, what would that look like? And I think that we are still in early innings of that. But it's been amazing to build the company with Michelle, and it's been great working with you over the last few years.

Michelle, what were -- yes, just, I guess, a similar question to you. When this whole Cloudflare journey started in '09, what were some of your observations there? And I mentioned we're going to get into sort of the future tense, but it's always helpful, I think, for those maybe less familiar with sort of the early days of Cloudflare.

Well, I was nodding along as Matthew was speaking because, I mean, he just laid it out so well, I mean, if you take back to when Matthew and I and Lee started with Cloudflare, a lot of what Matthew said was true. It was kind of like the, wow, there's a big problem here. While we came up with a really differentiated elegant solution, which I'm sure we'll get into our technology and how we can solve this as a globally distributed network and how do you deliver performance security reliability for all of these customer segments, whether they're small or large, that was something that, really, when we started to work on it, we just kept it every month. It was like -- it was almost like a wave that kept growing -- wow, there's a problem here. Wow, we came with a solution. There's a big business here. And I like to say that a little bit of our entrepreneurship story, this founding story of Cloudflare is a bit like made for Disney. It's almost like a Disney movie. It's a little bit like a fairy tale and all. And the next scene is Matthew and I packing our step up in a U-Haul and him -- his mother driving our stuff from Boston to San Francisco, when we showed up in the summer of 2009, 3 eager founders, to give it a go. I mean -- and 11 years later, we've built this -- we have made it a reality, and it's huge. We have so many customers around the world. We have close to 4 million customers around the world. And what's interesting is this need of -- how do I protect my applications, how to protect my content to be faster, safer and more reliable. It's a universal need. Whether you are that journalist reporting on human rights abuses, or whether you're a small business owner trying to put your product or idea online or your menu online, or if you're a photographer with your portfolio of photographs, how do you get -- make sure people can access those images and make sure they're fast and safe and reliable? Also, if you are Garmin and you have devices running around the world, you have this exact same need. Whether you're small or a large business, a nonprofit or government, anybody connecting online needs to make sure that those applications, those websites, that blog, that content is fast, safe and reliable. It's a very horizontal need. And so that was the premise from day 1. I think what's changed over time is living through that. It's something that you can never imagine, but it's exactly how Matthew described it.

So Michelle and Matthew, we've talked about this in the past, but I've known these guys, I think, since about 2014 or 2015. And I -- literally the first picture that I have on my phone, and I don't know if people can see that, but it's the architectural design that literally was in the S-1. These guys saw how the network is evolving. And so to see that vision back then to where it is today has certainly been no small feat. So I want to get into a lot of different topics here. But I think one of the questions that we often get is what is the secret sauce at the heart of it? What makes Cloudflare so unique relative to whether we're talking, obviously, hardware vendors, that's clear, but even CDN vendors, or even AWS, right? Because I think we tend to believe that you guys are well positioned as that next kind of edge cloud, call it, the fourth cloud. What is that secret sauce that you guys developed that makes you so unique?

I think there are 3 things that I would point to. So one is technical and architectural, the second is around how we think of going to market and the third is how we've built our team and continue to really build our team. So starting with the technical and architectural, what -- if you're a traditional hyperscale public cloud, the way that you built your network was you bought up one or more buildings in key locations around the world: Ashburn, Virginia, the Dalles of Oregon. You fill those buildings full of servers. You work to make sure that it was as efficient as possible. You wrote some software that made sure that you could essentially divide those servers into being able to sell them off in unique chunks. And then you sold that as a service. I think we, at Cloudflare, started sort of from the outside in rather than from the inside out, where we said, fundamentally, what Cloudflare is, is a network. And we want to be the network that connects all the clouds together, connects anything which is attached to the Internet, to be online, and make that network as programmable and efficient as possible. And in order to be able to deliver that, we actually deploy our equipment today in more than 250 cities worldwide. We're within milliseconds of basically anyone connected to the Internet. And in most of those cities, we're in multiple different buildings and locations, where we're largely partnering directly with whoever the local ISP is. And the reason that they are a great partner for us and we're a great partner for them is we help them reduce their costs. So if we deploy in Telecom Pakistan, and we've got equipment, we actually are in 3 different cities across Pakistan, what that means is that the ISP, the Pakistan telecom doesn't have to then pay for traffic to send that back to some central location in, say, Frankfurt or Amsterdam or some other locations. So it helps them save money. It also increases the quality of experience for their customers. But as a result of that, we are getting direct access, much faster, actually much more inexpensively directly to those facilities all around the world. That sounds easy at some level. But the real magic of what we've done is then write incredibly intelligent software that allows us to then spread load across that entire user base. And so we say this a lot. And I don't think that the sort of investor community has understand entirely yet, but every single server that makes up Cloudflare's network can run any application, any service that we deploy. And so what that means is that from a pure, just efficiency perspective, instead of us having to buy special hardware for our storage products versus our networking products versus our security products, we buy a very standard SKU of equipment. We have it manufactured by various ODM manufacturers for us around the world. We buy it at scale so that we can get very attractive pricing on it. And then we've deployed it in almost a just-in-time capability, where we are actually at a point where we can nearly double the capacity in any one of our critical cities around the world in less than 30 days. And so that gives us this incredible robustness and flexibility. And then we are completely software defined in terms of how our network works so that we can spread load across that entire capacity. That's what has allowed us to continue to scale as quickly as we have. And today, nearly 20% of all websites use Cloudflare. So it's pretty amazing, but we also are powering more and more of the infrastructure for the people who are actually accessing the web. And that scalability comes from that technical infrastructure and the way that we have been able to have a very symbiotic relationship with the other network providers around the world in order to connect everywhere. That's the technical architecture, which is just foundationally and fundamentally different than how anyone else has deployed a system. And we had to build that because of the second thing, which is how we went to market. And we started, as we already talked about, with that long tail individual developers, small businesses. We needed to make Cloudflare as easy to use as possible. And then we had to have the technology to be able to actually scale no matter who signed up. And remember when we launched the company, I said to Lee, who's the third co-founder of Cloudflare and really the technical genius behind everything that we've built -- I said, "Lee, did you put any caps or caveats or anything in mind? What if Yahoo! signs up?" And he said, Well, that would be a problem with that -- that would be a pretty good problem, right? And I sort of nodded and I think that -- that, again, that go-to-market function of just making it as easy for anyone to be able to sign up incredibly quickly has been really key to everything that we've developed. And then, I think, the third thing has been that we've just -- there are certain companies, over time, that if you're a talented engineer, you want -- you know that if you go and you work there, and they're on your resume, that it's going to be a place that you're never going to regret. And that ends up being just an absolute super power for those companies. Google had that for a really long time. Facebook had that for a while. And I think we're very fortunate that we're in a position, where, today, if you're a talented engineer working anywhere in the world, you're applying to come work for us. And if a candidate -- it might sound like that technology is the most important thing or the go-to-market strategy is the most important thing, I think the real secret to building great companies is creating great people. And the fact that we, as a B2B kind of infrastructure company, got nearly 0.25 million people applied to work for us over the last year, we accepted less than 1/2 of 1% of those applicants means that we're just getting that top caliber of talent. And those companies that can have that patina of engineering cool and be the place where, if you are a really talented engineer, you aspire to work, I think that, that is really the ultimate secret to our success. And I'm just incredibly honored by all the people who have chosen to spend their careers with us. And I think that that's the reason that we can do #1 and #2 as well as we have.

I mean to think -- I think at your Analyst Day last year, you talked about 25% of the Internet effectively flowing through your pipe at some point in the not-too-distant future is a remarkable statement. Because I think, if you look back 5 years ago, 10 years ago, you said it's preposterous relative to some of the big hyperscalers out there. But you've built this differentiated network with high barriers to entry, right? You can't buy your way into a lot of these ISPs. You have to prove out the ROI. And I think that is what's really stood out to us. Now Michelle, I wanted to pivot to you for a second. One of the sort of -- our bull thesis, one of the biggest, I guess, I'd say, across my universe, when I think about real bull cases here is Workers, right? And it's been something that you and I and Matthew have talked about for a long time, and it feels like it's just starting to kick in, this kind of this idea of the fourth cloud or an edge cloud. I remember we were together in Toronto before the pandemic, and you gave a lot of really interesting use cases. Now this is going on probably 2 years ago about how Workers, in its infancy, were starting to see some really unique things happening. For those that are less familiar, can you describe what Workers is? And can you give us some unique -- why is it different? And what are people doing on it, all the way from like maybe some bespoke IoT apps, all the way up to big banks leveraging it for running their applications?

Yes, definitely. So envision this global network that Matthew described, where, today, we're in 250 cities around the world and a lot of the requests are coming through our network. We're making those faster, safer and more reliable. Right there, very close to our devices, are people or users who are connecting customers, consumers, anyone connecting online, Cloudflare is within 50 milliseconds of those people connecting online. And again, we make all of those requests faster, safer and more reliable. We do identity and access, like in all of those locations around the world. So now imagine, what if you can start to do compute in those same places? Instead of it going back to a couple, your -- in the olden days, back in 15 years ago, you had on-premise data centers, then there's been a lot of cloud computing. But even cloud computing, you got to pick a region, you got to pick Amazon East or Amazon West or whatnot. What if you could put more of that store compute right into the network? So that is this idea of serverless computing. That's this whole idea of this next wave of computing platform. Sun Microsystems had a saying way back when, does the network become the computer, right? Can you put that compute into the network? Well, when Oracle bought Sun, they forgot to register their trademark, and so now Cloudflare owns that. And that's what we are basically doing. We are saying, "Hey, we already have this global network, which is hard to build." We just talked about -- Matthew talked about why that is so hard. There's a technical reason. There's a go-to-market reason. It's just -- it is a difficult thing to build. So we don't think that many companies will have it. What can you do with it? And there's lots of things we do today, but can you also make it -- can you also put -- make it the next computing platform? And so that is the way to think about it as an investor. And it's early, but we already see developers, both like individual developers as well as large companies saying, "Oh my God, how can I use this to solve some of the problems I'm having?" So let's take some of -- a large customer. So this is -- this was a large customer that are publishing. They're in the business of specialized content and they pay for -- they get -- their revenue stream is from people accessing their contents, okay? And one of their top 5 board level room, like pain points, was leakage. People finding ways around the different gates that they had on the content and it leaking and they felt like it was a big revenue leak. And it's really hard to solve that back on an on-premise or cloud data center because it's just so slow. It's so slow for the users. And there used to be this tension of like, man, if we do it this way, we can lock it all down, but it makes everything else slower because we've got to check all these things and then nobody comes for, and then we lose the other percent of our revenue stream. Well, all of a sudden, can we put those extra gates into the network using Cloudflare close to where the users are connecting. And all of a sudden, they had better content gates and could capture more of the revenue without introducing latency for all the regular visitors who are paying customers. So that's an example of where this large publishing company used Workers, Cloudflare Workers, to help solve this very pain point for them. Another one is a Global 2000 company, Garmin, actually, where they have a lot of devices around the world, including in China. And this is something they've spoken about. And it was also a big pain point, where it was just very slow for all our consumers in China to use the Garmin navigation. And when you're doing navigation, latency is not your friend. You need to find where you're going now. If it takes a slow time, you'll lose, like you throw your phone out the window or your Garmin device out the window, it's very frustrating. That's like the fastest way to a low NPS score is a customer satisfaction. And so again, when Garmin onboarded Cloudflare, they saw a 4x improvement because of our network. And now they're using Workers saying, what else can we do to even do more closer to the eyeballs. And so these are examples of how large organizations are using Workers to rethink their applications. And there's really places where there's data localization needs, right? Where it's like -- how you -- what you need to do regionally, how do you make sure that doesn't leak over. And every country has a lot of different rules that big companies have to adhere to, as well as what else can we build for this next wave to make it faster, safer and more reliable and build it into the network so we're not coming back to our data center. So that's the idea. It's early. And then we also see developers trying new things, standing up different things. And the answers you hear, you see this on Twitter all the time, developers like, "Oh my god, this is so fast to get started and deployed around the world." And I just -- like the power is unbelievable. And what makes us really excited at Cloudflare is we're excited to see what these next generation of developers build, like what is the killer app? It's really early in this computing platform. But like the idea is, oh my god, if you are just getting up to speed on cloud computing today, and also, that goes into the network, and it's not 14 locations around the world, but 250, and it's right there. My doorbell that has this smart AI, and it all of a sudden -- just all these things you can do, your refrigerator, your car, all these things, what else can you do but just connect it. You're just so close to where it's connecting to, and it's not just -- there's a lot of compute power there. So that's the way to think about it. We're excited about it. It's early days. Actually, it's funny that you brought that up because this week, we're doing a full-stack week. So we're having a lot of announcements around Workers. So if this is something that you're like, wow, that sounds really interesting, I want to learn more, you should come follow our blog, its blog.cloudflare.com. There's announcements going out every single day, examples. And this is an area that I would definitely continue to watch because it's early, but there's a movement here and there is something. And again, we have some words to describe it, and I think it's going to change and evolve a lot over the coming years. And we're well [indiscernible].

I have one more, because I think this can really drive it home for people this week. I would imagine that a lot of people who are watching are trying to think about their -- what they're going to get their kids for the holidays. In a little over a week, it's the busiest shopping day of the year, which is black -- known as Black Friday. And a lot of people are trying to figure out how can they get the latest video game system, the latest PlayStation or the latest Xbox. And they're incredibly in short supply right now. And so one of the largest retailers in the world, which is also one of the biggest distributors of video game consoles, came to us and said, "We have a problem. Every time we hold one of these sales, no matter how well we architect it in terms of a traditional cloud architecture, we see that our shopping cart falls over because it can't keep up with the traffic. Because Workers, our computing platform, is built so that, literally, every server that makes up Cloudflare's network can answer any single request, it seems like you guys could be able to scale that up and stay in front of what that traffic is." And so this particular retailer has built a very sophisticated shopping card application, which they have tested at over 100,000 transactions per second, which, to give you some sense of scale, Google does less than 60,000 searches per second. So it's a pretty unfathomable scale. And so if you happen to have -- not guaranteeing you that you're going to be able to get your kid the latest PlayStation, but if you have a better experience, where it doesn't feel like the shopping cart is crashing all the time, and it feels like it is at least a fair process to be able to get in line to order one, chances are -- there's a good chance that Cloudflare was behind that. And those are the sorts of applications that just aren't possible with a traditional architecture, but they are easy with an architecture like Cloudflare Workers.

Even hyperscale architecture, where you're not as close to that last mile to the end user, is really the unique factor.

Yes. And because you -- I remember when we were -- when we were hiring at Cloudflare, the hardest hire in the very early days was finding our technical operations team. And I think when we talk to other companies, whether they're small start-ups or big companies, finding great tech ops talent and being able to get them to be able to scale up for what things are and then scale down when you don't need things so that you're not wasting resources, is just an incredibly difficult challenge. And so what Workers does is it effectively says we're going to have to abstract away all of that technical operations team. And we're going to make it so that you can write code and you know that it's going to be able to scale wherever your users are around the world, whatever regulatory requirements, as Michelle referenced, that you have to -- if you have to comply with. If you have a German user and their data has to stay in Germany, that's an incredibly hard thing to do if you're using a traditional hyperscale public cloud. You have to spin up multiple instances. And if it's not just Germany, but it's India and Brazil and eventually every country on earth, that's very difficult when you only have maybe 14 availability zones around the world. With Workers, you can literally tag a piece of data and say, "This belongs to a German user and never have it leave Germany." You don't need to have a technical operations team involved. You don't need to think about anything else. You can really rely on just building what is the right application and letting it scale. And so one of the metrics that we think about at Cloudflare is, how can we take an individual developer who's really talented and wants to build whatever the next hot application is? And is it possible that the developer that builds the next billion-dollar company can do it on their own? And if they can, my hunch is that Cloudflare Workers is going to be the platform they use to do that.

Powerful comments. And now with the addition of Storage with R2, you've got compute, you've got storage, one would assume that perhaps a database could be a logical extension to kind of further build out that edge network. So I think we're all excited to track the progress of Workers, and it just feels like one of these kind of open-ended opportunities. I could talk about Workers for an hour, but I'm going to pivot for a couple of maybe non-Cloudflare things. Michelle, you're an extremely successful business person. What is Cloudflare doing to kind of help and promote women in tech these days?

Thanks, Matt. I'm also, I guess, a woman, so I guess that's why you're asking me that question, which is fair. I'm -- I love my job. I feel super lucky to be part of Cloudflare with Matthew and the rest of our team so -- that's for sure. So at Cloudflare, we believe that more diverse teams drive better business results and a better place to work. You just see -- first of all, all the data shows that. But we really believe that, and so we are constantly talking about it. And so if you look at our team, we're constantly trying to make sure that all of our leaders, everyone knows how much diversity matters. Again, better business results. We want to be -- have happy shareholders and a better place to work for all of us. And back to Matthew's point of view, we want to be a place where people want to come work and then do the best work of their life and stay for a long time. And so making sure they feel like they belong is a big piece of that. And I'm really proud of that, at Cloudflare, I feel like we do a really good job on this front, where people -- if you look at all the culture surveys that we do internally, people say they feel like they really belong at Cloudflare. They feel like there's a space for them here, both women and men and underrepresented minorities. And so I think that, that is something we're proud about. So that's looking inside. But it's also, like, what else can we do externally? And so -- there are a lot of different places where we're trying to help find -- help just model that it's possible. It's possible to be a woman in technology and have great careers, not only at Cloudflare, but in a lot of other places. So we collaborate with a lot of other organizations, a lot of other women groups around the industry. We have something called Cloudflare TV, where, if you want to hear more of Matthew and I and our team, we have a 24-hour TV network. It's all online. It's cloudflare.tv that we run, it's all powered by our technology. And it's just -- it's -- if you love content, if you love nerdy content, it's like MTV for nerds, I don't know, or Netflix for geeks is another way to describe it. And everyone across the company has different segments and shows. And so I have one called Yes, We Can, and it happens to be interesting people in technology who are doing interesting things that all happen to be women. And I love this because it's not just the CEO. It's like the women showing up, doing lots of different things. And I have a lot of highlights during my week. So again, I love my job. But like whenever I get to do one of these Yes We Can, say, which is weekly, I always leave inspired because it's the people who are showing up and doing the work and why they're so passionate about, why they're building this, the data scientists, the marketers, why they see it. And so giving them a platform to have a voice and to elevate what they're doing in their work, show their work has been hugely rewarding. And people watch that, and they're looking for those stories. Because often, in media, there's a lot of the negative stories. So it's like how do we lift people up who are doing the work and let those sink in. And so that's -- those are a couple of things that we're doing that we're really proud of. But I hope all of you, as investors, are looking at those teams, and you're asking teams that are maybe all male saying, where are the women? Because, again, you're missing on ROI and better places to work without them.

That's super insightful, and I think we can all appreciate those comments. The other thing I want to ask you about is you're a proud Canadian. And there's obviously a lot of really interesting tech coming out of Canada these days. Is there anything that you've observed from the Canadian tech scene that people down here in the States may not be aware of? I think we're all aware of Shopify and the success they've had. But maybe talk a little bit about the Canadian tech scene.

Shopify? I've never heard of it.

You've never heard of it? Does -- why don't you look it up?

I'm just kidding. I definitely have heard of it. They're a huge success story. It's amazing. I think that -- I am Canadian. I'm happy to be a Canadian living in the Silicon Valley, building our business, which has, again, been an amazing experience. Really proud of everything we've done and excited for what we're going to have left to do. But what's been interesting since we started Cloudflare, back in 2009, when Matthew, Lee and I were deciding where to start, I mean, like Silicon Valley was kind of the place. I mean New York came up and Atlanta came up a little bit because it's a big cybersecurity, but there was no way Matthew and I only were moving to Atlanta to do our company. And so San Francisco is kind of the place. I think that, today, that's no longer the case, right? You read a lot about this. Well, actually, why would I move in, right? There's a lot of places you could now go. So I think that there's been a proliferation of where people have decided to build their companies from. I actually think that's a healthy thing. It's good. It's good to spread out a lot of the economic upside more globally. I think it being just one power center is risky, and we've seen some of the slower effects of that. And so Canada has been leaning into this for a long time, Toronto, Ottawa, Vancouver. And I think that there is a real see -- and I go back to Toronto frequently, sometimes with you, Matt, sometimes to visit our customers, to see our team, or just for personal reasons and see friends family, and it's different. It feels different. There's just a lot more companies being built, a lot of unicorn companies with valuations over $1 billion, more companies going public. So Kovio just listed to go public. And I think that's a great thing, and there's definitely momentum. And so I'm excited to see what the next wave of Canadian entrepreneurs build, not just for Canada and for Canadians, but really globally like what Shopify has done. And I think that is a huge -- and you see that not just in Canada. You see that in Germany. You see that in U.K. You see that in a lot of places around world. I was talking to a woman on Yes We Can yesterday from Kenya, and she's like, "Hey, have you -- when do you come in to savanna?" Savanna -- silicon savanna, right, like that's they're calling themselves, the [ savannas ] of Africa, and there's just a thriving tech scene everywhere. And again, this is for investors, this is not a fad. Tech is not going away. It's everywhere. Internet is everywhere. It's enabled us the greatest invention that we've had in our lifetime. It's enabled so many things. And it's just -- it's still early. And we're going to see it change industries and companies and societies in ways that we understand some today, a bunch of other things yet to be invented. And it's going to impact everywhere around the world. So I love that it's getting spread out and distributed, including in Canada.

Well, hopefully, this whole next wave of entrepreneurs will architect on Cloudflare and drive a lot of innovation in that regard as well.

They can truly architect on Cloudflare. Yes, sorry. But they -- anybody building for anything, they need a service to make sure that it's fast, safe and reliable around the world. And so if you're just getting started, you start Cloudflare's free plan or $20 a month plan, because you don't know. But then if you become the next big thing, like club house, you need more support, and you can -- we can scale with those -- help those businesses scale, and we have lots of examples like that. Sorry, Matthew, you were going to say something?

Well, I think, there's just a real threat, which is important between both those questions, which is whether you're worrying about your investment portfolio or whether you're worrying about rhinos in Africa, diversity is incredibly important. And if you have a diverse investment portfolio, you're more likely to not have extraordinary losses across it. If -- the reason we're worried about the rhinos in Africa is because there's not genetic diversity. So if there's a disease that comes through, then they might get wiped out. And so I think that, both, as we think about building our teams and representing them with really diverse people, that is key for thinking about and finding the answer that no one else has thought about. And I think that as we have other regions around the world, Canada, Africa, it's really amazing. As you see this sort of more diverse proliferation of where you can start technology businesses and where you can start a company, that there's just more success. And I'm proud of the fact that, as Michelle said, that Cloudflare is in all of these places. And so you don't have to, from a technical perspective, move to Silicon Valley in order to have the technical resources to go forward. We're in Nairobi. We're in Rwanda. We're in India. We're across the Middle East. And that means that if you're an entrepreneur in those places, you can actually have that leg up and be able to compete. And that more diverse ecosystem, I think, is good for anyone who's investor in tech.

I 100% agree. I'm going to ask you about blockchain here in a second. But before we get into that, I want to know something fun and interesting about Matthew. And I'm going to ask you, Michelle, so -- to get your thought in mind. One fun fact about me, for those of you probably may know me, I love Pearl Jam. I'll see -- I'll travel literally around the globe to see them. It's been sort of my thing from high school until now. And so I'm a fanatic. But Matthew, what is it about -- outside of Cloudflare, what is it that we don't know about you that's really, really interesting?

I guess my fun Pearl Jam fact is that I had front row tickets to a show there is when an Eddie Vedder canceled because he had gas. And I've never totally forgiven them for that. But yes, I grew up in Park City, Utah, which is a small resort town in Utah. And once upon a time was a ski instructor and, still, I think that more than anything else I did that, that job -- because teaching 3- to 6-year-olds, you learn patience very quickly. And so I think that, that experience has actually been actually pretty helpful to me. And I think that -- I've always sort of been -- I was a law school professor for a while. If Cloudflare hadn't worked out, I'd probably be teaching at a business school somewhere. And I think that I really enjoy kind of helping explain things to other people. And I think that that's been a talent that has been really helpful in as I've done my job.

That's great. You -- and then I'm going to come back to you in a second, Michelle. One of the things that obviously is you can't get by without reading an article, and you hear about blockchain, you hear about cryptocurrency. Just sort of given you guys possess an edgy network that theoretically could have a lot of blockchain usage as well, what is your sort of thought on blockchain and cryptocurrencies? And I would imagine that this is an area that could be in and around Cloudflare's domain.

I think -- and first of all, whenever -- when everyone talks about this, this is that topic where, all of a sudden, I realize that I'm old because I don't feel like I totally -- I don't feel like I totally get it. But that doesn't mean there isn't something there. And I think that companies go wrong when they only build those things that their 47-year-old CEO understands. And so I don't pretend to know what's going to happen in this space, but I do know a couple of things. One, that -- there's the old adage that why do bank robbers rob banks, it's because it's where the money is. What are cybercriminals targeting today? It's all of the crypto exchanges and wallets and platforms. And so it is not a surprise that those platforms largely today, and almost exclusively today, run a top Cloudflare. And that does 2 things. One, they're great customers. And so if you look at the sort of Coinbases and others of the world, they've been long-term Cloudflare customers, and we help make sure that they can stay secure. But it also means that we have a front row seat for whatever the cybersecurity challenge of the future is because the very first place that cybercriminals go after is the blockchain space. And what will happen is, they'll sort of perfect an attack there and then they'll take it to going after traditional financial institutions or infrastructure or other things. And so that means that by protecting so much of the cryptocurrency space, we've actually gotten better at our job of protecting anyone who's online. I think the other thing is that -- I don't know that we know exactly where this is going to go. And so we want to continue to build the rails that supports whatever the future of the web and whatever the future of the Internet is. Blockchain does not solve the physics problem that you still have to have a network. You still have to have a connection that connects all of these various nodes together. And so we're building a very flexible network, and we're investing in this area because it may turn into something very large. And we want to make sure that we can support it whatever this area goes to. And so actually, this Friday, I'm hosting with Chris Dixon from Andreessen Horowitz, who's going to come on and, hopefully, that this old person explain a little bit more about what Web 3.0 is and what the opportunity is. And again, I think that -- that's us just trying to -- trying to make sure that we can be the network regardless of what the future brings. And again, this is an opportunity for us just to set our time machine back even further and say, well, if we all knew that crypto or Web 3.0 was going to be the next big thing, what would be -- how would we have designed the Internet better? We have very, very, very smart teams, people who are a lot smarter than I am in this area, that are working to enable that future.

Well, we're going to run out of time here. We haven't really talked about security. But I think one of the things that I've been hearing recently is that this whole -- it's easier for cybercriminals now to be in business, right, because of crypto, right, and it's funding this massive industry. And it feels like, to the extent that that's either a driver of security spend, but certainly, additional consumption of Cloudflare seems like an interesting tangent. Michelle, actually, we're going to run out of time. What -- tell us something about yourself that we don't know. Outside of work, what is it that we need to know about, Michelle?

Well, Pearl Jam concert sounds fun. Actually, Mike was [ and his roommate ] was -- I should introduce the 2 of you because he also travels around and sees him, but he sees all their shows. But that aside, I love to go to the farmers' market. I love cooking. I grew up in Saskatchewan, which is a big farming -- did a lot of home-cooked meals at home. So I love having a nice meal with friends. And then my husband and I are big musicians. I play piano, he plays guitar. So if you ever get -- come to my house for dinner, likely there will be a jam session at the end. And you will be forced to participate, whether you want or not, Matthew, [indiscernible] sing-a-longs around birthdays, celebrations and post dinner. So I love a good live show.

I love it. I love it. I'll take you up on that. The other thing, before we run out of time. Michelle, ESG is incredibly important. And I think Cloudflare has been doing a lot to promote that. I think your whole -- you've got something called Cloudflare Impact, where you believe a better Internet is not only a force for good, but also an engine for global sustainability. You've talked about being, I believe, carbon-neutral or removing all the historic carbon emission by 2025. Talk to us about why this is important as the Internet scales and, really, as I think you could be an example for other companies out there?

I think that Matthew and I and all the leadership and the whole team at Cloudflare, it comes back to this mission to help build a better Internet, right? Help has always been an important word, like we are one player that helps move this forward. And so we're doing that, and we want to deliver great ROI to our shareholders. We want to be really good to our customers. We want to be really good to our employees, and we've talked a lot about that. But also is the community in which -- that we operate in, right? Like how can we give back to our communities? And so we're constantly saying, "Okay, we run this global network. What else can we be doing to move some of these really important topics for? Where can we demonstrate leadership? How can we participate in a way that is unique to Cloudflare? And so we do run this global network. We offload a lot of load to the cloud computing, which is terrific. Well, how can we offset all of our -- make a commitment to the environment? And we said, our team was like, we can't wait let's do it. Let's show that leadership here and then help set a stage to show others and almost challenge them, "Hey, if we can do it, so can you. It's possible to find a way." It's same with giving Internet connectivity around the world. How can we help bring Internet access to places where it's hard? We all likely live in places where Internet access is very easy, and that is a privilege. There's a lot of places in the world where that's not the case. Some of those places are in the United States or in rural Canada. It's just hard to get good connectivity in some parts of the United States. But not only there, in places in Africa or Middle East where -- and we said, "Hey, how can we help partner with all of our different partners to bring better access to more people around the world?" Because we believe access to Internet provides access to information, better education. Maybe those people will build businesses locally in their community to help solve problems. You'll hear lots of great stories coming out of all these different far-fledged places around the world or rural places. And so we're constantly looking at the different United Nations' goals for sustainability, saying, "Hey, how can we help further these, be great members in our community while delivering great ROI to our shareholders, being a great place to work and then our customers?" And I will say that customers care. They love hearing what else we're doing. They take notice. They ask us. They say, "Hey, will you come to talk to our team because I want see our company doing more. I think this is a great example." And I do think we see more and more businesses and companies choosing to buy from their vendors or partners, where they feel like they're being good stewards in the community. And employees, people are voting with their talent. They want to go to companies where not only do they have a great job and, of course, have compensation. They believe what the company is doing, but the company also gives back in different ways. And so I think that that's been something that we're really proud of. Matthew, anything you'd add?

I just think that it's -- we are constantly trying to think about how we can deliver our services to people who are less fortunate. And it comes back to even how we started the business, where we saw a great business opportunity, but because of the fact that we provided a free version of a service from earliest days. We had journalists and human rights workers that said we couldn't exist without our Cloudflare. And so that service component has always been built into our culture. And so it makes it very easy when we think about how we're going to make sure that our environmental goals are really developed for sustainability and how we can be as efficient as possible, how we can make sure that our societal goals and what we're giving back. Things like when we realize that health care organizations around the world were having a hard time distributing the vaccine because their websites were crashing, we launched Project Fair Shot that gives our services away for free. When we saw in 2016 how there was interference in the elections, we launched the Athenian Project, which provides our service at no cost to anyone who's administering an election. And we were really proud in 2020 that more than half of U.S. states used Cloudflare in order to make sure that cyber wasn't part of the story in the election. So I think deep-embedded in what we're doing at Cloudflare is always a sense of purpose and a sense of mission. And so that makes it very easy and very natural for us to continue to invest in these ways. And it's not like something that's ancillary to our business, it's something that's core to our business. And I think that's been why we just continue to do things to, again, help make a better Internet and also help make a better world.

And the sustainability is key. So yes, the sundial is now moving across my screen here. So I think that's probably the signal that we need to wrap it up. I could keep going for hours and hours with you guys. I think the level of innovation around Cloudflare Birthday Week and all of these announcements that you guys -- it just -- it speaks to the level of innovation, which is just -- it's hard to find an equivalent out there. So innovative. So creative. And it really starts with -- it starts with the people, and I think you alluded to that early on. And the people are making a better Internet here and a lot of these are Cloudflare people. So from all of us at RBC, we've known you guys for a long time. We appreciate your time, as always. Hopefully, folks who have listened on this that maybe didn't know a lot about Cloudflare will learn something. Maybe if you know a lot about it, are invigorated with the future. We certainly remain encouraged with this long-term opportunity in front of you guys. So really, from all of us, thank you for your time and your participation. And for anybody who has any follow-up questions, feel free to reach out to me. I'd be happy to put you in contact with Jayson in IR. But really, thanks from all of us at RBC.

Thanks, Matt. Really appreciate it.

Yes. Thanks so much for having us. This was fun. Thanks, everyone. Thanks for tuning in.

Bye-bye.