Cloudflare Day 2026 | Product Deployment Strategies SharedForNext-Gen AgenticInternet Infrastructure

All right. Hello everyone and thank you for coming this year. I know it's a busy time of the year and it's not just because the Knicks are in the finals, but obviously there are lots of things going on in the investment world this week, let alone just the volatility that's in the market. So, we're going to make best use of your time with a very packed agenda here. We're going to first start with a fireside chat with our CEO and co-founder Matt Prince. You'll then hear from Rita Coglov and Sam Ray on our AI strategies both for our customers but also for Cloudflare. Stephanie Cohen is then going to take the stage to help everyone in this room better understand how Cloudflare is the only cloud built for the agentic internet. And then Mark Anderson will update everyone on our go to market strategies and after that Thomas Ciphert, our CFO, will delve into our financials and then as usual we'll end the day with open Q&A with Matthew, Michelle Zatlin, Thomas, and Mark. And so with that said, I would like to invite our co-founder and CEO Matthew Prince to the stage for yet another edition of our fireside chat from last year.

I think a lot more people showed up because the Knicks lost otherwise there would be a lot of tired eyes.

From 2019.

And so that was the very first founder letter that you and Michelle wrote. And I thought it was actually really good to go back to that and start at a high level here. And I'm going to quote something here.

It is and it's real. So we're all going to experience it.

But I thought this line was particularly interesting. It's still very relevant today. 'Many great startups pivot over time. We have not. We had a plan and been very purposeful and executed against it since our very earliest days. We are helping to build a better internet. That was an audacious goal and it shaped both our business model and our technical architecture in ways that we believe differentiate us and provide us with significant competitive advantages.' I think that still holds today. And so my question to you is, let's start at a 30,000 foot view and then we're going to zoom in with questions after that. But my question to you is, thinking back to that when you wrote that in 2019, what makes Cloudflare different and how has that changed? What makes us unique? How did the little pieces fit together? Those small decisions that were made along the way interconnect to make the whole greater than some of the parts.

Great. Well, let's continue from here because what you just described is sort of the beginnings, obviously that started as connecting and protecting origins and properties, but then it became a developer platform where people were building these agents, building their applications, and then sort of both sides of the internet interaction, then obviously connected with the most interconnected network in the world. So, let's drill into those three, but let's work backwards starting first with act three. And so I'm going to rewind back to 2017, because you put out a blog post about this new product called Workers.

And I was super excited about that. I was like, this is the future. This is the archetype of the next thing. I remember I did a call with you, John Graham-Cumming, Dan, and Thomas because I was so excited about it. I remember at the end you said, 'But Phil, remember developer platforms take 10 years.'

And as usual, you're right because we're now 9 years into this and we just said something seems to be changing. I mean, you can look at...

And let's also talk about security because obviously if you think about how we began, the business plan was called Project Web Wall. Yeah. And one of your friends said, 'Actually, I think what you're trying to build is a firewall in the cloud. You should call it Cloudflare.' Yeah. And so let's talk about security because that's obviously been a huge topic this year with Mithos, you know, it's almost equally dominant talking about AI and agents which is in the news and people are asking like, how do we protect when attackers are able to access these latest models? So my question is, how do you think AI impacts the security industry both near-term and long term, but also what's Cloudflare's role in this new security paradigm?

That's great. Now let's go back to the founder's letter here. One of the things we wrote is, 'We never wanted to do anything to discourage any potential customer from routing any amount of traffic, large or small, through our network.' So this is a question I get a lot, so I'm going to ask you about this too. Why is the free tier valuable to Cloudflare and has this answer changed over the years? Because with the rise of AI and the opportunity to help build the new business model of the internet...

All right, let's talk about how we're positioning ourselves to the next thing. And going back to the founders, you said, 'We will continue to invest in R&D so long as it demonstrates a significant return. Our investment philosophy is around making small inexpensive bets, quickly terminating those that don't work, increasing investment in the ones that do.' So let's fast forward to today now with AI. How has AI changed your view of potential for the pace of innovation at Cloudflare?

Yeah. So speaking of products, you said earlier that some of our best products, if you think about your developer platform, zero trust, actually started with us building solutions for ourselves, the problems that we face. So if you think about the pain point that we're solving right now internally, what do you think that next thing is that we're solving internally that customers face as well?

Yeah, that's great. All right. Last question here. At Cloudflare, we have a tendency to say we live in the future and so we...

Exactly. And so, but you know, we just celebrated our 15th birthday last September and Workers, as you said, turns 10 next year. When you think about Cloudflare's 20th birthday, when Workers turns 20, what excites you most about our potential as a company when you stare into the future?

That's great. Well, that's the end of our fireside chat. That 25 minutes went super fast, but Matthew will be back up here for open Q&A at the end. So, thank you, Matthew. Appreciate it.

All right, I have the honor of introducing our next speaker. This is her third year being here talking about AI. And so to the stage, I would like to welcome Rita Coslov, Vice President of Product for Cloudflare's developer platform.

Thank you, Phil. Hello everyone. My name is Rita Coslov. I lead product for Cloudflare's developer platform. I'll share a little fun fact with you. Just a couple of days ago, I got to celebrate my 10th anniversary at Cloudflare. And I'm being very sincere when I say that even though it's been an incredible 10 years, there hasn't been a time that's been more exciting to be at Cloudflare than right now. Now, I like to start by talking about Cloudflare's mission for developers because that's the reason that we're doing all of this. That's the reason that I get up out of bed in the morning. And it's to provide developers with a modern cloud platform that accelerates their velocity and enables them to build better end-user experiences. In other words, we want to help developers bring their ideas to life. And we want to make it as easy as possible from the first line of code that they write to the first million of users that they get and the millions to come after that. The other thing that I like to start with is the big bold non-consensus bet that we made nine years ago when we started on this journey of building a developer platform. The reason this was such a big bet is because every single cloud that's been built before us has been built on the foundation of virtual machines or containers. But we decided to take a different approach with a technology called isolates. And this came with a big trade-off. We knew that it meant that it would be harder to lift and shift applications onto Cloudflare. But it also meant that if you were building something new, if you were building a green field application, we could actually make that really easy for developers and remove the burden that we saw come with the clouds where they still had to worry about infrastructure and regions and scaling and performance. And when you're making a big decision like this, you always want to bet on the future, not on the past. And it's a good thing we did because the green field opportunity today is so much bigger than it's ever been. AI is making writing code incredibly cheap. And that means that there's a whole explosion happening of applications that are being built every single day. And the whole calculus around lifting and shifting applications is changing too because organizations are no longer stuck with these decisions that they made 10, 20, 30 years ago. They can actually choose to rebuild something and not have it be this ambitious project that never completes. These are real conversations that we're having with our customers right now. Lastly, developers are feeling really inspired because there is this whole new use case for them to build around agents. Now, this is my third time up here, and I feel like this is your opportunity to hold me accountable to the things that I promised, the predictions that I made a year ago. So, let's see how some of them have played out. The first thing that we talked about was how AI workloads were going to shift from training and inference to end-to-end automation or agents. And guess what? That's exactly what we're seeing unfolding right now with tools like OpenClaw, which is an open-source consumer agent growing so quickly in popularity that overnight it surpassed React. React, which has been the biggest front-end framework for the past 10 years. That's how much demand there is for agents. The next thing that we talked about was how in the next 5 years more code was going to be written than in the entire history of software that came before it. And again, we're well on track to surpass that goal. Every day this year, there are more websites, more new iOS apps being built than the year before. There is so much code being pushed up to GitHub every day that GitHub is barely able to keep up. And we're seeing the exact same thing from our users with Wrangler downloads being up nearly 1,000% year-over-year. Last but not least, and perhaps most importantly, we talked about how Cloudflare was going to become the go-to platform for developers to build and deploy these AI applications because Cloudflare could uniquely offer developers the best of scalability, performance, and developer experience. And again, you don't have to take my word for it. You can take the word of 5 and a half million developers that are building on Cloudflare today. And that's not all. Just a week ago, we announced the acquisition of a company called Void Zero, the company behind Vite, which has been one of the fastest growing developer tools that we've seen over the past couple of years. The reason it's so popular is because it powers the technology that underlies almost every framework out there with the exception of Next.js. And what's been incredible to see is that as Vite has been growing in popularity, well, so has Cloudflare's plugin that's been growing with it, just recently representing as much as 10% of total Vite downloads. But okay, this is all a year ago. So now that hopefully I've earned a bit of your trust, let's talk about what's going to happen next. And I'm going to start with making a small adjustment to something that I said a year ago. While yes, automation and agents are going to be the next phase of AI, what we're actually seeing happen is that this is occurring in two distinct phases. First, the models have to get smart enough to be able to actually operate these agents end to end. And what's going to happen next is all of these agents are going to need an execution environment to operate in. So let's dive into that. I'd like to start with a recap of how agentic systems even work. Agentic systems are made up of three main components. The AI piece. This is the model or the brain of the operation that's going to come up with a plan, constantly re-evaluate it to make sure that it's continuing to deliver on a goal. There's the workflow aspect of it that's going to make sure that the next steps are actually being taken every single time. And there are the APIs. These are the tools that the agents have at their disposal so that they're not just making plans, they can actually action on them. Let's start with the first component, AI, which is where we've seen so much improvement happen over the past year and really even over the past six months alone. Since November December, we've seen a massive step function improvement in the productivity that models have been able to give to agents with models like Opus 4.6, GPT 5.5 representing a massive unlock in agent productivity. And what's been remarkable is that open-source models have actually been very quick to follow here with models like Kimmy 2.6 and GLM 5.1 being just behind them. The good news here for Cloudflare customers is that they can always get access to the latest models. And this is especially important when new models are coming out so quickly that you don't want to be locked into a single vendor. Through Cloudflare's AI gateway, developers are able to access hundreds of models in a single place. And if you're choosing to run one of the open-source models like Kimmy, you can do so on Workers AI in a truly serverless way where you don't have to pay for pre-provisioned resources that might go unused. You can actually only pay for the inference that you end up using. But now that that's behind us, let's talk about the more interesting piece, which is the workflows and APIs. And this is where if you've used an agent recently and you found that while yes, it is really incredible, you can't quite leave it alone entirely unattended, you can't fully delegate a task to it and trust that it will fully get done. Why is that? I'd wager that the main reason behind it is that the agents absolutely must have the ability to write code. Now, that's a bold statement. So let me explain why. This all starts with something called the context window. The context window, you can think of it as the memory of the model, is everything that the model is able to hold in its head throughout the transaction of an agent. If you hear model labs announcing new models, often announcements start with this. 'We've extended the context window.' Now here's the thing about the context window. The context window of the largest models today is about 1 million tokens. But into it, you need to be able to fit in all the tool definitions that tell the model what tools it has access to, the conversation, the system prompt, the tasks. By comparison, Cloudflare's API surface alone to tell a model everything that Cloudflare can do, you need 2 and a half million tokens. More than double what today's biggest context windows are. And this is where you start to see weird things happen like the lack of accuracy that you see when agents are operating. For example, just this morning I asked my agent to create an event for later tonight for dinner at 6 p.m. at La Mercerie. Great restaurant, by the way, if you haven't been. And well, upon first glance, it seems like it successfully created the event. When I look closer, I realize that it actually created it for January 1st, 2024, which is not today's date. Why? Why did it do that? Models have no conception of what today's date is. The way that they obtain that information is through doing tool calling, but we just talked about how you have to be very conservative with what tools you include in your agent because of how quickly it blows the context window. So agents start to come up with all these inefficiencies and inaccuracies. What this really comes down to is that agents are not good at tool calling. Hello. Here we go. LLMs are bad at tool calling because there's no such thing as tool calling in nature. Tool calling is actually an entirely artificial process. Tool calling gets injected into the model after the model has already been trained. It's not actually code, which is where models start to get easily confused. If you have two tools that have similar names, they can conflate them. They're very inefficient at using these tools, which ends up using a lot of tokens, which adds up to a lot of cost for our customers. And this is not just me saying this about the model. The model labs know this about tool calling. This is coming directly from Anthropic. Asking LLMs to do tool calling is a bit like asking Shakespeare to take a month-long course in Mandarin and then asking him to write a play in it. You know, it's Shakespeare, so it will be good, but it's not going to be his best work. Now, what LLMs are really, really good at, what they're exceptional at, and have been trained on lots and lots of, is code. An LLM can write code extremely efficiently and quickly. An LLM can write a few lines of code to figure out today's date in a matter of milliseconds. But if LLMs are good at writing code, that means that they now need a place to be able to execute and scale all of that code. Well, if they need a place to scale and run all that code securely, why not just do that the same way that we've scaled and run applications all of these years, which is why not just run them on the hyperscalers? Well, the reason for that actually sits behind the way that we scale applications today. So, let's talk about that for a moment. Every application generally begins as a monolith. As a developer, you write that single application. And actually, after you write that code, it scales pretty well to the first hundred, maybe even first thousand users, each of them coming in and running through that code that you wrote. But eventually, you get that thousand and first user, and that monolith no longer scales for that. So what do you do? You create more copies, more instances of that exact app. For the past 20 years, when we've been talking about scaling applications and we've been talking about microservices, this is exactly what we're talking about. Running the same code over and over again. And when you need to make an adjustment, you write that code, you thoroughly review it, and you release it to your users. Agents don't work like this. Agents don't need more copies of the same code. Agents need a distinct new piece of code written not just for every user, but for every single task and sometimes even subtask. What we've been doing simply doesn't work here. To use an analogy, the way that we've been scaling applications is actually very similar to the way that fast food restaurants work. You have a chef, they come up with a menu, maybe they update it every couple of months, and you have this kitchen that's been designed to very efficiently execute on that exact same menu, producing hamburgers, fries, and milkshakes. Now, when you have a lot of customers, how do you scale as a fast food business? Well, you create more franchises, right? More copies of that kitchen designed to produce even more hamburgers, fries, and milkshakes. Now, the really incredible thing about the year 2026 and the time that we live in is that we accomplished what we previously thought was impossible. Now, every person can have a personal chef in the form of an LLM that comes up with a menu fully tailored to that user and what they want on that given day. But we're still stuck with that exact same kitchen that's only optimized for executing on hamburgers, fries, and milkshakes. What you really want in this situation is something more akin to a pop-up kitchen where you can quickly spin it up, have just the tools, just the ingredients that you need, and be able to produce that meal on demand, quickly spin down that kitchen and execute on the next one. Now, it's not just conceptually that this doesn't scale. The math shows it, too. Let's run through what it would take to power agents for the entire United States alone. There are about 100 million knowledge workers in the US today. Now being conservative, let's imagine that we run one agent per person and you can fit about 10 agents per CPU. If you're running containers, you need about 10 million CPUs to be able to power all of that. For context, current global CPU server production is about 35 to 45 million a year. So to power the US alone, that's about 20 to 30% of global CPU production. But we're not alone in this world, right? So now let's run the math globally. In the world, there are a billion knowledge workers. And realistically, we're not running one agent per person. They can run very efficiently in parallel. We can run two of them. They can run when we're asleep, when we're at dinner. Now, if you do the math, you need a billion server CPUs. That's 20 times current global production. If you think about the phases of AI adoption, each of them has been defined by a different bottleneck. The training era needed consistent GPU resources for training. For inference, you needed flexible GPU resources to be able to adjust to unpredictable traffic. The first phase of agents, the bottleneck was models getting smart enough. And the next bottleneck is going to be on access to these CPU resources. And the cloud that got us where we are today simply doesn't get us to where agents need to go. But you know what does? Remember that big bold bet that we made 9 years ago on isolates? Well, this is exactly what isolates were built for. Isolates are perfect for this moment because unlike VMs, isolates don't need to bring in an entire operating system every time they need to run a line of code, or unlike containers, they don't need to spin up the entire language runtime every time they need to run a line of code. They can actually just bring in the application code or the code that's been written by an agent and execute it on demand. This means that we can be a hundred times more efficient than any type of compute out there, being able to import the code that the agent just generated and move on to the next one. And it's not just about our efficiency. This results in meaningful cost savings for our customers, too. I'll start with a counter example actually where if you have a regular application that maybe only grows 10% year-over-year and you've really invested in optimizing your one server running on Cloudflare and spinning up a new worker, renting it every time that you need to run something might actually end up being about 15% more expensive. But when it comes to running agent generated applications, well, if you need to run about 10,000 of them, that's going to be about 63% more effective on Cloudflare. If you need to run a million agents, that's going to be nearly 75% more cost effective on Cloudflare. And at the scale that our customers run at, this adds up to really significant cost savings for them. Now, it's not that the cloud got everything wrong. In fact, Andy Jassy was absolutely right about one thing, and it's that it is all about primitives. It's just that the primitives that got us here are not the primitives that we need for the agentic era. If the last era was defined by primitives like S3, EC2, SQS, the next generation of application is going to need primitives that look a lot more like durable objects, artifacts, workers, and workflows. And this is not just me saying this. Our customers are starting to think about this already too. Just recently I was talking to Mark Smith who is the head of infrastructure at Discord, one of our customers, and he was telling me that, you know, he said, 'I know what hyperscalers are going to look like in 10 years. They're going to look exactly the same as they do now. I'm looking to Cloudflare to define what the next generation cloud is going to look like.' Because like us, our customers want to bet on the future, not on the past. And we're about to live through a major generational shift on the web. The last one of these that we saw was mobile. And while the cloud preceded mobile, it was actually mobile that made the cloud take off. Right? Before mobile, we could only access the web when we were tethered to our computers. But the smartphones made it possible for us to access the web anywhere we went. And these new devices were so much cheaper that they became accessible to a larger portion of the population, making internet traffic explode. We're about to see the exact same thing with agents. We're already on track to surpass human traffic with bot traffic, as Matthew was just saying before, earlier than we even expected. Stephanie is going to talk about how unlike humans, agents never tire. We get bored after clicking on five links, agents can look at thousands of links before they reach a conclusion. Traffic on the internet is about to take off and is going to need a different type of cloud to be able to power it. And if the iconic companies that were born out of the mobile native era are Airbnb and Uber and Netflix and they were all built on clouds like AWS, well the next generation of iconic applications, these agent native businesses, are going to be built on Cloudflare. And this is not a prediction. This is happening right now. Look at the past month of announcements alone. Figma, Lovable, Anthropic, OpenAI, the world's fastest growing agent native companies are already betting on Cloudflare. We're building the fastest, most secure, most cost-effective place to build, deploy, and scale agents and the code that they write. And I'll leave you with this one final thought. There are 8 billion people on this planet and we're starting to rely on agents not just for our jobs, but for our day-to-day lives. We're going to need multiple agents running per person. And these agents are going to generate infinite lines of code. And we can't just build more servers to scale our way out of this. We need a cloud with a fundamentally different approach. And Cloudflare is the only cloud that's going to be prepared for this next agentic era. Thank you.

All right. With that, I'm excited to invite Sam Ray to talk about how we do AI at Cloudflare.

Thank you, Rita. Hi, good afternoon everyone. My name is Sam Ray. I'm Cloudflare's CIO and today I get to share with you how we equip and enable everyone at Cloudflare to use AI. Now, Rita just told you about how their team has been creating the world's best platform to build and deploy AI agents. And my team is lucky. My team, we have the privilege of getting to use that platform first, becoming the first users of these technologies. We are our own most demanding customer and we're also a very active customer because recently we needed a way to give our entire team a turnkey solution for managing agents, for automating work, for getting their jobs done in the AI...

So we started building one. We started using all of those components that you heard about to create something that could really supercharge our workforce. And the result has become something that we call Cloudflare OS. It's this intuitive platform that gives every single member of the Cloudflare team the ability to automate work, to build and manage agents, to create apps and documents, all running on the infrastructure that you just heard about. Now, Cloudflare OS starts with a cloud-based agent running in our infrastructure that users get to with a single click. No more forcing your entire team to fumble around with command line tools. In fact, no requirement for local tools at all, which means your agents and your workflows keep running when you close your laptop. And it's all happening inside of an environment where we have total control and total visibility. And team members are not constrained by the number of hours in the day that they're on a keyboard. They can build and schedule agents that get jobs done autonomously. It comes batteries included with our organization's brain. We've invested the time to make sure it has the right context about how we work, about what our priorities are, and safe and secure access to our company's data. All while making sure, like you heard Matthew mention earlier, that everyone in the team can use the right model for the right job by running all AI inference through our AI gateway. So here's the architecture at a high level. It starts up there at the top. An employee starts their day by opening their laptop and within seconds inside of their browser they have a full comprehensive agent workspace all without needing to take time configuring local software. For IT that means we get everyone productive immediately and for our security team that means we move away from what I think is really an anti-pattern, this idea of putting all the data back on the device. Instead, it's all taking place in an environment where we have total control and total visibility. Now, that employee starts going about their day by accessing our context library. This is a collection of workflows, runbooks, material that give them the ability to solve problems and accomplish jobs with a single click inside of the system. And then on the bottom right here, like I mentioned earlier, they also have this safe and secure access to our systems of record, all of them. Because for a lot of teams, giving everyone access to all of your systems of record is both a security challenge and it's a context window challenge. Because like you heard Rita mention earlier, when you access these kinds of systems, it can explode your context window. It makes the AI agent or the AI workspace overwhelmed. But not with Cloudflare OS because we get to use something that we call code mode where our agent workspace doesn't interact directly with the systems of record. It interacts with an isolate running in our network that executes code to then go interact with those systems of record so that we can make sure every employee has access to the hundreds of various tools inside of these systems without overwhelming those context windows. Again, for our security team, all happening in a way where we have total visibility into every tool call. And then when those workflows, those agents, those user sessions when they need to use AI, we send everything through our AI gateway, no exceptions, because that gives us the ability to dynamically route inference to the right model for the job. And so for the IT team, this is fantastic because not everyone needs to spend $20 with the world's most powerful model just to summarize an email. And for our security team, they love it because they have total visibility into all AI usage at Cloudflare. And finally, our team members can build applications inside of Cloudflare OS that also run as isolates and they can schedule automated agents and workflows to get work done when they are not at their laptop. Now, Cloudflare OS is our open-ended internal platform, but it's not the only way that we deploy AI at Cloudflare. It's part of a larger funnel. Sometimes users build great applications in Cloudflare OS and that gives them an incredible opportunity to then just immediately share those with their teammates all safe and secure behind our zero trust layer. But sometimes those applications are really great. We see experts across the organization in various functions building the applications they always wanted, the tools they always dreamed of to get their jobs done. And in those cases, we're happy to partner a little bit more closely with them so they can kind of run these through an AI car wash and they can become more formally supported tools in our organization. It's really incredible to see the creativity that gets unlocked when everyone becomes a builder on top of Cloudflare's compute and storage platform. Now, thanks to our AI gateway, we can treat these models more like a choice, like a commodity, picking between the right model for the job while controlling token usage. We can route to external models to power workflows, but we can also steer jobs to the models that are running on our own GPUs where we run inference with incredible efficiency. And this also means that the latest models are available to every team member without any additional configuration. We're not handing out tokens or sign-in keys. They open this workspace, they have access to the latest greatest models, and they have access to models that map to the work they need to do. Now, we have all these incredible technology primitives that power Cloudflare OS, but like everybody else, you still get faced with this blinking cursor problem. You give people an AI workspace and you say go and they say, 'Well, what do I do here?' And that's why we really spent a lot of time investing in a central context layer, our organization's brain, because we have thousands of employees in various functions. And we want to take those manual jobs to be done and map them to skill files, to workflows, to instructions that team members can schedule or on demand invoke with a single click. All from a visible, transparent place inside of the ecosystem. All right, time for the fun part. Let's walk through how team members use Cloudflare OS starting with that context layer. So inside of Cloudflare OS there is this centrally managed skill file collection. These are all jobs to be done in our organization and these map to various roles to various functions and each can be invoked with a single click or scheduled with a trigger. It can take action while people aren't at their laptop and people can also bring their own context, their own skill files, so they can make this environment tailored to the way that they do work. And so within those people who are doing that work, let's zoom in on two personas, builders and sellers. How do we equip and enable them with Cloudflare OS to do incredible work? Up first, when developers use Cloudflare OS to write code, how do we make sure it meets our quality bar? AI allows us to write more code faster than ever before, but that's only useful if it's not introducing more problems. So you heard Matthew mention this earlier, but every submission to the code bases at Cloudflare runs against an AI review that's not just a generic AI review. It is powered by this context layer we debate and argue over because we want to make sure that everything that gets introduced into every codebase at Cloudflare maintains or improves our quality bar. And when it doesn't, it gives the developer the instructions that they need to go make the fixes and they can hand those over to an AI agent to go solve that problem for them. Because Cloudflare OS lets our builders focus on higher order challenges because they can just give Cloudflare OS a ticket or a problem and it will go about fixing it. It will provision a sandbox in our environment to test it. It will go create monitors to make sure that the builds are passing, that the test suites are passing, and if they aren't, it will come back and fix it for them as well. And that means our developers can focus on higher order challenges or quite frankly, they can go get a coffee because again, this doesn't rely on them walking around the office with their laptop cracked open. It keeps running in our infrastructure so that they can focus on other things. But what about everyone outside of R&D? How do we make it so that everybody at Cloudflare can own more of their workflow? They don't have to wait on five different specialized inputs to every stage in their workflow. How do we equip them? And we built Cloudflare OS to solve that as well. So here's an example of somebody doing research ahead of a conversation with a prospect customer. Before Cloudflare OS, they would have to go manually conduct this research, spend hours finding this material, referencing our blog and other material that we have internally. We want them to be able to spend that time with more customers. So with a single click they can get a tailored research report for one or dozens or hundreds of customers ahead of the conversations they go have with them. And this we don't need containers to go do this. What you're seeing on the screen is all running with our agents SDK orchestrating this. So it scales to meet our entire go to market function and more. And so we let sellers hit the ground running with Cloudflare OS so that they can, for example, start their morning without needing to go into a dozen different vertical applications to figure out what they're supposed to be doing that day. They can schedule workflows to run before their day starts. It will go look at our Salesforce, our Jira, their calendar, their email, and say, 'This is where you ought to focus today,' all before they sit down. And this works for various functions inside the organization. Actually, right about now, I have an agent that's reviewing some updates to our MCP servers using my own personal context file, so it can provide feedback while I'm here with you. And as that workday gets started for the rest of our team, for example, our sellers who used to need to request things from competitive intelligence or our brand marketing team to put together a deck before they go meet with that customer for whom they've done some research. They can create in a matter of minutes a tailored prescriptive deck using that organization's brain to think about how we talk about our product, how we position ourselves, what are the case studies we want to reference. Gone are the days of our single corporate deck. Our sellers can own more of this workflow. And like I mentioned earlier, some Cloudflare OS projects really deserve to be packaged up as formally supported tools in our organization. And that's increasingly from people outside of the R&D team, which is really exciting. This is an example from members of our events marketing team who plan hundreds of events like this one and small events all around the world using dozens of different spreadsheets and various tools, which inflicts an extremely high coordination cost. That's really painful. In fact, one of them sitting in our Lisbon office got so sick of this that she said, 'I'm going to build something better and use Cloudflare OS to prototype an idea that removes all of that coordination cost, building the tool that they always wanted.' And we've now partnered with them to make it something that's more formally supported in the organization. And I think you're going to see this happen in every part of our team. And in addition to reducing the coordination cost of our organization, we also want to shorten the time spent waiting in various parts of our team. So imagine that seller, they did that research for that customer. They had this prescriptive deck created for that customer. They met with them. They felt confident about the meeting because Cloudflare OS helped them out and the conversation went really well. Customer said, 'Great, I want to get started.' So in the old days, the seller might think, 'Oh gosh, I need to go schedule time with a solution architect or a bunch of other people, get some expert opinions, come back, put a document together, get it reviewed.' Not with Cloudflare OS because it can pull from our organization's brain, that investment we've made in that context layer. They can come in and just tell Cloudflare OS, 'Hey, conversation went well today. The customer really wants to talk about our developer platform and our zero trust products.' And it will create this prescriptive solution architecture for them. And of course, our teams are also global. I'm visiting here from our Lisbon, Portugal office, and we have teams around the world, meeting customers in every industry, in every geography. And previously, that slowed us down because we would need to wait on teams to do specialized case study, go find different advocacy stories, go find different localization tools, make sure that the materials that we've been talking about today were custom to a given region, a given industry, given segment. We don't need to do that anymore. We can make everyone all around the world at Cloudflare more productive by giving them the tools to adapt everything that we generate to the customer, the region, the industry that they're meeting with all in a matter of clicks. Now, I feel like I'm the luckiest CIO in the world because I get to build on top of everything that Rita and team are creating. But being the luckiest CIO in the world, that's only partially true. The reality is everyone, every CIO, every team in the world can use these same components to equip and enable their organizations to use AI. I'm so excited for us to keep building and more importantly sharing and learning from our customers because at this exact moment, every organization on the planet has this exact same problem. So I appreciate your time today. With that, I'm going to hand it over to Stephanie Cohen, our chief strategy officer, who's going to talk about the future of the agent internet. Thank you.

Thanks, Sam. It is so great to be here. My goal for today is to build on what you heard from Matthew, from Rita, and Sam, and demonstrate to you why Cloudflare was built for this moment. The internet itself is changing. We all see it in our daily lives. Cloudflare is the only cloud designed for this new agentic internet and not because we decided it was the cool thing to do. It's because we repeatedly made the right architectural choices over the last 15 years. The new agentic internet is turbocharging our existing businesses and it's opening up new opportunities because on the agentic internet every single interaction is a chance for commerce. So, yes, I don't think it's an exaggeration that orange is the new cloud. And that's coming from someone who lived right here in New York City for a really long time. And I prefer to wear black. While we along with everyone else eagerly await for what this new agentic internet holds, we are already seeing the benefits in our financial results. In the sectors that are most affected by the agentic internet, we're experiencing revenue growth north of 37%. And that's driven by new customers like Reddit and People Inc. and existing customers such as LinkedIn. Our retention and our expansion are higher because many of our products are now strategic imperatives. Those bots on your site, they're no longer just a nuisance or a security threat. They can either be a chance for new monetization or an existential threat. Depending on the decisions you make and the tools that you choose, when we go to meetings on application performance and security, they're now with the CEO in addition to the CTO and CISO. Cloudflare has never been more important to the C-suite. So before we go deeper into these results, let's start with how we got here and you heard this from Matthew. A new internet really is emerging. Okay, so you're all here. You're here in the context of your job, but I want you to take a minute and think about how your own daily interaction with the internet is changing. We're going through a platform shift at the fastest rate we have ever seen. The numbers on this page are staggering. It took 14 years for the internet to reach a billion users. Social media was almost 9 years. Smartphone 6. Generative AI in less than 3 years. And generative AI just keeps growing. It's now at more than 2 and a half billion active users. That's over 30% of humanity in just three and a half years. And the curve isn't just getting steeper, it's going vertical. Never before have we seen such a dramatic change in how we interact with information and how we perform our jobs. And this platform shift, it's not just faster, it's actually more extreme. In the AI era, the way all of us use the internet and actually spend our time is changing. The other platform shifts mainly fed the internet, but this one is taking our attention away from it. The previous platform shift taught us that if you just put your content out there and you allow bots to scrape it, you're going to get rewarded with traffic and you can monetize that traffic with ads, subscriptions, and affiliate revenue. But traffic from humans on the internet, it's disappearing. For every hour that we all spend today searching online for information, only 15 minutes of that is actually spent on the open web. When was the last time you actually clicked on a link? You just read the answer. And why? Because for most things, you just want the answer. You don't want a treasure map of blue links. These numbers don't lie. Traffic from humans for many news and content sites is quickly heading to zero. The Faustian bargain between search and content is no longer just a bad deal. It doesn't even exist. Many of our customers are preparing for what they call Google zero. A moment where none of their traffic comes from search. The answer is not to go back to the way the world was before, but we do need a new ecosystem because high-quality original content is valuable. It's valuable to all of us and it's also necessary for AI to flourish. And while media is the canary in the coal mine, they're not the only ones. Retail, software, IT, and finance are all seeing meaningful declines in human traffic on their sites to the tune of almost 40% in less than one year. And this matters. It matters not just to those sectors and companies, but it matters to all of us. The internet is a critical part of the economy and it's also a really important conduit of information. And it's why we at Cloudflare come to work every day. It's the north star for how and why we deliver value to our employees, our customers and our shareholders. For that reason, we are uniquely suited to help build and power the business model for this agentic internet. Providing the control plane for the agentic internet requires a unique combination. You need supply and you need demand, but you also need technical capabilities that support both sides and bring them together so that everyone can benefit. Let's start with the supply side. I think you may have heard the internet runs on Cloudflare. Because of that free network that Matthew talked about earlier, more than 20% of the internet runs on us, but we also have depth. 36% of the most visited sites sit behind us and more than 40% of the Fortune 500. We also have a large amount of hard to find unique user generated information that comes from communities that really matter both to humans but also to AI. But we said this before, this is not just about news and content. Every site is being impacted by the change in how the internet functions. Every site needs to understand what it means to be agent enabled. You heard Rita talk about all those agents. Those agents are going to all of our customer sites and they all depend on Cloudflare to help them. Whether it's media or software or retail or finance or healthcare, the largest sectors in the economy are all experiencing historic changes in traffic to their sites. And they depend on us. They depend on us to help them understand what in the world is going on, to give them insight, but also give them the tools to adapt. But what about the demand side? That part of the agentic ecosystem that wants access to the information, they all depend on Cloudflare, too. From OpenAI to Anthropic, almost 80% of leading AI companies use Cloudflare. But it's not just the big companies. We also support the long tail and the long tail really matters here if we want a sustainable ecosystem to emerge. We can't just have a small handful of large LLMs deciding what information matters to the world. Because of Cloudflare, this long tail is actually able to exist and they can compete with those really large companies and they do that by leveraging our network, our scale and the innovative products that you've heard a lot about today. We are uniquely really easy to use. We're efficient. We are global out of the box. And as you heard from Rita, our TCO for agent generated applications and agents is 60 to 70% less expensive. I think we need to pause on the 60 to 70% less expensive because that's how we get an ecosystem to emerge. It is our unique innovative capabilities that bring everything together and makes Cloudflare number one when it comes to being a platform for this new agentic internet. Our position of sitting uniquely at the intersection of the internet and AI that's been built over the last 15 years. It's not an accident. The world chooses Cloudflare because they are at their best when they build on us. And while it is of course dependent on products, it starts with a set of beliefs that are anchored in our mission to help build a better internet that helps us keep making the right architectural choices over and over again. You heard from Rita on the isolates. This is something that's embedded into who Cloudflare is. We're simply the best partner for every player that is building for the agentic internet now and in the future. We sit in between the supply and demand and have world-class primitives that work together seamlessly and will allow this new agentic internet to flourish. Well functioning markets like the one whose building we're sitting in today, they don't just appear. They have to be built on the right platform with the right capabilities. And for us, these capabilities include act one products like bot management and the full suite of developer products from act three. Let's start with bot management. My guess is I don't have to tell this crowd, but there is no sustainable market without reliable scarcity. No one pays for things that they can get for free. And of course, that's true for AI companies. The world's largest companies with the most sensitive data, including the AI companies themselves, depend on Cloudflare because no other bot management provider has the breadth and depth of data that we have. We see every IP address on average seven times per day and sit 15 milliseconds from 95% of the world's population. Our win rates show that we're just better and faster every time. But for most of our customers, blocking is just the starting point. What they really want is they want to optimize and monetize their content and information for AI. But in order to do that, they need analytics. The dashboard that we originally built for the security teams is now for the C-suite, business and marketing teams. This idea not only expands our customer base, but it actually makes us stickier. Once you help someone drive revenue rather than just reducing cost or risk, a product that could have become a commodity is now priced inelastic. And what about those AI companies who are spending hundreds of billions of dollars crawling an internet that was meant for humans, not machines? They need our help, too. Those same signals that make our bot management product best-in-class, they help AI companies decide what content to scrape and how often. Consider for a moment how easy it is for us to tell if a site behind us has been updated or whether the domain behind it is trusted. AI companies value that information on top of the value for the content. Our agents SDK makes it easy to build an agent that obeys site owner requests and therefore has better and also faster access to what it needs on the internet. And we've said this before. The vast majority of AI companies and agents want to do the right thing. Okay. So, I want to pause here because there's a lot of people who believe that AI and agents would just prefer to ignore site owners preferences. The data in our network tells us that's just not true. The reality is it's just not that easy. First, the internet. Just like we want to abstract away infrastructure for builders, we want to do the same for helping build agents. We uniquely can help builders to build while helping site owners maintain control. But it's not just about the tools. It's about the ecosystem itself. We as a society, I think we can all agree we need a level playing field. This chart on the right, this is just not good for the world. It shows that one large LLM has access to almost two times more information than the next LLM. And look at how quickly those bars get smaller. How can new model companies ever compete? We want to create an ecosystem where small model providers have this opportunity to actually compete with the world's largest companies by being able to access the same information. Right now, large existing companies are leveraging their advantages in one market to help them win in this new market. Cloudflare uniquely knows where the asymmetries exist and can help AI and agents access this harder-to-reach information and price what it's worth. With the finance crowd, every functioning market, what do we need? We need a payment system to support it. Today, there is no payment system that can match the throughput of the internet and the Cloudflare network. We process more than 500 million transactions per second. The largest payment company, they can process less than 100,000 transactions per second. I assume we can all do the math. It takes us less than two seconds to process the number of transactions that they process in a day. So it's not surprising that these large payment networks have decided that Cloudflare is a really important partner to them. All of them have embedded the ability for us to cryptographically verify bots at scale into their payment protocols. Okay, so that's how it works today. But there's a much larger opportunity. We spoke earlier about how the internet is changing and Rita alluded to this, but we didn't cover what that means for traffic. When a human goes to research a topic, they may go to five to 20 sites. Your agents go to thousands. And while traffic has always been a positive, growth in traffic has always been a positive for Cloudflare, growing agentic traffic is even more interesting. Today we monetize requests by providing security and developer products. Tomorrow we can monetize requests by simply being in the flow the way a payment company does. To start with Coinbase and Stripe, we created the X402 protocol so that machines can pay other machines at scale. Already today on the Cloudflare network, there are more than 2 billion 402 responses a day. A 402 response means payment required. So it's not just a block, it's a please pay me. Today the vast majority of these 402s don't actually result in a transaction. But the scaffolding is there. It's built into the internet with the capacity for a higher number of machine-to-machine transactions than the largest payment networks in the world. X402 is payment rail agnostic but is perfectly designed for stable coins. For the dream of agent commerce to be a reality, a lot of things need to work together. No other company has all the pieces to enable this agentic internet: building the agent, verifying the agent, and allowing for the payment. But it's not just about agentic commerce. It's about changing the surface area of the economic opportunity. On the human internet, I think we can all agree payments can be a bit of a nuisance. But on the agentic internet, they are the oil that allows new ecosystems to emerge. Micropayments for access to content and systems of record. Those just weren't viable before. And Cloudflare sits in between all of it. We go from protecting websites and applications to monetizing trusted automated demand. Yes, the agentic internet is new, but we already have proof that it's working. The largest media companies in the world are moving to Cloudflare to ensure that they're agent enabled. People, Condé Nast, just to name a few. And these companies are using Cloudflare to negotiate large deals with the LLMs. The best example is People Inc. In July of last year, they implemented bot management and by September, they had seen a significant shift in their negotiating leverage. What did they do? They created scarcity and they use that dashboard that we showed you earlier. And yes, the splashy deals between the big publishers and the LLMs, those make the headlines. But it's not just about them. Clay, a startup that provides AI powered sales and marketing tools to automate lead generation, prospect research, and data enrichment. They're using Cloudflare for signals so they can quickly and efficiently access updated information on the internet. Before they started using Cloudflare, they were constantly scraping the same sites over and over again. That creates unnecessary load for them and for the sites. It's very expensive. But now they're using our network and our storage capabilities. So we can just serve them the updated information. This capability is where we expect to start with most AI companies. We make it faster and cheaper for them to obtain access to information that they already can get to. But the next step is us getting them information from hard-to-reach places. Remember that chart, the difference between the LLM that had most information and the one that had the least. This is the ecosystem you see emerging. To that end, we have large AI companies working with us to get access to this niche, hard-to-reach content. Only Cloudflare would know that a top LLM was unsuccessfully attempting to crawl a specific healthcare site almost 800 million times in a 30-day period. We can see where the demand is and price it not just once, but programmatically. The promise of the agentic internet, it's already here. It's helping us to win new customers, grow existing customers, and increase stickiness and decrease price sensitivity. We are executing content deals and building stable coin payments into our products. We are building an ecosystem where both sides can benefit. At core, it's not separate from the rest of Cloudflare. It's only possible because of the foundations we built from act one and act three. We're the only platform that can build, secure, and enable this future. There is nothing more consistent with our mission and nothing that will deliver more value over the next few years. And with that, I'm going to turn it over to Mark. He's going to talk to you about how he's helping and all of us are helping our customers adopt our platform at scale. Thanks.

Compelling value proposition, you can roll up market share in a very meaningful way. My team certainly thrived with these dynamics at F5 and especially at Palo Alto Networks over the last couple of decades. But for us at Cloudflare, the opportunity is much larger. Given our massive total addressable market, my plan is to continue to invest in sales capacity and I expect that sales productivity will continue to grow for a very long time. As a reminder, when I first joined in 2024, many of these CIOs, CTOs, CISOs had little or no contact with Cloudflare. Most didn't know who we are, why we should matter. Again, we brought in stage-appropriate talent to build these relationships and earn the trust with the largest companies and governments around the world. Our momentum to bring the right AEs and sales pod members to customer teams globally is going full steam ahead. So where do we go from here? I believe that AI will transform not only what we sell but how we operate. The next phase of our journey is applying AI to our very own go-to-market organization. Not as a science experiment or side project but as a practical way to increase capacity, improve customer experiences, and help our teams operate at greater scale. We spent the last several years helping customers modernize their infrastructure. Now we're applying those same principles to ourselves. We intend to be one of the best examples of how AI can transform a modern enterprise because the future of go-to-market isn't humans or AI. It's humans and AI working together to create better outcomes for our customers and for our partners. One principle guides our approach. As Sam mentioned, we're our own most demanding AI customer. Before we ask customers to trust these technologies, we want to use them ourselves. We want to understand how they create value. We want to understand where they fall short. And we want to understand how humans and AI can work together most effectively. That experience helps us become a better operator and a far better partner to our customer base. And today, sales professionals probably spend less than half of their time actually selling. AI gives us an opportunity to change this big time. Across the customer lifecycle, we're seeing repetitive activities that can be automated, accelerated, or augmented. The goal isn't about replacing people. The goal is about allowing our teams to spend more time with customers and less time on administration. The next phase of our AI journey isn't just about how we sell. It's about how we serve customers throughout their lifecycle. With Cloudflare, we're applying automation and AI across onboarding, adoption, and renewal. For example, during onboarding, we're helping customers reach value faster through automated planning, deployment preparation, and follow-up. During adoption, we're using usage signals, business reviews, and customer engagement data to identify growth opportunities and proactively address risk. And as customers approach renewal, we're automating insight generation, forecasting, and expansion planning. This will allow our teams to spend more time delivering value and less time managing process. AI is fundamentally improving the customer experience while also increasing the scale and efficiency of our customer-facing teams. So folks, the opportunity in front of us at Cloudflare has never been larger. The market is moving towards the architecture that we've been building for years. Our platform continues to expand and grow. Our enterprise momentum continues to strengthen. Our go-to-market organization is operating at a higher level than ever before and we're just beginning to unlock what AI can do for our customers as well as for ourselves. I am mega excited about the road ahead. Now, some of that excitement comes from the confidence that I have in the team that I've assembled and the executives that you see here in the room. I think we have an incredible opportunity ahead of us. But folks, I've been at this for a long time and it's with mixed emotions that I'll share with you. At the end of this year, I'm going to retire. Psyched about it. My family psyched about it. I was stepping off of our board back in 2024. I had this incredible conviction that we could complement our product-led growth motion with the right people, strategy, and infrastructure to dominate where half of our total addressable market exists: large enterprise and large government. That's half the spending on what Cloudflare does. And I'm really proud of the progress that we've made and I'll continue to cheerlead from the sidelines in 2027 and beyond. We're launching a public search right away. And I know we'll find the very best person to take the baton and guide this go-to-market team and their efforts into the future. In the meantime, I'll be squarely focused on our FY26 plan and wrapping up the most successful fiscal year in Cloudflare's history. I want to thank you for your time. Some friendly faces here in the room that I'm going to miss, but I really appreciate the support you've provided over the years. And with that, I'm going to pass it off to our amazing CFO, Thomas Seert.

This is all script, so I give you a hug. Thank you. You know, it is quite a while until the end of the year, but this is the investor day and it falls on wherever it falls. So, I want to acknowledge that it has been a true pleasure working alongside you, Mark, for the last seven years. You and I have been both long enough in this business that we both know how important it is that our two roles have a really trusted relationship and I truly want to thank you for that. So I know it's a long time until the end of the year but in front of our investors and shareholders I want to acknowledge that. Thank you. So I'm Thomas, the CFO of Cloudflare. I was standing up here yesterday and one of you guys last year reminded me said Thomas, keep in mind we count CFO smiles. That is a really important KPI for us and I said finally, you know, I get my moment where a CFO can smile. I should have saved this comment for this year. This year is a way more appropriate place for smiles and especially now after Mark acknowledged that I work at a wonderful magical company. So here we go. So off we go. This is a slide you have seen two times already today and I think it's one of the reasons, as Messio said, this change that are behind the significant increase in traffic on our network is probably shaping up to be the biggest tailwind for Cloudflare moving forward. So how does this impact our financials? When does it show up in revenue? How does it show up in revenue is what I would try to take you through over the course of the next 20 minutes. And in order to get started off correctly, I take you back a moment and try to familiarize you again with how revenue at Cloudflare works. So today, as you can see, we have four primary models of how we generate revenue. They're the easy ones: the flat rate. This is where we came from where the world was easy when we IPOed and almost 100% of our revenue was subscription-based. There is a larger share of pure usage-based revenue today, still under 10%, where customers pay us in the rear. The complexity comes from the two other components of how we interact with our customers: cap models and pool of funds. And you'll find out it has a lot to do with t-shirt sizes and Nike swooshes. And why is that? So the majority of our contracts are based today on what we call a cap model. And requests in these contracts are the most significant measure for revenue. So what does this mean? Think of a t-shirt. You buy a customer buys a t-shirt. He commits to a ceiling of utilization of a product, a WAF for example, buys a medium-size t-shirt, 10 million requests per month, and it gives us predictable and smooth revenue as long as the customer is using under this umbrella of what he has committed to. But what happens if a customer outgrows that medium-sized t-shirt and has to go out and buy a larger one? Let's say from medium to large to $20 million requests per month. The traffic is increasing more than the customer has planned. He needs to buy up. But however, remember the customer is not going to buy what he consumes in the moment. He's trying to estimate what his future consumption is going to be. And this transition is letting our revenue grow but it will lag to the inflection point of usage and makes, you know, a little bit of sympathy from all of you, our job of guiding and forecasting a little bit more tricky. I brought you a good example. It's a very large leading technology company in retail space coding. So the company had already increased their caps twice in the past year. The customer is working where agents are, so it's highly likely that they will be up soon for another bigger t-shirt size. And keep in mind the lag to revenue will come with this model because the usage is lagging behind the revenue recognition. That is all, you know, still manageable. It gets a little bit more complicated when we get to pool of funds. Pool of funds has become a meaningful instrument for us and extremely beneficial to the platform adoption to get to larger customers, a frictionless expansion. In the fourth quarter of last year, 20% of our new ACV was coming in in pool of funds and pool of funds have a very significant impact in how they shape our financial model. You see here two cohorts of pool of funds for 2004 and 2005. And you see what would have happened if we had recognized this revenue in a more radical model. So the smooth line from the cap model disappears. It becomes much more a ramped model. And you can see that revenue lags compared to a ratable revenue recognition in the early parts of the contract before it catches up and exceeds it. That delta becomes bigger the bigger the pool of funds contracts are and you can see that in 2005 we were even more successful signing larger deals so the gap becomes more pronounced. What happens now when the customer is really burning through that commitment really fast? This is an example of one of our largest customers in the AI space increasing the pool of funds commitment already twice and in the fourth quarter there was a significant step up in commitment north of 215% of ACV commitment. The customer of course is negotiating better rates. So in the first and second quarter, and you get a little glimpse into the current quarter, it takes a while until revenue catches up and overtakes what revenue run rate with that specific customer was before. But you can also already see what momentum is building up behind that dip in the first and second quarter. You can also imagine what happens to us when we stack a couple of these extensions in a quarter on top of each other. The headwinds are a little bit more pronounced, make our job a little bit more difficult. You also have to keep in mind that becomes very important when we talk about gross margin later. You know, while the revenue dips, consumption or usage on the network is not going down. So not only is there a headwind from a revenue recognition perspective until the run rate catches up, there's also a slight headwind to gross margin for the transition. So with this out of the way, moving forward I want to focus on framing the discussion around the two primary drivers of value creation for us: growth and profitability. Starting with growth. I want to walk you really fast through the six or seven most important growth drivers. The Cloudflare business model always excelled itself because we have these multiple independent growth vectors that have been carrying us forward. So how do we think about the components at this point in time? First of all, there's TAM. Today we have about 75 revenue-generating products on the network including Act Four. A massive opportunity. I remember when I joined I think we were at five. Our total addressable market is forecasted to be around $238 billion for this year. That is more than seven times up from eight years ago. It's almost $40 million up just from the numbers we looked at last year just by adding developers this year for the first time and $100 million up for 28 and at four all the good stuff that Stephanie was talking about is not yet included in this number. A massive opportunity moving forward and we have been excelling and disrupting this time significantly. Pipeline momentum, you heard that from Mark, is really, really good. We have increased our opportunity in the market exiting the first quarter of 26. Our carry forward pipeline is already up 40% year-over-year. And as Mark mentioned, we have made significant progress in our sales organization over the last three years. Productivity, you saw that from Mark, is reaching all-time high and we are not finished yet. This is where all the good stuff that Sam showed you. You know, if you look carefully at the skill files that went down their menus, a lot of them were go-to-market related. So we think we can significantly optimize our cost to book revenue moving forward and you'll see this on a later slide. So productivity is reaching new all-time highs and this gives us the confidence really to continue to invest in quota-carrying capacity. Not only has it been increasing throughout 25, in the first and second quarter for this year, we forecast based on the confidence we have in pipeline creation and the momentum behind the business that sales capacity is going to continue to increase for the remainder of this year. You have also seen with Mark that the upward market on the enterprise side has been really successful. We now have 42% of Fortune 500 companies behind our network and the fastest-growing cohorts are our biggest customers. And I think this is probably the reflection of the combination that products are enterprise-ready and the account structures that Mark's team has employed and put in place are the right structures. We are seeing success in driving platform adoption. One of the reasons why DNR coming back up again is platform adoption. So the multitudes of products, the cohorts of products that customers have now, 10 and more products per customer is the largest cohort, and at the same time across the 75 products we have and sell, there's hardly any revenue concentration. So it's a widely diversified revenue footprint across the product portfolio that we have. So finally, there is accelerating traction in the key product areas including developers and SASE. In 2025, ARR for Cloudflare One, our SASE product suite, is up 43%. And developer grew 137% last year year-over-year in ARR. That's an important number. It shows the acceleration. It is also an important number to keep in mind when I try to give you context around what gross margin does and how gross margin will develop moving forward. So a significant acceleration in the key product areas. Well, growth was easy. How do we think about profitability moving forward? As you heard us now say many times, we are focused on maximizing long-term shareholder value by investing in growth while we remain committed to the underlying economics of our business. Exiting 2025, we increased our unit economic margin to about 44% despite the declines in gross margins. We'll come to that in a minute. We have also started to realize that the business has become complex. The dynamics that drive the business are very different. So we have to be way more granular in how we manage the business, how we allocate resources across the various products. And in order to give you some transparency how we think about this, I want to drill down more than a line item in terms of what the impact is on our P&L. Let's start with gross margin. So there have been two primary headwinds starting in the first quarter of 2014. The first one is, and we've talked about it, the free-to-paid mix transition. So free traffic moves to paid and over the last two years it has accelerated but this is simply an allocation topic: cost moves from sales and marketing to cost of goods sold. And this is a wash on the P&L but it's a headwind to gross margin. That is what you see in the blue colors. I think moving forward we've gotten out of it, it's flattening out. We have also made some adjustment, also a useful life of equipment that is also flattening out. The other mix shift is specifically coming from product mix. There's some little impacts in there like how contracts work, how the caps transition, how the pool of funds transition, but it's also a recognition that today the developer product has a slightly lower cost margin than the rest of the portfolio and we'll talk about this in more detail, what that means, where that is important, where we make it up, because how can it be that gross margin came down and the unit economic margin still went up. So while their gross margin might continue to hover at this level for a while, we expect the unit economic margin across the four acts to increase and to increase significantly. So let's talk about the unit economics for each one of the four acts and understand how it impacts our KPIs, what differs between the acts, and how we manage the business taking into account these products, these acts are now very different and how they influence our revenue mix and different line items on the P&L. So you might recognize this chart. All the credit goes to our esteemed chairman of the audit committee, Mark Hawkins. But it is inspired by him. But the unit economics define literally the growth and margin frontier. So the lower the cost to book, the higher the line is on the y-axis, and the lower the cost to serve and the lower the attrition, the further to the right the line will cut the x-axis. And where the line crosses the x-axis is exactly where the unit economic margin sits today at 44%. So now let's talk about the four acts and how they differ. Let's start with Act One. So you're not surprised, you would expect that Act One is our original and largest business. So it most closely resembles our overall unit economics. You know, it's the foundation for all of the acts that follow as you heard from Rita, from Matthew, and from Stephanie. It has cost to book average, cost to serve average, and because we have a higher mix of small and medium-sized businesses, the attrition rate is slightly higher. So, you know, this frames pretty much where most of the business from a volume perspective sits today. How does Act Two compare to that? Very different. You heard this before. Act Two significantly benefits from the infrastructure we have put in place with Act One. It's like taking the infrastructure for free. We compared it to planes that are flying to the eyeballs are empty and we fill them up with data on the way back for literally zero to very low marginal cost. So very low cost to serve, very low attrition, very sticky products, significantly higher cost to book, longer sales cycles. This is where Mark's graph on increased partner share comes into play. We have to share revenue and margin with customers, significantly higher cost to book. Now Act Three, as discussed earlier, our developer products currently carry a lower gross margin. That said, lower cost margin doesn't necessarily mean that the unit economics of the product are significantly lower. The combining impact of getting a platform business to scale is getting us to superior unit economic margins and there are good examples for it. We all know them, right? If you look at how the Google Cloud business developed, how AWS developed, how Microsoft Azure developed. So platform, and the reason for that is that platform businesses have this unique capacity that they can structurally shift their frontier and we've seen this now already happening in individual products in our developer platform portfolio. Rita showed you a good example for it. The lower costs to run agents on our infrastructure are a result of the progress we have been making taking costs down fast. So the curve is shifting, scale is shifting. This one of the biggest levers is still in front of us. You heard from Rita that unpredictable CPU workloads for agents are the next bottleneck for AI deployment. Well, if there's one thing that we are really good at better than anybody else, then it's making the most of our CPU capacity. So that's a significant lever that we're going to pull. So the curve is shifting up and to the right and at scale we think that Act Three could surpass Act One and Act Two from a unit economic perspective. So that is a good basis to start. And finally there comes Act Four. And you keep in mind what how Stephanie defined it. She said Act Four for us is a combination of Act One plus Act Three. So of all the acts we have, of all the products we have, it will have by far the lowest cost to serve. It will have by far the lowest cost to book because the traffic is already on the network and it will have significantly lower attrition cost. So this unit economic curve for Act Four could literally shift us off the chart from a performance and from a potential perspective. So let's put all of this together and talk about what it means for our financial targets moving forward. So just for housekeeping, we are clearly on pace to surpass the $5 billion annualized revenue target before 2028. You know, with the expanding TAM, the momentum you saw on traffic and pipeline, this simply will be the next revenue milestone. And as we execute on this massive opportunity, we've been talking about what guided us through all the years since the IPO. The north star for us was what we call the Rule of 40. It was a very serious KPI for us since the fourth quarter of 2020 on a rolling four-quarter average forecast. We have achieved 40 or above for 22 consecutive quarters. That's quite an achievement. So this is a very serious KPI for us. How the year is shaping up. The momentum we are seeing from a pipeline, from a traffic, from a customer engagement perspective allows us to see enough momentum that we exit the year, have clear line of sight to a Rule of 50. And I think this is why we think it's time to raise the bar for us for 27. We will move our north star up to a Rule of 50. More importantly, we have already enough signals in the data. We see that it will not take us another 9 years for that north star to shift. We think we will exit 27 with enough visibility to push the rule beyond a Rule of plus 50 exiting next year. And that is good news but it takes into account everything that you heard today. So a very important milestone that we have reached today. So we cannot talk about the Rule of 50, the impact and all the good news on the revenue side and keep our long-term operating model the same. So we are also now at a point where we are adjusting our long-term operating model. The first step we take is we make the range of our gross margin wider, not to signal that we will fluctuate between 70 and 77 all the time. It is more a reflection of the journey we will go through over the next quarters, recovering from where we are, improving from where we are, and getting back to where we came from primarily by a lot of good engineering work that is happening but also by a shift in revenue mix. So with that said, where do opEx fall in this play? Sales and marketing will come down a bit compared to where we were before. This is a reflection of two things. It's a reflection of an increase in revenue share in Act Three and Act Four products that have significantly lower cost to book. But it's also the results of what Sam and Mark have been talking about. In the past, we've been building go-to-market organizations where we scaled the support of quota-carrying employees by ratios and these roles, these ratios are literally compressing and falling away. So we think moving forward, already with the work that has started, we can significantly reduce the support infrastructure across support roles. We'll not let those dollars fall to the bottom line. We will use it, deploy it for more quota-carrying capacity which automatically means for every dollar that we continue to invest in sales and marketing compared to where we were before, we will see higher sales capacity, higher quota-carrying capacity. R&D will pretty much stay in the zones where we are today. However, with some of the best engineers in the world now, we give them the tools to be super productive. These are just three recent examples of how supercharged the engineering organization has become in terms of deploying new code, rebuilding new products. So we think even if we keep the run rate as it is today, the productivity we get out of our best engineers will jump and the flywheel that has been driving the Cloudflare innovation wheel will just continue to accelerate. Where we'll see the most significant changes from a productivity perspective is in the G&A line. So here, literally AI is transforming the G&A workflows that we have been operating with. This is where currently Sam's team is busiest across the organization. I see this in my own finance organization now every day, how roles are collapsing, how functions are moving from manual and monolithic ERPs to agent-driven execution, whether that is accounts receivable, revenue recognition, even IR, how we craft our Qs in case is impacted. So we think the frontier of where G&A costs and benchmarks are going to be moving forward will significantly fall and we will be leading that charge. That means our operating margin targets will go up from plus 20 to plus 30% and with that our free cash flow margins will significantly increase moving forward to about 30 to 35%. So quite a dramatic impact, I would say. And last but not least, having all this in sight, some of you are looking for the day. I've been looking for it myself. We will achieve GAAP profitability latest by 28. So in summary, I've been with the company for a while. It's the most exciting time to be with Cloudflare, to have a front row seat to what is happening in the world. The momentum and the opportunity in front of us is enormous. I'm proud to work with this team to make it all happen. And with that, we move to our Q&A. Thank you.

Okay. All right. Well, good afternoon everyone. We have some time for open Q&A now. So please wait for the mic before you ask a question for the webcast, please. So, Gabrielle.

Hey, good afternoon. Thank you for all of the new details throughout the presentations. I would actually love to talk to you all about some of the infrastructure you've built internally with Cloudflare OS and I would love to hear what are some of the technical challenges that you have to solve to get there? What do you think some of your peers are doing? Are there alternative approaches? And really the question is do you think that's something you can actually commercialize and monetize over the long term?

But we lied to them. We told them that it was an AI system behind the scenes.

Yeah, I'll just add that when Matthew mentioned Cloudflare OS on the earnings call, we had a number of inbounds from customers and some of the trusted relationships we have with long-term customers. I've stopped taking count of how many of them want us to do this for them.

Yeah. Second.

Getting your steps in, Heather.

Thanks so much for hosting. Sack Kelly at Barclays. I'd love to dig into Act Four a little bit. There was a chart, I forgot which presentation, that showed some websites where traffic is down precipitously. One of them was PC Magazine. And I remember not too far ago kind of thinking, "Oh, which laptop am I going to buy?" And going to PC Magazine, looking at that. Now, when was the last time we ever did that, right? We just looked for the answer. We just kind of get it like that, right? We just kind of all want the answer immediately. But I'm curious, maybe Matthew, Mark, anyone on the panel that wants to chime in. How are your conversations with those content creators going now? Because it feels like such a pivotal moment. And when does that start to unlock the value that you could provide with Act Four? It feels like that should inflect at some point. When does that happen?

Fatima.

Thank you. Fatima Balani from SEI. I appreciate you hosting this. I wanted to ask you about managed agents. I think all of us have lived through seven lifetimes of announcements from some of the frontier labs and what was striking to me is almost all of them seem like and probably are your customers. So Matthew, this is probably best suited for you and then please feel free to chime in because there's a commercial implication for my question as well. Managed agents versus what you're purpose-building at the edge for agents to be persistent, agents to be ephemeral. Where is kind of the line in the sand as it relates to cooperation, co-opetition, and competition? And ultimately, where will Cloudflare shine? Is it going to be the orchestration brain? And how do you get paid for that when you talk to customers who are thinking about building autonomous workflows to run their businesses from here on out?

Adam B with Cool. Thanks so much for the time. Appreciate the discussion today. So Matthew, I thought your comment with your fireside chat with Phil earlier was interesting around how AI is really driving a demand for your zero trust platform. So maybe a two-part question. First from Mark, maybe give us the state of the union of the SASE Cloudflare One in the field. Obviously the 43% growth you talked about Thomas was really impressive and then two maybe for Matthew talk a little bit more about how AI really drives demand and how that should play out in coming quarters in your space.

Yeah, I mean from a security standpoint, I think we made the point earlier that as you start to build and proliferate these agents, you need a security framework that's very different and differentiated from legacy point product technologies. And so I think the opportunity for us to have a conversation that traverses agents into security into global network performance is super easy for us. It's a lot harder for other people. So we've seen a lot more mindfulness of the accelerating acceleration towards a zero trust model. You know, it's funny, we're going to have our customer advisory council here tomorrow. I started, I think the week we had one two and a half years ago in New York and we surveyed customers at the end of every CAC and say what's your big strategic opportunity this year for your company and 75% of them said zero trust. One year later, same survey, 65% of the people said zero trust. Zero trust is a journey, it's not a point in time in which you buy some stuff, it's a journey to aspire towards and AI and agentic deployments really accelerate that.

Hey, Brian McWilliams, Wells Fargo. 10 to 100 times internet traffic over the next 5 years with AI agents. It seems more and more realistic each day. Is there anything you would need to change or reorient or invest in as the internet moves towards that level of activity in the future?

Hey guys, Matt over here from RBC. Thanks for doing this and by the way Mark, great run. It's been you really turbocharged still is really the best. Thanks. Thomas, a lot of good information there. We'll give one to you. I thought the way that you described the different acts from a cost to book, cost to service was great. When we think about that gross margin range that you presented, I think it's helpful context that you sort of provided, but I wanted to double click on that. So in other words, we should expect maybe a little bit of pressure on that in the near term and then an upward trajectory towards that or how should we progress in that range?

Today I would describe it best as a journey where we are and we will improve from where we are. Will it be a straight line? We might have a dip again, could happen, but it would come with a benefit. A dip in gross margin would mean that something else accelerates significantly, either growth rate or operating margin because a significant step up for us to dip even more, it would need to be a significant amount of additional revenue on top of the acceleration or the growth line we already have projected, right? So that additional revenue with maybe pressure on the gross margin would come with other benefits. You know, our path on the Rule of whatever north of 50 would accelerate. Our operating margin would increase as we have already seen. Apart from that, I think it's a journey that takes us from where we are to back to where we come from. And you know, we're public. I can say that you will see already a stabilization in the second quarter results.

I want to thank you for taking the questions. I think one of my favorite parts of the presentation was Rita's presentation around we're not going to be able to CPU and VM our way out of this. When do you think that reality sort of hits the enterprise? And maybe it already is with developer growth being 137%. But in terms of breaking that inertia and breaking that modality that most people have when it comes to building new applications, when do you think we hit that breaking point?

All right. Well, we're out of time, everyone. We actually have to get down to the closing.

Yes. You want to take one more?

Oh, the market will... I said we'll wait. I was like really? Excuse me, but we have 15 of our longest tenured Cloudflare players who are going to be joining us, many of whom are actually in this room, to ring the closing bell and we also have a bunch of members from Cloudflare New York office joining us as well. So thank you for your time today. I certainly learned a lot. I hope you did too and we'll be around afterwards to chat. You know where to find me. So thank you everyone today up here for joining us.

All right.