#1CLOUDFLARE Investor Presentation May 2022 CLOUDFLARE © Copyright Cloudflare, Inc.#2Safe Harbor This presentation and the accompanying oral commentary have been prepared by Cloudflare, Inc. ("Cloudflare") for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise, or representation by the presenter or Cloudflare or any officer, director, employee, agent, or advisor of Cloudflare. This presentation does not purport to be all-inclusive or to contain all of the information you may desire. Information provided in this presentation and the accompanying oral commentary speak only as of the date set forth on the cover page of this presentation. This presentation and the accompanying oral commentary contain express and implied "forward-looking" statements within the meaning of the federal securities laws, and these statements involve substantial risks, assumptions, and uncertainties. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, the current and planned functionality of our products, expectations of future operating results or financial performance, business strategy and plans, the impact of the COVID-19 pandemic on our and other businesses and economic conditions generally, market trends, size and growth opportunities, the calculation of certain of our key financial and operating metrics, capital expenditures, plans for future operations, competitive position, technological capabilities, and strategic relationships, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential," "would," "continue," "ongoing" or the negative of these terms or other comparable terminology. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Actual results could differ materially from our current expectations as a result of many factors, including those identified in the "Risk Factors" section of our filings made with the Securities and Exchange Commission ("SEC"). You can locate these reports on our investor relations website (https://cloudflare.NET) or on the SEC website (www.sec.gov). If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements included in this presentation represent our views only as of the date of this presentation, and except as required by law, we assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations. In addition to our results determined in accordance with generally accepted accounting principles ("GAAP"), this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. See the appendix for a reconciliation of those measures to the most directly comparable GAAP measures. This presentation and the accompanying oral commentary may contain statistical data, estimates, and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation. By attending or receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business and products. The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the network and products of Cloudflare. CLOUDFLARE © Copyright Cloudflare, Inc.#32010 Launched 270+ Cities in Network 2,751 Employees CLOUDFLARE © Copyright Cloudflare, Inc. 154K+ Paying Customers >50% Of Revenue from Large Customers 78% GAAP Gross Margin $287 Cloudflare at a Glance 51% CAGR 2019 Total Revenue ($M) $431 2020 $656 2021 54% $138 Q1 2021 $212 Q1 2022 Large Customers > $100,000 Annualized Revenue 66% CAGR 556 Q1 2020 945 Q1 2021 1,537 Q1 2022 Note: Unless indicated otherwise, all data in orange shaded area of slide are as of March 31, 2022, except revenue from Large Customers and GAAP gross margin are for three months ended March 31, 2022. Large Customers data in white shaded area of slide are as of applicable year ends. See Appendix for "Large Customers" definition.#4Environmental, Social, Governance Building a Greener Internet Green Compute on Cloudflare Workers Green Hosting with Cloudflare Pages Published first Greenhouse Gas Emissions Report CLOUDFLARE © Copyright Cloudflare, Inc. Promoting Human Rights Published Human Rights Policy Athenian Project International Expansion Published UN Communication on Progress (COP) Building Sustainable Communities Project Pangea First Diversity, Equity, Inclusion Report First Impact Report Joined the 1% Pledge PLEDGE 1% PROUD MEMBER We are powering our network with 100% renewable energy and committed to removing all historical emissions from our global network by 2025 For more information, visit https://www.cloudflare.com/impact/#5Cloudflare's mission is to Help build a better Internet CLOUDFLARE © Copyright Cloudflare, Inc.#6The Internet was not built for what it has become. CLOUDFLARE © Copyright Cloudflare, Inc. POP-10 PLI POP-10 HAWAII [wwwy PDP-10 POP-11 STANFORD POP-10 POP-10 PDP-11 FPS AP-1208 PDP-11 DEC-2040 PDP-10 PDP-10 MOFFETT POP-11 PDP-11 AMESIS CDC 7600 CDC 6600 ISI 22 AMES 16 POP-11 PDP-10 UNIVAC 1108 H716 PLI POP-IN PDP-10 370-150 POP-10 360/67 POP-11 POP-10 SUMEX PDP-11 SRI 2 SRI 51 PDP-11 NELC LLL PDP-10 POP-10 PDP-11 360/91 NUC ISI 52 POP-10 RAND O IMP O TIP SPS-41 POP-11 SCAL LBL POP-11 XGP DEC-1090 SPS-41 POP-II POP-111 POP-11 XEROX MAXC ARPANET LOGICAL MAP, MARCH 1977 TYNSHARE FNWC NOVA BOO PARC-MAXC2 POP-11 PDP-11 POP-11 UTAH UCLA POP-11 PDP-11 PDP-11 VARIAN 73 370/195 CDC6500 CDC3200 MP32 AFWL POP-1 A PLURIBUS IMP ww SATELLITE CIRCUIT ILLINOIS ANL PDP-10 PDP-10 CMU OGWO TEXAS C.mmp COOCB VPDP 11 USC POP-10 WPAFB POP-11 8-4700 PDP-11 SCOTT PDP-10 PDP-10 PDP-11 ECLIPSE DEC-1080 DCU-50 LINCOLN RADC PDP-10 H6180 H-6180 H-6180 PDP-11 SPS-41 GUNTER EGLIN DATA- COMPUTER PDP-10 MIT 6 370/168 BELVOIR 360/44 360/40 360/40 PLURIBUS H68/80 MIT 44 POP-11 PDP-11 CDC6600 EGLIN POP-11 DEC-2050 PLURIBUS POP-10 MITRE CCA PDP-11 POP-10 POP-10 H316 88N 300 DEC-1090 V/PDP-11 85500 sasmu DEC POP-1 PDP-10 PDP-10 POP POP-15 XGP DARPA ODA POP. ABERDEEN (PLEASE NOTE THAT WHILE THIS MAP SHOWS THE HOST POPULATION OF THE NETWORK ACCORDING TO THE BEST INFORMATION OBTAINABLE, NO CLAIM CAN BE MADE FOR ITS ACCURACY) NAMES SHOWN ARE IMP NAMES. NOT INECESSARILY) HOST NAMES RCC5 RCC HARVARO RCC 49 POP-11 POP-11 COBBN 40 50 VPDP-11 PDP-10 NYU RUTGERS NORSAR www.w360/40 SPS-41 POP-11 PDP-10 PDP-11 CDC6600 POP-11 CDC7600 CDC6600 PDP-11 PDP-11 PENTAGON UNIVAC-1108 PDP-11 POP-11 360/40 NBS LONDON POP-9 PDP-11 POP-9 360/195 GEC 4080 ICL 470 CDC6400 CDC 6600 COC 7600#7From Endless Hardware to a Global Cloud Platform ● ● ● ● BAND-AID BOXES Costly and complex Web of dependencies Specialized hardware On-premise only Point solutions 15 BETTER INTERNET Easy-to-use, flexible, and scalable • Unified control plane Serverless cloud architecture • Cloud, hybrid, on-premise, and SaaS Broad, integrated product platform ● CLOUDFLAREⓇ Global Cloud Platform#8CLOUDFLARE Hardware / Software (Buy) Yesterday ......... CISCO riverbed SAP hp EMC² Evolution of Enterprise Stack © Copyright Cloudflare, Inc. f5 Check Point® SOFTWARE TECHNOLOGIES LTD. paloalto Lenovo Juniper NETWORKS Microsoft ORACLE® Sun microsystems FIREEYE™ DELL COMPAQ NETWORK APPLICATION STORE/COMPUTE Services / Cloud (Rent) Tomorrow workday. zendesk -------- CLOUDFLARE® NETSUITE salesforce (-) Alibaba Cloud Dropbox box Google Cloud Adobe servicenow box shopify Microsoft Azure aws#9An Integrated Global Cloud Platform 1 CLOUDFLARE Cloudflare One Cloudflare Edge Developer Platform Cloudflare Global Network Cloudflare Zero Trust Services Cloudflare for Teams suite ZTNA with Private Routing Remote Browser Isolation SWG with CASB Identity/Endpoint Integration Workers Workers KV ago Cloudflare Network Services WAN-as-a-Service Firewall-as-a-Service L3 & L4 DDoS Protection Network Interconnect Smart Routing Pages 岳→白D B © Copyright Cloudflare, Inc. ZTNA = Zero Trust Network Access | SWG = Secure Web Gateway | CASB = Cloud Access Security Broker Durable Objects Cloudflare Application Services WAF with API Protection Rate Limiting Load Balancing Bot Management L7 DDoS Protection CDN and DNS Video Streaming Global Edge: 270+ cities, 95% of population within 50ms, 10,500 interconnects, 142 Tbps capacity, China Network Building Blocks: SSL/TLS, mTLS, Authoritative/Recursive DNS, DNSSEC, DNS over HTTP, L4-7 over Wireguard Compliance/Privacy: ISO, SOC, PCI, GDPR-compliant Logs & Analytics, Data Localization Suite#10CLOUDFLARE We Operate at Massive Scale 117B Cyber Threats Blocked per Day 154K+ Total Paying Customers >50% Of Revenue from Large Customers 47% Of Revenue from Outside of the U.S. © Copyright Cloudflare, Inc. Note: Cyber threats blocked per day is average over the three months ended March 31, 2022. All other figures as of or for the three months ended March 31, 2022. See Appendix for "Paying Customers" and "Large Customers" definitions.#11CLOUDFLAREⓇ CLOUDFLARE © Copyright Cloudflare, Inc. Our Flexible, Scalable, & Efficient Serverless Architecture ● ● ● Abstracts underlying infrastructure Dynamically optimizes and leverages capacity across network Single unified code base Deployment on commodity hardware#12A Global Network Powering our Platform 270+ cities in 100+ countries, including mainland China 10,500 networks directly connect to Cloudflare, including ISPs, cloud providers, and large enterprises go 142 Tbps of network capacity and growing 154,000+ paying customers Plans for 1,000+ of the world's busiest office buildings and multi-dwelling units to link directly with the Cloudflare network in the future 63% year-over-year Large Customer growth in Q1'22 Note: All figures as of March 31, 2022. See Appendix for "Large Customers" definition. Cloudflare city- 95% of the world's population is within 50 ms of a Cloudflare data center#13Our Product & Network Flywheels Drive Our Business CLOUDFLARE * Better Products © Copyright Cloudflare, Inc. Increased Efficiency Serve Everyone CLOUDFLAREⓇ Helping Build a Better Internet Global Scale Network Product Serverless Architecture Ease of use#14Data Intelligence & Quality Assurance at Scale CLOUDFLARE Global sensor network with paying customers in 175+ countries. Immune system for the Internet blocking an average of 117 billion cyber threats each day. Machine learning systems improve products with every customer's request. Rapid development cycles and QA through free users volunteering to test new products. © Copyright Cloudflare, Inc. Note: Cyber threats blocked per day is approximate average over the three months ended March 31, 2022. Other figures as of the three months ended March 31, 2022.#15CLOUDFLARE Our Competitive Advantages 101010101 10010 110 1010 1010 01 SHARED INTELLIGENCE © Copyright Cloudflare, Inc. NETWORK SCALE EASE OF USE 1010 10010 1101 1010 0101 10 0101 010 NO TRADE OFFS Security + Performance#16CLOUDFLARE 000 Our Favorable Competitive Position On-Premise Point Solutions © Copyright Cloudflare, Inc. Public Cloud $ * . ● ● ● ● ● Limitations Complex and expensive Not suited to address cloud-based and hybrid deployments Architected to deliver single point / more narrow product portfolio Customers are increasingly looking for an integrated platform offering security, performance, and reliability through a single vendor Inability to serve as a unified control plane across on-premise, cloud, hybrid, and SaaS infrastructure Customer lock-in and competition concerns#17Innovation Drives Massive TAM Expansion Cloudflare Application Services 1> Cloudflare One • Application Delivery Controllers ● WAN ● CDN ● DDoS Intrusion Detection & Prevention ● Firewall CLOUDFLARE © Copyright Cloudflare, Inc. $32B 00] $80B agão $115B !!!!!! $125B !! $135B gão !!! R2 Object Storage Cloudflare Network Services Cloudflare Zero Trust Services ● ● Carrier Services (MPLS & SD-WAN) Offices ● Data Loss Prevention ● Privileged Access Management ● VPN Content Filtering Remote Browser Isolation Network Analytics Email ● CASB ● 2018 2021 2022 2023 2024 Note: Total Addressable Market figures are Cloudflare estimates based on IDC market forecasts. Figures reflect the markets addressed by our current product offerings. Areas for Potential Incremental Growth <> Serverless ODD Database Internet of Things (18¹) A 5G Cellular Consumer#18Traditional Go-To-Market Model Inverted We don't build ahead of the curve. Sources of Leverage Self service adoption for customers of all sizes Natural expansion • Pulled into new geographies ● Pulled up market ● ● CLOUDFLARE © Copyright Cloudflare, Inc. CLOUDFLARE Model Get customers Add sales reps to service new customer segments Spend marketing budget#19CLOUDFLARE Acquire new customers Our Strategy for Growth Grow awareness Field sales International coverage Expand channel partnerships © Copyright Cloudflare, Inc. . Expand relationships with existing customers Upgrading to premium plans Increased usage Adding products ● Develop new products High product velocity Set pace for innovation in market Expand into new markets to expand TAM · · ● Extend our serverless platform strategy Enable a new class of applications Power store and compute workloads Increase stickiness Opens new market opportunity#20CLOUDFLARE Financial Overview CLOUDFLARE © Copyright Cloudflare, Inc.#21CLOUDFLARE Key Financial Highlights $115B Large Addressable Market in 2022 © Copyright Cloudflare, Inc. 54% Y/Y Q1'22 Revenue Growth 78% Q1'22 GAAP Gross Margin 1,537 Large Customers Note: Total Addressable Market represents 2022 expected spend from our analysis based on IDC data. Year-over-year revenue growth and gross margin are as of the three months ended March 31, 2022. Large Customers is as of March 31, 2022. See the Appendix for how we define "Large Customers."#22Track Record of Delivering Revenue Growth $85 $135 2016 2017 CLOUDFLARE © Copyright Cloudflare, Inc. 51% CAGR $193 Total Revenue ($M) $656 2018 $287 2019 $431 2020 2021 54% $138 Q1 2021 $212 Q1 2022 Investment in enterprise sales Large customer momentum Land and expand strategy drives growth across cohorts Strong penetration across the entire product portfolio#23CLOUDFLARE 73,555 Q1 2019 Paying Customers 28% CAGR Rapid Customer Growth 89,223 119,206 154,109 Q1 2020 Q1 2021 Q1 2022 © Copyright Cloudflare, Inc. Note: See the Appendix for how we define "Paying Customers" and "Large Customers." Large Customers >$100,000 Annualized Revenue 336 Q1 2019 66% CAGR 556 Q1 2020 945 Q1 2021 1,537 Q1 2022#24CLOUDFLARE Strong Dollar-Based Net Retention 123% Q1'21 124% Q2'21 124% Q3'21 125% Q4'21 127% Q1'22 © Copyright Cloudflare, Inc. Note: See the Appendix for how we define "Dollar-Based Net Retention." Gross revenue retention is defined as 1 - gross revenue churn. ว DNR includes all paying customers Large customers are a tailwind to DNR Gross retention above 90% Continuous innovation offers expansion opportunities#25Non-GAAP Gross Margin 78% 78% 79% 79% 79% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 CLOUDFLARE © Copyright Cloudflare, Inc. Note: See Appendix for GAAP to Non-GAAP reconciliation. Attractive & Consistent Gross Margin Serverless architecture deployed on commodity hardware Single software stack across the network Symbiotic relationship with ISPs Leverage idle capacity across network#26Non-GAAP Operating Margin Operating Expense as a % of Revenue CLOUDFLARE © Copyright Cloudflare, Inc. Leverage of Our Operating Model (25)% 23% 27% 52% 2019 (8)% 18% 21% 46% 2020 S&M Note: See the Appendix for GAAP to Non-GAAP reconciliation. (1)% R&D 15% 20% 45% 2021 G&A (5)% 17% 21% 46% Q1 2021 2% 15% 19% 42% Q1 2022#27Revenue Y/Y Growth Q2 2022 Operating Loss Operating Margin EPS $226.5 227.5 CLOUDFLARE © Copyright Cloudflare, Inc. 49% ($2.0) - ($1.0) (0%) - (1%) ($0.01) - $0.00 Guidance (as of May 05, 2022) Revenue Y/Y Growth EPS FY 2022 Operating Income Operating Margin $955.0-959.0 45% - 46% $10.0 - $14.0 1% $0.03 $0.04 Anticipate Returning to Free Cash Flow Positive FY 2022 Network Capex as % of Revenue 12%-14% 2nd Half 2022 Note: These forward looking statements were provided by us on May 05, 2022. This forward looking guidance speaks only as of such date and the inclusion of such guidance in this presentation should not be interpreted as a confirmation or affirmation of such guidance as of any other date. Except as required by law, we assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations.#28CLOUDFLARE Non-GAAP Gross Margin Sales & Marketing (% of revenue) Research & Development (% of revenue) General & Administrative (% of revenue) Non-GAAP Operating Margin Long-Term Model 2019 78 % 52 % 27% 23 % (25)% 2020 78 % 46 % 21 % 18 % (8)% 2021 79 % 45 % 20% 15 % (1)% Q1 2022 © Copyright Cloudflare, Inc. Note: Metrics shown are Non-GAAP. See Appendix for GAAP financial measures and GAAP to Non-GAAP reconciliation. 79 % 42 % 19% 1 15 % 2% Long-Term Model 75% - 77% 27% -29% 18% - 20% 8% - 10% 20% + Driving product innovation as the marginal cost to serve customers declines creates significant long-term operating margin opportunity#29Cash, Cash Equiv, & AFS ($ in millions) Raised $565 million in our IPO that priced on September 12th, 2019, net of fees and expenses Raised $495 million in our Convertible Notes Offering due 2025 that priced on May 13th, 2020, net of issuance costs and a capped call with respect to the 2025 convertible notes Raised $790 million in our Convertible Note Offering due 2026 that priced on August 10th, 2021, net of the repurchase of 2025 notes, issuance costs, and a capped call with respect to the 2026 convertible notes $2,000 $1,667 $1,333 $1,000 $667 $333 $0 $1,035 Q1 2021 CLOUDFLARE © Copyright Cloudflare, Inc. Strong Cash Position Cash Balance $1,814 $1,034 Q2 2021 Q3 2021 $1,822 Q4 2021 $1,725 Q1 2022 Operating Cash Flow ($ millions) $50.0 $30.0 $10.0 ($10.0) ($30.0) ($50.0) Operating Cash Flow & Margin ($8.8) -7% Q4 2020 17% $23.5 Q1 2021 5% $7.5 Q2 2021 ($6.9) -4% Q3 2021 21% $40.6 Q4 2021 ($35.5) -17% Q1 2022 25% 16% 7% -2% -11% -20%#30Our Business Model CLOUDFLARE © Copyright Cloudflare, Inc. Do Disrupting a large and growing total addressable market Widely distributed global cloud platform Expansive product portfolio; open to developer innovation Highly efficient business model and low fundamental cost structure High growth subscription revenue model with attractive gross margin#31CLOUDFLARE © Copyright Cloudflare, Inc. CLOUDFLARE Appendix#32GAAP to Non-GAAP Reconciliation (Annual) CLOUDFLARE © Copyright Cloudflare, Inc. GAAP Cost of Revenue Less: Stock-based Compensation Expense & Related Payroll Taxes Less: Amortization of Acquired Intangible Assets Non-GAAP Cost of Revenue GAAP Gross Profit Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets Non-GAAP Gross Profit GAAP Gross Margin Non-GAAP Gross Margin GAAP Sales and Marketing Less: Stock-based Compensation & Related Payroll Taxes Non-GAAP Sales and Marketing GAAP S&M Expense as a % of Revenue Non-GAAP S&M Expense as a % of Revenue GAAP Research and Development Less: Stock-based Compensation & Related Payroll Taxes Less: Acquisition-related and other expenses Non-GAAP Research and Development GAAP R&D Expense as a % of Revenue Non-GAAP R&D Expense as a % of Revenue GAAP General and Administrative Less: Stock-based Compensation & Related Payroll Taxes Less: Acquisition-related and other expenses Non-GAAP General and Administrative Expense GAAP G&A Expense as a % of Revenue Non-GAAP G&A Expense as a % of Revenue GAAP Loss from Operations Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets Add: Acquisition-related and other expenses Non-GAAP Loss from Operations GAAP Operating Margin Non-GAAP Operating Margin 2019 $63,423 -$716 -$125 $62,582 $223,599 $716 $125 $224,440 78% 78% $159,298 -$8,709 $150,589 56% 52% $90,669 -$13,037 $77,632 32% 27% $81,578 -$14,165 $67,413 28% 23% -$107,946 $36,627 $125 -$71,194 -38% -25% 2020 $101,055 -$1,466 -$3,081 $96,508 $330,004 $1,466 $3,081 $334,551 77% 78% $217,875 -$17,678 $200,197 51% 46% $127,144 -$30,497 -$5,725 $90,922 29% 21% $91,753 -$13,875 -$554 $77,324 21% 18% -$106,768 $63,516 $3,081 $6,279 -$33,892 -25% -8% 2021 $147,134 -$3,703 -$2,946 $140,485 $509,292 $3,703 $2,946 $515,941 78% 79% $328,065 -$32,869 $295,196 50% 45% $189,408 -$61,056 $128,352 29% 20% $119,503 -$19,706 -$380 $99,417 18% 15% -$127,684 $117,334 $2,946 $380 -$7,024 -19% -1%#33GAAP to Non-GAAP Reconciliation (Quarterly) CLOUDFLARE © Copyright Cloudflare, Inc. GAAP Cost of Revenue Less: Stock-based Compensation Expense & Related Payroll Taxes Less: Amortization of Acquired Intangible Assets Non-GAAP Cost of Revenue GAAP Gross Profit Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets Non-GAAP Gross Profit GAAP Gross Margin Non-GAAP Gross Margin GAAP Sales and Marketing Less: Stock-based Compensation & Related Payroll Taxes Non-GAAP Sales and Marketing GAAP S&M Expense as a % of Revenue Non-GAAP S&M Expense as a % of Revenue GAAP Research and Development Less: Stock-based Compensation & Related Payroll Taxes Less: Acquisition-related and other expenses Non-GAAP Research and Development GAAP R&D Expense as a % of Revenue Non-GAAP R&D Expense as a % of Revenue GAAP General and Administrative Less: Stock-based Compensation & Related Payroll Taxes Less: Acquisition-related and other expenses Non-GAAP General and Administrative Expense GAAP G&A Expense as a % of Revenue Non-GAAP G&A Expense as a % of Revenue GAAP Loss from Operations Add: Stock-based Compensation & Related Payroll Taxes Add: Amortization of Acquired Intangible Assets Add: Acquisition-related and other expenses Non-GAAP Loss from Operations GAAP Operating Margin Non-GAAP Operating Margin Q1 2021 $32,084 -$523 -$700 $30,861 $105,971 $523 $700 $107,194 77% 78% $69,974 -$6,835 $63,139 51% 46% $39,527 -$11,058 $28,469 29% 21% $27,724 -$4,648 $23,076 20% 17% -$31,254 $23,064 $700 -$7,490 -23% -5% Q3 2021 $35,029 $37,525 $42,496 -$803 -$1,040 -$1,337 -$700 -$700 -$846 $33,526 $35,785 $40,313 $117,399 $134,822 $151,100 $803 $1,040 $1,337 $700 $700 $846 $118,902 $136,562 $153,283 78% 78% 79% 79% $85,877 $96,219 -$8,271 -$10,184 $77,606 $86,035 50% 50% 45% 44% $61,762 -$24,747 77% 78% $75,995 -$7,579 $68,416 50% 45% $46,770 -$13,971 Q2 2021 $41,349 -$11,280 $30,069 27% 20% $28,927 -$4,486 $24,441 19% 16% $32,799 27% 19% -$4,024 -19% -3% $28,669 -$4,742 $23,927 17% 14% -$28,872 -$26,494 $24,148 $28,024 $700 $700 $2,230 -15% 1% Q4 2021 $37,015 32% 19% $34,183 -$5,830 -$380 $27,973 18% 14% -$41,064 $42,098 $846 $380 $2,260 -21% 1% Q1 2022 $47,051 -$1,323 -$507 $45,221 $165,116 $1,323 $507 $166,946 78% 79% $100,057 -$10,379 $89,678 47% 42% $67,054 -$24,079 -$2,639 $40,336 32% 19% $38,029 -$6,018 $32,011 18% 15% -$40,024 $41,799 $507 $2,639 $4,921 -19% 2%#34Definitions Paying Customers. We believe our ability to grow the number of paying customers on our network provides a key indicator of growth of our business and our future business opportunities. We define a paying customer at the end of the quarter as a person or entity who has generated revenue during such quarter, excluding (i) customers that were not acquired through ordinary sales channels, (ii) customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and Warp, which agreements and customers together represent an insignificant amount of our revenue. An entity is defined as a company, a government institution, a non-profit organization, or a distinct business unit of a large company that has an active contract with us or one of our partners. Large Customers (> $100,000 Annualized Revenue). While we continue to grow customers across all sizes, over time, our large customers have contributed an increasing share of our revenue. We view the number of customers with Annualized Revenue greater than $100,000 as indicative of our penetration within large enterprise accounts. To measure Annualized Revenue at the end of a quarter, we take the sum of revenue for each customer in the quarter and multiply that amount by four. For example, if we signed a new customer that generated $1,800 of revenue in a quarter, that customer would account for $7,200 of Annualized Revenue for that year. Our Annualized Revenue calculation excludes (i) agreements that were not entered into through our ordinary sales channels, (ii) revenue generated from customers using only our registrar product, and (iii) customers using our consumer applications, such as 1.1.1.1 and Warp, which agreements and customers together represent an insignificant amount of our revenue. Our Annualized Revenue metric also includes any usage charges by a customer during a period, which represents a small portion of our total revenue and may not be recurring. As a result, Annualized Revenue may be higher than actual revenue over the course of the year. Dollar-Based Net Retention. Our ability to maintain long-term revenue growth and achieve profitability is dependent on our ability to retain and grow revenue generated from our existing paying customers. We believe that we will achieve these objectives by continuing to focus on customer loyalty and adding additional products and functionality to our network. Our dollar-based net retention rate is a key way we measure our performance in these areas. Dollar-based net retention measures our ability to retain and expand recurring revenue from existing customers. To calculate dollar-based net retention for a quarter, we compare the Annualized Revenue from paying customers four quarters prior to the Annualized Revenue from the same set of customers in the most recent quarter. Our dollar-based net retention includes expansion and is net of contraction and attrition, but excludes Annualized Revenue from new customers in the current period. Our dollar-based net retention excludes professional services and the benefit f free customers that upgrade to a paid subscription between the prior and current periods, even though this is an important source of incremental growth. CLOUDFLARE © Copyright Cloudflare, Inc.