Why Cloudflare is Operating at Break Even, North of $100M in ARR

The speed and security of your website are paramount to your long-term success. If you’re not able to serve your customers online in an efficient, secure manner, you will inevitably set yourself up for failure as a business.

Cloudflare was built to speed up and protect websites, APIs, SaaS services, and other properties connected to the Internet. Their software improves performance, boosts security, improves reliability, and provides valuable insights for online businesses.

How much is Cloudflare doing in ARR?

Cloudflare is a SaaS business that charges its customers on a subscription basis. Their customers are segmented into two unique cohorts: self-service and enterprise. Their self-service customers participate in their freemium offering and generate roughly $100 in monthly revenue while their enterprise packages begin at $5k.

According to CEO Matthew Prince, the company crossed $100M in ARR two years ago and is now “well north” of that figure. Cloudflare is also still exhibiting healthy growth, growing 5o%+ year over year at this point in time.

What is Cloudflare’s churn?

Cloudflare has been very intentional around driving expansion revenue and has had success with their land and expand model. Today, the company has net revenue retention in excess of 100% within their enterprise cohort.

The business has “remarkably low” customer acquisition at this point in time with more than half of their revenue coming from organic channels today. On average, the company drives 15k new inbound sign-ups with no marketing spend.

How much has Cloudflare raised?

In total, Cloudflare has raised $180M in total capital to date and crossed a $1B valuation back in 2014. The company currently operates at break even and has more than half of the capital they raised still on hand, Prince explained.

Cloudflare’s team of 700 employees is based in San Francisco.