Cloudflare $NET recently participated in JP Morgan's Tech conference.
The CEO @eastdakota used this opportunity to really highlight the TRUE identity of Cloudflare and discussed some of their profound competitive advantage.
Here are 8-important takeaways for Investors:
1/ $NET is purposely not a Usage-Based Business Model:
Only about 5% of $NET is usage-based bcos of the potential impact or harm to a customer if some emergency came up.
Over 90% of revenue is subscriptions which gives great revenue visibility & sustains revenue
I like this.
2/ $NET's business model & strategic focus (compared to $FSLY or $AKAM):
$NET has pivoting from becoming a "CDN provider that cares about speed of streaming event"
Into
More of a security company and network ecosystem that protects their customers entire network. This is key.
3/ Software Defined Network (SDN)
This is likely the biggest moat that many ignore! Well done @zatlyn & @eastdakota
$NET has an advanced SDN. It was built from Day-1 to make $NET extremely asset light requiring less servers & led to high margins
More on this in a future thread
4/ $NET benefits from Cybersecurity Tailwinds
It's not explicit below but due to $NET's Zero trust (ZT) security & their move into SASE networks, they stand to become one of the beneficiaries of the Biden security executive plan - Including attracting major enterprise customers.
5/ $NET's true identity:
They are a network company at heart - building security features to make a network reliable.
He noted, we shouldn't compare them to $FSLY (CDN), $CRWD (End-point protection) or $OKTA (identity access) due to their different approach. They're partners!
6/ Their biggest competitor-> $AMZN
$AMZN's Cloudfront is the CEO's biggest threat.
Why? - They have extensive resources than $NET could ever deploy.
However, most companies are using multi-cloud strategies and $NET is closer to developers - so this is how $NET stays relevant
7/ $NET's Edge Compute Platform:
Beyond cybersecurity, Workers is the most exciting product for investors.
The biggest value add of Edge besides speed, is that $NET can build organic products and ensure data regional compliance for businesses. There are even many more use-cases
8/ $NET's real advantage!
i) Low Unit Economics due to their SDN Tech -> leads to higher margins
ii) Brand leads to Low CAC: Due to their freemium model, they are closer to more developers and can use this advantage for testing new products
iii) Culture of Innovation machines!
9/Summary:
1⃣ Subscription based b-model has worked great
2⃣ $NET has pivoted from being CDN to a network cybersecurity provider
3⃣ SDN Technology architecture is a key moat behind everything
4⃣ Major beneficiary from Biden's security executive order due to their ZT security
..
10/ Summary (2):
5⃣ $NET's true identity is about creating partnerships.
6⃣ $AMZN is the biggest threat
7⃣ Edge Compute offers much more than speed
8⃣ $NET's moat is Low CAC, Asset light tech and the culture.
I'll be creating another thread to connect this! @InvestiAnalyst
END/
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My First #FF for Investors with less <3K Followers.
They provide value in different ways to FinTwit.
Also, thank you all for the 6K, I'm not sure I deserve it. Paying it forward by recommending these underrated investors below that provide key insights: [1/6]
2/ Generalists: They provide value and broad insights
@EugeneNg_VCap - Great ER highlights & Investor insights.
@tpsojda - Lots of interesting company data shared
Affirm Holdings [$AFRM] Mar 21 Earnings Highlights:
I just finished reviewing the report and the call.
Thread Outline⬇️
i) 10 key takeaways from the report;
ii) What trends are happening across the Fintech & BNPL Industry;
iii) And Key observations from Shopify & Peloton.
🧵
1/ $AFRM Top-line highlights - Revenue:
Jun 20 - 120% YoY Growth
Sep 20 - 98% YoY "
Dec 20 - 57% YoY "
Mar 21 - 67% YoY "
*8 sequential QoQ growth
Yes, growth slowed down but it was primarily due to the Covid shutdown. But now, it is accelerating as the economy is reopening.
2/ $AFRM Gross Merchandise Volume (GMV)
• GMV is growing 83% YoY though AoV slowed down
+ Increases in network revenue
• Travelling is growing triple digits (already in Feb!)
• Everyone talks about $PTON, but if you remove $PTON, the business is accelerating over 100% YoY.
• Marketplace Revenue- 141% YoY
+ Marketplace- 165%
+Services - 90% YoY
- Marketplace = combination of visits+conversion+AoV)
• Home improvement is still one of highest spend
CFO indicated that April is already momentum. Essential part.