Fastly (FSLY) 20 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Maria Lukens	Vice President, Investor Relations
Joshua Bixby	Chief Executive Officer
Artur Bergman	Chief Architect and Executive Chairperson
Adriel Lares	Chief Financial Officer
Jeff Van Rhee	Craig-Hallum
Charlie Erlikh	Baird
Brad Zelnick	Credit Suisse
Rishi Jaluria	D.A. Davidson
Jonathan Ho	William Blair
Tim Horan	Oppenheimer
James Fish	Piper Sandler
Michael Turits	Raymond James
Walter Pritchard	Citi
Brad Reback	Stifel

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good evening. My name is Sherrill, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fastly Fourth Quarter and Full Year 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions] [Operator

would Vice turn Please President I to conference go like Lukens, Maria of now you. the to over ahead. Thank Investor Relations.

Maria Lukens

full Thank XXXX everyone. you joining fourth Hi, for earnings quarter call. our year

CEO, Fastly’s and Bergman; Lares Chairperson, Adriel have Architect and Joshua We CFO, today. Executive us with Artur Chief Bixby;

and it. remind and read of hour time to Before a our the on Shareholder rest to the with chance SEC of letter an make lot a everyone website had questions. everyone about the the a Since details, start, We some provides they want our format hope ago. of Letter Investor about your for I call. published Relations brief reserve will we opening remarks We the

statements performance long-term the During statements including this future call, of business, strategy, results, related expected we growthand financial overall future prospects. forward-looking make our to will

and are Please XXXX filings from could SEC to QX Shareholder actual subject to results factors to statements and of a that results with implied Letter These the the risks, or differ. known that cause assumptions could at discussion our uncertainties our cause a look projected our during materially and differ the unknown for those take call.

this Also law. obligation available date. note We except required by the to statements as call forward-looking disclaim update as of are on that based information any us on statements to today’s any forward-looking

a most directly on financial substitute be website. results. we call, Letter this are non-GAAP Relations not GAAP will be to discussing comparable GAAP during our These intended the measures. are Also the Investor financial provided non-GAAP measures for our Shareholder in to measures Reconciliations

afterwards. website will Finally, be this and being call archived on our is shortly webcast

over will turn the With Artur. to that, I call

Artur Bergman

-- to and you results. welcome. XXXX full Maria. discuss ’XX We year you, today appreciate Thank fourth quarter our and us Hi, joining everyone

those that talk stage position fastest news we today growth. of Before I earlier the will about for want to exciting announced some us next discuss

on Executive and product what Chief years, Similar Fastly’s incredible started I to ago Bixby point. nine the we we inflection proud Chairperson step past at journey. point as fulltime to the were when been Architect decided we role new into have very CEO. have are inflection and am I nine of years accomplished These we Joshua the have I of Fastly.

a built my the our vision today. both of is apps and and how Tyler nine are McMullen Compute@Edge shift result CTO, ago in paradigm years

Just had cloud integrated online have used easily the have as vision better show develop be continued we was the it. should world evolve the have expand to further, now and way security to We we to that Edge Edge to that build right experiences. the and

we secure of We our developer see environments building the our so community. much future potential market in platform and closely are computing for with Edge the

we to beta. drive transformation the feedback We have continued positive to are Compute@Edge currently continue feedback which is the on of improving in Edge. receiving product The enables iterating us in receive order to

We Compute@Edge modern to also efficient the have past. have more as as new want of keep we been the not if being to We continue Compute@Edge. our demands network with to in meet adapting

time on for more because is this to needs and educate understand with to and and have what's Joshua with spend planned I I make transition them six The customers computing. to have worked can I Edge together years. prospects reason possible their over

into is built believe to the trust right Joshua that Fastly and the future. I have We person together lead

investors. needed organization of Having grow. customers employees, also different people, what spent know time business in partners, He Joshua cares for to about parts unique and the a are running type systems knows deeply to us and our our out. business of and and ability

about to helping the direction of forward future. I you keep strategic Joshua the the and the rest with term all to continue team leadership work company of will Fastly support I and the interacting look closely with long very

join me turning will new congratulating over him, to that Joshua he I the now Please go his role and over in so call. am in

Joshua Bixby

It's Arthur. you, lead been an Fastly you serve Fastly. and grow is help to honor Thank six with incredible amazing to years. for It over

journey continue build We on I and exciting trustworthy a more an momentum. energized am our Internet to are to

was Fastly. XXXX for a great year

This quarter calendar benefit our excite the our and to brings public a end year community. first customers company. products features several innovative that and of We launched us and as new our

Edge. Our customers build on and motivated to the are create

our across across differentiate verticals base, We and all and geographies. continue to see we from to continue our global competitors growth customer

As XX% million a the $XX results. Shareholder you over fourth share revenue, are saw to we Letter, had our year. excited up year in in generated We strong quarter and

Edge results Our and products our by existing enterprise our security including platform new customers. reflect cloud increased adoption of both

the progress performance to world and around scale as our more be towards security mission identify the making us critical and for drive the as operating opportunities We continue more believe and the developers to on are over to decade digitized. We path by scales. network profitability will continues next driven need the to Edge, leverage move functions

such As security programmability be the will believe we and paramount.

to XXXX XXXX. momentum make In significant are that and progress carry we excited into

rich a look and to As remain invest providing and offering poised portfolio. security in which cloud an include at our their are that much edge as great our this continuing Compute@Edge we forward and we on platform to is will year, developers to trajectory more. do can own, edge mission we furthering scale focusing so a Fastly delivering adopt on feature

to financial who walk With highlights. that, the Adriel, hand through call will over some I will

Adriel Lares

continuing Joshua, and to Thanks, my look you forward new congratulations. partnership with your role. and I

top fourth line Joshua we calendar and strong to momentum XXXX. year As mentioned, the and see continue quarter growth in during the

$XXX $XX up was year-over-year. XXXX Full revenue XX% million, was quarter XX% up million, XXXX year-over-year. year revenue Fourth

our strong customers. last from customers of XX% This resulted in XX-month growth customers the in to trailing Enterprise the both and spend revenue, XXX,XXX, customer XXX, grew enterprise up quarter. among increased up total experience in existing XX% up We count to enterprise all also QX customer new previous continue average XXX,XXX XXX with in generating from quarter. from

was of up previous also net the quarter XXX%, from dollar-base expansion a XXX%. Our rate

Our customer approach land, our time. relationships to retention additional over then focused XX%. whereby and and incorporate In customers for over Fastly our annual extend we rate on are one Fastly adopt increased and features further products through revenue strengthen case also to XXXX use particular continuing adopt

XX.X% expansion in XX.X% XXXX. to year opportunities in fourth continue continue business. drive the XXXX also GAAP up ago from up leverage XX.X% the the We from and period the quarter XX.X% margin in was quarter full pursue the as gross we margin year in and for to for

Non-GAAP in private XXXX prior. XX.X% a relative in margin XX.X% to was for public quarter gross stock-based as company significantly up XX.X% non-GAAP from up year that increased full has year the margin, XXXX. we XXXX were And the which excludes XX.X% with compensation gross from while

previous request on in margin the of we time. All being by to gross impacted personnel As customers gross quarters, our confident ramp timing that we continue up can drive infrastructure our we investments, and usage seasonal margin by over expansion can the have be our as and that as said said, well remain platform. still

full deliver Lastly, we as a despite year G&A public across fourth our quarter in the ramping year able investments and also in the sales, R&D company first leverage XXXX. in operating to -- our were and as first

look to far We and are opportunities progress made I ahead. the the have so pleased forward with we

I'd XXXX now our QX to like and to move full guidance. year

$XX million, in range $X.XX operating in non-GAAP million and to of loss revenue of net expect of per share range we $XX quarter million the to first the $X.XX. the $XX range loss in $XX million non-GAAP the to For

loss loss non-GAAP $XXX non-GAAP For operating in to range net the the XXXX, in cents the to we $X.XX million share and $XX per of expect the $XXX range million $XX full $X.XX year to million, revenue of range of in cents. million

this virus business. the impact situation of business to The like second a also our evolve magnitude comment take Covid-XX the overall on on the to cannot on be time. I'd and quantified the reliably impact continues our to at of

at But this we material effect seen have time. no

at For we chain see also might internet a usage some negative our but point may has occurred. increase. supply impact nothing to Conversely yet again example

pleased we public strong company we our as an excellent with quarter first closing, execution. year a and have close had In calendar that are to

with that, turn to some will I And operator back the for it Q&A.

Operator

Instructions] ahead. Rhee [Operator from comes of Craig-Hallum. first Van The Jeff question Please go

open. line Your is

Jeff Van Rhee

questions, nice for Thanks real guys, my on congrats there. taking quarter Great.

about can Edge. terms How the are pipeline what pipeline versus to does look you competitors, maybe of talk about use cases, in verticals, seeing. of the have talk just just at respect with what the you kind forward changing First, you closing been what's

Joshua Bixby

Jeff, Hey. Joshua. question. it's Thanks for the

on in marketing the pay are as think investment I see side was previous a year we we and starting calls, that that, off. of to talked XXXX about

an have geographies. pipeline So seen in the verticals, expansion I the across all all think that we

to -- have not I a we competitive think are the environment. dramatic we change seen

often to continue player dominant legacy the see to CDN see and quite the continue players. them We

perspective, remains vertical and it geographical From a same. the really

good strong verticals --I and pretty we right I continue all and that It's think to all we would see a now. across time geographies add that’s growth universal.

Jeff Van Rhee

And as are timing evolved, thought to role happen thinking you I time? am sure I I brought like pretty It just relates you sounds this has both terms how How right to where you the about of both. been just guess your the have you it's process Artur. I that about am shift, conclusion, it this and to just mean this here. pleased interested didn't over to it take going in congratulations

Artur Bergman

and and love really taken then well I partnership my that have quite on Thank parts large over It’s less it. I excited Joshua’s very of as business and love evolved I executed good I less am will explore he's over very this do has I very that stuff and time you. where and felt with growing change And actually to and at been keep happy. we because a that am close. while we the to the and I

field about engineers work who back want and ago do. they we spend I what out excited our so want complete with more know tell what branch really and the them I of am just those to into time can and and so our evolution years that's eight I -- the they what I that. customers, learn did the and get

Jeff Van Rhee

just this be. helpful. That’s for Last one me, to Great. Adriel maybe is

obviously did and annual of approach that As you Olympics, seasonal of variable what the outlook, how look would you bake that? uplift typically kind be, guide can maybe in did given at elections, the demand, the some a you differently your what year into bring in for ask it how

Adriel Lares

is thing. a election historically found good we year Generally, an Yeah.

I is a that of company. impacted think this sort guided ever my the guide the fact have is earliest one we thing public as that

got of us. a in full front have we So year

usage can here given base, is that The you a just just great we quarter that I saw we is, so what think see and a year. finished you the some there are are year, variability conservatism early in that just a appropriate fact great there we is and some what occur this

on make year growth see the midpoint still the generally given positive generally feel sort rate think I wider of your what see where some But think you band of sure and appropriately it's just we associated in to terms about you we there, of usage. account that can for uncertainties with I with going are an the just

Jeff Van Rhee

Okay. everybody. Great. Thanks Congrats Got it. again.

Artur Bergman

Jeff. Thanks,

Joshua Bixby

you. Thank

Operator

comes Baird. Will question ahead. Power next from of Your go Please

Your line is open.

Charlie Erlikh

in you hiring sales that you your hires This if just you could end for for and marketing finish XXXX? and started the in plans is about and Thanks and strong guys. Will. marketing I could to on the of update progress. talk How the on us to little maybe taking the employees have your Charlie of hired wondering Hey, congrats on into ramp year. XXXX sales Erlikh terms question was

Adriel Lares

This Sure. Adriel, and the thanks is for question.

are investment percentage sort continue we sort that of will overall, where likely the to targeting pleased XX% were the revenue of year we that a we ended of that. and as we do So, with

we no return like getting in that investment investments. on return there are those feel different past we than just as long on affirmed experienced the was we you the XXXX have So and the

a we of rate folks before. of current and have revenue is we XX invest that generating you really hiring seen continued the us from should see so with here, standpoint are From at sort think get pleased what and I we forward sort going

to I sales the want to marketing continue we I that that are were as of to make progress we going return continue early to XXXX, want but that continuing into and far portion into as we to sure we we rate. to though marketing think get still monitor spend on and that looks maintain so are days we

Charlie Erlikh

you about because the leverage? for it QX XXXX Great. to calling just necessarily are that less the the anything made of to gross should And more than Is margins comments QX that's seasonally traffic there normal clarify to seasonality? So That’s would I there typical just seem one in usually not that due is anything the wanted Letter of unique out QX then be weaker out ordinary that's the year. you helpful. there, Shareholder me, cadence through

Adriel Lares

No.

I about correctly. before. it think past can live of talked quarter. lots we for you the seasonally said probably good it that we have in -- our QX, In you There's participate compete strongest as it's in events

There's itself the XXXX. differences helps just QX you also should will great general it shopping into repeat our holiday But there. customers some but QX see from and them us that same the e-commerce in doesn't of follow over some that then carry becomes to trend season

strength we fourth sort quarter year. we as of the seasonal again see that sort enter of this

Charlie Erlikh

Got All right. it. Thanks, Adriel.

Artur Bergman

Thank you.

Operator

Please comes of Credit Your go from Brad Zelnick Suisse. question next ahead.

open. is line Your

Brad Zelnick

follow in could streaming the around up quarter Excellent. the a on quarter. touch organization. Thanks in a I congrats good wanted question some if changes gross of on on on But the congrats so to my events much I on live the leadership margins, and and I all echo

you called about multiple in live to out us if could pace letter events impact XXXX ahead and how of to you and quantify the into impact that? about but was the the various are the events political expansion So margin should wondering think we help from gross how Olympics thinking with you the I

Adriel Lares

Sure. Brad again. this Adriel is

a do think sort I trying and earnings publicly past incrementally so we thing XXX gross basis about think on on are were we pleased were of I this in for have we are and points basis year we to that. we talked year-on-year biggest we call to is aiming overall able focused are annual really grow margin about the

occurred build I think live timing for events that only should case or normal the particular going up in but preparation live be forward that QX. were in we not have QX, in events QX, in impacts there still just would in as related here also

so was there's named and one nothing. in Super Bowl of them

balancing think in I that from that the investments in make our unusual of and constantly I we regard our today standpoint for customers. think growth we are preparation

growing revenue can think you in of the balance year-on-year, a opportunity the our of they when As as expansion side sort little see trying are the with our with fast see we that goals front it's to I margin and as XX% on us. bit tougher are we

itself So, are did in I in still going but in you I how little color about on of a year I bit the hope confident year good that gives feel XXXX. to terms and more feel of we about do we sort quarter what XXXX

Brad Zelnick

been case, is right? technology into the year actually progress it's early? take Thanks, you too initial ad follow-up case Compute@Edge Altitude, just Adriel. It’s this we guess. it, in very helpful year’s an and insertion early, maybe still and then has it the move as I how for last know of a I rest real of time still for But and conversations whomever way around use highlighted as that terms wants or yet implemented have to At production anywhere it into use

Joshua Bixby

still Hey. early. too Brad, it’s Joshua here. It’s

in We that. still beta with are

that story powerful This Edge and to think very brings and power the is form most think therefore scale has of traffic and positive. to I particularly Edge is where been I see perspective. powerful the the it security is from analyzed and that scenarios notion do that and served the is more being we not ad the very and insertion continue progression

would we that see others dynamic but this that are be taken are that things where In case, many case about very have there emerging use personalized are are we and the as we bullish out. that could very

want we to do roll in seen power we over of the that. thoughtfully We have -- capture products are about bare past, very thoughtful for and very around part given by and developers. that's you is we that built were we as of really I last developers that the these And is that out, what we think have imagination months seen that the excitement few the how

excited out when our in that we we of and have have that that the is said our remains with brought at and opening goal as is remarks, I assets year even And that we shoulders Compute@Edge of built think it’s to scale this more of bring case a than the about on and wonderful are previously first I out -- on businesses the the and one have. continue we of the the others That’s creativity momentum, we show -- beautiful. to people types customers our that build beta see talked

Brad Zelnick

Awesome.

questions. for We it are excited my taking much so Thanks for too.

Artur Bergman

you. Thank

Operator

ahead. D.A. Please question of comes Jaluria go next Your Davidson. from Rishi

Your line is open.

Rishi Jaluria

of for Thank CapEx wanted taking by the I you a at results. that you continued do guys. and level so return staying CapEx year see you bit kind long-term a a through much Hey, of maybe you start in my and to how Can I help at of got strong first the an Shareholder then next and going elevated to potential Letter about follow-up. you above for outlook. questions where which Maybe look that little understand have continued talk see actually I us that the on

Adriel Lares

Sure. Rishi, again. it’s Adriel

to pleased capacity So in finance term of ended of different the up we our time CapEx And of revenue. outcome work at to where in bring ways XXXX, on XX% notion, the sort internally our and here we about just future when standpoint also with for CapEx we plan I we while and growth. providing in think still are of from

how know with ourselves is I challenge of giving you as to growth I XXXX. XX% going faster aspect customers for But XX% your am a a of like earlier is here which given bit sort of are a the have mentioned bit why room

respect get of just just give CapEx. context will we we we Clearly, outperformed deployment I to in that think we some and time, as beat relative Again try I that. to you when thought to well -- be in that what our with of sort of but do we to can whatever But do XXXX.

Rishi Jaluria

then Thanks and revenue some live events Can of helpful. you in aren't in as just how those That's on or of including much Adriel. impact expected revenue the one-time help around the understand a Thanks. magnitude QX Okay. the carry that over. us And commentary were? to

Artur Bergman

Yeah.

was like to been Bowl our events growth this second live that not is I year year never think how unlike strong we into exposed of for it a that. Super little bit doing had new

had greater we are in exposed and of the past. as a to getting we have the greater So result opportunities success

one-time those played say of I events to are mean a for when occurring typically to that from the annual sports when that sort continue when were from compete or those So are it's basis. QX I a it's think more an sense them standpoint. we QX But QX seasonal I to on going

Rishi Jaluria

helpful. you Thank That's Okay. so much.

Operator

question Please next Jonathan William Blair. comes from ahead. go Your Ho from

is open. Your line

Jonathan Ho

Hi.

echo me Let you of to as roles. in my well the new both congratulations

starting little you you opportunities maybe or Josh, or new with out in of maybe improvements? role, changes about, now that as a can maybe bit things new you some can either Just drive some to you are do you talk a sort what see that

Joshua Bixby

you. Thank Jonathan.

think said partnership that over half for and years. six I is this which well has a a Artur been very

the is quarter we the that as year think this decisions I made from and Fastly thriving. So and the like we see have can I feel made together in business have you

not is don't So change. this I -- about

an developers Compute@Edge continue just this so in focus is next-generation of to augment area. about and Artur I for Fastly actually part areas allow is platform time spend to enhancing and that to all this need and that the of a shift that at think obviously that we of I we is more have think augmenting is I already and to the our talked this think about. is core

we phase to that the nothing that thing I that our in a place to there invest out we we Artur this are wonderful for about more us. going here heavily customers and and of than to very at is continues area broken continuing think also augment. proud and just to is that’s other for the results be think Other and continue is is grow called important continue think a is a wonderful wonderful the and be this I I that that security to

Jonathan Ho

it. of the it. terms And DBNER Got then sequentially. just in that Got accelerated results

of just I is Edge you, of so or security break from get that the to cases expansion whether some different DBNER And to a drivers maybe or any between it's core. wanted sense the use down there way

us Thank sense you. give to what's Just what? a maybe of driving

Adriel Lares

past one what Adriel. another respect little It��s now good Yeah. to that's those I even large eventually a just please that meter continues bit down I in Jonathan. of sort that With me a way. though talked have DBNER to to Hey, the And expect numbers. that of in

where driver main is of terms the really it coming in across in But is the from Board.

high releasing also to fact it's up think rate on the XX% we that I with from annual you XX%. basis or know an retention are an that context in that bumped already

I does customers. think our of sort different Fastly adopt and all is that strategy of really this with of expand show land the across us together all

any it's So not one particular segment.

Jonathan Ho

Thank you.

Adriel Lares

Thank you.

Operator

Your Tim from next Oppenheimer. go Horan Please ahead. question comes of

open. is line Your

Tim Horan

having you you on assuming can you little on you this color in talk your Thanks at competitors to and of guys. Are ahead are how you. your just far security adopt And am services based are the the at? more you of on give a Thank what some or are competitions architecture of are good what services liking? you those really you customers security different marketplace? some maybe about this competitors trying Maybe and are new think on kind of any are you Can the applications Compute@Edge some I seeing in. seeing of

Artur Bergman

are see Hi. there's to here. last we this much say couple We compared some -- -- entering the are see we to of competitors quarter. that I Thank update a that trying they market. you. It’s Artur to mean, to don't significant

really of view. to performance that are from not and scalability we our point are talking a customers when seeing We flexibility

large core of compliances. older prospects really and we -- making security existing sandboxes working how are and So some we very isolation around the and customers good feel the or technology sure the about we are needs think with engaging

regards have around so leakage issues twist years had parts meltdown from been that and specter AMD ground the this of like memory different you leakage customers that's the conversations deep data up they combat and have things opportunity and Now this are avoid to and Intel we one some the safe vulnerabilities with with and the know last and between gives environment to of the our about to how to like over an their those in on interesting of -- of ensure try and critical has that couple for different kind have been that right and data. happy

And talking on same have a the mean, the to customers this application side, I our been brand is to, I do.

to time and evaluating So this taking some to integrating it's the for really them start and adding roadmap.

product security time. be have products aren’t that will new But to this yet develop would the over or the that the migrating based on On we side, and the we technology. use security ones the products technology security

the safer of benefit we. Edge is the with Compute@Edge and our for as that can One us so well can innovate not on faster only customers

and them R&D flexibility and more our have coming and department up they seeing releasing new allowing work. product products can in we quicker in with so And how

we probably more later around So have significantly this achieve will to how year. this for update

Tim Horan

Thank you.

Operator

question Please Fish comes ahead. next Piper James from Your Sandler. go of

Your line is open.

James Fish

it Congrats the am have guys hasn't the little surprised the but in those in guess promotion much -- are moving QX overall I how for just Artur I new specifically, into point, and for of guys. terms out how in for new Adriel, you the role this impact guidance gotten in And the business thinking about business mass around Hi, streaming Josh services the at a an services XXXX? the new of itself? could all and the quarter then, on impact the in results QX. new with how

Joshua Bixby

question Joshua. Adriel. I first and it’s handle off James, will it to hand your

there’s that and we in services, lot think streaming obviously, around new as this regard. been so much of I a press questions get

customers of margin of they about, a help of do We things dominant we that. really to as business. streaming that the business talked on our grower everything relies sort our the do. focus large we are the know But that we on the as that events and have high always in with One you side not

And part trends our the seeing of non-media our XXXX one in which to and see that business, a we revenue. percentage -- is are of as continues the grow of continued non-media

actually are sector. the see media notwithstanding growth the we of any in you So

We are is in think which continuing see important non-media the business, to continue growth a growth extending overall. and I

who market. say of value Fastly out I and look And of a it really really and where who if quality in hand there high So plays say would value is part. the performance at of it becoming in is are there I you side customers overtime. But the Adriel for revenue to percentage as I over second business as overall will our less that that

Adriel Lares

$X features either I have deliver customers. sort enables us to enterprise our business this us that our of -- higher Josh end. of to really and some strategically build of midpoint. the which sort thanks for fantastic $X But sort within business is to mix from there non-media Jim. media within think question that down network point model, is the of I Joshua, Thanks, allows and you which up some know million some million range of there XXX many There of was is growth in to lots

questions are built we I big but is aspect there's sort as sort growth, it. am in So your speak. some Hopefully, dependence on not if it not not of to answers I sort core there. am that a -- of that an not business so Again, to counting our for of

James Fish

No. it. No. Got

can't more more ads of I more, kind enterprise why get low-to-mid is think you multiples hanging consistently fruit customers hit this of of net the the yet one going for at guess me what's is similar here, low just kind a teens adding are then I in And your on. kind some level. guys wall? I the add of peers are

Adriel Lares

Adriel Jim, Hey. it’s again.

this, start those is, to I that's So the average maybe now enterprise which if will Joshua about size and on greater to to of customers, our add $XXX,XXX $XXX,XXX. you think I up think bill want that than

and significant our I much our not that how utilizing from with pleased customer sophisticated how DBNER also itself the it and customers now reflects am and I and they per also average revenue spend but pretty think growth. in standpoint, flex only are These could are overall

end we the So that that standpoint, working as sophisticated on from higher edge more Compute@Edge Edge are take -- we add there speak. ultimately customers and advantage our we enterprise out these trying cloud have really that we then the are to of really our do

a an is of involved side customers, into there's continuing there's that which marketing up. but of I with intimately area the is relatively to these So think bit we time takes know new house, Joshua I invest was to it a setting are this get and the

Joshua Bixby

Yeah.

Just I use calculations one metric as more, important a backwards it think, more metric people metric. well. as is our one different this What's understanding about with looking element,

are we we not as projecting to try to a that know actually and of approach always picture forward like you the in back of take going other are future, I sort think predict to the but a So past we organizations give are what's to understand happened. conservative looking

James Fish

sense, and Got ton it. That makes again. guys. congrats Thanks a of

Joshua Bixby

you. Thank

Operator

Your of go Please James. next Raymond ahead. Michael question Turits comes from

is open. line Your

Michael Turits

the Hi, of Adriel everybody. evening, company course, and and and both whole else quarter. and everybody congrats good Josh Good for to the

is. year. you margin upside gross did that Brad this how about points Just almost thought to you question. to the It the much seems I back asked X think come that

right And the bit it I few that you think, thought be are still Adriel, XXX you years it's this over can maybe I am is little be your at would saying clear seems, ago? bps next year, just a case. so, a less getting you than I for is if point what that plan

Adriel Lares

pleased XXX would So me which that on the am an the we first progress were of question part of we actually and drive in is areas terms of at the And the recent is basis. able on quarter-on-quarter. want get that answer good I sort sort one some annual let line most labor of the of really there bps quarter particularly to its really on to least leverage

the internal at work. a complicated from even the more that to many, as software that as here know able hand hours of that's many In allows helped Fastly to require that the really greater isn't we human that tasks not particular are This being future used us delivering levels continue we team scale do lot hire I to and of many of you internally from helps network. there in sort by automated to

something was in have of past. experienced sort that the So we

move rebolster of we can And in will we little drive am bit a focused have can in But sort primarily how margin from we gross just quarter-to-quarter. again terms on QX of that have on sort this experienced everything we year that done, basis over and what that could I that confidence so. year of or do a LTM

Michael Turits

there, the versus question, Thanks. or XQ reservation to digits actually competitors that media flat the words, a fees were -- like come look upfront your Yeah. is of come doesn’t to capacity part if regarding other part double the to as had quarter-over-quarter are launches And fees very well of VOD so, what out year? pointed that were may nature. any that more last that James, And one-time have of for with of December, which why one-time would in back in been in guiding high non-live paid have services in in two then there profile big been both you

Joshua Bixby

Michael. we sense, It’s a business. Joshua. fee one-time the From Hey, in not really general are

the we talk grow have as about want I over quarter. continue always our we will to believed hand of next to customers to sort and that Adriel that see well. it with We to

Adriel Lares

on respects nature some of to that Bowl based like general network. time the ads, nature. to are of of they again exception -- are again, things capacity fact sort events, our in time with not it's be up of there Super From these of the one-time on will a sort But they the taking be we some will that Yeah. customers spend required that we minimums on sort to

Michael Turits

Okay. Thanks, Thanks, Josh. Adriel.

Joshua Bixby

Michel. Thanks,

Operator

Walter Pritchard Your next from question Citi. ahead. with comes Please go

Your is line open.

Walter Pritchard

Hi. talk maybe and change of sounds Thanks. do think about some A general basis year about the of [inaudible] terms you which sort the to hear from you levers love about just can think on just XX of come gross benefits mix you out -- still what couple this perspective you just Could that how the saw margins? like of in would to same you sort but drove points we the do scale, and questions, what's gross from margin side. the services that of scale, general and separate one of

Adriel Lares

of Yeah. general of of Adriel. of QX in percentage in the COGS -- terms will was COGS one Walter, share. we fact bandwidth be in it's of previously bandwidth terms that I of in grew would the the that had and the things talked portion greater a the in future

other like in into the going blip then areas up little talked will So eventually co-location, bit markets. things about expand a co-location labor leverage of like sort to we just different forward I most as going also be of is

talked in we at really also are excuse world are the world serve have we how there's today XX, markets there. XXX the we around markets -- past about believe and believe halfway me, it need in probably to we to I XX be we But in so the that about

areas bigger we the you of overall those want don’t just see I I in Josh of anything. add get and you think was just to -- will to just continue footprint time. we scale will you or So if sort helpful over see Fastly, sort other as expand would as Hopefully leverage that's as Ben

Joshua Bixby

Yeah.

I see certainly think other from margin continue the the high customer security growth in Walter, significant add products to side. will we I the and rates product base. just driving attach on

across the in and talked across seeing at enterprise are customers as well. terms remarks are and that seeing that's geographies are the You seeing in what opening as topline that driving verticals that and we we of also about

Walter Pritchard

you specific some Bowl, a times the had have the it is number? the Super in And Super Bowl, the there mean, for Great. on is as up assumption couple just that impact relates you I past come here in QX to then have that's I any know with -- are

Joshua Bixby

incorporated. been It's Yeah.

into that it's already So factored just guidance we gave. the

Walter Pritchard

Okay.

revenue there there -- isn't in or or? is revenue As

Joshua Bixby

Yes. There-- the into I and guidance. mean there event is incorporated revenue, us for a but now it's past

Walter Pritchard

Okay.

right. Thank All you. Okay.

Joshua Bixby

Thank you.

Operator

comes of Reback go question ahead. Please from next Stifel. Brad Your

line is Your open.

Brad Reback

CapEx end think was year? of know much. this little more a last we year very such how implications, front gross the margin I timing spend. Adriel, Thanks Great. about should any the loaded, which issues some had

Adriel Lares

No.

sort will traditional of it general think the timeframe. in seasonality just I follow

So it gets flow are that and we action. see purchasing statement sort of deployed speak. likely cash today, into impacts we so, is when of margin stuff it we what the you actually But put in or fact will that CapEx some -- the as gross

think should I you similar the be So saw trend in XXXX XXXX. to that the trend in

bit sort what XX%. that And being largest normal we to going thought on impact. absorbing XXXX actual QX ended in so XXXX I you the better of is at year But timeframe up which being little the flow being of a CapEx than overall see be, the QX of XX%, statement. that seasonal with sort sort was that cash saw within I of XX%, most CapEx But the

Brad Reback

Great. Thank you much. very

Operator

I further Joshua no for There at Bixby call this are closing the over time. questions turn to will remarks.

Joshua Bixby

San TMT at look We thank Francisco you. Morgan to our have families, without Stanley our Thank of the our our success hope and I future the near on Xnd. our see want over partners forward in many employees to March investors, years. you could to connecting Conference quarter our in we whom strong achieved with and this not of many you the and and customers,

what with to to the is and can't come. in for you. excited more are share you wait ahead Thank quarters We

Operator

for participation. This concludes your you Thank today’s conference call.

may now disconnect. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.