Fastly (FSLY) 5 Aug 202020 Q2 Earnings call transcript

Company Profile

Participants

Maria Lukens	Vice President of Investor Relations
Joshua Bixby	Chief Executive Officer
Artur Bergman	Chief Architect & Executive Chairperson
Adriel Lares	Chief Financial Officer
Robert Majek	Raymond James
Brad Reback	Stifel
Will Power	Baird
Jonathan Ho	William Blair
Brad Zelnick	Credit Suisse
Rishi Jaluria	D.A. Davidson
Tim Horan	Oppenheimer
Tal Liani	Bank of America
Walter Pritchard	Citi

Call transcript

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Operator

Good afternoon. My name is Josh, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fastly Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference over to Maria Lukens, Vice President of Investor Relations. ahead. go Please

Maria Lukens

you call. Thank our quarter second Hi, for earnings XXXX everyone. joining

We Architect our today. Bixby; Artur Joshua a format have CEO, make Fastly's we We call, Chief website the with remind the details, about some CFO, published and Lares, it. of our to a letter Bergman; Since Adriel and letter Relations chance with reserve of a want had opening us on I the shareholder everyone we the Investor and SEC Chairperson, about your the brief will hope an and remarks time to everyone hour questions. of provides ago. lot rest read Executive for

These measures our substitute any information the Investor financial during cause be results to to measures. during our we from in actual Please comparable particular, this disclaim During shareholder are known as update measures available in not to strategy, including results Reconciliations SEC, on provided this letter us making filings for we Also results, assumptions materially Also We related to factors to future are look business, non-GAAP long-term will will differ note the the differ. call that today's any of could intended take and required growth statements, cause to or and of risks, risk call, website. These unknown those forward-looking that based the our to discussion GAAP XXXX except factors within future the be subject financial our this could statements the by our obligation with results. are discuss overall for as shareholder letter financial to call, on and statements uncertainties Relations the on forward-looking GAAP forward-looking prospects. directly QX a certain and are statements non-GAAP that a those call. performance the at of most filings our implied a projected expected law. statements date.

webcast our the Finally, be over afterwards. is on will I'll turn to With Joshua. this being archived call call shortly and website that,

Joshua Bixby

Maria. you another their Fastly you're strong for from have We and Thank continues keeping that safe. today. societal exceptionally world hope all digital and transformation. significantly the Thanks, accelerate for was The that resulting prioritize in rapidly. healthy pandemic quarter changes and everyone joining organizations QX to a Hi, welcome. to us continued to this structural need for change

XX% generating show results. performance. and the continued of delivered strength these execution another our up security X,XXX existing the continues X,XXX robust history and We can quickly of top Fastly we We are around are customer simplified, was and securely. never from that has of grew fast at and both see users public. if drive customer platform The products believe Despite of platform customers Developers world. only new largest security exceptional The they developer and but turbulent to adoption We some times, we with and our year-over-year. needs team's in focus uncertain to the modern and thanks transformation revenue, to count edge empowerment. they and clearly digital at the operator transformation and solutions security build and be greater. will been by billions in multiple of to now going geographies. verticals across evolving quarter, since our the quarterly previous line edge effectively of support to We frictionless, create scale the total secure partner our the We delivered million in the of can a continue them major increase see the shift solid need to quarter platform in growth, modern to edge in lasting. times which most trustworthy center in for operators long $XX

from grew quarter. XXX, Our count to customer up XXX enterprise last

category. with grew new pleased enterprise who are the We number of well as enterprise as the into customers customers

strong out However, of customers growth some in COVID impacted offset industries. category falling was the by this

was addition, US In the largest create in app our our TikTok of around support uncertainty Any ByteDance, this to ban customer quarter. by operator customer. of TikTok the the the would ability

loss a longer this of the While they able we the no position business. to US, majority customer's believe we operate would on in our traffic have are an are the case in backfill of traffic this in impact to

quarter. enterprise average previous Our spend $XXX,XXX the in increased customer from to $XXX,XXX

net more from more XXX% as Our and increased are of dollar of and last on based customers net XXX% XXX% last rate up our reflected rate quarter. quarter in relying retention XXX%, existing us expansion from up

now architecture Looking serverless edge further ahead, ever continue Compute@Edge, need offerings applications. our the our than architectures. why build to of differentiation embracing network more adopt are rapidly new and our for security. This developers to customers Many real-time Compute@Edge in and and at we high-performance invest specifically is

we enhanced observability with logging our bringing the granular forefront to environment. metrics tracing the features, quarter, This serverless including valuable observability of offering computing real-time new and

We the are of on availability track for Compute@Edge. and expect to further expand

are learn customers and are we thinking about from our inspired cases use to by enabling new are of including innovative continue security. ways the We variety they

edge, applications placed evolving As secure to an transformation and critical it’s into drives applications. websites more and code increasingly the

always security key has we area. delivered Security Fastly we to focus and in this quarter, continue significantly features Control. invest new a key been us including will Flow This for

for an beginning record to build demand. scale XX% and important representing the year. second of also pace per reached are We meet We a our to milestone since global XXX terabits digital today's the at us, network continuing growth of capacity,

and to is times. that to uncertain to financial will turn Fastly continue the during growth uniquely it these Our guidance empower drive reflect that, will and Adriel our through positioned I details. walk results With to customers over

Adriel Lares

will shortly. guidance, about you Thank you, second raised joining I talk in everyone Fastly more and thank a today. which strong detail reflected quarter, us for results had Joshua, and in as our XXXX

key First, financial I of want upon some to results. briefly the touch

million revenue, growth. we XX% in representing $XX year-over-year This generated quarter

continue from same up increased basis XXX Non-GAAP for leverage XX% We to as XX.X% margin healthy last was operating continue the year. also over software deliver to gross was the our of demonstrating gross the gross realizing leverage year-over-year. network for of points defined a quarter, in GAAP quarter, we margin scale. margin XX.X% quarter improvement

As we have continue of usage quarters, fluctuations timing margin gross along infrastructure seasonal investments with the our will to said in impacted platform previous the by of by personnel be uncertainty, economic security remain deliver as and continuing gross in our innovative deliver ability scale incremental Despite solutions. computing expansion confident customers. and our continue edge to margin annual to we we and

significant we of quarter as positive delivered our a marked quarter towards profitability this first EBITDA. Finally, shift

sheet, and it the successful a with $XXX balance have to securities. navigate pleased balance to restricted with cash, and Turning and investments quarter ended follow-on the we cash sheet liquidity we We're marketable for economic remain in bolstered strong raising a offering as and services of the strong That's our year and why future the mission into demand our environment. We the the about and guidance XXXX. underlying again growth for we're periods. fundamentals, full optimistic uncertain current critical our business QX million

Non-GAAP range in Non-GAAP in to quarter, $X of $X.XX to $X.XX million. negative we per $XX.X expect negative of million $XX.X the per For share in $X the the range million net positive the of share million. income positive revenue operating share. range per to income third

Non-GAAP $XXX and $X.XX. our guidance closing, million from to million million minus to minus loss million. from to our to further we minus $XX million increased range In minus minus $XX $X minus to For to the $XXX to well $X.XX per million full execute $X.XX from million. we revenue to share to $XXX $XXX million minus range operating $XX believe net XXXX, are to range loss Non-GAAP we minus to growth. $X.XX positioned year continue

continues require innovation. and more customer from base a that product Our to fuel Fastly edge serve platform diversified offerings to

a balance sheet have including our We Compute@Edge and continue invest and and will to network offerings, strong strategically in security.

to turn permanently has transformation. that, pandemic evolves on by to fast, that platform a adapt the digital take ongoing on accelerated back in focused operator questions. with secure to focus edge succeed businesses their and I'll the emerges and believe providing world that we your their With it developers needs. need has helping business the reliable Fastly the for Finally,

Operator

Please question Robert Raymond [Operator comes Instructions] James. ahead. your first And from go with Majek

Robert Majek

offering the have is shifting delivery you My furthermore, elaborate is driver Thanks. on are delivery of and that image that selling what growth image questions higher personalization business Can might prices? just then so, given there scale. if business, mix at impact you're of towards part your I'm around and the average on if curious what revenue

Joshua Bixby

Hey, Joshua. Rob, it's

vertical Compute@Edge. strong the and to started was We're of at it remains program a rely the edge inherent in us. business. to to absolutely we verticals, optimization idea see the the part some image, we it cases with So Fastly. growth We the around really continue at underlying story verticals is, key IO mobility; quarter, It is it very some of dependent; edge look personalization the and of doing innovative on But general, out In it. really across image geographies strong. this, obviously, to see seeing continue for when use across widespread when you comes

our quarter last not same have shift anyway, in the for We was significant actually seen mix a business business quarter. as this mix the -- in

So this about image included. broad, optimization across is and strong all sectors growth

Robert Majek

exploring interesting curious Perhaps customers of [ph] just use today. on highlight it's the could but you one FERC more know that just if I Compute@Edge from are me, early some cases

Joshua Bixby

Artur, this. this. know turn Yes, have Artur, in I stories some is in you deep absolutely. to interesting I who

Artur Bergman

a Yes. to One retailer, customers micro we've up. the Hello, and to seen early all good to everyone, in Yes, you availability, use testing they services our we've online again. want to see started edge. pricing, during POCs to more out migrate cases stock of beta and is, coming reach couple

users. can So to update updates live and they faster end deliver

online own so also more and how smarter in are rooms be We responsive, have those simplify tokens they out. retailer case architecture to with handed that want use their they much tokens waiting fair purchases, more another do where can about, to be

other more overloaded have that cash to way data online are because retailers surges. origins of personalize their the responses We and at when edge even want

-- so they as they deliver still don't they that best So can.

space of pick less they and origin, is who wants if Interactions. encoder, smarter best origins their do from -- to there We significantly in the buffering so live health have so playback examples can checking that the each video of best someone edge of the

some than place that we more time. kind think and that So little would I in are all but this at advanced point some to of have I expected, it's expected really over a bit

Robert Majek

Thanks a Great. lot.

Joshua Bixby

Thanks, Robert.

Operator

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

Brad Reback

is of bit what maybe revenue give just versus much. it little level, Great. high traffic Thanks world more what sense dig we can you of the very rest maybe US you? into percent and for TikTok, percent a a can the Joshua, represents of us

Joshua Bixby

Sure.

in in is it that to historically this the US, six sector months areas with and working XX% and XX. revenue, other is with apps of we just represents what's last high have, innovators they obviously, are about than months, we of the June about that of X closely, the ending situation like us over are on value unique business. that innovators continue that Less the we TikTok the in the the So innovator are monitor XX% trailing an

not So we is think other and something APIs video, when to areas, help a which also important. just with about deliver it's

at this we at that about make side not on direction in looked as short we strategy case seeing are at because that's sure prepared the today. there traffic wanted of meaningful our didn't we're have move risk, it, we in traffic could the that work we've everyone what looked in of heard but very how notice, is I something we to right a confident amount remarks, obviously of stated this So

Brad Reback

following Great. line And Adriel, on thought. then, up this of just

quo you TikTok the look status As with in assumptions? guidance, you changes have have the made at half back Thanks. or assumed you any a

Adriel Lares

Brad. more moment us we this this gives to quo sort time. year -- time latter bit status as lot as react. and, Hey, were sort a also of Yes, a of to of assuming Joshua nothing again, sort I half it sort of of mentioned, little a a mean, the at get you the at of

sort of that's into So that. built

Brad Reback

very much. Thanks Perfect.

Joshua Bixby

Thanks, Brad.

Operator

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

Will Power

Yes, when up guess something bit. that's the QX that just following from I historically, a I mean, to Okay, maybe wonder you pick that about slightly more if informing at to Adriel, QX on have the are factors pretty could great, assumes normally QX good flatter talk broadly maybe look sequentially and midpoint. guidance down I thanks. up a just you guidance.

the what trying maybe seeing traffic June just of trends to much you've you of I'm any versus of how that from guess been in have along And sense July? in go so figure conservatism change And trend? your those May, kind out I as created is for into lines, kind you

Adriel Lares

Hey, Will. Yes.

we up QX. do some general, sort to see in pick QX begin we of from to So see

keep in relatively to previous the is, think this QX QX QX versus thing is actually clearly year, I relative to year mind seasonally flat.

what Of growth a course, we're think QX a QX to rate, year, comparison still so that's you the when we you challenge the pretty this I for I have worth getting at bit noting. not year-over-year midpoint about here that is strong fact experienced think think some of

States be we some as the in uncertain United idea in sort our be to coming is from from play to that's bag, going folks quarter kind mixed we're here the of So sort of before of from see true standpoint, it's had mostly rest sort that a life out. built of little and to able a a the of back is last what's would world bit how normal rest getting of shelter-in-place to a to but respects that beginning the -- and that

the the is So to of very bit the with a in QX. some ameliorate respects respective QX, by sort sort [indiscernible] seasonality QX being very, to a respect sort somewhat of normal of comparison strong it's but

Will Power

just financial forward we just of I follow-up deal think from some benefits trajectory and good to were maybe margins the gross go about here? to side, If about on a margin, how gross going maybe for the the talk Okay. that stronger, could --

Adriel Lares

margin that Yes, be you sequentially quarter actually the for I gross know, going talk I upward. time about was to the we definitely last guiding as fact did first

alone pleased to was we pretty see year-over-year. quarter-over-quarter I were to let deliver meaningful able that from growth So

annual traffic, I think do to I that that one of more basis think going that QX I still XXX normalizing over that thing project. that sort given points well to QX, going the of the an sort we're believe makes always the I'm we're of on over mix give year-on-year. contribute basis, challenging

I deliver this pretty to year. So confident we're going feel about the leverage,

go versus a sort into little guiding I before of think where going we margins going I'm normalized sort to when here. are to from QX, a hold go QX now going to bit the of gross

Will Power

Thank Okay, great. you.

Adriel Lares

Will. Thanks,

Operator

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

Jonathan Ho

COVID-XX could start just good is maybe you a actually us, -- to and stay I Hi, know out sense much home quarter? to contributed afternoon. but wanted with how challenging, at growth this maybe for just quantify I rough if of this

Joshua Bixby

is in assuming are a this not Joshua here. improvements Yes, we is general. one-time event. you see sustained hard as we I there assess it's in Jonathan, are we mean, I guidance that projecting to are seeing mean our here. that that and of is And long-term sort

is with in unique I world. most companies a this usage-based model position think the to innovative in Fastly the be

be and their the And the look the -- so when it and most you largest at Shopify, just on, innovators goes you results, whether on list Pinterest stack or on.

And I strength. are you're companies you sustained just that strong is strength. really at think what seeing those the story telling look if

out. parse to hard So

of in factor that momentum of a there about I our exciting quarter think innovators think some other customer is is is new shift and we perspective industries. gain a is the tremendous the to the But this generational particularly think from count. looking thing I these at are continuing this

think the And seeing in the which So just new the call, in has we've platform. people the this success, We've net seen of a we changed. the customers that of is on I isn't couple increase talked weeks that about obviously this. about environment earnings seen. This the selling about seen early is largest last in

we that going story going a arc, much this more are is that hard sustained I It's out, strength strength forward seeing to forward in quarter but which regard. demonstrates unquestionably. sustained parse think

Jonathan Ho

the companies the the and terms determining you main were of of quarter in wide of wins of transformation in sort that just factors terms highlighted in then, And digital things, it. what side Got some -- the of

Joshua Bixby

check Jonathan, there… out

Operator

has I questionnaire think dropped.

your So from… comes next question

Joshua Bixby

arcs sort the of to least because of where or in I'll you think hear terms rejoin it of at recording. story this going winning. question can I that to actually try I answer mean, I we're in know why Jonathan, was

programmability be thematic developers really as digital with that developers customers. as story to I We the is by of we that our are and of for strong think strong -- One, serve arc in this transformation. ever built continues elements. strong world enterprise notion

is transformation digital idea. great this So

You ultimately it, book But of can article. can an in our about it write are you a the output transformation. see results digital

We are are benefiting world. have ones that from who the those seen this

because coming us their developers. stronger programmability forced build the are than being to So to ever their they're what reality are people and and by seeing of we're not trusting is differentiation of they because

And security are This make we're and signal our side, is in. piece invest customers know that continues want which which to separate to more. we're us very continue of is from the but able to are well. as is strong is stronger, to invest category, strong people do in security heavily strong. because areas Another that's one looking that Compute@Edge, a you on to set very offerings which the We're to the and to us continue investing enterprise competitive continuing be and coming the much as to around them is

of lots of where we're and in we category. particularly So, are that reasons proud

question. So happy the to next take

Operator

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

Brad Zelnick

so questions. got I've all a of the guys thanks success. much. And couple Great, on congrats

today, more For heard I so emphasize SecOps you starters, I've think than the audience ever.

you might five it look percentage curious what And today in the be? remind you back be we the Can mature investors opportunity, side a also business mix that I investments case the how highlighted always and like in of bit of use click for double viewed honestly, you if more, just You view you on just less think capabilities than others years, market. your quite of Flow or to three us security I'd and Control. the because had as are where

Joshua Bixby

Yes, I a understand don't that's security do DNA. our people I think great mean, that question.

in I think invest don't how how that we area. understand and we invest people heavily deeply

stepping we for So right, to back, network, is makes and of secure course both network number but DDoS which one That visibility there us we one amount a talk which control. where of a a are network a things, about I tremendous customers' application. a a think efficiencies for benefit have lot one, don't unique, provides or us for

I real-time So every with you that's changing of every customers who to don't want for services are to hard. to middle of in battle coming security. second, pretty when us are call the that's And data for hold, these they really the professional minute. are to have deal example, adversaries get, mean, in our if

wins. think mean, it that all leading. partners education I culture I all continue us getting TLS, e-commerce through platform, that environment we in about areas think their security-related. enterprise one investment have would the about is so pick this The our protection, those like. driven we gets we're of that inorganic. the And on we form in those down we to an just one are however, areas leaders cases DevOps for past the that's service to seen area. of And really in use our Compute@Edge, we invest continue where we're many an portfolio space investment heart reuse in at we interesting is. of area looking of or we those of This SEK proven in of right, that talked and many that have each revenue as privacy. allows is around services, be is, believe that to are way customers are that seeing the in that requests find we into the the future a We've our that from WAF an think of coming how these really proximity are built I you and both some strong of to is through don't categories really is of Compute@Edge in both put on really and or company responses are to certainly to that I because big other look financial for coming we've drive some pretty denial in on the opportunities, data But letter really intersection, some We that culture. own talked see we the our focus tenants us that some and Compute@Edge customers to offering coming and and and and us the strongly. isolate And of organic to

partner we you'll certainly But us So it's a looking the innovators. market And future. to lot out our about think point, a your hear from to are in one with misunderstood story. more to of those part ways do that I in the find

Brad Zelnick

more. the of I customer can Fantastic. about just Thank well, It's what squeeze in you, could quarter. and spend? to you're in terms as you see us you're the seeing one nice record the propensity how in Joshua. and today What size And the customers in adding would to you of if adds tell funnel wallet characterize the

Joshua Bixby

sales to seen and tens, really Yes, you by I the which with the partners. we think our of domains I go in and have where a figuring -- monetize we've I the wisdom millions mean going think well machine that. is last so market we that approach can mean, how know SMB that instead individual strength of few I on our does building out hundreds, to of months, market, strategy pretty Brad the

play We Shopifys the us to we strong have do. sophisticated aggregators most to to That's the that the and and it's and and for Wicks the the a gone largest others. something aggregators, continue Adobes want and

with us. the the with which customers, work tend So, would we from have in of partners our customers will be if to the at they historically. obviously we Most done relationship on that that customers, customers a smaller enterprise larger of benefit have who direct you new really we category look

have about X,XXX X,XXX XXX these. of customers you're our some mean, sizes, into the space to large large, perspective, I put talking -- So wallet our of largest enterprise in competitors

X,XXX from in universe limited our X,XXX sectors. are traditional only much And enterprise think market perspective. lack that that this So, by the to the is days of very early I of innovation programmability is the and of -- customers in this we

that So if these some have you customers we're looking where of or enterprise companies XX,XXX XXX,XXX sort of other that captures certainly wider to at.

are the it is that acceleration we're in about at really it where into early, pretty journey. now. and humbled we we about right but excited seeing So It stepping are and

Brad Zelnick

Awesome. Thank so much questions. you the for taking

Joshua Bixby

Thank you.

Operator

Your comes Rishi Jaluria next Please ahead. question go from Davidson. DA with

Rishi Jaluria

so at Hey, much taking questions. one those for I for for guys. my Joshua, talk thought as going One notable got for letter, more using Adriel? or -- how how was Can the using that vertical on the Thanks the in I've online look, education where experience a you shareholder little a about follow-up semester for about you some a universities hybrid learning, or even Fastly help and Joshua, better which and the of fully learning academic being vertical, the US year. virtual is Adriel. really in customer you interesting bit education Fastly these are the customers wins, students transition least after are talk this have one make to to university online

Joshua Bixby

through that how digital for think a the they just think in exciting an All have is quickly? but at particularly they the if what the at right how look that with How of, right, developers they questions amazing of are it if have sure are leading struggling scalable, frictionless, and walk it's institutions institutions complete that one eyes the to I three are, I you can that's of arc through a really we're And beautifully nature innovation universities digital on personalized, and now some do When they that's experiences. into part absolutely, play new when are it's there's Yes, and schools, Sure. frictionless transformation and I are gold secure are just makers make the do story that personalized? at excited thing happens of innovating. underpinning those they of What they the that. delivered developers I who Khan learning the educational the general win is Academy, innovation and us education, they given forefront that boys isn't my That do content digital rush are upstairs I rethink get online. experiences these content sector decision seeing is particular of us. that's there, think so

So golden that all different. of others, I don't us, economy is the like a it's about The excited win and is years very is vertical underlying the think gold out survive., these thesis the digital that and of transformation for that same, hills real the to the coming through growth order and does in the else of actually space everyone need to thread digital, [ph], by universities, accelerate leads modern

Rishi Jaluria

helpful. well expansion to that's see as nice Adriel, on the Alright, gross side the great margin as bottom margin just some both line.

that's partners is there quarter. little the a talk that was in bit income On operating in Can you and is the is you cash the of flow cash COVID quarter, to flow still is there, AR the looking you going non-GAAP and what like just be a should a big just and reason looks sequentially good dynamic cash on flow. maybe increase Thanks. the side customer though, maybe wanted beyond going we to it thinking or translation about about -- there else something through be wanted And customers, or on? how operating EBITDA to negative

Adriel Lares

with mentioned think the of what's on think customers that uncertainty you A much of the early terms negotiations as terms and certainly of terms lot on And rates. I've of with Rishi. our of more definitely the I one pandemic. in going in customers partnering those COVID-XX We're future and on in situations. to It a especially payment last in is of of partner happen to good was trying lot really call, them sort the it the face was Yes, news I to on question most head. customers

standpoint, was in I of my the majority the that collected that already the, here of the first the of pleased first from DSO what in collected month to swung So see quarter. we've really QX. was Most in

that some and are you to the trying think we focused of I to some went will on that to in pleased saw additional understand. really I I So general, one effect see was out be begin of why folks cash, still reasons primary ourselves. And which cash you

Just we to more and feel I feel even before bit little more comfortable balance sheet comfortable a we the sort of think now. have if

Rishi Jaluria

All right, you, great. Thank guys.

Joshua Bixby

you. Thank

Operator

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

Tim Horan

can that know all Azure guess contrast and to, little Compute@Edge little Artur, AWS your I compare competitors CDN and just product legacy you more kind and are the does you you there? contrast about guys. compare biggest bit to a kind contrast what and I products, Thanks, can talk And doing, are guys. that talk maybe the server-less bit and How which a server-less. more compare of of at Lambda out what

they say why your product Thank better like is why, than this edge product theirs basically at an have point. you. Let's

Artur Bergman

kind Yes, product of look serverless course, adapted to and a is but the alright. Yes, I run mean functionality the of one at deliver it edge the customers edge. at

operating need requirements of in security of do and a do things said is, really against the you efficiency that comes and And as so earlier, from weight one the requirements to the constrained requirements environment. how key kind Joshua we more multi-tenancy speed

of massive middle the nowhere. would in So centers they everywhere, not at were be the data edge. It's in

is the sandbox. each environment run memory it's and And that its chose underlying notion all, web through of so, own which the use, assembly request core is or we that on first isolated technology to based

lot safety that as of thing world to CPU like kind doesn't -- the memory, entire [ph]. tabs looking the considering assembly support offering. think people start-up and state add our a and I it all one tax programmatic -- run browser, could seen edge Targets a amazing efficiently we target they that's browser of that's making will also, is the allow a edge fake too, location deliver storage. and But the A the especially will in of have a shared of detailed really around efficiently We just people what in for difference to the multiple the logging support you normally will the addressable they -- I down need is web out that much central that But cash writing that I to languages, tax guarantees page from take of visibility web deliver that guarantees, and those a we've technology have different your here we of and think that the a of more for assembly have in huge more break assembly access take languages. that still language you and kind same move to one automatically if written have can It what can since or differentiation. core very as at enterprise so You customers is and key from sharing by to languages, that our features access scale is cheap think it can market more and applies. we environments And so to time, the it's then

Tim Horan

to sense start going you size what think you Thank certain like And market now? do is when is off the really maybe looks this products and you. your great of to versus the take That of have a just color. do

Joshua Bixby

'XX Joshua here. we're hit go through we're on for cycle that. this track in in still that Rishi, track. still and and Yes, on said it's We 'XX our normal would

add it mentioned continues continue prepared to fact, be successful. In I to in remarks, the that as we to functionality and

adopt having we've package. with but in about of impact this some think full going talked like as 'XX I we're this products, to see our a many customers

towards. we're that's driving see definitely what we'll 'XX, So impact in

Tim Horan

Thank you.

Operator

comes Rhee Your Please go with from Jeff Van next question Capital ahead. Group. Craig-Hallum

Unidentified Analyst

into on be Hi, hiring and at Wolfgang just his sort what start Adriel guess, stepping said I point and or out, Sales last think at this had for being, to plans of there June, left you the this back I guys, time Rudy would for my Thanks role quarter maybe are think know of I overseeing I are this questions. Wanted you forward -- you Jeff. taking guys' for is so in [ph] new that. the Head a going what thoughts point?

Joshua Bixby

Joshua. it's Rudy, Yes.

So that's in stepping in me, currently. that I'm role

new quarter Wolfe. us and below that and results speak to looking support an this I leader. I been I we that are established group in to excellent has think think a think just Wolfe that for transition continues the importantly

results think putting a to sales seasoned the they're that and have the group of have are business They on I running who We and themselves. have certainly of lot speak a of given deserve swagger lot the board. executives the for swagger a results up

ample sense not fill to to of a And feeling right important an time going So urgency sense with the in person. that that's we're the do that. fill, we role to it have but

Unidentified Analyst

and you Adriel. it. Great. Yes, then one. I And Got another met

could Just if that curious if I'm sure but traffic not think about trends on as to COVID. I'm follow-up, a -- quantify related this, you just as you

If March, COVID to you month, April. peaked emerges probably just think in month traffic

Just is how now it June/July you if call you've seasonality growth, in how know, a seen is prior it compared still years? made typical traffic now, the has and to growing traffic trended towards

Joshua Bixby

Yes, Artur time in this a has of been lot spending area.

some off it analysis insight. done some brilliant to on hand give I'll So this. really him you to He's

Artur Bergman

end any ever kids than of has things that pretty right, June QX and, in March in Yes, with traffic traffic in seasonality has biggest were May The one closed in parse out schools comparisons dramatic. to clearly have drove of the we've at and And in the But and previous closed. trying this were traffic home just we historically and weren't that it sense had. less school in grown then June, but schools was hi. the July, I really the you're in then more of starting dramatic. mean, was issue growth lack course, and it's in is increases of school closures of April the been QXs

to much the COVID as is, really July people how of answer elevated and how how numbers. growth And split compensated, mainly that going outside did so they traffic the just it's usually was went exactly or much down by because in June, -- started compensated hard that still

this with row year and this have So can year that, better. a I be strongest have years afraid answer sure in we I really to when able we'll I'm great answer effect, three I'll a don't from compare now, call and have the that a I'm one being the

Unidentified Analyst

Got Great. Thanks, guys. it.

Joshua Bixby

Thanks, Rudy.

Operator

with ahead. [Operator Instructions] Tal go question your comes next Bank America. from And Please of Liani

Tal Liani

hand, growth I on quarter revenue you're trying trying understand I'm one for to to seasonality. understand have the one questions; next I'm just what happened is quarter. versus guys. next two guiding flat Hi, for this quarter. numbers. On

about grew last quarter X%, before. While you year year, the before had other you more hand way similar, but this on the than

evens of kind the two. out it So between

project and we very question. why was XQ So, of flat that's this is demand pulled kind XQ anything there strong So happened first between see and XQ that XQ? that forward any and or my

Second we'll question at a is so technical, time. more maybe take one

Joshua Bixby

Tal. Sure, next don't handle you the yes. Adriel, then why one. take first we'll Thanks, one, the

Adriel Lares

QX sort earlier for you Sure of of bit of thing, but head year-on-year. think you to definitely into that Joshua. we sort Joshua Tal. I with Yes, that traditionally and as of that our trillions was unprecedented through I pace strongest you the terms I QX, QX -- of Artur quarter. is XX% I growth over well, bit in -- sort seasonally as is traffic an of spoke normally mix sort little a not it as we QX up network Joshua were -- alluded was was just saw of so begin piping The to mean, just Hello, sort the and which which in you think

you're is growth. a take midpoint QX then, to that and of you about guidance, I even XX% basically QX sort implies So year-on-year of what a sort comparison seeing is really think which of our challenge the here, if

So, relatively believe in growth strong it's QX. still I

bit originally, sense the uncertain and it's that be closures, as school respect a play to QX, that's just probably how in to respect respect respect of and I QX as our thing period with a uncertainty in of working will QX think out. unique as all biggest it's there one orders move QX was in with how a just some largest closures. be that and to we and you into there deployed world effectively as to So customers, standpoint, that think will shelter-in-place uneven and the from then how is lockstep school going know, the with well entire was I those sort into bit And beyond

bit so probably little there And see of you'll well. a as conservatism

Tal Liani

Got it.

this You how quarter same said was quarter, much year? XX% that TikTok of the was revenues it last

Adriel Lares

Yes.

XX% we was what it X So XXXX. ending about previous June it's XX, to of for not have talked we last was what Yes, the revenue months said that.

Tal Liani

but where your your let's talked or architecture of understand competitors there any about question applications if about more favorable any cloud, My more is to one versus come is edge you advantages. -- applications [indiscernible]? Are to Got to segmentation is that what second etc. there say, applications are it. so technical applications. cloud, is edge software are in market the you, ERP traditional I'm to any you're of trying likely newer type to there more there

trying to just I'm after niche the with your going kind So, understand of solution?

Joshua Bixby

Sure. first Artur, take half that? do you to of want

Artur Bergman

way possible. user, user sense that I migrating. to But when of of that as on Sure. the serverless, edge. one instead applications new I close something processes look think general is a and at to to you it as development, a is the of data think real processing it of kind I targeted migrations lot new the makes is if that assemble data in that mean, you're

then our warehouse If you're along and large on than cloud. collecting it central running a data into rather data models

So seeing the on first pulling you central application, different at pulls of all, has that and to I'm different and data, client end ERP even like two the out and at the the data bunch user a going has edge. I'd center authenticating maybe of is making or -- and after of done the some you've from displays some to data maybe it the access the it different then cash, information that ones. go assemble securing of whole sure sources back that that Then resources, edge a to someone

then need, off it the You and you still what for hand client. you clear it to

And so makes tremendous me to it of application amount to I of edge. kind think sense even leverage that the in

logic for And as user assembled if and move the absolutely possible. and that's data it specific close things one sense one life so the really those of it's to secured that user for as to personal authenticated, makes

Adriel Lares

then as thought to as I've we're that not that's There edge be the ways but and anyway, of replace Tal, I'm going the cloud this, that completely, Artur one not telling. central about jobs. think are I story does the technical compute right not

is specialized I training like training about require training, jobs, to that One cloud. learning and suited processes the central GPUs learning it is long you of think that running datasets, type like really things machine of the ways well like very if enormous

from use to infer However, talking way you've once a is for about, you're case great ready it and a the that in trained that's model Artur the edge.

Oracle, The Those is tremendous amounts information of when stores a need persisted are data maintain it's like I other consistency. where of lots to the example, a like cloud good of out you database that's candidates period area time. also think that easier large large long for that persistent worth calling is really for central

we a So flourish I which and what it these of it. use opposite that's a about And think is -- sort just way sense, good different think it's where candidate. in me the about really isn't of where think about to cases helped slightly sort

Tal Liani

Got it. Thank you.

Joshua Bixby

Tal. Thanks,

Operator

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

Walter Pritchard

for Question Adriel. Hi.

coming in -- overage versus sources; this how what it's historically? trended of contracted contracted On talk sort the and you revenue been that can versus about revenue quarter that's

Adriel Lares

Hi, actually the still same. relatively Walter. it's Yes,

we're about So XX%. still

to up probably coming will and the in commitments two of normally that is of should level over of that higher, you're QX folks say based -- historical revenue what back sort sort and get to quarter I on be and spend they get of not think their rates. because from going the every where on but sort want run a new renewals So readjust they and what committed for XX% standpoint, bit then sort it's to I'd about usage a of we commit.

Walter Pritchard

online how just it in services what versus full kind tend some they're your environment of in; on would take the in of of of products And typically Joshua you this the from does? seen. basic of offering get you come installed these base you've do they have consumption get current consuming come terms the guess of that's demand kind I new of a Is for a to to that or full customers as characterize then, services customer more on

Joshua Bixby

customers, dependent, had an deliver you I doing X to always vertical possibly and about say, it majority about are features, matches ago, I if of base which you edge. mean, years the together, the bundled for my innovator -- think both this all this hey, they one our without -- delivery. I that it but without can't you somebody Yes. want honestly, the This conversation they control security and to mean, secure, is security anymore. coded but is our use visibility coming not They installed the content together, you is doesn't can having think And exist you the into other. is programmability

it's net same core so that's the the exactly seen very we've add as of it this And really exactly customer widespread past. in new mirrors the customers, we're and strong with base thing and what seeing

Walter Pritchard

great. Thank you. Okay,

Joshua Bixby

Walter. Thanks,

Operator

remarks. Mr. this Bixby, back turn further time, There at are questions to I the closing over for you no call

Joshua Bixby

thank customers, Before say our partners investors. I we want employees, to sign-off, you and to

you of All the in of growth, and ongoing and at Oppenheimer deeply many virtually with We KeyBanc to contribute see grateful. to connecting & of you hope look and success to future, we're forward the you upcoming conferences. most near our

and confident quarters to you. future look sharing Thank to come. the are our about We forward more in

Operator

This concludes today's call. conference

now disconnect. You may

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