Fastly (FSLY) investor relations material

Leadership and organizational transformation

• Recent leadership changes, including a new CEO and go-to-market leader, have driven significant improvements in execution and strategy, resulting in a more effective sales organization and expanded product suite.

• The company evolved from offering a single security product to a comprehensive portfolio, enabling stronger cross-selling and positioning as a true security player.

• Go-to-market transformation led to higher revenue with reduced sales and marketing expenses, reflecting improved efficiency and leadership impact.

• Customer concentration remains a focus, with the top 10 customers accounting for 26% of revenue, but efforts are ongoing to deepen relationships and diversify.

• Net revenue retention reached a four-year high at 117%, highlighting strong customer engagement and recurring revenue.

Financial performance and operational efficiency

• Achieved over 20% year-over-year revenue growth for three consecutive quarters, with the latest quarter at 23.3%.

• Reported record gross margins of 65.8% and four consecutive quarters of operating profit, alongside six quarters of free cash flow generation.

• Operating a single, software-configured network for all products has driven capital efficiency and lower infrastructure CapEx compared to peers.

• Gross profit flow-through reached 96%, and operating leverage flow-through was 79%, both exceeding guidance.

• Infrastructure CapEx is guided at 10%-12% of revenue, with proactive component purchasing to mitigate supply chain risks.

Product innovation and AI strategy

• Internal development expanded the security suite from one to five products, leveraging prior acquisitions and enabling full integration on a single network.

• AI and agentic workloads are driving new business, especially in Bot Management and ContentGuard, which help customers manage and monetize AI-driven traffic.

• Compute revenue grew 70% year-over-year, reflecting momentum in new product areas.

• The company is not investing in GPU infrastructure, focusing instead on leveraging existing CPU capacity at the edge for efficiency and ROI.

• AI traffic is viewed as a new source of visibility and brand exposure, with strategies evolving to distinguish between beneficial and non-beneficial traffic.