Fastly (FSLY) Piper Sandler 5th Annual Growth Frontiers Conference summary

Market and demand trends

• Achieved 23% year-over-year revenue growth last quarter, with broad-based demand across delivery, security, and compute segments.

• Security revenue grew 43% year-over-year, delivery services up 17%, and RPO increased 38%.

• Customers are making larger commitments due to component shortages, reflected in strong RPO growth.

• Demand remains strong in both live/streaming and full site delivery, with increasing complexity from machine traffic and DDoS threats.

• Machine-to-machine traffic now accounts for nearly half of total requests, driving security product demand.

Product and technology evolution

• Expanded from one to five security products, enabling broader customer adoption and competitive takeouts.

• Bot Management and DDoS products are experiencing triple-digit growth, with WAF remaining the strongest security product.

• Compute@Edge leverages existing network infrastructure, offering high gross margin flow-through (96% over the last 12 months).

• Focus remains on edge-based security and open, cloud-neutral compute solutions for AI and agentic workloads.

• Product team is investing in both improving current offerings and exploring new edge security innovations.

Execution and go-to-market strategy

• New head of sales and CEO brought in mid-2024, improving sales discipline and security expertise.

• Enhanced go-to-market execution combined with a full product suite has driven security revenue growth.

• Competitive takeouts accelerated by product breadth and integration between CDN, delivery, and security.

• Net retention rate reached a four-year high at 117%, driven by cross-sell and customer focus.

• Multi-product adoption is increasing, with more customers using two or more security products.