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What changed in Fastly, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fastly, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+591 added−595 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Fastly, Inc.'s 2025 10-K

591 paragraphs added · 595 removed · 439 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

100 edited+70 added−52 removed36 unchanged
Biggest changeFastly DDoS Protection offers a zero attack fee billing model ensuring customers are not billed for attack traffic. 12 TLS Encryption • Transport Layer Security (“TLS”). As part of our standard product, our platform terminates HTTPS connections at our network edge, offloading encrypted traffic from our customers’ web servers for better performance.
Biggest changeAs part of our standard product, our platform terminates HTTPS connections at our network edge, offloading encrypted traffic from our customers’ web servers for better performance. Predefined roles allow customers to more precisely manage TLS access without having to grant unnecessarily broad permissions. We also provide a number of different certificate procurement and hosting options. • Platform TLS.
Examples include: DataDog, Looker (Google Cloud), SumoLogic, Logentries, Google Cloud Platform, Microsoft (Azure Blob Storage), and more. • Compute: We work with a growing ecosystem of partners who are tapping into our powerful Compute serverless technology to extend their solutions across a variety of different use-cases. • Media & Entertainment: We have partnerships across a number of technology providers in the media & entertainment industry to enhance our edge platform’s performance features, modern security offerings, and real-time metrics.
Examples include DataDog, Looker (Google Cloud), SumoLogic, Logentries, Google Cloud Platform (GCP), Microsoft (Azure Blob Storage), and more. • Compute: We work with a growing ecosystem of partners who are tapping into our powerful Compute serverless technology to extend their solutions across a variety of different use-cases. • Media & Entertainment: We have partnerships across a number of technology providers in the media and entertainment industry to enhance our edge platform’s performance features, modern security offerings, and real-time metrics.
However, many of our competitors have substantially greater financial and technical resources in addition to larger sales and marketing budgets, broader market distribution, and more mature intellectual property portfolios. Our Culture and Human Capital Resources Our Values Technology has the potential to make a radically positive impact on the world, and we aspire to improve human lives through our work.
However, many of our competitors have substantially greater financial and technical resources in addition to larger sales and marketing budgets, broader market distribution, and more mature intellectual property portfolios. 20 Our Culture and Human Capital Resources Our Values Technology has the potential to make a radically positive impact on the world, and we aspire to improve human lives through our work.
The information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K. 22 We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act.
The information contained on, or that can be accessed through, our website does not constitute part of this Annual Report on Form 10-K. We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act.
They can report on egress data within the Fastly web interface with interactive dashboards. Customers can also verify the success of their Fastly services, especially with shielding or multi-CDN environments. • Domain Inspector. Customers can easily monitor traffic for a single fully qualified domain name or multiple domains within a Fastly service.
They can report on egress data within the 15 Fastly web interface with interactive dashboards. Customers can also verify the success of their Fastly services, especially with shielding or multi-CDN environments. • Domain Inspector. Customers can easily monitor traffic for a single fully qualified domain name or multiple domains within a Fastly service.
The principal competitive factors in our market include: • platform functionality, scalability, performance, ease of use, ease of integration and programmability, reliability, security availability, and cost effectiveness; • global network coverage and availability; • ability to support modern application development processes and utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • ability to identify new markets, applications, and technologies; • ability to attract and retain customers; 18 • brand, reputation, and trustworthiness; • credibility with developers; • quality of customer support; • ability to recruit software engineers and sales and marketing personnel; • ability to protect intellectual property; and • ability to identify opportunities for acquisitions and strategic relationships and successfully execute on them.
The principal competitive factors in our market include: • platform functionality, scalability, performance, ease of use, ease of integration and programmability, reliability, security availability, and cost effectiveness; • global network coverage and availability; • ability to support modern application development processes and utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • ability to identify new markets, applications, and technologies; • ability to attract and retain customers; • brand, reputation, and trustworthiness; • credibility with developers; • quality of customer support; • ability to recruit software engineers and sales and marketing personnel; • ability to develop and protect intellectual property; and • ability to identify opportunities for acquisitions and strategic relationships and successfully execute on them.
Provides customers with a real-time and programmatic means for checking domain availability. A programmatic solution for verifying trust for domains is especially useful for platform customers. Using Domainr's APIs, customers can embed these functions directly into their workflows. • Modern protocols and performance.
Provides customers with a real-time and programmatic means for checking domain availability. A programmatic solution for verifying trust for domains is especially useful for platform customers. Using Domainr's APIs, customers can embed these functions directly into their workflows. 10 • Modern Protocols and Performance.
Our land and expand sales strategy for enterprise customers has successfully demonstrated our platform’s capabilities, and our customer support enables broad adoption of our technology within an organization. 20 Customer Support We have designed our products and platform to be self-service and require minimal customer support.
Our land and expand sales strategy for enterprise customers has successfully demonstrated our platform’s capabilities, and our customer support enables broad adoption of our technology within an organization. Customer Support We have designed our products and platform to be self-service and require minimal customer support.
Our support model is global, with 24/7 coverage and support offices located in North America, EMEA, and APAC. Research & Development Our research and development team members are responsible for the design, development, and reliability of all aspects of our edge cloud platform.
Our support model is global, with 24/7 coverage and support offices located in North America, EMEA, and APAC. 22 Research & Development Our research and development team members are responsible for the design, development, and reliability of all aspects of our edge cloud platform.
This helps avoid difficult third party log management and debugging challenges. ◦ Tracing. For customers building apps with Compute, we tag individual end-user requests with unique identifiers and maintain request tracing parameters by tracking when users enter and exit our serverless platform. This feature allows developers to more easily track the performance of application functions post-deployment. • Developer Experience.
This helps avoid difficult third-party log management and debugging challenges. • Tracing. For customers building apps with Compute, we tag individual end-user requests with unique identifiers and maintain request tracing parameters by tracking when users enter and exit our serverless platform. This feature allows developers to more easily track the performance of application functions post-deployment.
We are building a go-to-market engine that scales, becomes increasingly more efficient, and is nimble enough to continue to grow our business in four dimensions: • Customer logo acquisition • Expansion into additional vertical markets and within existing customers • Partner ecosystem leverage • International expansion Fastly’s marketing efforts have a significant impact on new logo acquisition and demand generation.
We are building a go-to-market engine that scales, becomes increasingly more efficient, and is nimble enough to continue to grow our business in four dimensions: • Customer logo acquisition • Expansion into additional vertical markets and within existing customers • Partner ecosystem leverage • International expansion Fastly’s marketing efforts have a significant impact on new logo acquisition, demand generation, and brand awareness.
Combined with comprehensive APIs, VCL allows our customers to build, test and deploy custom logic, using their own development, test and deployment environment, for even the most complex digital experiences. • Content Compression. Compresses content with technologies like Gzip and Brotli, providing direct performance improvements and a more responsive web experience for end users. • Reliability Features .
Combined with comprehensive APIs, this allows our customers to build, test and deploy custom logic, using their own development, test and deployment environment, for even the most complex digital experiences. • Content Compression. Compresses content with technologies like Gzip and Brotli, providing direct performance improvements and a more responsive web experience for end users. • Reliability Features .
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Please refer to Note 10—Commitments and Contingencies for discussion around our legal proceedings.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Please refer to Note 9—Commitments and Contingencies for discussion around our legal proceedings.
Support for languages that developers already know and want to code in is key for adoption and we will continue to add more over time. 13 • Data . Compute has a number of features that makes it easier and faster to access data at the edge instead of having to go back to the central cloud.
Support for languages that developers already know and want to code in is key for adoption and we will continue to add more over time. • Storage and Data . Compute has a number of features that makes it easier and faster to access data at the edge instead of having to go back to the central cloud.
Copies of our reports on Forms 10-K, Forms 10-Q, and Forms 8-K, may be obtained, free of charge, electronically through our investor relations website at www.fastly.com/investors as soon as reasonably practicable after we file such material with, or furnish such material to, the SEC. 23
Copies of our reports on Forms 10-K, Forms 10-Q, and Forms 8-K, may be obtained, free of charge, electronically through our investor relations website at www.fastly.com/investors as soon as reasonably practicable after we file such material with, or furnish such material to, the SEC. 24
We help customers stop API abuse by enabling them to monitor for unexpected values and parameters submitted to API endpoints, and block unauthorized requests. • ATO Protection. Account takeover (“ATO”) occurs when attackers use authentication credentials to take over legitimate user accounts.
We help customers stop API abuse by enabling them to monitor for unexpected values and parameters submitted to API endpoints, and block unauthorized requests. • Account Takeover Protection. Account takeover occurs when attackers use authentication credentials to take over legitimate user accounts.
Allows customers to fine-tune purging by tagging related objects across their site with a key name and description, then purging by that key. They can purge their entire site of a given object or set of objects at once, without impacting performance.
Allows customers to fine-tune purging by tagging related objects across their site with a key name and description, then purging by that key. Customers can purge their entire site of a given object or set of objects all at once, without impacting performance.
Whether customers are looking to deliver engaging web and streaming experiences to their users, move apps to the cloud or scale their DevOps practices, our Network Services provide the speed, security and flexibility needed. Content Delivery Network • Dynamic Site Acceleration.
Whether customers are looking to deliver engaging web and streaming experiences to their users, move apps to the cloud, or scale their DevOps practices, our Network Services provide the speed, security, and flexibility customers need. Content Delivery Network • Dynamic Site Acceleration.
Key features of Compute include: • Serverless execution environment. Compute offers a fast, secure serverless code execution engine. It allows customers to deploy code across Fastly’s global edge cloud infrastructure, and execute the code close to the user for low latency.
Key features of Compute include: • Serverless execution environment. Compute offers a fast, secure serverless code execution engine. It allows customers to deploy code across Fastly’s global edge cloud platform, and execute the code close to the user for low latency.
For example, they could purge any images and content related to discontinued sale items, discounted products, or outdated news across their site all at once. • Programmatic Control. Provides direct programmatic control of edge delivery services to our customers via VCL, allowing them to precisely control what content is cached, for how long and when it should be refreshed.
For example, customers could purge any images and content related to discontinued sale items, discounted products, or outdated news across their site all at once. • Programmatic Control. Provides direct programmatic control of edge delivery services to our customers, allowing them to precisely control what content is cached, for how long and when it should be refreshed.
We operate between and complement the “big 3” origin cloud platforms, Amazon Web Services (“AWS”), Microsoft (Azure), and Google Cloud Platform, and a growing community of companies that provide big data, machine learning, and security solutions. In this sense, we act as the unifying layer for a growing number of cloud services.
We operate between and complement the “big 3” origin cloud platforms, Amazon Web Services (“AWS”), Microsoft (Azure), and Google Cloud Platform, and a growing community of companies that provide big data, AI, and security solutions. In this sense, we act as the unifying layer for a growing number of cloud services.
Customers are automatically covered by our Standard support plan as soon as they sign up with us. They can file a ticket with the support team, access documentation including online FAQs, API references, and configuration guidelines. Our support approach is unique as we have built it with developers in mind.
Customers are automatically covered by our Standard support plan as soon as they sign up with us. They can file a ticket with the support team, and access documentation including online FAQs, API references, and configuration guidelines. Our support approach is unique and built with developers in mind.
We offer a real-time image manipulation and delivery service and store transformations at the edge. When an image is requested, we resize it, adjust quality, crop/trim, change orientations, convert formats, and more, all on demand. Transforming images at the edge eliminates latency and reduces traffic to a customer’s origin servers, allowing them to save on infrastructure and egress costs.
We offer a real-time image manipulation and delivery service and store transformations at the edge. When an image is requested, we resize it, adjust quality, crop/trim, change orientations, convert 11 formats, and more, all on demand. Transforming images at the edge eliminates latency and reduces traffic to origin servers, allowing customers to save on infrastructure and egress costs.
We intend to grow the number of data center colocation sites as traffic on our network grows and as demands for new markets justify investment.
We intend to grow the number of data center colocation sites as traffic on our network grows and as demand for new markets justify investment.
We also partner with a number of third-party technologies to extend our capabilities across new markets and use-cases. Ultimately, partners help our customers by: • Providing a complete suite of value-added services and solutions • Offering flexible and efficient engagement models • Acting as a single point of contact; and • Extending geographic coverage and support Channel Partners.
We also partner with a number of third-party technical partners to extend our capabilities across new markets and use-cases. Ultimately, partners help our customers by: • Providing a complete suite of value-added services and solutions • Offering flexible and efficient engagement and purchasing models • Acting as a single point of contact; and • Extending geographic coverage and support.
Enables customers to push data in real time to many users, such as synchronous communication of messages in a chatroom, server updates to IoT devices and other types of data between devices. Real-time messaging is used in a wide range of data streaming applications, including IoT, live commenting, end-user notifications, chat and more. 10 • Domainr .
Enables customers to push data in real time to many users, such as synchronous communication of messages in a chatroom, server updates to Internet of Things (“IoT”) devices and other types of data between devices. Real-time messaging is used in a wide range of data streaming applications, including IoT, live commenting, end-user notifications, chat and more. • Domainr .
We are focused on optimizing the return on our marketing investment to drive demand across our portfolio and regions. Our sales and marketing organizations work together closely to cultivate customer relationships with developers and business leaders at enterprises and technology-savvy organizations to drive revenue growth. We have geographically-based sales teams that continue to enhance our value-based selling methodology.
We are focused on optimizing the return on our marketing investment to drive demand across our portfolio and regions. Our sales and marketing organizations collaborate to cultivate customer relationships with developers and business leaders at enterprises and technology-savvy organizations to drive revenue growth. We have geographically-based sales teams that continue to enhance our value-based selling methodology.
We plan to continually increase wallet-share over time for existing customers as we build out new products and features, and as customers continue to fully recognize the value of our platform. 16 • Grow our technology partner ecosystem.
We plan to continually increase wallet-share over time for existing customers as we build out new products and features, and as customers continue to fully recognize the value of our platform. • Grow our technical partner ecosystem.
Our Media Shield product supports these efforts and can reduce the total cost of ownership while also regaining lost visibility and improving performance. By collapsing multiple origin requests for identical content across several CDNs, content can be streamed faster, more efficiently, and with a significantly smaller infrastructure burden. Load Balancing • Load Balancer.
Our Media Shield product supports these efforts and can reduce the total cost of ownership while also regaining lost visibility and improving performance. By collapsing multiple origin requests for identical content across several CDNs, content can be streamed faster, more efficiently, and with a significantly smaller infrastructure burden. • Cache Reservation.
This helps developers innovate faster and unlocks more latency-sensitive use cases at the edge. ◦ KV Store. KV Store offers global, durable storage for compute functions at the edge.
This helps developers innovate faster and unlocks more latency-sensitive use cases at the edge. ◦ Key Value (“KV”) Store. KV Store offers global, durable storage for compute functions at the edge.
The edge cloud is a category of Infrastructure as a Service (“IaaS”) that enables developers to build, secure, and deliver digital experiences, at the edge of the Internet.
The edge cloud is a category of Infrastructure as a Service (“IaaS”) that enables software engineers to build, secure, and deliver digital experiences at the edge of the Internet.
This feature enables our customers to serve highly dynamic content at the edge more quickly and allows for delightful application experiences. Rapidly changing content like shopping cart items, flight search results, sports scores, or current weather conditions in any given location can all be served faster from the network edge. • Surrogate Keys.
This feature enables our customers to serve highly dynamic content at the edge faster, facilitating delightful application experiences. Rapidly changing content like shopping cart items, flight search results, sports scores, or current weather conditions in any given location can all be served faster from the network edge. • Surrogate Keys.
Speeds up requests and responses between cache nodes in our POPs and customers’ origin servers to serve their dynamic web and mobile content faster. • Origin Shield. Allows us to designate a specific POP to serve as a shield for a customer’s origin servers.
Speeds up requests and responses between cache nodes in our Points of Presence (“POPs”) and customers’ origin servers to serve their dynamic web and mobile content faster. • Origin Shield. Allows us to designate a specific POP to serve as a shield for a customer’s origin servers.
Our product managers regularly engage with customers and developers, DevOps and site reliability engineering communities, as well as our internal stakeholders and subject matter experts, in order to understand customer needs. Our engineering team includes experts with deep experience who intimately understand customers’ technical challenges and build solutions accordingly.
Our product managers regularly engage with customers and developers, DevOps and site reliability engineering communities, as well as our internal stakeholders and subject matter experts, in order to understand customer needs. Our engineering team includes experts with deep experience who intimately understand customers’ technical challenges and build solutions that deliver outcomes our customers value the most.
Intellectual Property We rely on a combination of patent, copyright, trademark, and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to protect our proprietary technology.
Intellectual Property We rely on a combination of patent, copyright, trademark, and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to protect our proprietary technology. We also rely on a number of registered and unregistered trademarks to protect our brand.
We segment the competitive landscape into six key categories: • Legacy CDNs like Akamai; • Application and API security vendors like Akamai, Cloudflare, F5, and Thales (Imperva); • Point CDN players like Bunny CDN, CDNetworks, CDN77, and Qwilt; • CDN providers, which now offer serverless edge compute functionality like Akamai (Linode) and Cloudflare; • Public cloud providers that have added CDN and WAF capabilities like AWS, Google Cloud Platform, and Microsoft (Azure); and • Traditional on-premise, data center appliance vendors for load balancing, WAF, and/or DDoS like F5, Thales (Imperva), and Radware.
We segment the competitive landscape into six key categories: 19 • Legacy CDN platform solutions like Akamai; • Application and API security vendors like Akamai, Cloudflare, F5, and Thales (Imperva); • Point CDN players like Bunny CDN, CDNetworks, CDN77, and Qwilt; • CDN providers that also offer serverless edge compute functionality like Akamai and Cloudflare; • Public cloud providers that have added CDN and WAF capabilities like Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft (Azure); and • Traditional on-premise, data center appliance vendors for load balancing, WAF, and/or DDoS like F5, Thales (Imperva), and Radware.
Our Growth Strategy Our growth strategy focuses on making our edge cloud platform accessible to a broader base of customers through enhancing our product experience, investments in technology, and vertical expansion. Key elements of our growth strategy include the following: • Product strategy.
Our Growth Strategy Our growth strategy focuses on making our edge cloud platform accessible to a broader base of customers through enhancing our product experience, investments in technology and infrastructure, attracting new business, growing partnerships, and vertical expansion. Key elements of our growth strategy include the following: • Product strategy.
As of December 31, 2024, we had 389 employees in our research and development group. Our research and development expenses were $138.0 million for the year ended December 31, 2024. Infrastructure Our infrastructure team is responsible for the design, deployment, and maintenance of the servers and network hardware that form the foundation of our mission critical edge cloud environment.
As of December 31, 2025, we had 415 employees in our research and development group. Our research and development expenses were $162.7 million for the year ended December 31, 2025. Infrastructure Our infrastructure team is responsible for the design, deployment, and maintenance of the servers and network hardware that form the foundation of our mission critical edge cloud environment.
We were founded on strong ethical principles, and have intentionally grown values-first, scaling our workforce, services, customer portfolio, and investment partners purposefully. We are only as good as the company we keep, and this guides our hiring practices as well as the ethics we are committed to upholding as we scale.
We were founded on strong ethical principles, and have intentionally grown values-first, scaling our workforce, services, customer portfolio, and investment partners purposefully. Our values guide our hiring practices as well as the ethics we are committed to upholding as we scale.
These partners help expand our reach into new markets by offering 17 customers a solution that seamlessly integrates with their existing technology stack making our technology even stickier. Here are some examples: • Security: Our Next-Gen WAF seamlessly integrates with third-party tools to help customers enhance their workflows, empower DevOps processes, increase their security visibility, and drive operational efficiencies.
These partners help expand our reach into new markets by offering customers a solution that seamlessly integrates with their existing technology stack making our technology even stickier. Here are some examples: • Security: Our Next-Gen WAF integrates seamlessly with a broad ecosystem of third-party tools, enabling customers to streamline workflows, strengthen DevOps processes, enhance security visibility, and improve operational efficiencies.
Compute also exposes the power of Fastly’s global infrastructure via a set of powerful developer API’s for fine grained programmatic control (e.g. Cache API’s). • Language support. Compute works with any WASM-supported languages, including JavaScript, Rust, Go, Ruby and more. Customers also have the ability to create their own language Software Development Kits.
Compute also leverages the power of Fastly’s global platform via a set of powerful developer APIs for fine grained programmatic control (e.g. Cache API’s). • Language support. Compute works with any WASM-supported languages, including JavaScript, C++, Rust, Go, and a growing list of additional languages. Customers also have the ability to create their own language Software Development Kits.
Our platform offers a broad range of capabilities. Our differentiated high performance and low-latency delivery network and edge compute platform, as well as enhanced security capabilities, allows us to serve the needs of our existing customers and continue to add customers from a diverse set of industries. • Expand existing customer relationships.
Our differentiated high performance and low-latency delivery network and edge compute platform, as well as enhanced security capabilities, allows us to serve the needs of our existing customers and continue to add customers from a diverse set of industries. • Expand existing customer relationships. Over time, our customers have expanded their use of our platform.
Employees As of December 31, 2024, we had a total of 1,100 employees worldwide and 240 employees located outside of the United States; 45% of our employees resided within 50 miles of a Fastly office and 55% of o ur employees worldwide were considered remote, which means they resided more than 50 miles from a Fastly office or in locations where we do not have a Fastly office presence.
Employees As of December 31, 2025, we had a total of 1,140 employees worldwide and 258 employees located outside of the United States; 47% of our employees resided within 50 miles of a Fastly office and 53% of o ur employees worldwide were considered remote, which means they resided more than 50 miles from a Fastly office or in locations where we do not have a Fastly office.
This service represents the convergence of the Content Delivery Network (“CDN”) with functionality that has been traditionally delivered by hardware-centric appliances such as Application Delivery Controllers (“ADC”), Web Application Firewalls (“WAF”), Bot Detection, Distributed Denial of Service (“DDoS”), and observability solutions.
Our platform represents the convergence of the Content Delivery Network (“CDN”) with functionality that has traditionally been delivered by hardware-centric appliances such as Application Delivery Controllers (“ADC”), Web Application Firewalls (“WAF”), API Management, Bot Detection, Distributed Denial of Service (“DDoS”), Web Application and API Protection (“WAAP”), and infrastructure protection.
It can deliver online content using major HTTP streaming formats while providing real-time feedback to optimize viewer experiences. In addition, we partner with multiple video platform vendors to improve the flexibility and scale of live-streaming workflows and reduce the total cost of ownership. • Live Event Monitoring.
Delivers millions of concurrent high-quality live streams. It can deliver online content using major HTTP streaming formats while providing real-time feedback to optimize viewer experiences. In addition, we partner with multiple video platform vendors to improve the flexibility and scale of live-streaming workflows and reduce the total cost of ownership for customers. • Video on Demand.
Helps our customers, and the Internet in general, receive the best possible performance regardless of user device, connectivity or location though supporting the development of next generation web technologies and protocols such as HTTP/3, QUIC, client hints and HTTP prioritization. Video / Streaming • Live Streaming. Delivers millions of concurrent high-quality live streams.
Helps our customers, and the Internet in general, receive the best possible performance regardless of user device, connectivity or location though supporting the development of next generation web technologies and protocols such as HTTP/3, QUIC, client hints and HTTP prioritization. • Staging Environment.
As of such date, we also had 25 issued patents and nine patent applications published or pending for examination in foreign jurisdictions, all of which are related to U.S. patents and patent applications. In addition, as of December 31, 2024, we had 20 registered trademarks and two pending trademarks in the United States.
As of such date, we also had 22 issued patents and one patent application published or pending for examination in foreign jurisdictions, all of which are related to U.S. patents and patent applications. In addition, as of December 31, 2025, we had 18 registered trademarks and no pending trademarks in the United States.
In addition, we seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development of intellectual property on our behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights, including intellectual property rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law.
In addition, we seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development of intellectual property on our behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights, including intellectual property rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law. 23 Despite our efforts to protect our technology and proprietary rights through intellectual property rights, licenses, and other contractual protections, unauthorized parties may still copy or otherwise obtain and use our software and other technology.
Advanced Rate Limiting enables customers to stop malicious and anomalous high volume web requests and reduce resource consumption while allowing legitimate traffic through to application and API endpoints—doing so means companies can provide a superior customer experience that scales to meet increasing demand. DDoS. Customers using Fastly’s CDN automatically get access to our always-on DDoS protection capabilities.
Advanced Rate Limiting enables customers to stop malicious and anomalous high volume web requests and reduce resource consumption while allowing legitimate traffic through to application and API endpoints—doing so means companies can provide a superior customer experience that scales to meet increasing demand. Bot Management.
We integrate with major cloud providers to enhance their services and create solutions that are powerful, scalable, and secure. We have exclusive Private Network Interconnects (PNIs) and peering arrangements with key cloud providers such as Google Cloud Platform, AWS, and others to eliminate or minimize egress fees, enhance security, and improve overall performance.
We have exclusive Private Network Interconnects (PNIs) and peering arrangements with key cloud providers such as Google Cloud Platform, AWS, and others to eliminate or minimize egress fees, enhance security, and improve overall performance.
The Gold support plan offers enhanced product support, priority routing for support cases, and expedited 24/7 incident response times. • Enterprise .
Customer support is available via email during business hours. • Gold . The Gold support plan offers enhanced product support, priority routing for support cases, and expedited 24/7 incident response times. • Enterprise .
The three primary channel partner types we work with are: • Referral partners: Recommend Fastly products to their customers for a commission and include partners like agencies and consultants; and • Reseller partners: Act as a reseller to offer additional value on top of Fastly’s products and services and include partners like value-added resellers, system integrators, and more. • MSP and MSSP partners: Utilize Fastly technology to enhance and optimize the offerings to their customer base.
The three primary channel partner types we work with are: • Referral partners: Recommend Fastly products to their customers for a commission and include partners like agencies and consultants. 18 • Reseller partners: Act as a reseller to offer additional value on top of Fastly’s products and services and include partners like value-added resellers, system integrators, and more. • MSP and MSSP partners: Managed Service Providers (MSP) and Managed Security Service Providers (MSSP) can earn technical certifications to provide certified implementation services and/or embed Fastly technology to enhance their SaaS or Platform as a Service offerings.
Partner Ecosystem We partner with a number of global channel partners who offer our performant and secure solutions on top of their own value-added services. We work with top cloud service providers to combine our complementary products and services to deliver even more value for our joint end users.
To achieve this, we partner with a number of global channel partners who offer our performant and secure solutions on top of their own value-added services. We work with top cloud service providers to combine our complementary products and services and to offer streamlined procurement through cloud marketplaces.
Our on-the-fly-packaging feature optimizes streaming media on demand and facilitates immediate playback, thus enhancing viewer experiences across regions, devices, and platforms. • Media Shield. Large streaming customers typically use multiple CDNs for media delivery for redundancy and protection.
Reduces the load on origin servers and accelerates time-to-first-frame by caching and rapidly delivering Video on Demand content. Our on-the-fly-packaging feature optimizes streaming media on demand and facilitates immediate playback, thus enhancing viewer experiences across regions, devices, and platforms. • Media Shield. Large streaming customers typically use multiple CDNs for media delivery for redundancy and protection.
We offer various levels of engagements, from a light helping hand, to acting as an extension of developer teams, with global support and flexible professional services hours. • Managed Security Service.
We offer various levels of engagements, from a light helping hand, to acting as an extension of developer teams, with global support and flexible professional services hours. • Response Security. This service offers rapid, expert intervention when customers need it the most.
With the goal of making it easier for customers to do business with us, we will continue to build out a single, unified platform where they can access and manage all their Fastly services in one place.
We plan to expand existing product lines like Network Services and Security, and expect to further incubate newer products for future growth. 17 With the goal of making it easier for customers to do business with us, we continue to build out a single, unified platform where they can access and manage all their Fastly services in one place.
Fastly offers three levels of support plans and available technical support add-ons with dedicated technical specialists and account managers that provide extended security expertise. • Standard . The Standard support plan gives every Fastly customer immediate access to our Community Forum and extensive documentation. Customer support is available via email during business hours. • Gold .
Our service can be used exclusively, or as part of a hybrid, multi-CDN strategy. Support Plans. Fastly offers three levels of support plans and available technical support add-ons with dedicated technical specialists and account managers that provide extended security expertise. • Standard . The Standard support plan gives every Fastly customer immediate access to our Community Forum and extensive documentation.
For more traditional organizations, we are often brought in to initially help facilitate a move to the cloud and from there we extend our product to support many other use cases.
In more technically savvy organizations, software engineering leaders have championed our solution, paving the way for us to engage with business decision makers. For more traditional organizations, we are often brought in to initially help facilitate a move to the cloud and from there we extend our product to support many other use cases.
They can account for every domain request, byte, and status code or quickly determine edge or origin issues with our combined edge and aggregated origin metrics, all without needing to send log data to a third-party data collector. • Edge Observer : Provides per-second visibility and historical reporting on the performance and activity of multiple Fastly services in a single pane of glass.
They can account for every domain request, byte, and status code or quickly determine edge or origin issues with our combined edge and aggregated origin metrics, all without needing to send log data to a third-party data collector.
It leverages the Hashicorp vault to centrally store, access, and manage secrets across Fastly's cloud infrastructure. • Storage. Fastly Object Storage is an Amazon S3-compatible large object storage solution that works seamlessly with Fastly’s Compute service. Customers can store large file sizes with Fastly, improving latency, increasing cache hit ratios, and reducing egress charges.
It leverages the Hashicorp vault to centrally store, access, and manage secrets across Fastly's cloud infrastructure. ◦ Object Storage. Fastly Object Storage is an Amazon S3-compatible large object storage solution that works seamlessly with Fastly’s Compute and CDN services. • Developer Experience.
Compute supports a multitude of use cases, including: • Enhancing Search Engine Optimization ranking by managing redirects at the edge to improve site performance and gain real-time visibility; • Lowering infrastructure costs and offering faster personalized experiences by generating unique user tokens for authentication; and • Enabling low latency ad personalization by allowing our customers to serve ads quickly from the edge based on user data.
Like all our offerings, Compute is built to be secure, performant and scalable. 13 Compute supports a multitude of use cases, including: • Enhancing Search Engine Optimization ranking by managing redirects and content rewrites at the edge to improve site performance and gain real-time visibility; • Building high-volume data pipelines for telemetry, user monitoring, IoT sensor arrays, and more; • Lowering infrastructure costs while delivering faster personalized experiences by handling user authentication and token management for application APIs at the edge; and • Enabling low latency ad personalization by allowing our customers to serve ads quickly from the edge based on user data.
Our solution requires no tuning, and is more accurate than the traditional rule or signature-based approaches. Our WAF can be installed in any infrastructure: cloud, container, on-premise data center or hybrid environments or at the edge. Key features include: • Bot Management. Bad bots can perform content scraping, tie up system resources, perform account brute forcing and other harmful actions.
Our context-aware solution requires no tuning, reducing our customers’ time to deploy software changes, and is more accurate than the traditional rule or signature-based approaches. Our WAF can be installed in any infrastructure: cloud, virtual private cloud, container, on-premise data center or hybrid environments or at the edge. Key features include: • Bot Management.
It is an effective way to lower transit costs, reduce engineering complexity, and improve reliability for high-volume streaming content. 11 Security Security is an essential part of every online business, and customers rely on Fastly to help rapidly secure their business-critical websites, apps, and APIs.
This is an effective way to lower transit costs, reduce engineering complexity, and improve reliability for high-volume streaming content. Security Customers across multiple industries rely on Fastly to help rapidly secure their business-critical websites, apps, and APIs. Our modern approach to application security provides the accuracy, flexibility, and ease-of-use that our customers value and expect.
Attackers test stolen credentials in an automated manner called “credential stuffing.” Our Account Takeover Protection empowers customers to automatically block and alert on credential stuffing attacks. Bot Management.
Attackers test stolen credentials in an automated manner called “credential stuffing.” Our Account Takeover Protection empowers customers to automatically block and alert on credential stuffing attacks. • Deception. Our advanced deception feature blocks malicious login attempts while also misleading attackers with fake “invalid username/password” responses.
Observability For customers, the ability to continuously monitor the status of their website, product, or service is essential. Across all our Network Services, Compute and Security product lines, we provide customers with real-time insights for better decision making.
Observability For customers, the ability to continuously monitor the status of their websites, products, and services is essential. Across all our Network Services, Compute and Security product lines, we provide customers with real-time insights for better decision making. Software engineers can quickly identify potential issues, investigate anomalies, improve performance, and uptime and iterate faster on new releases. • Real-time Logging.
In addition to real-time logs and metrics, which all our products benefit from, Compute also features log tailing and tracing to improve developer visibility. ◦ Log Tailing. We give customers visibility into log messages from their applications so they can quickly identify bugs all within their terminal of choice with Fastly Command Line Interface.
The following add-on Observability tools are designed to support our Compute product line, empowering developers to monitor and program in real-time: • Log Tailing. We give customers visibility into log messages from their applications so they can quickly identify bugs, all within their terminal of choice with Fastly Command Line Interface.
These solutions are designed to be real-time, scalable, and customizable, offering businesses the ability to tailor their security to their specific needs. With a focus on performance and flexibility, Fastly enables businesses to safeguard their digital experiences. Next-Gen WAF . Our next-generation Web Application Firewall protects applications from malicious attacks that seek to compromise apps and APIs.
This solution suite is designed to be real-time, scalable, and customizable, offering customers the ability to tailor and adapt their security to their unique and evolving business needs. Next-Gen WAF . Our next-generation Web Application Firewall protects applications from malicious attacks that seek to compromise apps and APIs.
Our Employee Resource Groups are open to all employees and focus on making Fastly a better place where all employees are included, valued and engaged. We also use employee engagement surveys to collect employee feedback and assess the effectiveness of our culture, our strategy, and various health and well-being programs.
We also use employee engagement surveys to collect employee feedback and assess the effectiveness of our culture, our strategy, and various health and well-being programs.
Metrics and logs along with every part of the request path are available for consumption in real-time without adding latency. Services Professional Services. Fastly offers the following professional services: • Network Services. Distributed systems can be complex, but regardless of a customer’s skill level, Fastly technical experts are available to guide and optimize the customer's cloud strategy.
This helps to simplify onboarding and configuration for both new and existing users. Services Professional Services. Fastly offers the following professional services: • Network Services. Distributed systems can be complex, but regardless of a customer’s skill level, Fastly technical experts are available to guide and optimize the customer's cloud strategy.
We also rely on a number of registered and unregistered trademarks to protect our brand. 21 As of December 31, 2024, in the United States, we had 105 issued or allowed patents, which expire between August 2033 and March 2042, and three patent applications pending for examination.
As of December 31, 2025, in the United States, we had 112 issued or allowed patents, which expire between August 2033 and March 2043, 5 patent applications pending for examination.
The A10-Fastly partnership gives us access to new customers, many of whom use their own data centers, have less of a public cloud footprint, and are located in different geographic areas than Fastly's traditional customer base. • Logging & Analytics: Our real-time logging feature integrates with more than 20 logging endpoint partners to allow customers to customize and visualize their edge data for better monitoring of performance and security anomalies.
This partnership expands our reach to new customer segments, including organizations that primarily operate in private data centers, maintain a smaller public cloud footprint, or are located in different geographic regions where Fastly has had more limited historical penetration. • Logging & Analytics: Our real-time logging feature integrates with more than 20 logging endpoint partners to allow customers to customize and visualize their edge data for better monitoring of performance and security anomalies.
We believe that our platform gives our customers a significant competitive advantage, whether they were born into the digital age or are just embarking on their digital transformation journey.
We believe that our platform gives our customers a significant competitive advantage – whether they were born into the AI-centric digital age or are just embarking on their transformation journey. 7 Products & Services Fastly Platform Fastly’s platform has evolved over the years to meet changing technology demands and the needs of a growing customer base.
We will continue to search for the best possible talent for every role and cultivate best-in-class in-office and remote employee experiences.
We will continue to search for the best possible talent for every role and cultivate best-in-class in-office and remote employee experiences. Our Organization Sales & Marketing Sales and marketing work closely to attract new customers and expand the adoption of our platform to help customers drive business outcomes.
We provide a number of different certificate procurement and hosting options. • Platform TLS. Our Platform TLS offering is designed to allow customers with multiple web properties to manage TLS certificates at scale, while enabling a fast, secure experience for their end-users.
Our Platform TLS offering is designed to allow customers with multiple web properties to manage TLS certificates at scale, while enabling a fast, secure experience for their end users. It supports delivery and management of hundreds of thousands of certificates, supported by our worldwide TLS termination and acceleration solution. • Certainly. Certainly is our own publicly-trusted TLS Certification Authority.
Our solution (available as part of our Next-Gen WAF) monitors web application and API traffic for automated bot activity, allowing customers to automatically block malicious bot-generated web requests, while providing access for wanted or verified bots. • API Protection. Attackers often target sensitive APIs, attempting to validate stolen credit cards, perform ecommerce gift card fraud or obtain patient healthcare records.
Bad bots can perform content scraping, tie up system resources, perform account brute forcing and other harmful actions. Our solution (available as part of our Next-Gen WAF) monitors web application and API traffic for automated bot activity, allowing customers to automatically block malicious bot-generated web requests, while providing access for wanted or verified bots.
We support a number of protocols that allow our customers to stream logs to a variety of locations, including third-party services, for storage and analysis. • Logging Insights. Fastly Logging Insights is a professional services package that provides actionable intelligence that can be used to diagnose and troubleshoot issues for optimal performance and user experience.
To help tune the performance of Fastly services, we support real-time log streaming of customer data that passes through Fastly. We support a number of protocols that allow our customers to stream logs to a variety of locations, including third-party services, for storage and analysis. • Logging Insights.
Fastly works with a broad range of the service provider community, entities such as Managed Service Providers (MSP) and Managed Security Service Providers (MSSP). Partners work with Fastly’s sales and presales teams to scale sales cycle support. This helps expand our worldwide network of partners dedicated to protecting and delivering customers’ content.
Partners work with Fastly’s sales and presales teams to scale sales cycle support. This helps expand our worldwide network of partners dedicated to protecting and delivering customers’ content. We have expanded the reach and breadth of these partners to include cross-selling delivery and security products.
With real-time monitoring, streaming delivery, request collapsing, capacity planning, and flexible deployment, Fastly Live Event Monitoring gives customers insights into their live streaming performance and the ability to troubleshoot immediately–all while reducing costs. • Video on Demand. Reduces the load on origin servers and accelerates time-to-first-frame by caching and rapidly delivering Video on Demand content.
With real-time monitoring, streaming delivery, request collapsing, capacity planning, and flexible deployment, Fastly Live Event Monitoring gives customers insights into their live streaming performance and the ability to troubleshoot immediately, all while reducing costs. Object Storage • Object Storage. Fastly Object Storage is an Amazon S3-compatible large object storage solution that works seamlessly with both our CDN and Compute services.
Precision Path detects underperforming origin connections and automatically reroutes the connection to the best alternative in real-time. AutoPilot is an automated egress traffic engineering solution which enables us to reliably deliver high traffic events without manual intervention. • Fully programmable.
Fast Path Failover provides automatic detection and rerouting of underperforming edge connections at the transport layer. Precision Path monitors origin connections and reroutes traffic in real time to the best available path. Autopilot, our automated egress traffic engineering solution, allows us to reliably manage high-traffic events without manual intervention.
Fastly's Bot Management is an add-on service that provides customers with visibility into bot traffic, allowing them to differentiate between good and bad bots at the network edge, closer to where requests arrive and further from their origin.
Fastly Bot Management is an add-on service that provides customers with visibility into bot traffic, allowing them to differentiate between good and bad bots. They can then enforce rulesets and policies in the Fastly Next-Gen WAF control panel.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo the extent we 43 experience this seasonality, it may cause fluctuations in our operating results and financial metrics, and make forecasting our future operating results and financial metrics difficult. Additionally, we do not have sufficient experience in selling certain of our products to determine if demand for these products is, or will be, subject to material seasonality.
Biggest changeAdditionally, we do not have sufficient experience in selling certain of our products to determine if demand for these products is, or will be, subject to material seasonality. Our current operations are international in scope and we plan on further geographic expansion, creating a variety of operational challenges.
In some cases, third-party cloud providers run their own platforms that we access, and are, therefore, vulnerable to their service interruptions.
In some cases, third-party cloud providers run their own platforms that we access, and we are, therefore, vulnerable to their service interruptions.
We face substantial competition from legacy CDNs, small business-focused CDNs, cloud providers, traditional data center, and appliance vendors.
We face substantial competition from legacy CDNs, small business-focused CDNs, cloud providers, and traditional data center and appliance vendors.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), (collectively “GDPR”) Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais or “LGPD”) (Law No. 13,709/2018), Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) and Canada’s Anti-Spam Legislation (“CASL”), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing the personal information of individuals.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR” and collectively “GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais or “LGPD”) (Law No. 13,709/2018), Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) and Canada’s Anti-Spam Legislation (“CASL”), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing the Personal Information of individuals.
The U.S. federal, state, local, or non-U.S. international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules, regulations, or ordinances on multinational corporations to which we are subject are or under which we operate are unsettled in certain respects and may be subject to significant change.
The U.S. federal, state, local, or non-U.S. international tax laws on income, sales, use, indirect, or other tax laws, statutes, rules, regulations, or ordinances on multinational corporations to which we are subject or under which we operate are unsettled in certain respects and may be subject to significant change.
While our ability to do business has not been materially affected, and the global restrictive measures that have been taken in response to such events, and could be taken in the future, have created significant global economic uncertainty that could prolong and escalate tensions and expand the geopolitical conflict, which could have a lasting impact on regional and global economies, any of which could harm our business and operating results.
While our ability to do business has not been materially affected, the global restrictive measures that have been taken in response to such events, and could be taken in the future, have created significant global economic uncertainty that could prolong and escalate tensions and expand the geopolitical conflict, which could have a lasting impact on regional and global economies, any of which could harm our business and operating results.
Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business.
Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer, other existing customers, and new customers and harm our business.
Overall growth of our business depends on a number of factors, including our ability to: • address new and developing markets, such as large enterprise customers outside the United States; • recruit, hire, train, and manage additional qualified engineers and product managers; 41 • recruit, hire, train, and manage additional sales and marketing personnel; • maintain and enhance our corporate culture; • expand our international operations; • establish more mature organizational designs and structures, with more skill, technical and leadership depth with experience scaling and expanding global businesses; • implement and improve our administrative, financial and operational systems, procedures, and controls; • attract new customers and increase our existing customers’ usage on our platform; • expand the functionality and use cases for the products we offer on our platform; • provide our customers with customer support that meets their needs; • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our products; and • recruit experienced leaders and strategists to facilitate successful acquisitions and integrations.
Overall growth of our business depends on a number of factors, including our ability to: • address new and developing markets, such as large enterprise customers outside the United States; • recruit, hire, train, and manage additional qualified engineers and product managers; • recruit, hire, train, and manage additional sales and marketing personnel; • maintain and enhance our corporate culture; • expand our international operations; • establish more mature organizational designs and structures, with more skill, technical and leadership depth with experience scaling and expanding global businesses; • implement and improve our administrative, financial and operational systems, procedures, and controls; • attract new customers and increase our existing customers’ usage on our platform; • expand the functionality and use cases for the products we offer on our platform; • provide our customers with customer support that meets their needs; • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our products; and • recruit experienced leaders and strategists to facilitate successful acquisitions and integrations.
As a result, our operating results could suffer due to: • any decline in demand for our edge cloud platform; • the failure of our edge cloud platform to achieve continued market acceptance; • the market for edge cloud computing services not continuing to grow, or growing more slowly than we expect; 35 • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our edge cloud platform; • technological innovations or new standards that our edge cloud platform does not address; • sensitivity to current or future prices offered by us or our competitors; • our customers’ development of their own edge cloud platform; and • our inability to release enhanced versions of our edge cloud platform on a timely basis.
As a result, our operating results could suffer due to: • any decline in demand for our edge cloud platform; • the failure of our edge cloud platform to achieve continued market acceptance; • the market for edge cloud computing services not continuing to grow, or growing more slowly than we expect; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our edge cloud platform; • technological innovations or new standards that our edge cloud platform does not address; • sensitivity to current or future prices offered by us or our competitors; • our customers’ development of their own edge cloud platform; and • our inability to release enhanced versions of our edge cloud platform on a timely basis.
Our effective tax rate could be adversely impacted by several factors, including: • Changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • Changes in tax laws, tax treaties, and regulations or the interpretation of them; • Changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • The outcome of current and future tax audits, examinations, or administrative appeals; and • Limitations or adverse findings regarding our ability to do business in some jurisdictions.
Our effective tax rate could be adversely impacted by several factors, including: • Changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • Changes in tax laws, tax treaties, and regulations or the interpretation of them; 54 • Changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business; • The outcome of current and future tax audits, examinations, or administrative appeals; and • Limitations or adverse findings regarding our ability to do business in some jurisdictions.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force, particularly new salespeople and sales leadership, as we increase the size of our sales force and train our new salespeople to sell to enterprise customers; • the discretionary nature of customers’ purchasing decisions and budget cycles; • customers’ procurement processes, including their evaluation of competing products; • economic conditions and other factors affecting customer budgets; • the regulatory environment in which our customers operate; • integration complexity for a customer deployment; • the customer’s familiarity with edge cloud computing platforms; • evolving customer demands; • selling new products to enterprise customers; and • competitive conditions.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force, particularly new salespeople and sales leadership, as we increase the size of our sales force and train our new salespeople to sell to enterprise customers; • the discretionary nature of customers’ purchasing decisions and budget cycles; • customers’ procurement processes, including their evaluation of competing products; • economic conditions and other factors affecting customer budgets; • the regulatory environment in which our customers operate; • integration complexity for a customer deployment; 39 • the customer’s familiarity with edge cloud computing platforms; • evolving customer demands; • selling new products to enterprise customers; and • competitive conditions.
Our new products or enhancements and changes to our existing products could fail to attain sufficient market acceptance for many reasons, including: • failure to predict market demand accurately in terms of functionality and a failure to supply products that meet this demand in a timely fashion; • defects, errors, or failures; • negative publicity about our platform’s performance or effectiveness; • changes in the legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our platform; • emergence of a competitor that achieves market acceptance before we do; • delays in releasing enhancements to our platform to the market; and • introduction or anticipated introduction of competing products by our competitors.
Our new products or enhancements and changes to our existing products could fail to attain sufficient market acceptance for many reasons, including: • failure to predict market demand for functionality accurately and a failure to supply products that meet this demand in a timely fashion; • defects, errors, or failures; • negative publicity about our platform’s performance or effectiveness; • changes in the legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our platform; • emergence of a competitor that achieves market acceptance before we do; • delays in releasing enhancements to our platform to the market; and • introduction or anticipated introduction of competing products by our competitors.
We expect to continue to expend substantial financial and other resources on: • sales and marketing, including a significant expansion of our sales organization; • our infrastructure, including POP deployments, systems architecture, management tools, scalability, availability, performance, and security, as well as business continuity measures; • product development, including investments in our product development team and the development of new products and new functionality for our existing products; • acquisitions or strategic investments; • international expansion; and • general administration, including legal and accounting expenses associated with being a public company.
We expect to continue to expend substantial financial and other resources on: 43 • sales and marketing, including a significant expansion of our sales organization; • our infrastructure, including POP deployments, systems architecture, management tools, scalability, availability, performance, and security, as well as business continuity measures; • product development, including investments in our product development team and the development of new products and new functionality for our existing products; • acquisitions or strategic investments; • international expansion; and • general administration, including legal and accounting expenses associated with being a public company.
Moreover, any failure to identify new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected and cause us 46 to fail to meet our reporting and financial obligations or incur significant additional costs to remediate new material weaknesses, each of which could harm our ability to raise capital on favorable terms in the future or otherwise have a negative impact on our financial condition.
Moreover, any failure to identify new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements that may continue undetected and cause us to fail to meet our reporting and financial obligations or incur significant additional costs to remediate new material weaknesses, each of which could harm our ability to raise capital on favorable terms in the future or otherwise have a negative impact on our financial condition.
Pricing decisions may also impact the mix of adoption among our customers and negatively impact our overall revenue. Moreover, larger organizations may demand substantial price concessions. As a result, in the future we may be 37 required to reduce our prices or develop new pricing models, which could adversely affect our revenue, gross margin, profitability, financial position, and cash flow.
Pricing decisions may also impact the mix of adoption among our customers and negatively impact our overall revenue. Moreover, larger organizations may demand substantial price concessions. As a result, in the future we may be required to reduce our prices or develop new pricing models, which could adversely affect our revenue, gross margin, profitability, financial position, and cash flow.
Our inability to protect our intellectual property and proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could, among other things, delay 56 further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new products, result in our substituting inferior or more costly technologies into our products, or injure our reputation.
Our inability to protect our intellectual property and proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could, among other things, delay further sales or the implementation of our platform, impair the functionality of our platform, delay introductions of new products, result in our substituting inferior or more costly technologies into our products, or injure our reputation.
Our actual or perceived failure to comply with such obligations could harm our business, by resulting in regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, adverse publicity and reputational damage, loss of revenue or profits, loss of customers or sales and other adverse consequences that may negatively affect the value of our business and decrease the price of our common stock.
Our actual or perceived failure to comply with such obligations could harm our business, by resulting in regulatory investigations or actions, disputes or litigation, fines and penalties, disruptions of our business operations, adverse publicity and reputational damage, loss of revenue or profits, loss of customers or sales, and other adverse consequences that may negatively affect the value of our business and decrease the price of our common stock.
If we are found not to be protected by the safe harbor provisions of the DMCA, CDA or other similar laws, or if we are deemed subject to laws in other countries that may not have the same protections or that may impose more onerous obligations on us, we may owe substantial damages and our brand, reputation, and financial results may be harmed.
If we are found not to be protected by the safe harbor provisions of the DMCA, CDA, or other similar laws, or if we are deemed subject to laws in other countries that may not have the same protections or that may impose 52 more onerous obligations on us, we may owe substantial damages and our brand, reputation, and financial results may be harmed.
If we are unable to timely collect accounts receivable from our customers or detect fraudulent self-service customer accounts in a timely manner, our business will be harmed. Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.
If we are unable to timely collect accounts receivable from our customers or detect fraudulent self-service customer accounts in a timely manner, our business will be harmed. 31 Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.
Maintaining adequate research and development resources, such as the appropriate personnel and development technology, to meet the demands of the market is essential. If we are unable to develop products internally due to inadequate or ineffective research and 38 development resources, we may not be able to address our customers’ needs on a timely basis or at all.
Maintaining adequate research and development resources, such as the appropriate personnel and development technology, to meet the demands of the market is essential. If we are unable to develop products internally due to inadequate or ineffective research and development resources, we may not be able to address our customers’ needs on a timely basis or at all.
Any inability to license third-party technology in the future would have an adverse effect on our business and operating results, and would adversely affect our ability to compete. We may also be contractually obligated to indemnify our customers or other third parties in the event of infringement of a third party’s intellectual property rights.
Any inability to license third-party technology in the future would have an adverse effect on our business and operating results, and would adversely affect our ability to compete. We may also be contractually obligated to indemnify our customers or other third parties in the event of a claim of infringement of a third party’s intellectual property rights.
The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards and regulatory changes, as well as changing customer needs, requirements, and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
The market in which we compete is relatively new and subject to rapid technological change, evolving industry standards and regulatory changes, as well as changing customer needs, requirements, and preferences. The success of our business will 30 depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
In addition to the other risks described herein, factors that may affect our operating results include the following: • fluctuations in demand for or pricing of our platform; • our ability to attract new customers; • our ability to retain our existing customers; • fluctuations in the usage of our platform by our customers, which is directly related to the amount of revenue that we recognize from our customers; • fluctuations in customer delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • the timing of customer payments and any difficulty in collecting accounts receivable from customers; • timing of new functionality of our existing platform; • our ability to control costs, including our operating expenses and transmission bandwidth pricing; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; 36 • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the effects of acquisitions or other strategic transactions; • expenses in connection with acquisitions or other strategic transactions; • our ability to successfully deploy POPs in new regions; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the ability to maintain our partnerships; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform; and • awareness of our brand and our reputation in our target markets.
In addition to the other risks described herein, factors that may affect our operating results include the following: • fluctuations in demand for or pricing of our platform; 37 • our ability to attract new customers; • our ability to retain our existing customers; • fluctuations in the usage of our platform by our customers, which is directly related to the amount of revenue that we recognize from our customers; • fluctuations in customer delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • the timing of customer payments and any difficulty in collecting accounts receivable from customers; • timing of new functionality of our existing platform; • our ability to control costs, including our operating expenses and transmission bandwidth pricing; • the amount and timing of payment for operating expenses, particularly research and development and sales and marketing expenses, including commissions; • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the effects of acquisitions or other strategic transactions; • expenses in connection with acquisitions or other strategic transactions; • our ability to successfully deploy POPs in new regions; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the ability to maintain our key partnerships; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform; and • awareness of our brand and our reputation in our target markets.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our services.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our IT Systems and operations, supply chain, and ability to produce, sell, and distribute our services.
If our other lead generation methods do not result in broader market acceptance of our platform and the users of trial versions of our platform do not become, or are unable to convince their organizations to become, paying customers, or if paying customers choose to convert to the free versions of our platform, we will not realize the intended benefits of this strategy, and our business will be harmed.
If our other lead generation methods do not result in broader market acceptance of our platform and the users of free versions of our platform do not become, or are unable to convince their organizations to become, paying customers, or if paying customers choose to convert to the free versions of our platform, we will not realize the intended benefits of this strategy, and our business will be harmed.
If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax 54 charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.
If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.
We compete on the basis of a number of factors, including: • our platform’s functionality, scalability, performance, ease of use, ease of integration and programmability, reliability, security availability, and cost effectiveness relative to that of our competitors’ products and services; • our global network coverage and availability; • our ability to support modern application development processes and utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • our ability to identify new markets, applications, and technologies; • our ability to attract and retain customers; • our brand, reputation, and trustworthiness; • our credibility with developers; • the quality of our customer support; • our ability to recruit software engineers and sales and marketing personnel; • our ability to protect our intellectual property; and 31 • our ability to identify opportunities for acquisitions and strategic relationships and successfully execute on them.
We compete on the basis of a number of factors, including: • our platform’s functionality, scalability, performance, ease of use, ease of integration and programmability, reliability, security availability, and cost effectiveness relative to that of our competitors’ products and services; • our global network coverage and availability; 32 • our ability to support modern application development processes and utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • our ability to identify new markets, applications, and technologies; • our ability to attract and retain customers; • our brand, reputation, and trustworthiness; • our credibility with developers; • the quality of our customer support; • our ability to recruit software engineers and sales and marketing personnel; • our ability to protect our intellectual property; and • our ability to identify opportunities for acquisitions and strategic relationships and successfully execute on them.
In addition, we will need to appropriately scale our processes and procedures that 33 support our growing customer base, including increasing our number of POPs around the world and investments in systems, training, and customer support. Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction.
In addition, we will need to appropriately scale our processes and procedures that support our growing customer base, including increasing our number of POPs around the world and investments in systems, training, and customer support. Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction.
If we invest substantial time and resources to further expand our international operations and are unable to do so successfully and in a timely manner, our business may be harmed. If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected.
If we invest substantial time and resources to further expand our international operations and are unable to do so successfully and in a timely manner, our business may be harmed. 46 If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected.
Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers. Current or future economic uncertainties or downturns could adversely affect our business and results of operations. 55 The U.S. capital markets experienced and continue to experience extreme volatility.
Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers. Current or future economic uncertainties or downturns could adversely affect our business and results of operations. The U.S. capital markets experienced and continue to experience extreme volatility.
Like many other companies, our ability to monitor third parties’ information security practices is limited, and these third parties may not have adequate information 28 security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
Like many other companies, our ability to monitor third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
The importance of maintaining high quality support will increase as we expand our business and pursue new customers. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to maintain and expand our relationships with existing and new customers could suffer and our business could be harmed.
The importance of maintaining high quality support will increase as we expand our business and pursue new customers. If we do not help our customers quickly resolve issues and provide effective ongoing support, our ability to maintain and expand our 41 relationships with existing and new customers could suffer and our business could be harmed.
We may also be bound by contractual obligations related to privacy and data security, and our efforts to comply with such obligations may not be successful. For example, certain privacy and data security laws, such as the EU GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.
We may also be bound by contractual obligations related to privacy and data security, and our efforts to comply with such obligations may not be successful. For example, certain privacy and data security laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.
In addition, these 51 governmental agencies may be required to publish the rates we negotiate with them, which could harm our negotiating leverage with other potential customers and in turn harm our business. The success of our business depends on customers’ continued and unimpeded access to our platform on the Internet.
In addition, these governmental agencies may be required to publish the rates we negotiate with them, which could harm our negotiating leverage with other potential customers and in turn harm our business. The success of our business depends on customers’ continued and unimpeded access to our platform on the Internet.
Furthermore, our activities are subject to United States economic sanctions laws and regulations that generally prohibit the direct or indirect exportation or provision of products and services to countries, governments, and individuals and entities targeted by United States embargoes or sanctions, except to the extent authorized by OFAC or exempt from sanctions.
Furthermore, our activities are subject to United States economic sanctions laws and regulations that generally prohibit the direct or indirect exportation or provision of products and services to countries, governments, and individuals and entities 56 targeted by United States embargoes or sanctions, except to the extent authorized by OFAC or exempt from sanctions.
The occurrence of any defects, errors, disruptions in service, failures involving redundant data centers, or other performance problems, interruptions, or delays with our platform, whether in connection with the day-to-day operations or otherwise, could result in: 24 • loss of customers; • reduced customer usage of our platforms; • lost or delayed market acceptance and sales of our products, or the failure to launch products or features on anticipated timelines; • delays in payment to us by our customers; • injury to our reputation and brand; • governmental inquiry or oversight; • legal claims, including warranty and service level agreement claims, against us; or • diversion of our resources, including through increased service and warranty expenses or financial concessions, and increased insurance costs.
The occurrence of any defects, errors, disruptions in service, failures involving redundant data centers, or other performance problems, interruptions, or delays with our platform, whether in connection with the day-to-day operations or otherwise, could result in: 25 • loss of customers; • reduced customer usage of our platforms; • lost or delayed market acceptance and sales of our products, or the failure to launch products or features on anticipated timelines; • delays in payment to us by our customers; • injury to our reputation and brand; • governmental inquiry or oversight; • legal claims, including warranty and service level agreement claims, against us; or • diversion of our resources, including through increased service and warranty expenses or financial concessions, and increased insurance costs.
If we fail to achieve the necessary level of efficiency in our company as it grows, or if we are not able to accurately forecast future growth, our business would be negatively impacted. 42 If we cannot maintain our company culture as we grow, our success and our business may be harmed.
If we fail to achieve the necessary level of efficiency in our company as it grows, or if we are not able to accurately forecast future growth, our business would be negatively impacted. If we cannot maintain our company culture as we grow, our success and our business may be harmed.
If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences, and privileges senior to those of holders of our common stock. 60 Future sales of our common stock in the public market could cause the market price of our common stock to decline.
If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences, and privileges senior to those of holders of our common stock. Future sales of our common stock in the public market could cause the market price of our common stock to decline.
Such risks may also be augmented based on relative performance, both against any initiatives or goals we communicate as well as in 40 comparison to our competitors. Various of our stakeholders are also subject to similar pressures, which may result in additional or novel risks.
Such risks may also be augmented based on relative performance, both against any initiatives or goals we communicate as well as in comparison to our competitors. Various of our stakeholders are also subject to similar pressures, which may result in additional or novel risks.
Any such impairment charge or write-off may have an adverse effect on our business, financial condition, and results of operation. 45 Current and future indebtedness could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.
Any such impairment charge or write-off may have an adverse effect on our business, financial condition, and results of operation. Current and future indebtedness could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.
These proposals, recommendations and enactments include changes to the existing 53 framework in respect of income taxes, as well as new types of non-income taxes (such as taxes based on a percentage of revenue or taxes applicable to digital services), which could apply to our business.
These proposals, recommendations and enactments include changes to the existing framework in respect of income taxes, as well as new types of non-income taxes (such as taxes based on a percentage of revenue or taxes applicable to digital services), which could apply to our business.
If we are unable to develop 29 and sell new products that satisfy and are adopted by our customers and provide enhancements, new features, and capabilities to our platform that keep pace with rapid technological and industry change, our revenue and operating results could be adversely affected.
If we are unable to develop and sell new products that satisfy and are adopted by our customers and provide enhancements, new features, and capabilities to our platform that keep pace with rapid technological and industry change, our revenue and operating results could be adversely affected.
For example, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act 9 (“Section 404”).
For example, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”).
If we fail to successfully promote and maintain our brand, our business may be harmed. Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, and dilute stockholder value .
If we fail to successfully promote and maintain our brand, our business may be harmed. 33 Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, and dilute stockholder value .
If we do not comply with these laws or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply with these laws, we could face direct liability or delivery of content by our platform may be blocked by certain governments.
If we do not comply with these laws or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply 48 with these laws, we could face direct liability or delivery of content by our platform may be blocked by certain governments.
Even when we have contractual protections against such customer claims, we may choose to honor a customer’s request for indemnification or otherwise seek to maintain customer satisfaction by issuing customer credits, assisting our customer in defending against claims, or in other ways.
Even when we have contractual protections against such 59 customer claims, we may choose to honor a customer’s request for indemnification or otherwise seek to maintain customer satisfaction by issuing customer credits, assisting our customer in defending against claims, or in other ways.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale 62 of additional equity securities.
Some of these agreements provide for uncapped liability for which we would be responsible, and some 57 provisions survive termination or expiration of the applicable agreement. Large liability payments could harm our business, results of operations, and financial condition.
Some of these agreements provide for uncapped liability for which we would be responsible, and some provisions survive termination or expiration of the applicable agreement. Large liability payments could harm our business, results of operations, and financial condition.
We receive a substantial portion of our revenues from a limited number of customers from a limited number of industries, and the loss of, or a significant reduction in usage by, one or more of our major customers would result in lower revenues and could harm our business.
We receive a substantial portion of our revenues from a limited number of customers within a limited number of industries, and the loss of, or a significant reduction in usage by, one or more of our major customers would result in lower revenues and could harm our business.
While we may be entitled to damages if our third-party service providers fail to satisfy their privacy and data security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
While we may be entitled to damages if our third-party service providers fail to satisfy their 29 privacy and data security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
If we fail to adequately control fraudulent credit card transactions, we may face civil liability, reputational harm, and 39 significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.
If we fail to adequately control fraudulent credit card transactions, we may face civil liability, reputational harm, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.
In addition, we believe that the success of our business and corporate culture depends on employing people with a variety of backgrounds and experiences, and the competition for such diverse personnel is significant. The market for such talented personnel is competitive.
In addition, we believe that the success of our business and corporate culture depends on employing people with a variety of backgrounds and experiences, and the competition for such personnel is significant. The market for such talented personnel is competitive.
Our future success depends on establishing and maintaining successful relationships with a diverse set of customers. We currently receive a substantial portion of our revenues from a limited number of customers and from a limited number of industries, such as media and entertainment.
Our future success depends on establishing and maintaining successful relationships with a diverse set of customers. We currently receive a substantial portion of our revenues from a limited number of customers and within a limited number of industries, such as media and entertainment.
Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our IT Systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
On August 23, 2024 and December 20, 2024, substantially similar stockholder derivative complaints were filed against certain of our officers and directors in the United States District Court for the District of Delaware and the Court of Chancery for the State of Delaware.
On August 23, 2024 and December 20, 2024, substantially similar stockholder derivative complaints were filed against certain of our officers and directors in the United States District Court for 34 the District of Delaware and the Court of Chancery for the State of Delaware.
If our platform does not allow us or our customers to comply with the latest regulatory requirements, our existing customers may decrease their usage on our platform and new customers will be less likely to adopt our platform.
If our platform does not allow us or our customers to comply with the latest regulatory requirements, our existing customers may decrease their usage on our platform or leave our platform and new customers will be less likely to adopt our platform.
In addition, during 2023 we introduced the option for customers to purchase product packages with single price points and set limits on usage. We do not charge for overages on these single price point product packages.
In addition, during 2023 we introduced the option for customers to purchase product packages with single price points and set limits on usage. We generally do not charge for overages on these single price point product packages.
Our platform and related applications, including our security solutions, are designed to provide rapid protection against web application vulnerabilities and cyber-attacks. However, no security product can provide absolute protection against all vulnerabilities and cyber-attacks.
Our platform and related applications, including our security solutions, are designed to provide rapid protection against web application vulnerabilities and cyber-attacks. However, no security product can provide absolute protection against all 35 vulnerabilities and cyber-attacks.
Our current and future international business and operations involve a variety of risks, including: • changes in a specific country’s or region’s political or economic conditions; • longer payment cycles; • greater difficulty collecting accounts receivable; • potential or unexpected changes in trade relations, regulations, or laws, including as a result of tariffs imposed by the current administration; • increased regulatory inquiry or oversight; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe; • differing labor regulations, especially in Europe and Japan, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations, and where potential labor organizing and works council negotiations in certain of those countries could contribute to increased operational costs or otherwise disrupt our business; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs; • challenges to our corporate culture resulting from a dispersed workforce; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we choose to do so in the future; 44 • challenges related to providing support and developing products in foreign languages; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • potential tariffs and trade barriers; • limited or insufficient scope, strength and enforcement of intellectual property rights; • political instability, economic sanctions, terrorist activities, or international conflicts, including ongoing conflicts between Russia and Ukraine and Hamas and Israel, which may impact the operations of our business or the businesses of our customers; • inflationary pressures, such as those the global market is currently experiencing, labor shortages and supply chain disruptions, which may increase costs for certain services; • exposure to liabilities under anti-corruption and anti-money laundering laws, and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
Our current and future international business and operations involve a variety of risks, including: • changes in a specific country’s or region’s political or economic conditions; • longer payment cycles; • greater difficulty collecting accounts receivable; • potential or unexpected changes in trade relations, regulations, or laws, including as a result of tariffs imposed by the current administration; 45 • increased regulatory inquiry or oversight; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe; • differing labor regulations, especially in Europe and Japan, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations, and where potential labor organizing and works council negotiations in certain of those countries could contribute to increased operational costs or otherwise disrupt our business; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs; • challenges to our corporate culture resulting from a dispersed workforce; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we choose to do so in the future; • challenges related to providing support and developing products in foreign languages; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • potential tariffs and trade barriers; • limited or insufficient scope, strength, and enforcement of intellectual property rights; • political instability, economic sanctions, terrorist activities, or global conflicts and developments, including, but not limited to, ongoing conflicts between Russia and Ukraine and in the Middle East, which may impact the operations of our business or the businesses of our customers; • inflationary pressures, such as those the global market is currently experiencing, labor shortages, and supply chain disruptions, which may increase costs for certain services; • exposure to liabilities under anti-corruption and anti-money laundering laws, and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
The market price of our common stock may continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: • actual or anticipated fluctuations in our financial condition and operating results; • decreased usage by one or more of our customers; • variance in our financial performance from expectations of securities analysts or investors; • changes in the pricing we offer our customers; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our platform or related products; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • publicity associated with network outages and problems; • our involvement in litigation; • changes in senior management or key personnel; • the trading volume of our common stock; • potential equity or debt financings; • changes in the anticipated future size and growth rate of our market; and • general political, social, economic, regulatory, and market conditions, in both domestic and our foreign markets, including the effects of global events like the war in Ukraine and the more recent hostilities in Israel on the global economy, labor shortages, supply chain disruptions, inflation, increased interest rates, banking instability and slow or negative growth of our markets.
The market price of our common stock may continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: • actual or anticipated fluctuations in our financial condition and operating results; • decreased usage by one or more of our customers; • variance in our financial performance from expectations of securities analysts or investors; • changes in the pricing we offer our customers; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our operations, platform or related products; • announcements by us or our competitors of significant business developments, acquisitions, or new offerings; • publicity associated with network outages and problems; • our involvement in litigation; • changes in senior management or key personnel; • the trading volume of our common stock; • potential equity or debt financings; • changes in the anticipated future size and growth rate of our market; and • general political, social, economic, regulatory, and market conditions, in both domestic and our foreign markets, including the effects of global events like the war in Ukraine and the hostilities in the Middle East on the global economy, labor shortages, supply chain disruptions, inflation, increased interest rates, banking instability, and slow or negative growth of our markets.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business. 63 Item 1B. Unresolved Staff Comments None.
If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business. 65 Item 1B. Unresolved Staff Comments None.
Some of our customers, who generally do not include our enterprise customers, enter into “click-though” agreements with us via our self-service model, and agree to a minimum monthly fee by signing up online with a credit card, and can easily terminate their subscriptions, or switch to a less expensive plan, at will with little advance notice.
Some of our customers, who generally do not include our enterprise customers, enter into “click-through” agreements with us via our self-service model, and agree to a minimum monthly fee by signing up online with a credit card, and can easily terminate their subscriptions, or switch to a less expensive plan, at will with little advance notice.
These two shareholder derivative actions have been consolidated and stayed pending resolution of our motion to dismiss in the securities class action.
These two shareholder derivative actions have been consolidated and stayed pending resolution of our motion(s) to dismiss in the securities class action.
Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, injunctions, or other collateral consequences. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business could be harmed.
Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, injunctions, reputational harm, or other collateral consequences. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business could be harmed.
In addition, they may reduce or cease their use of our products at any time without penalty or termination charges, even after they have expanded usage in prior periods. We base our decisions about expense levels and investments on estimates of our future revenue and anticipated rate of growth.
In addition, certain customers may reduce or cease their use of our products at any time without penalty or termination charges, even after they have expanded usage in prior periods. We base our decisions about expense levels and investments on estimates of our future revenue and anticipated rate of growth.
Additionally, we are or may become subject to other laws and regulations around the world with respect to the Internet related to, among other things, content liability, security requirements, critical infrastructure designations, Internet resiliency, law enforcement access to information, net neutrality, data localization requirements, and restrictions on social media or other content.
Additionally, we are or may become subject to other laws and regulations around the world with respect to the Internet related to, among other things, content moderation, security requirements, critical infrastructure designations, Internet resiliency, law enforcement access to information, net neutrality, data localization requirements, and restrictions on social media or other content.
These developers often make design decisions and influence the product and vendor processes within our customers. If we fail to gain or maintain their acceptance of our platform, our business would be harmed. We rely on third-party hosting providers that may be difficult to replace.
These developers often 40 make design decisions and influence the product and vendor processes within our customers. If we fail to gain or maintain their acceptance of our platform, our business would be harmed. We rely on third-party providers that may be difficult to replace.
We rely on third-party service providers and technologies to operate critical business systems to process Sensitive Information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, content delivery to customers, and other functions.
We rely on third-party service providers and technologies to operate critical IT Systems and to process Sensitive Information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, content delivery to customers, and other functions.
On August 1, 2024, the United States Court of Appeals for the Sixth Circuit granted a stay of the network neutrality rules.
On August 1, 2024, the United 53 States Court of Appeals for the Sixth Circuit granted a stay of the network neutrality rules.
Nightingale and Mr. Bergman, and key employees are employed on an at-will basis. We cannot ensure that we will be able to retain the services of any member of our senior management or other key employees or that we would be able to timely replace members of our senior management or other key employees should any of them depart.
Compton and Mr. Bergman, and key employees are employed on an at-will basis. We cannot ensure that we will be able to retain the services of any member of our senior management or other key employees or that we would be able to timely replace members of our senior management or other key employees should any of them depart.
For additional information regarding the conditional conversion feature of the Notes, see Note 9, Debt Instruments. Future sales and issuances of our capital stock or rights to purchase capital stock could result in dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline.
For additional information regarding the conditional conversion feature of the Notes, see Note 8, Debt Instruments. Future sales and issuances of our capital stock or rights to purchase capital stock could result in dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline.
Several U.S. federal statutes may apply to us with respect to various activities of our customers, including the Digital Millennium Copyright Act (“DMCA”), which provides recourse for owners of copyrighted material who believe their rights under U.S. copyright law have been infringed on the Internet; and section 230, enacted in the Communications Decency Act (“CDA”), which addresses blocking and screening of content on the Internet.
Several U.S. federal statutes may apply to us with respect to various activities of our customers, including free account users, including the Digital Millennium Copyright Act (“DMCA”), which provides recourse for owners of copyrighted material who believe their rights under U.S. copyright law have been infringed on the Internet; and section 230, enacted in the Communications Decency Act (“CDA”), which addresses blocking and screening of content on the Internet.
Climate change and other environmental or social pressures is expected to increase the frequency and severity of certain events, as well as contribute to chronic changes (such as changes in meteorological and hydrological patterns) that may also result in similar or additional risks.
Climate change and other environmental or social pressures are expected to increase the frequency and severity of certain events, as well as contribute to chronic changes (such as changes in meteorological and hydrological patterns) that may also result in similar or additional risks.
In April 2024, under the prior administration, a bill was signed into law that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, does not sell its stake in TikTok within a set time frame.
In April 2024, under the prior administration, a bill was signed into law that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, did not sell its stake in TikTok within a set time frame.
In addition, in April 2024, the former administration signed into law a bill that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, does not sell its stake in TikTok within a set time frame.
In addition, in April 2024, the former administration signed into law a bill that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, did not sell its stake in TikTok within a set time frame.
Because many of our largest customers’ minimum usage commitments for our platform are relatively low compared to their expected 25 usage, it can be easy for certain customers to quickly reallocate usage or switch from our platform to an alternative platform altogether.
Because many of our largest customers’ minimum usage commitments for our platform are relatively low compared to their expected 26 usage, it can be easy for certain customers to quickly reallocate usage or switch from our platform to an alternative platform altogether.
For example, following Russia’s invasion of Ukraine, the United States and other countries imposed economic sanctions and severe export control restrictions against Russia and Belarus, and the United States and other countries could impose wider sanctions and export restrictions and take other actions should the conflict further escalate.
For example, following Russia’s invasion of Ukraine, the United States and other countries imposed economic sanctions and severe export control restrictions against Russia,Belarus, and restricted regions of Ukraine, and the United States and other countries could impose wider sanctions and export restrictions and take other actions should the conflict further escalate.
Obligations relating to privacy and data security (and customers’ data privacy expectations) are evolving, increasingly stringent, creating uncertainty, and may result in increasing scrutiny. Such obligations may be subject to different applications and interpretations, and which may be inconsistent and conflicting among different jurisdictions.
Obligations relating to privacy and data security (and customers’ data privacy expectations) are evolving, increasingly stringent, and create uncertainty, and may result in increasing scrutiny. Such obligations may be subject to different applications and interpretations, and which may be inconsistent and conflicting among different jurisdictions.
Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, currency and interest rate fluctuations, political turmoil, natural catastrophes, warfare, public health issues, and terrorist attacks on the United States, Europe, the Asia Pacific region, or elsewhere, could cause a downturn or recession and a decrease in business investments, including spending on information technology, which would harm our business.
Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, currency and interest rate fluctuations, political turmoil, actual or potential government shutdowns, natural catastrophes, warfare, public health issues, and terrorist attacks on the United States, Europe, the Asia Pacific region, or elsewhere, could cause a downturn or recession and a decrease in business investments, including spending on information technology, which would harm our business.
Any failure or perceived failure by us or third parties upon whom we rely to comply with obligations, relating to privacy and data security may result in significant consequences including but not limited to governmental investigations and enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing personal data, and orders to destroy or not use personal information.
Any failure or perceived failure by us or third parties upon whom we rely to comply with obligations, relating to privacy and data security or the Internet may result in significant consequences including but not limited to reputational harm, governmental investigations and enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing Personal Information, and orders to destroy or not use Personal Information.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors in this Annual Report on Form 10-K, including “If we or our third-party providers fail to protect our IT Systems or Confidential Information, and/or experience a data security incident our business could experience materially adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, loss of revenue or profits, loss of customers or sales, reputational harm, and other adverse consequences.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general risk oversight function.
Biggest changeRisk Factors in this Annual Report on Form 10-K, including “If our IT Systems or data, or those of third parties upon which we rely, are compromised, limited, or fail, our business could experience materially adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, loss of revenue or profits, loss of customers or sales, reputational harm, and other adverse consequences.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general risk oversight function.
The CISO and security organization identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods including, for example: (1) identifying vulnerabilities through automated scans, vulnerability assessments, and subscriptions to threat intelligence feeds and notices; (2) assessing security weaknesses identified through internal security reviews, external penetration tests, and reports on our products and services; and (3) assessing the Company’s threat landscape given the industry’s risk profile, the results of our enterprise risk assessment, and information technology, privacy, and security audits.
The CISO and security organization identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods including, for example: (1) identifying vulnerabilities through automated scans, vulnerability assessments, and subscriptions to threat intelligence feeds and notices; (2) assessing security weaknesses identified through internal security reviews, internal and external penetration tests, and reports on our products and services; and (3) assessing the Company’s threat landscape given the industry’s risk profile, the results of our enterprise risk assessment, and information technology, privacy, and security audits.
The board of directors is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CISO, Mr. Marshall Erwin.
The board of directors is responsible for overseeing the Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CISO, Mr. Marshall Erwin.
The Company 64 generally attempts to engage reputable third-party service providers and when appropriate, imposes contractual obligations related to cybersecurity on its providers. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
The Company 66 attempts to engage reputable third-party service providers and when appropriate, imposes contractual obligations related to cybersecurity on its providers. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
The disclosure committee, which includes members of management such as our Chief Financial Officer and general counsel, meets quarterly. The CISO acts in an advisory capacity to the Company's disclosure committee on an as-needed basis.
The disclosure committee, which includes members of management such as our Chief Financial Officer and Chief Legal Officer, meets quarterly. The CISO acts in an advisory capacity to the Company's disclosure committee on an as-needed basis.
Our incident response plan is designed to escalate certain cybersecurity incidents, including breaches, to members of management depending on the circumstances, including our CISO, general counsel, and other members of leadership when appropriate.
Our incident response plan is designed to escalate certain cybersecurity incidents, including breaches, to members of management depending on the circumstances, including our CISO, Chief Legal Officer, and other members of leadership when appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in San Francisco, California and consists of approximately 71,343 square feet of space under a lease that expires on July 31, 2027. We also maintain offices in Denver, Pleasanton, New York, London and Tokyo. We lease all of our facilities and do not own any real property.
Biggest changeItem 2. Properties Our corporate headquarters is located in San Francisco, California and consists of approximately 56,308 square feet of space under a lease that expires on July 31, 2034. We also maintain offices in Denver, Colorado; Pleasanton, California; New York, New York; London, England; and Tokyo, Japan.
We believe that our facilities are sufficient to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate expansion of our operation s .
We lease all of our facilities and do not own any real property. We believe that our facilities are sufficient to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate expansion of our operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock has traded on The New York Stock Exchange (“NYSE”) under the symbol “FSLY” since May 17, 2019. Holders of Record As of December 31, 2024, there were 41 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock has been traded on the Nasdaq Global Select Market under the symbol “FSLY” since December 9, 2025.
We have presented below the cumulative total return to our stockholders between December 31, 2019 through December 31, 2024 in comparison to the S&P 500 Index and S&P 500 Information Technology Index. The graph assumes a $100 initial investment at the market close on December 31, 2019.
We have presented below the cumulative total return to our stockholders between December 31, 2020 through December 31, 2025 in comparison to the S&P 500 Index and S&P 500 Information Technology Index. The graph assumes a $100 initial investment at the market close on December 31, 2020.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 67 Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None. 68 Item 6. Reserved Not required. 69
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 69 Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None. 70 Item 6. Reserved Not required. 71
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Prior to that date, our common stock was traded on the New York Stock Exchange from May 17, 2019, through December 8, 2025. Holders of Record As of December 31, 2025, there were 39 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear ended December 31, 2024 2023 (in thousands) Consolidated Statement of Operations: Revenue $ 543,676 $ 505,988 Cost of revenue 247,738 239,660 Gross profit 295,938 266,328 Operating expenses: Research and development 137,980 152,190 Sales and marketing 198,610 191,773 General and administrative 113,399 116,077 Impairment expense 4,144 4,316 Restructuring charges 9,720 — Total operating expenses 463,853 464,356 Loss from operations (167,915) (198,028) Net gain on extinguishment of debt 1,365 52,416 Interest income 14,871 18,186 Interest expense (2,747) (4,051) Other expense, net (1,028) (1,832) Loss before income tax expense (benefit) (155,454) (133,309) Income tax expense (benefit) 2,604 (221) Net loss attributable to common stockholders $ (158,058) $ (133,088) 79 The following tables set forth our results of operations for the period presented as a percentage of our revenue: Year ended December 31, 2024 2023 Consolidated Statements of Operations, as a percentage of revenue:* Revenue 100 % 100 % Cost of revenue 46 47 Gross profit 54 53 Operating expenses: Research and development 25 30 Sales and marketing 36 38 General and administrative 21 23 Impairment expense 1 1 Restructuring charges 2 — Total operating expenses 85 92 Loss from operations (31) (39) Net gain on extinguishment of debt — 10 Interest income 3 4 Interest expense (1) (1) Other expense, net — — Loss before income tax expense (benefit) (29) (26) Income tax expense (benefit) — — Net loss attributable to common stockholders (29) % (26) % __________ * Columns may not add up to 100% due to rounding.
Biggest changeYear ended December 31, 2025 2024 (in thousands) Consolidated Statement of Operations: Revenue $ 624,018 $ 543,676 Cost of revenue 267,815 247,738 Gross profit 356,203 295,938 Operating expenses: Research and development 162,662 137,980 Sales and marketing 201,434 198,610 General and administrative 110,692 113,399 Impairment expense 415 4,144 Restructuring charges — 9,720 Total operating expenses 475,203 463,853 Loss from operations (119,000) (167,915) Net gain on extinguishment of debt 941 1,365 Interest income 12,290 14,871 Interest expense (12,699) (2,747) Other expense, net (721) (1,028) Loss before income tax expense (119,189) (155,454) Income tax expense 2,488 2,604 Net loss attributable to common stockholders $ (121,677) $ (158,058) 79 The following tables set forth our results of operations for the period presented as a percentage of our revenue: Year ended December 31, 2025 2024 Consolidated Statements of Operations, as a percentage of revenue:* Revenue 100 % 100 % Cost of revenue 43 46 Gross profit 57 54 Operating expenses: Research and development 26 25 Sales and marketing 32 36 General and administrative 18 21 Impairment expense — 1 Restructuring charges — 2 Total operating expenses 76 85 Loss from operations (19) (31) Net gain on extinguishment of debt — — Interest income 2 3 Interest expense (2) (1) Other expense, net — — Loss before income tax expense (19) (29) Income tax expense — — Net loss attributable to common stockholders (19) % (29) % __________ * Columns may not add up to 100% due to rounding.
Our principal uses of cash in the near term have primarily been around funding our operations, our capital expenditures, business acquisitions, investments and fulfilling our debt and contractual commitments. We have also entered into longer term commitments to support our operations, including arrangements to directly lease and operate our infrastructure assets and colocation facilities.
Our principal uses of cash in the near term have primarily been around funding our operations, our capital expenditures, business acquisitions, and investments and fulfilling our debt and contractual commitments. We have also entered into longer term commitments to support our operations, including arrangements to directly lease and operate our infrastructure assets and colocation facilities.
We believe that our cash and cash equivalents balances, and available borrowing capacity under our credit facility, and the cash flows generated by our operations, net of the cash outflows used in our operations, will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.
We believe that our cash and cash equivalents balances, available borrowing capacity under our credit facility, and the cash flows generated by our operations, net of the cash outflows used in our operations, will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.
This requires us to continue to expand our sales and marketing capabilities outside of the United States, increase the number of markets we have a presence in around the world to support our customers, and manage the administrative aspects of 73 a global organization, each of which place a strain on our business and culture.
This requires us to continue to expand our sales and marketing capabilities outside of the United States, increase the number of markets we have a presence in around the world to support our customers, and manage the administrative aspects of a global organization, each of which place a strain on our business and culture.
For most contracts, usage charges are determined on a monthly basis based on actual usage within the month and do not impact usage charges within any other month. Our larger customers often enter into contracts that contain minimum billing commitments and reflect discounted pricing associated with such usage levels.
For most contracts, usage charges are determined on a monthly basis based on actual usage 76 within the month and do not impact usage charges within any other month. Our larger customers often enter into contracts that contain minimum billing commitments and reflect discounted pricing associated with such usage levels.
However, our research and development expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. 77 Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including commissions for our sales employees, salaries, benefits, bonuses, and stock-based compensation.
However, our research and development expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including commissions for our sales employees, salaries, benefits, bonuses, and stock-based compensation.
The main drivers of the changes in operating assets and liabilities were an increase in accounts receivable of 85 $32.9 million, primarily due to an increase in revenue and the timing of cash receipts, an increase in other assets of $23.1 million related to deferred contract costs as well as $22.1 million of operating lease payments.
The main drivers of the changes in operating assets and liabilities were an increase in accounts receivable of $32.9 million, primarily due to an increase in revenue and the timing of cash receipts, an increase in other assets of $23.1 million related to deferred contract costs as well as $22.1 million of operating lease payments.
However, our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. General and Administrative General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses, and stock-based compensation for our administrative support personnel.
However, our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. 77 General and Administrative General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses, and stock-based compensation for our administrative support personnel.
We will continue to build out a single, unified platform, simplify customer onboarding and service usage, and simplify our pricing and packaging. This will require us to dedicate significant resources to further develop the market for our platform and differentiate our platform from competitive products and services.
We will also continue to build out a single, unified platform, simplify customer onboarding and service usage, and simplify our pricing and packaging. This will require us to dedicate significant resources to further develop the market for our platform and differentiate our platform from competitive products and services.
While the conflicts are still evolving and the outcomes remain highly uncertain, we do not believe the Russia-Ukraine or Israel-Hamas conflicts will have a material impact on our business and results of operations. We do not have Points of Presence (“POPs”) in Russia, Ukraine, or Israel.
While the conflicts are still evolving and the outcomes remain highly uncertain, we do not believe the Russia-Ukraine, Israel-Hamas, or other conflicts will have a material impact on our business and results of operations. We do not have Points of Presence (“POPs”) in Russia, Ukraine, or Israel.
For the year ended December 31, 2023, cash provided by operating activities consisted primarily of our net loss of $133.1 million, adjusted for non-cash items of $203.3 million, and net cash flows used in operating assets and liabilities of $69.9 million.
For the year ended December 31, 2023, cash provided by operating activities consisted primarily of our net loss of $133.1 million, adjusted for non-cash items of $203.3 million, and net cash flows used in operating assets and liabilities of 85 $69.9 million.
If we have server asset levels in excess of forecasted network capacity needs, we have in the past and may need to continue to write-down or write-off server assets.
If we have server asset levels in excess of forecasted network capacity needs, 74 we have in the past and may need to continue to write-down or write-off server assets.
General and administrative expenses also include costs related to legal and other professional services fees, SaaS costs, an allocation of our general overhead expenses, credit losses and acquisition-related costs.
General and administrative expenses also include costs related to legal and other professional services fees, an allocation of our general overhead expenses, credit losses, and acquisition-related costs.
Cash Flows from Financing Activities For the year ended December 31, 2024, cash used in financing activities was $17.1 million, primarily consisting of $15.0 million of finance lease liabilities repayments, $5.7 million payment of debt issuance costs and $3.8 million in payments for deferred consideration for business acquisitions.
For the year ended December 31, 2024, cash used in financing activities was $17.1 million, primarily consisting of $15.0 million of finance lease liabilities repayments, $5.7 million payment of debt issuance costs and $3.8 million in payments for deferred consideration for business acquisitions.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Revenue Recognition We recognize revenue in accordance with ASC 606, where revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Revenue Recognition We recognize revenue in accordance with ASC 606, where revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration we expect to receive in exchange for those services.
We have generated losses from operations in the past and expect to continue to incur operating losses for the foreseeable future due to the investments and strategic initiatives we intend to make to grow our business.
We have generated losses from operations in the past and may continue to incur operating losses for the foreseeable future due to the investments and strategic initiatives we intend to make to grow our business.
We expect to maintain this valuation allowance for the foreseeable future. 78 Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We expect to maintain this valuation allowance for the foreseeable future. 78 Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
We report our revenue by three product lines: Network Services, Security and Other. Network Services include solutions designed to improve performance of websites, apps, application programming interfaces (“APIs”) and digital media. Security includes products designed to protect websites, apps, APIs and users.
We present our disaggregated revenue by three product lines: Network Services, Security, and Other. Network Services include solutions designed to improve performance of websites, apps, application programming interfaces (“APIs”), and digital media. Security includes products designed to protect websites, apps, APIs and users.
For the years ended December 31, 2024 and 2023 the ARR was 99.0% and 99.2%, respectively. Last-Twelve Months Net Retention Rate (“LTM NRR”) Our ability to generate and increase our revenue is also dependent upon our ability to retain our existing customers. LTM NRR allows us to track customer retention which demonstrates the stickiness of our edge cloud platform.
For the years ended December 31, 2025 and 2024 the ARR was 98.7% and 99.0%, respectively. Last-Twelve Months Net Retention Rate (“LTM NRR”) Our ability to generate and increase our revenue is also dependent upon our ability to retain our existing customers. LTM NRR allows us to track customer retention which demonstrates the stickiness of our edge cloud platform.
For the trailing twelve months ended December 31, 2024 and 2023 our LTM NRR was 102.3% and 113.4%, respectively. Remaining Performance Obligations (“RPO”) RPO represent future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied.
For the trailing twelve months ended December 31, 2025 and 2024 our LTM NRR was 110.1% and 102.3%, respectively. Remaining Performance Obligations (“RPO”) RPO represent future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied.
During the fourth quarter of 2024, we identified an immaterial error in the historical calculation of our total customer count related to our online self-service customers. Revenue that would have been recorded for these customers was less than $0.1 million for the quarter ended December 31, 2024.
During the fourth quarter of 2024, we identified an immaterial error in the historical calculation of our total customer count related to our online self-service customers. Revenue that would have been recorded for these customers was less than $0.1 million for the quarter ended December 31, 2024. Due to the immateriality, we have not revised prior periods.
Initially, customers typically choose to become platform customers, for which we charge fees based on their committed or actual use of our platform, as measured in gigabytes and requests. Many of our customers generate billings in excess of their minimum commitment.
Customers typically choose to utilize our platform for Network Services, for which we charge fees based on their committed or actual use of our platform, as measured in gigabytes and requests. Many of our customers generate billings in excess of their minimum commitment.
We also generate revenue from additional products as well as professional and other services, such as implementation, account management and enhanced customer support. We charge a flat one-time or recurring monthly fee depending on the additional products and services selected.
We also generate revenue from Security and Other product lines, including Compute and Observability, as well as professional and other services, such as implementation, account management and enhanced customer support. We charge a flat one-time or recurring monthly fee depending on the additional products and services selected.
As of December 31, 2024, the aggregate amount of the transaction price in our contracts allocated to RPO that were unsatisfied or partially unsatisfied was $244.4 million. 76 Key Components of Statement of Operations Revenue We derive our revenue primarily from usage-based fees earned from customers using our platform.
As of December 31, 2025, the aggregate amount of the transaction price in our contracts allocated to RPO that were unsatisfied or partially unsatisfied was $353.8 million. Key Components of Statement of Operations Revenue We derive our revenue primarily from usage-based fees earned from customers using our platform.
Revenue growth was driven by a $24.9 million increase in revenue related to further adoption of our modern edge platform and products. For the years ended December 31, 2024 and 2023, approximately 95% and 95% of our revenue was driven by usage on our platform, respectively.
Revenue growth was driven by a $66.4 million increase in revenue related to further adoption of our modern edge platform and products. For the years ended December 31, 2025 and 2024, approximately 96% and 95% of our revenue was driven by usage on our platform, respectively.
The Company continues to maintain a full valuation allowance in the U.S. and the tax expense (benefit) for the periods were primarily due to foreign tax expense. Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents, and marketable securities totaling $295.9 million.
The Company continues to maintain a full valuation allowance in the U.S. and the tax expense for the periods were primarily due to foreign tax expense. 83 Liquidity and Capital Resources As of December 31, 2025, we had cash, cash equivalents, and marketable securities totaling $361.8 million.
For the years ended December 31, 2024 and 2023, our research and development expenses as a percentage of revenue were 25% and 30%, respectively. Our research and development expenses each period is impacted by the amount of software development costs that meet the criteria for capitalization.
For the years ended December 31, 2025 and 2024, our research and development expenses as a percentage of revenue were 26% and 25%, respectively. Our research and development expenses in each period are impacted by the amount of software development costs that meet the criteria for capitalization.
Cash Flows from Investing Activities For the year ended December 31, 2024, cash provided by investing activities was $178.9 million, primarily consisting of $371.2 million of maturities and sales of marketable securities.
This was offset by $223.1 million of maturities and sales of marketable securities. For the year ended December 31, 2024, cash provided by investing activities was $178.9 million, primarily consisting of $371.2 million of maturities and sales of marketable securities.
The increase in Security revenue was primarily driven by an increase in Next-Gen WAF revenue, partially offset by a decrease in Fastly legacy WAF revenue. Other revenue was $12.9 million for the year ended December 31, 2024, compared to $8.0 million for the year ended December 31, 2023, an increase of $4.9 million, or 61%.
The increase in Security revenue was primarily driven by an increase in Next-Gen WAF revenue, partially offset by a decrease in Fastly legacy WAF revenue. Other revenue was $21.2 million for the year ended December 31, 2025, compared to $12.9 million for the year ended December 31, 2024, an increase of $8.2 million, or 64%.
In addition, we cannot be certain what actions the United States or another country’s government may take with respect to certain of our customers that may adversely affect our ability to do business with our customers that operate in China, target China as a market or that have strong business ties to China.
In addition, we cannot be certain what actions the United States or another country’s government may take with respect to certain of our customers that may adversely affect our ability to do business with our customers that operate in China, target China as a market or that have strong business ties to China, and any such governmental action could have a negative impact on our business.
Our cash, cash equivalents, and marketable securities primarily consisted of money market funds, investment-grade commercial paper, corporate notes and bonds. As of December 31, 2024, we did not have any marketable securities classified as non-current.
Our cash, cash equivalents, and marketable securities primarily consisted of money market funds, investment-grade commercial paper, corporate notes and bonds, U.S. treasury securities, certificates of deposit, and municipal bonds. As of December 31, 2025, we did not have any marketable securities classified as non-current.
Other Income and Expenses Our interest income consists primarily of interest earned on our cash, cash equivalents and investments. Our interest expense consists primarily of the interest expense on our finance leases and amortization of discount and debt issuance costs associated with our debt obligations. Our other income (expense), net, consists primarily of foreign currency transaction gains and losses.
Our interest expense consists primarily of the interest expense on our finance leases, amortization of discount, coupon interest expense, and debt issuance costs associated with our debt obligations. Our other expense, net, consists primarily of foreign currency transaction gains and losses.
During the year ended December 31, 2024, we entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to exchange $157.9 million aggregate principal amount of the 2026 Notes for $150.0 million aggregate principal amount of 7.75% convertible senior notes due 2028 (the “2028 Notes”) and aggregate transaction costs of $5.8 million.
During the year ended December 31, 2023, we entered into several separate privately negotiated transactions with certain holders of the 2026 Notes to repurchase $367.3 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $309.1 million and aggregate transaction costs of $2.0 million. 84 During the year ended December 31, 2024, we entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to exchange $157.9 million aggregate principal amount of the 2026 Notes for $150.0 million aggregate principal amount of 7.75% convertible senior notes due 2028 (the “2028 Notes”) and aggregate transaction costs of $5.8 million.
General and administrative General and administrative costs were $113.4 million for the year ended December 31, 2024 compared to $116.1 million for the year ended December 31, 2023, a decrease of $2.7 million, or 2%. The decrease was primarily due a $6.5 million decrease in stock-based compensation expenses as well as a $1.6 million decrease in professional fees.
General and Administrative General and administrative costs were $110.7 million for the year ended December 31, 2025 compared to $113.4 million for the year ended December 31, 2024, a decrease of $2.7 million, or 2%. The decrease was primarily due to a $6.9 million decrease in stock-based compensation expenses as well as a $1.4 million decrease in personnel related costs.
The remainder of our revenue was generated by our other products and services, including support and professional services. Network Services revenue was $427.7 million for the year ended December 31, 2024, compared to $405.1 million for the year ended December 31, 2023, an increase of $22.6 million, or 6%.
The remainder of our revenue was generated by our other products and services, including support and professional services. Network Services revenue was $477.8 million for the year ended December 31, 2025, compared to $427.7 million for the year ended December 31, 2024, an increase of $50.1 million, or 12%.
This service represents the convergence of the Content Delivery Network (“CDN”) with functionality that has been traditionally delivered by hardware-centric appliances such as Application Delivery Controllers (“ADC”), Web Application Firewalls (“WAF”), Bot Detection, Distributed Denial of Service (“DDoS”) and Observability solutions.
Our platform represents the convergence of the Content Delivery Network (“CDN”) with functionality that has traditionally been delivered by hardware-centric appliances such as Application Delivery Controllers (“ADC”), Web Application Firewalls (“WAF”), API Management, Bot Detection, Distributed Denial of Service (“DDoS”), Web Application and API Protection (“WAAP”), and infrastructure protection.
Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses, and related disclosures. Actual results and outcomes could differ significantly from our estimates, judgments, and assumptions.
The preparation of our consolidated financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses, and related disclosures. Actual results and outcomes could differ significantly from our estimates, judgments, and assumptions.
Enterprise Customer Count Historically our revenue has been driven primarily by a subset of our customers, our enterprise customers, who have leveraged our platform substantially from a usage standpoint. We believe that the recruitment and cultivation of enterprise customers is critical to our long-term success.
As of December 31, 2025 and 2024, we had 3,092 and 3,061 customers, respectively. 75 Enterprise Customer Count Historically our revenue has been driven primarily by a subset of our customers, our enterprise customers, who have leveraged our platform substantially from a usage standpoint. We believe that the recruitment and cultivation of enterprise customers is critical to our long-term success.
Our Last-Twelve Months Net Retention Rate (“LTM NRR”) metric also measures the revenue growth from existing customers attributable to increased usage of our platform and features, and purchase of additional products and services. For additional details on our key metrics, refer to the “Key Business Metrics” section.
Our Last-Twelve Months Net Retention Rate (“LTM NRR”) metric also measures the revenue growth from existing customers attributable to increased usage of our platform and features, and purchase of additional products and services.
We will also need to expand, retain, and motivate our sales and marketing personnel in order to target our sales efforts at larger enterprises and senior management of these potential customers.
We will also need to expand, retain, and motivate our sales and marketing personnel in order to target our sales efforts at larger enterprises and senior management of these potential customers. We emphasize retaining our customers and expanding their usage of our platform and adoption of our other products.
As of December 31, 2023, we had 578 of such enterprise customers which generated 92% of the total annualized current quarter revenue for our total customers for the period ended December 31, 2023.
As of December 31, 2025, we had 628 enterprise customers which generated 94% of the total annualized current quarter revenue for our total customers for the period ended December 31, 2025.
Other Income and Expense Interest income Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Interest income $ 14,871 $ 18,186 $ (3,315) (18) % Interest income was $14.9 million for the year ended December 31, 2024 compared to $18.2 million for the year ended December 31, 2023, a decrease of $3.3 million, or 18%.
Other Income and Expense Interest Income Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Interest income $ 12,290 $ 14,871 $ (2,581) (17) % Interest income was $12.3 million for the year ended December 31, 2025 compared to $14.9 million for the year ended December 31, 2024, a decrease of $2.6 million, or 17%.
The increase in Network Services revenue was primarily driven by growth in usage from existing customers. Security revenue was $103.0 million for the year ended December 31, 2024, compared to $92.9 million for the year ended December 31, 2023, an increase of $10.2 million, or 11%.
The increase in Network Services revenue was primarily driven by growth in usage from existing customers. Security revenue was $125.1 million for the year ended December 31, 2025, compared to $103.0 million for the year ended December 31, 2024, an increase of $22.0 million, or 21%.
Gross margin was 54% for the year ended December 31, 2024 compared to 53% for the year ended December 31, 2023, an increase of 2%.
Gross margin was 57% for the year ended December 31, 2025 compared to 54% for the year ended December 31, 2024, an increase of 3%.
No single customer accounted for more than 10% of revenue for the years ended December 31, 2024 and 2023. No affiliated customers that are business units of a single company generated more than 10% of revenue for the year ended December 31, 2024.
Affiliated customers that are business units of a single company generated an aggregate of 10% of the Company’s revenue for the year ended December 31, 2025. No affiliated customers that are business units of a single company generated more than 10% of revenue for the year ended December 31, 2024.
Cost of Revenue Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Cost of revenue $ 247,738 $ 239,660 $ 8,078 3 % Cost of revenue was $247.7 million for the year ended December 31, 2024 compared to $239.7 million for the year ended December 31, 2023, an increase of $8.1 million, or 3%.
Cost of Revenue Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Cost of revenue $ 267,815 $ 247,738 $ 20,077 8 % Cost of revenue was $267.8 million for the year ended December 31, 2025 compared to $247.7 million for the year ended December 31, 2024, an increase of $20.1 million, or 8%.
However, our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. Impairment Expense Our impairment expense relates to write-off charges for certain long-lived assets. Restructuring Charges Our restructuring charges relate to a restructuring plan to reduce expenses including a reduction of our workforce.
However, our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. Impairment Expense Our impairment expense relates to non-recurring charges for our long-lived assets.
Convertible Senior Notes In March 2021, we issued approximately $948.8 million aggregate principal amount of 0% convertible senior unsecured notes due in 2026 (the “2026 Notes”) in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act.
During the year ended December 31, 2025 and 2024, no amounts were drawn down on the Credit Agreement. Convertible Senior Notes In March 2021, we issued approximately $948.8 million aggregate principal amount of 0% convertible senior unsecured notes due in 2026 (the “2026 Notes”) in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act.
Customers often begin with smaller deployments of one of our products and then expand their usage over time. Our platform includes a variety of offerings across Network Services, Security, Compute and Observability product lines. As our customers mature, we assist them in expanding their use of our platform, including the use of additional offerings beyond content delivery or security.
Customers often begin with smaller deployments of one of our products and then expand their usage over time. Our platform includes a variety of offerings across Network Services, Security, and Other product lines, including Compute and Observability.
This decrease was primarily due to a decrease of $12.2 million in stock-based compensation expense, a $6.0 million increase in capitalized software costs, a $2.8 million decrease in executive transition costs, as well as a $0.5 million decrease in colocation costs.
This increase was primarily due to a $10.8 million increase in stock-based compensation expense, a $9.2 million decrease in capitalized software, an increase of $5.7 million of personnel-related costs, as well as a $1.0 million increase in software costs.
Other income (expense), net Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Other expense, net $ 1,028 $ 1,832 $ (804) (44) % Other expense, net was $1.0 million for the year ended December 31, 2024 compared to $1.8 million for the year ended December 31, 2023, a decrease of $0.8 million, or 44%.
Other Expense, net Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Other expense, net $ 721 $ 1,028 $ (307) (30) % Other expense, net was $0.7 million for the year ended December 31, 2025 compared to $1.0 million for the year ended December 31, 2024, a decrease of $0.3 million, or 30%.
Cash Flows The following table summarizes our cash flows for the period indicated: Year ended December 31, 2024 2023 2022 (in thousands) Net cash (used in) provided by operating activities $ 16,406 $ 362 $ (69,632) Net cash provided by investing activities $ 178,900 $ 294,940 $ 235,751 Net cash used in financing activities $ (17,099) $ (331,380) $ (189,149) Cash Flows from Operating Activities For the year ended December 31, 2024, cash provided by operating activities consisted primarily of our net loss of $158.1 million, adjusted for non-cash items of $228.6 million, and net cash flows used in operating assets and liabilities of $54.1 million.
Cash Flows The following table summarizes our cash flows for the period indicated: Year ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 94,444 $ 16,406 $ 362 Net cash (used in) provided by investing activities $ (213,032) $ 178,900 $ 294,940 Net cash (used in) provided by financing activities $ 12,761 $ (17,099) $ (331,380) Cash Flows from Operating Activities For the year ended December 31, 2025, cash provided by operating activities consisted primarily of our net loss of $121.7 million, adjusted for non-cash items of $239.0 million, and net cash flows used in operating assets and liabilities of $22.9 million.
We generate substantially all of our revenue from charging our customers based on their usage of our platform, and we generate a substantial majority of our revenue from customers that have negotiated contracts with us.
For additional details on our key metrics, refer to the “Key Business Metrics” section. 72 We generate substantially all of our revenue from charging our customers based on their usage of our platform, and we generate a substantial majority of our revenue from customers that have negotiated contracts with us.
This was partially offset by $8.6 million in proceeds from the employee stock purchase plan ( “ ESPP”) and $2.2 million in proceeds from stock option exercises by our employees and directors.
This was partially offset by $8.6 million in proceeds from the employee stock purchase plan ( “ ESPP”) and $2.2 million in proceeds from stock option exercises by our employees and directors. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.
Gross Profit and Gross Margin Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Gross profit $ 295,938 $ 266,328 $ 29,610 11 % Gross margin 54 % 53 % 2 % Gross profit was $295.9 million for the year ended December 31, 2024 compared to $266.3 million for the year ended December 31, 2023, an increase of $29.6 million, or 11%.
Gross Profit and Gross Margin Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Gross profit $ 356,203 $ 295,938 $ 60,265 20 % Gross margin 57 % 54 % 3 % Gross profit was $356.2 million for the year ended December 31, 2025 compared to $295.9 million for the year ended December 31, 2024, an increase of $60.3 million, or 20%.
The main drivers of the changes in operating assets and liabilities were an increase in other assets of $35.4 million related to deferred contract costs, an increase in accounts receivable of $27.4 million, primarily due to an increase in revenue and the timing of cash receipts from certain of our larger customers and an increase of $6.8 million in prepaid expenses and other assets due to pre-payments for hosting services and software licenses.
The main drivers of the changes in operating assets and liabilities were $20.7 million of operating lease payments, an increase in other assets of $19.5 million related to deferred contract costs, a $18.0 million increase in other liabilities, a $6.2 million increase in accounts receivable, primarily due to an increase in revenue and the timing of cash receipts, a $4.5 million decrease in accounts payable due to timing of payments, and a decrease of $1.6 million in prepaid expenses and other current assets due to pre-payments for hosting services and software licenses.
As of December 31, 2024 2023 Customer metrics: Total Customer Count (based on current quarter revenue) 3,061 3,243 Enterprise Customer Count (based on annualized revenue) 596 578 Annual Revenue Retention Rate 99.0 % 99.2 % Other key metrics: Last-twelve Months Net Retention Rate (“LTM NRR”) 102.3 % 113.4 % Total Customer Count We believe that our total number of customers is an important indicator of the adoption of our platform.
As of December 31, 2025 2024 Total Customer Count (based on current quarter revenue) 3,092 3,061 Enterprise Customer Count (based on annualized revenue) 628 596 Annual Revenue Retention Rate 98.7 % 99.0 % Last-twelve Months Net Retention Rate (“LTM NRR”) 110.1 % 102.3 % Remaining Performance Obligations (“RPO”) (in millions) $ 353.8 $ 244.4 Total Customer Count We believe that our total number of customers is an important indicator of the adoption of our platform.
We believe that our platform gives our customers a significant competitive advantage, whether they were born into the digital age or are just embarking on their digital transformation journey.
We believe that our platform gives our customers a significant competitive advantage – whether they were born into the AI-centric digital age or are just embarking on their transformation journey. We focus our direct selling efforts on expanding our customers ’ use of our platform, which includes companies that are exhibiting significant growth.
Conversely, if we underestimate network 74 capacity needs, we may in future periods be unable to meet demand and be required to incur higher costs to secure necessary parts and components of our servers.
Conversely, if we underestimate network capacity needs, we may in future periods be unable to meet demand and be required to incur higher costs to secure necessary parts and components of our servers. In addition, international trade disputes may further disrupt or delay our supply chain for these components or lead to pricing increases.
And any such governmental action could have a negative impact on our business. In April 2024, President Biden signed into law a bill that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, does not sell its stake in TikTok within a set time frame.
In April 2024, under the prior administration, a bill was signed into law that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, does not sell its stake in TikTok within a set time frame.
This is calculated by taking the revenue we recognized for each customer in the current quarter and multiplying it by four. As of December 31, 2024, we had 596 of such enterprise customers which generated 93% of the total annualized current quarter revenue for our total customers for the period ended December 31, 2024.
As of December 31, 2024, we had 596 enterprise customers which generated 93% of the total annualized current quarter revenue for our total customers for the period ended December 31, 2024.
We may also seek to acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform, enhance our technical capabilities, or otherwise offer growth opportunities.
We may also seek to acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform, enhance our technical capabilities, or otherwise offer growth opportunities. Developers use our platform to build custom applications and require a state-of-the-art infrastructure to test and run these applications.
During the year ended December 31, 2023, we entered into several separate privately negotiated transactions with certain holders of the 2026 Notes to repurchase $367.3 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $309.1 million and aggregate transaction costs of $2.0 million.
On December 9, 2025, we entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase $150.0 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $148.9 million and aggregate transaction costs of $6.7 million.
As enterprises grow and experience increased traffic, their needs evolve, leading them to find additional use cases for our platform and expand their usage accordingly. In addition, given that customer acquisition costs are incurred largely for acquiring and initial onboarding, we may gain operating leverage to the extent that existing customers expand their use of our platform and products.
As our customers mature, we assist them in expanding their use of our platform, including the use of additional offerings beyond content delivery or security. In addition, given that customer acquisition costs are incurred largely for acquiring and initial onboarding, we may gain operating leverage to the extent that existing customers expand their use of our platform and products.
The decrease was primarily due to less convertible notes retired in the year ended December 31, 2024.
The decrease was primarily due to a lower aggregate principal amount of convertible notes retired in the year ended December 31, 2025.
Net Gain on Extinguishment of Debt Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Net gain on extinguishment of debt $ 1,365 $ 52,416 $ (51,051) (97) % Net gain on extinguishment of debt was $1.4 million for the year ended December 31, 2024 compared to $52.4 million for the year ended December 31, 2023, a decrease of $51.1 million, or 97%.
There were no restructuring activities in 2025. 82 Net Gain on Extinguishment of Debt Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Net gain on extinguishment of debt $ 941 $ 1,365 $ (424) (31) % Net gain on extinguishment of debt was $0.9 million for the year ended December 31, 2025 compared to $1.4 million for the year ended December 31, 2024, a decrease of $0.4 million, or 31%.
Factors Affecting Our Performance Winning New Customers We are focused on continuing to attract new customers, including those in diverse vertical markets, and expanding our relationship with existing customers, by enhancing our product experience, investing in technology, and leveraging our partner ecosystem.
Factors Affecting Our Performance We are focused on continuing to attract new customers and expanding our relationship with existing customers by enhancing our product experience, investing in technology, and leveraging our partner ecosystem. Our customer base ranges from emerging companies to large enterprises undergoing digital transformation across diverse industries and verticals.
The increase in gross margin was driven by revenue growth during the year ended December 31, 2024 outpacing the increases in the costs incurred to support the growth of our network. 81 Operating Expenses Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Research and development $ 137,980 $ 152,190 $ (14,210) (9) % Sales and marketing 198,610 191,773 6,837 4 % General and administrative 113,399 116,077 (2,678) (2) % Impairment expense 4,144 4,316 (172) (4) % Restructuring charges 9,720 — 9,720 100 % Total operating expenses $ 463,853 $ 464,356 $ (503) — % Percentage of revenue: Research and development 25 % 30 % (5) % Sales and marketing 36 % 38 % (2) % General and administrative 21 % 23 % (2) % Impairment expense 1 % 1 % — % Restructuring charges 2 % — % 2 % Research and development Research and development expenses were $138.0 million for the year ended December 31, 2024 compared to $152.2 million for the year ended December 31, 2023, a decrease of $14.2 million, or 9%.
The increase in gross margin was driven by revenue growth during the year ended December 31, 2025 outpacing the increases in the costs incurred to support the growth of our network. 81 Operating Expenses Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Research and development $ 162,662 $ 137,980 $ 24,682 18 % Sales and marketing 201,434 198,610 2,824 1 % General and administrative 110,692 113,399 (2,707) (2) % Impairment expense 415 4,144 (3,729) (90) % Restructuring charges — 9,720 (9,720) (100) % Total operating expenses $ 475,203 $ 463,853 $ 11,350 2 % Percentage of revenue: Research and development 26 % 25 % 1 % Sales and marketing 32 % 36 % (4) % General and administrative 18 % 21 % (3) % Impairment expense — % 1 % (1) % Restructuring charges — % 2 % (2) % Research and Development Research and development expenses were $162.7 million for the year ended December 31, 2025 compared to $138.0 million for the year ended December 31, 2024, an increase of $24.7 million, or 18%.
During the year ended December 31, 2023, we recognized an impairment charge of $4.3 million related to property and equipment. 82 Restructuring charges During the year ended December 31, 2024, in an effort to streamline our organization, we initiated a restructuring plan to reduce expenses including a reduction of our workforce.
Restructuring Charges During the year ended December 31, 2024, in an effort to streamline our organization, we initiated a restructuring plan to reduce expenses including a reduction of our workforce. In connection with this plan, we incurred charges of $9.7 million primarily consisting of employee-related severance and termination benefits.
In anticipation of winning new customers and staying ahead of our customers’ needs, we plan to continue to invest in order to expand the scale and capacity of our software-defined modern network.
We expect our revenue growth to be dependent on an expanding customer base and continued adoption of our edge cloud delivery, security, and other products and services. In anticipation of winning new customers and staying ahead of our customers’ needs, we plan to continue to invest in order to expand the scale and capacity of our software-defined modern network.
Impairment expense During the year ended December 31, 2024, we recognized an impairment charge of $4.1 million related to write-off of certain equipment, an internal-use software project as well as right-of-use assets.
Impairment Expense During the year ended December 31, 2025, we recognized an impairment charge of $0.4 million, which primarily consisted of the write-off of intangible assets no longer in use. During the year ended December 31, 2024, we recognized an impairment charge of $4.1 million related to property and equipment.
Performance, security, and building the most engaging applications are paramount to driving mission success for Fastly’s customers. The edge cloud is a category of Infrastructure as a Service (“IaaS”) that enables developers to build, secure, and deliver digital experiences, at the edge of the Internet.
The edge cloud is a category of Infrastructure as a Service (“IaaS”) that enables software engineers to build, secure, and deliver digital experiences at the edge of the Internet.
The length of our sales cycles, from initial evaluation to payment, can range from several months to well over a year and can vary substantially from customer to customer. Similarly, the onboarding and ramping process with new as well as existing enterprise customers with new business can take several months and can be subject to delays for unanticipated reasons.
Similarly, the onboarding and ramping process with new as well as existing enterprise customers with new business can take several months and can be subject to delays for unanticipated reasons. The timing of new revenue from our sales efforts and changes in usage by our largest customers can make revenue difficult to predict.
This was partially offset by decreases of $8.7 million in prepaid expenses. For the year ended December 31, 2022, cash used in operating activities consisted primarily of our net loss of $190.8 million, adjusted for non-cash items of $207.3 million, and net cash flows used in operating assets and liabilities of $86.2 million.
For the year ended December 31, 2024, cash provided by operating activities consisted primarily of our net loss of $158.1 million, adjusted for non-cash items of $228.6 million, and net cash flows used in operating assets and liabilities of $54.1 million.
In addition, our bandwidth costs are higher in markets outside of the United States and Europe, which may impact our gross margins. We are closely monitoring the unfolding events of the Russian invasion of Ukraine, as well as the more recent hostilities in Israel, and their global impacts.
In addition, our bandwidth costs are higher in markets outside of the United States and Europe, which may impact our gross margins.
Sales and marketing Sales and marketing expenses were $198.6 million for the year ended December 31, 2024 compared to $191.8 million for the year ended December 31, 2023, an increase of $6.8 million, or 4%. This increase was primarily due to a $14.4 million increase in personnel related costs, such as salaries, sales commissions and benefits.
This increase was partially offset by a $1.4 million decrease in travel and entertainment expense, as well as a $0.6 million decrease in corporate costs. Sales and Marketing Sales and marketing expenses were $201.4 million for the year ended December 31, 2025 compared to $198.6 million for the year ended December 31, 2024, an increase of $2.8 million, or 1%.
This decrease was partially offset by an increase of $5.8 million of personnel-related costs, such as salaries and benefits as well as a $1.5 million increase in software costs.
The increase was partially offset by a $0.8 million decrease in personnel related costs including sales commissions, a $0.6 million decrease in software costs, as well as a $0.5 million decrease in corporate costs.
Interest expense Year ended December 31, Change 2024 2023 $ Change % Change (in thousands) Interest expense $ 2,747 $ 4,051 $ (1,304) (32) % Interest expense was $2.7 million for the year ended December 31, 2024 compared to $4.1 million for the year ended December 31, 2023, a decrease of $1.3 million, or 32%.
Interest Expense Year ended December 31, Change 2025 2024 $ Change % Change (in thousands) Interest expense $ 12,699 $ 2,747 $ 9,952 362 % Interest expense was $12.7 million for the year ended December 31, 2025 compared to $2.7 million for the year ended December 31, 2024, an increase of $10.0 million, or 362%.
We incurred a net loss of $158.1 million and $133.1 million in the years ended December 31, 2024 and 2023, respectively. Our 10 largest customers generated an aggregate of 33% and 37% of our revenue in the trailing 12 months ended December 31, 2024 and 2023, respectively.
Our 10 largest customers generated an aggregate of 32% and 33% of our revenue in the trailing 12 months ended December 31, 2025 and 2024, respectively. No single customer accounted for more than 10% of revenue for the years ended December 31, 2025 and 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 10% change in interest rates during the period presented would not have had a material impact on our consolidated financial statements. Currency Exchange Risks The functional currency of our foreign subsidiaries is the U.S. dollar. Therefore, we are exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars.
Biggest changeA hypothetical 10% change in interest rates during the period presented would not have had a material impact on our consolidated financial statements.
These risks primarily include interest rate and currency exchange risks as follows: Interest Rate Risk We had cash, cash equivalents, and marketable securities of $295.9 million, as of December 31, 2024 which primarily consisted of bank deposits, money market funds, investment-grade commercial paper and corporate notes and bonds. The cash and cash equivalents are held for working capital purposes.
These risks primarily include interest rate and currency exchange risks as follows: Interest Rate Risk We had cash, cash equivalents, and marketable securities of $361.8 million, as of December 31, 2025 which primarily consisted of bank deposits, money market funds, investment-grade commercial paper and corporate notes and bonds. The cash and cash equivalents are held for working capital purposes.
We do not currently engage in any hedging activity to reduce our potential exposure to currency fluctuations, although we may choose to do so in the future. A hypothetical 10% change in foreign exchange rates during the period presented would not have had a material impact on our consolidated financial statements. 90
A hypothetical 10% change in foreign exchange rates during the period presented would not have had a material impact on our consolidated financial statements. 88
Removed
Our foreign subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the period.
Added
Currency Exchange Risks The functional currency of our foreign subsidiaries is the U.S. dollar and our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates relative to the U.S. dollar. The majority of our revenue is denominated in U.S. dollars.
Removed
If there is a change in foreign currency exchange rates, the conversion of our foreign subsidiaries’ financial statements into U.S. dollars would result in a realized gain or loss which is recorded in our consolidated statements of operations.
Added
Our expenses are generally denominated in the currencies of the countries in which our operations are located and are subject to fluctuations due to changes in their respective foreign currency exchange rates. We do not currently engage in any hedging activity to reduce our potential exposure to currency fluctuations, although we may choose to do so in the future.

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