- Record second quarter revenue of $122.8 million grew 20%
year-over-year and exceeded the high end of our guidance
range.
- Expanded market reach with new packaging and pricing for our
core services, making it easy for companies of all sizes to try,
buy, and use the powerful Fastly platform.
- Repurchased $236.4 million in aggregate principal amount of
convertible debt for $195.7 million, reflecting a 17% discount to
par, and resulted in a $36.8 million net gain.
Fastly, Inc. (NYSE: FSLY), one of the world’s fastest edge cloud
platforms, today announced financial results for its second quarter
ended June 30, 2023.
“I am pleased with the enormous progress the team has made and
we’re proud of the revenue and operating performance of the second
quarter, exceeding the top end of our guidance,” said Todd
Nightingale, CEO of Fastly.
“We continue to execute on our strategic initiatives to simplify
our go-to-market, increase our innovation velocity, and drive a new
operational rigor and cost control throughout our business,”
continued Nightingale. “All of this progress helps us drive our
mission to make every user experience fast, safe, and engaging…
fueling growth and delivering a strong financial result.”
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Revenue
$
122,831
$
102,518
$
240,395
$
204,900
Gross margin
GAAP gross margin
52.3
%
44.9
%
51.8
%
46.1
%
Non-GAAP gross margin
56.6
%
50.4
%
56.1
%
51.5
%
Operating loss
GAAP operating loss
$
(49,827
)
$
(68,968
)
$
(97,102
)
$
(131,972
)
Non-GAAP operating loss
$
(7,785
)
$
(26,893
)
$
(21,859
)
$
(44,633
)
Net loss per share
GAAP net loss per common share—basic and
diluted
$
(0.08
)
$
(0.14
)
$
(0.44
)
$
(0.67
)
Non-GAAP net loss per common share—basic
and diluted
$
(0.04
)
$
(0.23
)
$
(0.12
)
$
(0.38
)
Second Quarter 2023 Financial Summary
- Total revenue of $122.8 million, representing 20%
year-over-year growth and 4% sequential increase.
- GAAP gross margin of 52.3%, compared to 44.9% in the second
quarter of 2022. Non-GAAP gross margin of 56.6%, compared to 50.4%
in the second quarter of 2022.
- GAAP net loss of $10.7 million, compared to $16.4 million in
the second quarter of 2022. Non-GAAP net loss of $4.6 million,
compared to $28.0 million in the second quarter of 2022.
- GAAP net loss per basic and diluted shares of $0.08 compared to
$0.14 in the second quarter of 2022. Non-GAAP net loss per basic
and diluted shares of $0.04, compared to $0.23 in the second
quarter of 2022.
Key Metrics
- Trailing 12 month net retention rate (LTM NRR)1 remained flat
at 116% in the second quarter compared to the first quarter.
- Dollar-Based Net Expansion Rate (DBNER)2 increased to 123% in
the second quarter from 121% in the first quarter.
- Total customer count was 3,072 in the second quarter, down 28
from the first quarter; 551 were enterprise customers3 in the
second quarter, up 11 from the first quarter.
- Average enterprise customer spend4 of $818 thousand in the
second quarter, up 3% quarter-over-quarter.
For a reconciliation of non-GAAP financial measures to their
corresponding GAAP measures, please refer to the reconciliation
table at the end of this press release.
Second Quarter Business and Product Highlights
- Expanded market reach with new packaging and pricing for our
core services, including flat-rate pricing and tiered packages,
making it easy for companies of all sizes to try, buy, and use the
powerful Fastly platform.
- Repurchased $236.4 million in aggregate principal amount of
convertible debt for $195.7 million, reflecting a 17% discount to
par, and resulted in a $36.8 million net gain.
- Peter Alexander joined Fastly as Chief Marketing Officer,
bringing his experience from Check Point as CMO in addition to CMO
of Harmonic and marketing roles at Cisco.
- Marshal Erwin joined Fastly as Chief Information Security
Officer, bringing his experience from Mozilla as Chief Security
Officer in addition to roles in the US intelligence community.
- Karen Greenstein was promoted to General Counsel, joining
Fastly in 2019 and serving as interim GC in addition to legal roles
in digital media and entertainment.
- Support for Mutual TLS two-way authentication released,
providing a higher security posture requiring both the client and
server to present trusted digital certificates, saving time and
resources for our customers.
- Released Dynamic Backends, enabling customers to create new
backend server definitions seamlessly.
- Introduced Core Cache API, a powerful set of API Primitives,
enabling developers building on our Edge Compute platform to have
access to our powerful, globally distributed cache network.
- Premier Edge Deployment of our Next-Gen WAF released, bringing
Advanced Rate Limiting and the Site Flagged IP signal for the
Next-Gen WAF to the edge.
- Limited availability of Certainly released, providing domain
validated TLS certificates that are fully automated in our Fastly
managed TLS services and enabling trusted identification of
websites, improving security and reliability.
Third Quarter and Full Year 2023 Guidance
Q3 2023
Full Year 2023
Total Revenue (millions)
$125 - $128
$500- $510
Non-GAAP Operating Loss
(millions)
($15.0) - ($13.0)
($49.0) - ($43.0)
Non-GAAP Net Loss per share
(5)(6)
($0.09) - ($0.07)
($0.27) - ($0.21)
A reconciliation of non-GAAP guidance measures to corresponding
GAAP measures is not available on a forward-looking basis without
unreasonable effort due to the uncertainty of expenses that may be
incurred in the future and cannot be reasonably determined or
predicted at this time, although it is important to note that these
factors could be material to Fastly’s future GAAP financial
results.
Conference Call Information
Fastly will host an investor conference call to discuss its
results at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, August 2,
2023.
Date:
Wednesday, August 2, 2023
Time:
1:30 p.m. PT / 4:30 p.m. ET
Webcast:
https://investors.fastly.com
Dial-in:
888-330-2022 (US/CA) or 646-960-0690
(Intl.)
Conf. ID#:
7543239
Please dial in at least 10 minutes prior to the 1:30 p.m. PT
start time. A live webcast of the call will be available at
https://investors.fastly.com where listeners may log on to the
event by selecting the webcast link under the “Quarterly Results”
section.
A telephone replay of the conference call will be available at
approximately 5:00 p.m. PT, August 2 through August 16, 2023 by
dialing 800-770-2030 or 647-362-9199 and entering the passcode
7543239.
About Fastly
Fastly’s powerful and programmable edge cloud platform helps the
world’s top brands deliver the fastest online experiences possible,
while improving site performance, enhancing security, and
empowering innovation at global scale. With world-class support
that achieves 95%+ average annual customer satisfaction ratings,
Fastly’s beloved suite of edge compute, delivery, and security
offerings has been recognized as a leader by industry analysts such
as IDC, Forrester and Gartner. Compared to legacy providers,
Fastly’s powerful and modern network architecture is one of the
fastest on the planet, empowering developers to deliver secure
websites and apps at global scale with rapid time-to-market and
industry-leading cost savings. Thousands of the world’s most
prominent organizations trust Fastly to help them upgrade the
internet experience, including Reddit, Pinterest, Stripe, Neiman
Marcus, The New York Times, Epic Games, and GitHub. Learn more
about Fastly at https://www.fastly.com/, and follow us @fastly.
Forward-Looking Statements
This press release contains “forward-looking” statements that
are based on our beliefs and assumptions and on information
currently available to us on the date of this press release.
Forward-looking statements may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results,
performance, or achievements to be materially different from those
expressed or implied by the forward-looking statements. These
statements include, but are not limited to, statements regarding
our future financial and operating performance, including our
outlook and guidance, our operation and cost management, our
ability to innovate, our go-to-market efforts and our ability to
deliver on our long-term strategy. Except as required by law, we
assume no obligation to update these forward-looking statements
publicly or to update the reasons actual results could differ
materially from those anticipated in the forward-looking
statements, even if new information becomes available in the
future. Important factors that could cause our actual results to
differ materially are detailed from time to time in the reports
Fastly files with the Securities and Exchange Commission (“SEC”),
including in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2022. Additional information will also be set
forth in our Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2023. Copies of reports filed with the SEC are
posted on Fastly’s website and are available from Fastly without
charge.
Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with accounting
principles generally accepted in the United States ("GAAP"), the
Company uses the following non-GAAP measures of financial
performance: non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating loss, non-GAAP net loss, non-GAAP basic and diluted net
loss per common share, non-GAAP research and development, non-GAAP
sales and marketing, non-GAAP general and administrative, free cash
flow and adjusted EBITDA. The presentation of this additional
financial information is not intended to be considered in isolation
from, as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. These
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with our results of operations as
determined in accordance with GAAP. In addition, these non-GAAP
financial measures may be different from the non-GAAP financial
measures used by other companies. These non-GAAP measures should
only be used to evaluate our results of operations in conjunction
with the corresponding GAAP measures. Management compensates for
these limitations by reconciling these non-GAAP financial measures
to the most comparable GAAP financial measures within our earnings
releases.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
loss, non-GAAP net loss and non-GAAP basic and diluted net loss per
common share, non-GAAP research and development, non-GAAP sales and
marketing, and non-GAAP general and administrative differ from GAAP
in that they exclude stock-based compensation expense, amortization
of acquired intangible assets, acquisition-related expenses,
executive transition costs, net gain on extinguishment of debt and
amortization of debt discount and issuance costs.
Adjusted EBITDA: excludes stock-based compensation
expense, depreciation and other amortization expenses, amortization
of acquired intangible assets, acquisition-related expenses,
executive transition costs, interest income, interest expense,
including amortization of debt discount and issuance costs, net
gain on extinguishment of debt, other income (expense), net, and
income taxes.
Acquisition-related Expenses: consists of
acquisition-related charges that are not related to ongoing
operations. Management considers its operating results without this
activity when evaluating its ongoing non-GAAP net loss performance
and its adjusted EBITDA performance because these charges may not
be reflective of our core business, ongoing operating results, or
future outlook.
Amortization of Acquired Intangible Assets: consists of
non-cash charges that can be affected by the timing and magnitude
of asset purchases and acquisitions. Management considers its
operating results without this activity when evaluating its ongoing
non-GAAP performance and its adjusted EBITDA performance because
these charges are non-cash expenses that can be affected by the
timing and magnitude of asset purchases and acquisitions and may
not be reflective of our core business, ongoing operating results,
or future outlook.
Amortization of Debt Discount and Issuance Costs:
consists primarily of amortization expense related to our debt
obligations. Management considers its operating results without
this activity when evaluating its ongoing non-GAAP net loss
performance and its adjusted EBITDA performance because it is not
believed by management to be reflective of our core business,
ongoing operating results or future outlook. These are included in
our total interest expense.
Capital Expenditures: consists of cash used for purchases
of property and equipment, net of proceeds from sale of property
and equipment, capitalized internal-use software and payments on
finance lease obligations, as reflected in our statement of cash
flows.
Depreciation and Other Amortization Expense: consists of
non-cash charges that can be affected by the timing and magnitude
of asset purchases. Management considers its operating results
without this activity when evaluating its ongoing adjusted EBITDA
performance because these charges are non-cash expenses that can be
affected by the timing and magnitude of asset purchases and may not
be reflective of our core business, ongoing operating results, or
future outlook.
Executive Transition costs: consists of one-time cash and
non-cash charges recognized with respect to changes in our
executive’s employment status. Management considers its operating
results without this activity when evaluating its ongoing non-GAAP
net loss performance and its adjusted EBITDA performance because it
is not believed by management to be reflective of our core
business, ongoing operating results or future outlook.
Free Cash Flow: calculated as net cash used in operating
activities less purchases of property and equipment, net of
proceeds from sale of property and equipment, principal payments of
finance lease liabilities, capitalized internal-use software costs
and advance payments made related to capital expenditures.
Management specifically identifies adjusting items in the
reconciliation of GAAP to non-GAAP financial measures. Management
considers non-GAAP free cash flow to be a profitability and
liquidity measure that provides useful information to management
and investors about the amount of cash generated by the business
that can possibly be used for investing in Fastly's business and
strengthening its balance sheet, but it is not intended to
represent the residual cash flow available for discretionary
expenditures. The presentation of non-GAAP free cash flow is also
not meant to be considered in isolation or as an alternative to
cash flows from operating activities as a measure of liquidity.
Income Taxes: consists primarily of expenses recognized
related to state and foreign income taxes. Management considers its
operating results without this activity when evaluating its ongoing
adjusted EBITDA performance because it is not believed by
management to be reflective of our core business, ongoing operating
results or future outlook.
Interest Expense: consists primarily of interest expense
related to our debt instruments, including amortization of debt
discount and issuance costs. Management considers its operating
results without this activity when evaluating its ongoing non-GAAP
net loss performance and its adjusted EBITDA performance because it
is not believed by management to be reflective of our core
business, ongoing operating results or future outlook.
Interest Income: consists primarily of interest income
related to our marketable securities. Management considers its
operating results without this activity when evaluating its ongoing
non-GAAP net loss performance and its adjusted EBITDA performance
because it is not believed by management to be reflective of our
core business, ongoing operating results or future outlook.
Net Gain on Debt Extinguishment: relates to net gain on
the partial repurchase of our outstanding convertible debt.
Management considers its operating results without this activity
when evaluating its ongoing non-GAAP net loss performance and its
adjusted EBITDA performance because it is not believed by
management to be reflective of our core business, ongoing operating
results or future outlook.
Other Income (Expense), Net: consists primarily of
foreign currency transaction gains and losses. Management considers
its operating results without this activity when evaluating its
ongoing adjusted EBITDA performance because it is not believed by
management to be reflective of our core business, ongoing operating
results or future outlook.
Stock-based Compensation Expense: consists of expenses
for stock options, restricted stock units, performance awards,
restricted stock awards and Employee Stock Purchase Plan ("ESPP")
under our equity incentive plans. Although stock-based compensation
is an expense for the Company and is viewed as a form of
compensation, management considers its operating results without
this activity when evaluating its ongoing non-GAAP net loss
performance and its adjusted EBITDA performance, primarily because
it is a non-cash expense not believed by management to be
reflective of our core business, ongoing operating results, or
future outlook. In addition, the value of some stock-based
instruments is determined using formulas that incorporate
variables, such as market volatility, that are beyond our
control.
Management believes these non-GAAP financial measures and
adjusted EBITDA serve as useful metrics for our management and
investors because they enable a better understanding of the
long-term performance of our core business and facilitate
comparisons of our operating results over multiple periods and to
those of peer companies, and when taken together with the
corresponding GAAP financial measures and our reconciliations,
enhance investors' overall understanding of our current financial
performance.
In the financial tables below, the Company provides a
reconciliation of the most comparable GAAP financial measure to the
historical non-GAAP financial measures used in this press
release.
Key Metrics
1
We calculate LTM Net Retention
Rate by dividing the total customer revenue for the prior
twelve-month period (“prior 12-month period”) ending at the
beginning of the last twelve-month period (“LTM period”) minus
revenue contraction due to billing decreases or customer churn,
plus revenue expansion due to billing increases during the LTM
period from the same customers by the total prior 12-month period
revenue. We believe the LTM Net Retention Rate is supplemental as
it removes some of the volatility that is inherent in a usage-based
business model.
2
We calculate Dollar-Based Net
Expansion Rate by dividing the revenue for a given period from
customers who remained customers as of the last day of the given
period (the “current” period) by the revenue from the same
customers for the same period measured one year prior (the “base”
period). The revenue included in the current period excludes
revenue from (i) customers that churned after the end of the base
period and (ii) new customers that entered into a customer
agreement after the end of the base period.
3
Under our new methodology, our
number of customers are calculated based on the number of separate
identifiable operating entities with which we have a billing
relationship in good standing, from which we recognized revenue
during the current quarter. Under our prior methodology, our number
of customers are calculated based on the number of separate
identifiable operating entities with which we have a billing
relationship in good standing, from which we recognized revenue
during the last month of the quarter. Under our new methodology,
our enterprise customers are defined as those with annualized
current quarter revenue in excess of $100,000. This is calculated
by taking the revenue for each customer within the quarter and
multiplying it by four. Under our prior methodology, our enterprise
customers are defined as those with revenue in excess of $100,000
in the trailing 12-month period. Under our prior methodology, our
total customer count was 2,965 in the second quarter, down 36 from
the first quarter of 2023; 520 were enterprise customers in the
second quarter, up 6 from the first quarter of 2023.
4
Under our new methodology, our
average enterprise customer spend is calculated by taking the
annualized current quarter revenue contributed by enterprise
customers existing as of the current period, and dividing that by
the number of enterprise customers as of the current period. Under
our prior methodology, our average enterprise customer spend is
calculated by taking the sum of the trailing 12-month revenue
contributed by enterprise customers existing as of the current
period, and dividing that by the number of enterprise customers as
of the current period. Under our prior methodology, our average
enterprise customer spend was $809 thousand in the second quarter,
up 4% quarter-over-quarter.
5
Non-GAAP Net Loss per share is
calculated as Non-GAAP Net Loss divided by weighted average basic
shares for 2023.
6
Assumes weighted average basic
shares outstanding of 129.9 million in Q3 2023 and 128.6 million
for the full year 2023.
Condensed Consolidated Statements of
Operations
(in thousands, except per share
amounts, unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Revenue
$
122,831
$
102,518
$
240,395
$
204,900
Cost of revenue(1)
58,617
56,466
115,927
110,381
Gross profit
64,214
46,052
124,468
94,519
Operating expenses:
Research and development(1)
37,421
38,717
74,852
79,154
Sales and marketing(1)
47,797
46,760
92,068
88,240
General and administrative(1)
28,823
29,543
54,650
59,097
Total operating expenses
114,041
115,020
221,570
226,491
Loss from operations
(49,827
)
(68,968
)
(97,102
)
(131,972
)
Net gain on extinguishment of debt
36,760
54,391
36,760
54,391
Interest income
4,508
1,502
8,694
2,183
Interest expense
(1,232
)
(1,530
)
(2,445
)
(3,152
)
Other income (expense)
(803
)
(1,673
)
(1,053
)
(1,952
)
Loss before income taxes
(10,594
)
(16,278
)
(55,146
)
(80,502
)
Income tax expense
110
159
245
199
Net loss
$
(10,704
)
$
(16,437
)
$
(55,391
)
$
(80,701
)
Net income (loss) per share
attributable to common stockholders, basic and diluted
$
(0.08
)
$
(0.14
)
$
(0.44
)
$
(0.67
)
Weighted-average shares used in
computing net income (loss) per share attributable to common
stockholders, basic and diluted
127,863
121,242
126,648
120,295
__________
(1)
Includes stock-based compensation
expense as follows:
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Cost of revenue
$
2,837
$
3,188
$
5,518
$
6,134
Research and development
12,205
13,889
23,686
32,478
Sales and marketing
9,877
10,184
16,582
20,278
General and administrative
12,073
7,717
19,357
16,110
Total
$
36,992
$
34,978
$
65,143
$
75,000
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Gross Profit
GAAP gross profit
$
64,214
$
46,052
$
124,468
$
94,519
Stock-based compensation
2,837
3,188
5,518
6,134
Amortization of acquired intangible
assets
2,475
2,475
4,950
4,950
Non-GAAP gross profit
$
69,526
$
51,715
$
134,936
$
105,603
GAAP gross margin
52.3
%
44.9
%
51.8
%
46.1
%
Non-GAAP gross margin
56.6
%
50.4
%
56.1
%
51.5
%
Research and development
GAAP research and development
$
37,421
$
38,717
$
74,852
$
79,154
Stock-based compensation
(12,205
)
(13,889
)
(23,686
)
(32,478
)
Non-GAAP research and
development
$
25,216
$
24,828
$
51,166
$
46,676
Sales and marketing
GAAP sales and marketing
$
47,797
$
46,760
$
92,068
$
88,240
Stock-based compensation
(9,877
)
(10,184
)
(16,582
)
(20,278
)
Amortization of acquired intangible
assets
(2,575
)
(2,710
)
(5,150
)
(5,419
)
Non-GAAP sales and marketing
$
35,345
$
33,866
$
70,336
$
62,543
General and administrative
GAAP general and administrative
$
28,823
$
29,543
$
54,650
$
59,097
Stock-based compensation
(12,073
)
(7,717
)
(19,357
)
(16,110
)
Acquisition-related expenses
—
(1,912
)
—
(1,970
)
Non-GAAP general and
administrative
$
16,750
$
19,914
$
35,293
$
41,017
Operating loss
GAAP operating loss
$
(49,827
)
$
(68,968
)
$
(97,102
)
$
(131,972
)
Stock-based compensation
36,992
34,978
65,143
75,000
Amortization of acquired intangible
assets
5,050
5,185
10,100
10,369
Acquisition-related expenses
—
1,912
—
1,970
Non-GAAP operating loss
$
(7,785
)
$
(26,893
)
$
(21,859
)
$
(44,633
)
Net loss
GAAP net loss
$
(10,704
)
$
(16,437
)
$
(55,391
)
$
(80,701
)
Stock-based compensation
36,992
34,978
65,143
75,000
Amortization of acquired intangible
assets
5,050
5,185
10,100
10,369
Acquisition-related expenses
—
1,912
—
1,970
Net gain on extinguishment of debt
(36,760
)
(54,391
)
(36,760
)
(54,391
)
Amortization of debt discount and issuance
costs
803
776
1,519
1,739
Non-GAAP loss
$
(4,619
)
$
(27,977
)
$
(15,389
)
$
(46,014
)
Non-GAAP net loss per common
share—basic and diluted
$
(0.04
)
$
(0.23
)
$
(0.12
)
$
(0.38
)
Weighted average basic and diluted
common shares
127,863
121,242
126,648
120,295
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Adjusted EBITDA
GAAP net loss
$
(10,704
)
$
(16,437
)
$
(55,391
)
$
(80,701
)
Stock-based compensation
36,992
34,978
65,143
75,000
Depreciation and other amortization
13,030
10,860
25,210
20,835
Amortization of acquired intangible
assets
5,050
5,185
10,100
10,369
Acquisition-related expenses
—
1,912
—
1,970
Interest income
(4,508
)
(1,502
)
(8,694
)
(2,183
)
Interest expense
429
754
926
1,413
Amortization of debt discount and issuance
costs
803
776
—
1,519
—
1,739
Net gain on extinguishment of debt
(36,760
)
(54,391
)
(36,760
)
(54,391
)
Other expense
803
1,673
1,053
1,952
Income tax expense
110
159
245
199
Adjusted EBITDA
$
5,245
$
(16,033
)
$
3,351
$
(23,798
)
Condensed Consolidated Balance
Sheets
(in thousands)
As of June 30,
2023
As of December 31,
2022
(unaudited)
(audited)
ASSETS
Current assets:
Cash and cash equivalents
$
273,742
$
143,391
Marketable securities, current
123,605
374,581
Accounts receivable, net of allowance for
credit losses
78,295
89,578
Prepaid expenses and other current
assets
29,500
28,933
Total current assets
505,142
636,483
Property and equipment, net
179,045
180,378
Operating lease right-of-use assets,
net
56,733
68,440
Goodwill
670,356
670,185
Intangible assets, net
72,550
82,900
Marketable securities, non-current
78,042
165,105
Other assets
95,550
92,622
Total assets
$
1,657,418
$
1,896,113
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
5,561
$
4,786
Accrued expenses
47,001
61,161
Finance lease liabilities, current
22,233
28,954
Operating lease liabilities, current
20,575
23,026
Other current liabilities
36,234
34,394
Total current liabilities
131,604
152,321
Long-term debt
472,369
704,710
Finance lease liabilities, non-current
7,026
15,507
Operating lease liabilities,
non-current
51,448
61,341
Other long-term liabilities
7,217
7,076
Total liabilities
669,664
940,955
Stockholders’ equity:
Common stock
2
2
Additional paid-in capital
1,747,959
1,666,106
Accumulated other comprehensive loss
(3,152
)
(9,286
)
Accumulated deficit
(757,055
)
(701,664
)
Total stockholders’ equity
987,754
955,158
Total liabilities and stockholders’
equity
$
1,657,418
$
1,896,113
Condensed Consolidated Statements of
Cash Flows
(in thousands, unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Cash flows from operating
activities:
Net loss
$
(10,704
)
$
(16,437
)
$
(55,391
)
$
(80,701
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation expense
12,920
10,736
24,960
20,586
Amortization of intangible assets
5,175
5,309
10,350
10,618
Non-cash lease expense
5,648
5,608
11,763
11,522
Amortization of debt discount and issuance
costs
803
775
1,519
1,739
Amortization of deferred contract
costs
3,746
2,138
7,171
3,989
Stock-based compensation
36,992
34,978
65,143
75,000
Provision for credit losses
567
402
1,100
529
Loss on disposals of property and
equipment
296
586
547
854
Amortization and accretion of discounts
and premiums on investments
298
894
747
1,851
Impairment of operating lease right-of-use
assets
187
—
187
—
Net gain on extinguishment of debt
(36,760
)
(54,391
)
(36,760
)
(54,391
)
Other adjustments
(85
)
(67
)
(328
)
61
Changes in operating assets and
liabilities:
Accounts receivable
6,482
5,097
10,183
(4,122
)
Prepaid expenses and other current
assets
217
(2,701
)
(417
)
(4,812
)
Other assets
(4,771
)
(3,948
)
(11,983
)
(6,399
)
Accounts payable
1,119
3,336
944
844
Accrued expenses
234
(3,729
)
(6,593
)
1,162
Operating lease liabilities
(6,682
)
(5,349
)
(12,432
)
(10,981
)
Other liabilities
9,308
83
5,419
2,781
Net cash provided by (used in)
operating activities
24,990
(16,680
)
16,129
(29,870
)
Cash flows from investing
activities:
Purchases of marketable securities
—
(207,286
)
—
(355,479
)
Sales of marketable securities
774
159,552
774
161,853
Maturities of marketable securities
114,884
127,333
342,095
367,880
Business acquisitions, net of cash
acquired
—
(25,224
)
—
(25,999
)
Advance payment for purchase of property
and equipment
—
(29,310
)
—
(29,310
)
Purchases of property and equipment
(4,464
)
(4,151
)
(7,958
)
(8,815
)
Proceeds from sale of property and
equipment
14
241
36
241
Capitalized internal-use software
(6,230
)
(4,926
)
(10,439
)
(8,736
)
Net cash provided by investing
activities
104,978
16,229
324,508
101,635
Cash flows from financing
activities:
Cash paid for debt extinguishment
(196,934
)
(177,082
)
(196,934
)
(177,082
)
Repayments of finance lease
liabilities
(6,557
)
(6,147
)
(15,202
)
(11,029
)
Cash received for restricted stock sold in
advance of vesting conditions
—
—
—
10,655
Cash paid for early sale of restricted
shares
—
(3,539
)
—
(7,037
)
Payment of deferred consideration for
business acquisitions
(4,393
)
—
(4,393
)
—
Proceeds from exercise of vested stock
options
535
1,721
871
4,769
Proceeds from employee stock purchase
plan
2,191
1,571
4,787
3,977
Net cash used in financing
activities
(205,158
)
(183,476
)
(210,871
)
(175,747
)
Effects of exchange rate changes on cash,
cash equivalents, and restricted cash
469
(100
)
585
(319
)
Net increase in cash, cash equivalents,
and restricted cash
(74,721
)
(184,027
)
130,351
(104,301
)
Cash, cash equivalents, and restricted
cash at beginning of period
348,613
246,687
143,541
166,961
Cash, cash equivalents, and restricted
cash at end of period
273,892
62,660
273,892
62,660
Reconciliation of cash, cash
equivalents, and restricted cash as shown in the statements of cash
flows:
Cash and cash equivalents
273,742
62,510
273,742
62,510
Restricted cash, current
150
150
150
150
Total cash, cash equivalents, and
restricted cash
$
273,892
$
62,660
$
273,892
$
62,660
Free Cash Flow
(in thousands, unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Cash flow provided by (used in)
operations
$
24,990
$
(16,680
)
$
16,129
$
(29,870
)
Capital expenditures(1)
(17,237
)
(14,983
)
$
(33,563
)
$
(28,339
)
Advance payment for purchase of property
and equipment(2)
—
(29,310
)
$
—
$
(29,310
)
Free Cash Flow
$
7,753
$
(60,973
)
$
(17,434
)
$
(87,519
)
__________
(1)
Capital expenditures are defined
as cash used for purchases of property and equipment, net of
proceeds from sale of property and equipment, and capitalized
internal-use software and payments on finance lease obligations, as
reflected in our statement of cash flows.
(2)
As reflected in our statement of
cash flows. In the six months ended June 30, 2023, we received $1.6
million of capital equipment that was prepaid prior to the current
quarter.
Source: Fastly, Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802331060/en/
Investor Contact: Vernon Essi, Jr. ir@fastly.com Media
Contact: press@fastly.com
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