FASTLY : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

[ad_1]

You should read the following discussion and analysis of our financial condition
and results of operations together with the condensed consolidated financial
statements and related notes that are included elsewhere in this Quarterly
Report on Form 10-Q. This discussion contains forward-looking statements based
upon current plans, expectations, and beliefs that involve risks and
uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
those set forth under “Risk Factors” and in other parts of this Quarterly Report
on Form 10-Q. Our fiscal year ends on December 31.
As used herein, “Fastly,” “we,” “our,” “the Company” and similar terms include
Fastly, Inc. and its subsidiaries, unless the context indicates otherwise.

Overview

Developers are reinventing the way we live, work, and play online. Yet they
repeatedly encounter innovation barriers when delivering modern digital
experiences. Expectations for digital experiences are at an all-time high; they
must be fast, secure, and highly personalized. If they aren't reliable,
end-users simply take their business elsewhere. The challenge today is enabling
developers to deliver a modern digital experience while simultaneously providing
scale, security, and performance. We built our edge cloud platform to solve this
problem.
The edge cloud is an emerging category of Infrastructure as a Service ("IaaS")
that enables developers to build, secure, and deliver digital experiences, at
the edge of the internet. 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, and
Distributed Denial of Service ("DDoS") solutions. It also includes the emergence
of a new, but growing, edge computing market which aims to move compute power
and logic as close to the end-user as possible. The edge cloud uses the emerging
cloud computing, serverless paradigm in which the cloud provider runs the server
and dynamically manages the allocation of machine resources. When milliseconds
matter, processing at the edge is an ideal way to handle highly dynamic and
time-sensitive data. The edge cloud complements data center, central cloud, and
hybrid solutions.
Our mission is to fuel the next modern digital experience by providing
developers with a programmable and reliable edge cloud platform that they adopt
as their own.
Organizations must keep up with complex and ever-evolving end-user requirements.
We help them surpass their end-users' expectations by powering fast, secure, and
scalable digital experiences. We built a powerful edge cloud platform, designed
from the ground up to be programmable and support agile software development. We
believe 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. Our platform consists of four key components: a
programmable edge, a software-defined modern network, safety in depth, and a
philosophy of customer empowerment. Our programmable edge provides developers
with real-time visibility and control, where they can write and deploy code in a
serverless environment and to push application logic to the edge. It supports
modern application delivery processes, freeing developers to innovate without
constraints. Our software-defined modern network is built for the
software-defined future. It is powerful, efficient, and flexible, designed to
enable us to rapidly scale to meet the needs of the most demanding customers and
never be a barrier to their growth. Our 145 terabit software-centric network is
located across 61 markets as of June 30, 2021. We define markets as unique
metropolitan areas where we have one or more Points of Presence ("POPs"). Our
safety in depth approach integrates security into multiple layers of
development: architecture, engineering, and operations. That's why we invest in
building security into the fabric of our platform, alongside performance. We
provide developers and security operations teams with a fast, safe environment
to create, build, and run modern applications.

Our platform provides developers and security operations teams with solutions
that foster innovation without impacting performance. Finally, being developers
ourselves, we empower customers to build great things while supporting their
efforts through frictionless tools and a deeply technical support team that
facilitates ongoing collaboration.

                                       42

——————————————————————————–

We serve both established enterprises, mid-market companies and technology-savvy
organizations. Our customers represent a diverse set of organizations across
many industries with one thing in common: they are competing by using the power
of software to build differentiation at the edge. With our edge cloud platform,
our customers are disrupting existing industries and creating new ones. For
example, several of our customers have reinvented digital publishing by
connecting readers through subscription models to indispensable content, helping
people understand the world through deeply reported independent journalism. Our
customers’ software applications use our edge cloud platform to deliver
consistently excellent experiences, such as online shopping, fast and more
secure financial transactions, and broadcast quality live streaming on any
device. The range of applications that developers build with our edge cloud
platform continues to expand rapidly.

So where do we go from here? Our vision is to create a trustworthy internet,
where good thrives. We want all developers to have the ability to deliver the
next transformative digital experience on a global scale. And because big ideas
often start small, we love it when developers experiment and iterate on our edge
cloud platform, coming up with exciting new ways to solve today’s complex
problems.

We generate substantially all of our revenue from charging our customers based
on their usage of our platform. 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. We also
generate revenue from additional products as well as professional and other
services, such as implementation. We charge a flat one-time or recurring fee for
these additional products and services. In the fourth quarter of 2020, we also
began offering subscriptions to access a unified security web application and
application programming interface at a fixed rate.

We focus our direct selling efforts on medium to large organizations as well as
smaller companies that are exhibiting significant growth. We engage with and
support these customers with our field sales representatives, account managers,
and technical account managers who focus on customer satisfaction and drive
expansion of their usage of our platform and products. These teams work with
technical and business leaders to help our customers’ end-users receive the best
possible digital experience, while also lowering our customers’ total cost of
ownership.
We are continuing to bring new innovations to our edge cloud platform and
software-defined modern network architecture, and are seeing an increased
interest from customers in our programmable edge computing solution. The success
of these direct selling efforts is reflected by our 408 enterprise customers, as
of June 30, 2021 that generated 89% of our total revenue for the trailing 12
months ended June 30, 2021. These enterprise customers are defined as customers
with revenue in excess of $100,000 over the previous 12-month period. Legacy
Signal Sciences customers are counted as enterprise customers if they have had
revenue in excess of $75,000 during the previous 9-month period, since the
closing of the Signal Sciences acquisition on October 1, 2020 (see Note 5).
Our usage-based revenue grows as our customers’ websites and applications
deliver, process, and protect more traffic, as they adopt more features of our
edge platform and as they more broadly adopt our platform across…

[ad_2]

Read More:FASTLY : MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF