Company Announcements

Fastly Announces Second Quarter 2022 Financial Results

  • Record quarterly revenue exceeded high-end of quarterly guidance range
  • Repurchased $235 million of convertible debt at a 25% discount to par
  • Second quarter Net Retention Rate (LTM) of 117%

 

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 3, 2022-- Fastly, Inc. (NYSE: FSLY), the world’s fastest edge cloud platform, today announced financial results for its second quarter ended June 30, 2022.

“We are pleased to continue our revenue momentum into 2022, exceeding the top end of our guidance range and representing another record revenue quarter, further demonstrating Fastly’s value with our existing and new customers,” said Joshua Bixby, CEO of Fastly.

“Against the backdrop of an uncertain economic environment, our customers are expanding their usage with Fastly and taking interest in our newer products,” continued Bixby. “Coupled with accelerated product delivery and continued market validation by leading research firms, we see renewed growth in our Enterprise customer base, prompting us to increase our annual revenue guidance.”

Fastly today separately announced that the Board of Directors has named Todd Nightingale as Chief Executive Officer to lead the company effective September 1, 2022. As previously announced, he will succeed Joshua Bixby, who will remain with the Company as an advisor. Nightingale joins Fastly from Cisco, where he currently serves as Executive Vice President and General Manager of Enterprise Networking & Cloud, leading business strategy and development efforts for Cisco's multi-billion dollar core portfolio.

Three months ended
June 30,
Six months ended
June 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

$

102,518

 

$

85,026

 

$

204,900

 

$

169,878

 

Gross Margin
GAAP gross margin

 

44.9

%

 

52.6

%

 

46.1

%

 

54.2

%

Non-GAAP gross margin

 

50.4

%

 

57.6

%

 

51.5

%

 

58.9

%

Operating loss
GAAP operating loss

$

(68,968

)

$

(57,468

)

$

(131,972

)

$

(107,431

)

Non-GAAP operating loss

$

(26,893

)

$

(17,560

)

$

(44,633

)

$

(30,465

)

Net loss per share
GAAP net loss per common share—basic and diluted

$

(0.14

)

$

(0.51

)

$

(0.67

)

$

(0.95

)

Non-GAAP net loss per common share—basic and diluted

$

(0.23

)

$

(0.15

)

$

(0.38

)

$

(0.27

)

Second Quarter 2022 Financial Summary

  • Total revenue of $102.5 million, representing flat sequential growth and 21% year-over-year growth.
  • GAAP gross margin of 44.9%, compared to 52.6% in the second quarter of 2021. Non-GAAP gross margin of 50.4%, compared to 57.6% in the second quarter of 2021.
  • GAAP net loss of $16.4 million, compared to $58.3 million in the second quarter of 2021. Non-GAAP net loss of $28.0 million, compared to $17.4 million in the second quarter of 2021.
  • GAAP net loss per basic and diluted shares of $0.14 compared to $0.51 in the second quarter of 2021. Non-GAAP net loss per basic and diluted shares of $0.23, compared to $0.15 in the second quarter of 2021.
  • Repurchased $235.0 million in aggregate principal amount of convertible debt for $176.4 million, a 25% discount to par, before related fees and transaction costs, reducing total debt balance to $703.4 million from $934.1 million and recording a $54.4 million net gain.

Key Metrics

  • Trailing 12 month net retention rate (NRR LTM)1 increased to 117% in the second quarter from 115% in the first quarter 2022.
  • Dollar-Based Net Expansion Rate (DBNER)2 increased to 120% in the second quarter from 118% in the first quarter 2022.
  • Total customer count of 2,894 in the second quarter, of which 471 were enterprise3 customers.
  • Average enterprise customer spend of $730K in the second quarter, up 1% 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 Highlights

  • Peer-recognized as a Customers’ Choice in the 2022 Gartner Peer Insights “Voice of the Customer”: Global CDN; Fastly received the highest customer rating of 4.8 out of 5 stars and highest customer willingness to recommend (97%), as of February 2022.
  • Acquired Glitch, a platform of 1.8 million developers, bringing together two of the world’s best ecosystems for application development into a single, seamless developer experience to deliver globally performant, secure and reliable applications at scale.
  • Introduced Fastly Security Labs, a new program that empowers customers to continuously innovate by being the first to test new detection and security features directly with the Security Product team, bolstering our feedback loops for Fastly’s Next-Gen WAF.
  • Introduced Fastly’s new Object Store offering global, durable storage for compute functions at the edge allowing developers to store, control, or cache their data to reduce origin dependency and unlock new use cases.

Third Quarter and Full Year 2022 Guidance

Q3 2022 Full Year 2022
Total Revenue (millions) $102 - $105 $415 - $425
Non-GAAP Operating Loss (millions) ($21.5) - ($18.5) ($78) - ($72)
Non-GAAP Net Loss per share (4)(5) ($0.18) - ($0.15) ($0.68) - ($0.63)

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 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, August 3, 2022.

Date:

Wednesday, August 3, 2022

Time:

2:00 p.m. PT / 5:00 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 2:00 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 3 through August 17, 2022 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 consistently achieves 95%+ 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 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.

*As of June 1, 2022

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, the demand for our platform, 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, 2021. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022. 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, 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, 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 the acquisition-related expenses when evaluating its ongoing non-GAAP 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. Amortization of acquired intangible assets is included in the following cost and expense line items of our GAAP presentation: cost of revenue and sales and marketing. Management considers its operating results without the amortization expense of our acquired intangible assets when evaluating its 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 non-GAAP net loss and adjusted its EBITDA results without this activity when evaluating its ongoing 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. Depreciation and amortization expense is included in the following cost and expense line items of our GAAP presentation: cost of revenue, research and development, sales and marketing, and general and administrative. Management considers its operating results without the depreciation and other amortization expense when evaluating its 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.

Free Cash Flow: calculated as net cash used in operating activities less capital expenditures, including any advance payments made related to capital expenditures.

Income Taxes: consists primarily of expenses recognized related to state and foreign income taxes. Management considers its adjusted EBITDA results without these charges when evaluating its ongoing 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 total interest expense when evaluating its 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 non-GAAP net loss and its adjusted EBITDA results without this activity when evaluating its ongoing 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 non-GAAP net loss and adjusted EBITDA results without this activity when evaluating its ongoing 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 other income (expense), net when evaluating its 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. Stock-based compensation is included in the following cost and expense line items of our GAAP presentation: cost of revenue, research and development, sales and marketing, and general and administrative.

Although stock-based compensation is an expense for the Company and is viewed as a form of compensation, management excludes stock-based compensation from our non-GAAP measures and adjusted EBITDA results for purposes of evaluating our continuing operating 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.

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 Enterprise customers are defined as those spending $100,000 or more in a twelve-month period.

4 Assumes weighted average basic shares outstanding of 122.4 million in Q3 2022 and 121.8 million for the full year 2022.

5 Non-GAAP Net Loss per share is calculated as full-year Non-GAAP Net Loss divided by weighted average basic shares for the full year 2022.

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
 

Three months ended
June 30,

 

Six months ended
June 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

$

102,518

 

$

85,026

 

$

204,900

 

$

169,878

 

Cost of revenue(1)

 

56,466

 

 

40,320

 

 

110,381

 

 

77,814

 

Gross profit

 

46,052

 

 

44,706

 

 

94,519

 

 

92,064

 

Operating expenses:
Research and development(1)

 

38,717

 

 

30,346

 

 

79,154

 

 

59,334

 

Sales and marketing(1)

 

46,760

 

 

36,334

 

 

88,240

 

 

71,206

 

General and administrative(1)

 

29,543

 

 

35,494

 

 

59,097

 

 

68,955

 

Total operating expenses

 

115,020

 

 

102,174

 

 

226,491

 

 

199,495

 

Loss from operations

 

(68,968

)

 

(57,468

)

 

(131,972

)

 

(107,431

)

Net gain on extinguishment of debt

 

54,391

 

 

-

 

 

54,391

 

 

-

 

Interest income

 

1,502

 

 

276

 

 

2,183

 

 

450

 

Interest expense

 

(1,530

)

 

(1,436

)

 

(3,152

)

 

(2,097

)

Other income (expense)

 

(1,673

)

 

178

 

 

(1,952

)

 

114

 

Loss before income taxes

 

(16,278

)

 

(58,450

)

 

(80,502

)

 

(108,964

)

Income tax expense (benefit)

 

159

 

 

(155

)

 

199

 

 

14

 

Net loss

$

(16,437

)

$

(58,295

)

$

(80,701

)

$

(108,978

)

Net income (loss) per share attributable to common stockholders, basic and diluted

$

(0.14

)

$

(0.51

)

$

(0.67

)

$

(0.95

)

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted

 

121,242

 

 

115,326

 

 

120,295

 

 

114,733

 

__________
(1) Includes stock-based compensation expense as follows:
Three months ended
June 30,
Six months ended
June 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cost of revenue

$

3,188

 

$

1,828

 

$

6,134

 

$

3,014

 

Research and development

 

13,889

 

 

8,634

 

 

32,478

 

 

16,592

 

Sales and marketing

 

10,184

 

 

5,631

 

 

20,278

 

 

10,639

 

General and administrative

 

7,717

 

 

17,333

 

 

16,110

 

 

34,019

 

Total

$

34,978

 

$

33,426

 

$

75,000

 

$

64,264

 

Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, unaudited)

Three months ended
June 30,

 

Six months ended
June 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Gross Profit
GAAP gross profit

$

46,052

 

$

44,706

 

$

94,519

 

$

92,064

 

Stock-based compensation

 

3,188

 

 

1,828

 

 

6,134

 

 

3,014

 

Amortization of acquired intangible assets

 

2,475

 

 

2,475

 

 

4,950

 

 

4,950

 

Non-GAAP gross profit

$

51,715

 

$

49,009

 

$

105,603

 

$

100,028

 

GAAP gross margin

 

44.9

%

 

52.6

%

 

46.1

%

 

54.2

%

Non-GAAP gross margin

 

50.4

%

 

57.6

%

 

51.5

%

 

58.9

%

 
Research and development
GAAP research and development

$

38,717

 

$

30,346

 

$

79,154

 

$

59,334

 

Stock-based compensation

 

(13,889

)

 

(8,634

)

 

(32,478

)

 

(16,592

)

Non-GAAP research and development

$

24,828

 

$

21,712

 

$

46,676

 

$

42,742

 

 
Sales and marketing
GAAP sales and marketing

$

46,760

 

$

36,334

 

$

88,240

 

$

71,206

 

Stock-based compensation

 

(10,184

)

 

(5,631

)

 

(20,278

)

 

(10,639

)

Amortization of acquired intangible assets

 

(2,710

)

 

(2,709

)

 

(5,419

)

 

(5,525

)

Non-GAAP sales and marketing

$

33,866

 

$

27,994

 

$

62,543

 

$

55,042

 

 
General and administrative
GAAP general and administrative

$

29,543

 

$

35,494

 

$

59,097

 

$

68,955

 

Stock-based compensation

 

(7,717

)

 

(17,333

)

 

(16,110

)

 

(34,019

)

Acquisition-related expenses

 

(1,912

)

 

(1,298

)

 

(1,970

)

 

(2,227

)

Non-GAAP general and administrative

$

19,914

 

$

16,863

 

$

41,017

 

$

32,709

 

 
Operating loss
GAAP operating loss

$

(68,968

)

$

(57,468

)

$

(131,972

)

$

(107,431

)

Stock-based compensation

 

34,978

 

 

33,426

 

 

75,000

 

 

64,264

 

Amortization of acquired intangible assets

 

5,185

 

 

5,184

 

 

10,369

 

 

10,475

 

Acquisition-related expenses

 

1,912

 

 

1,298

 

 

1,970

 

 

2,227

 

Non-GAAP operating loss

$

(26,893

)

$

(17,560

)

$

(44,633

)

$

(30,465

)

 
Net loss
GAAP net loss

$

(16,437

)

$

(58,295

)

$

(80,701

)

$

(108,978

)

Stock-based compensation

 

34,978

 

 

33,426

 

 

75,000

 

 

64,264

 

Amortization of acquired intangible assets

 

5,185

 

 

5,184

 

 

10,369

 

 

10,475

 

Acquisition-related expenses

 

1,912

 

 

1,298

 

 

1,970

 

 

2,227

 

Net gain on extinguishment of debt

 

(54,391

)

 

-

 

 

(54,391

)

 

-

 

Amortization of debt discount and issuance costs

 

776

 

 

993

 

 

1,739

 

 

993

 

Non-GAAP loss

$

(27,977

)

$

(17,394

)

$

(46,014

)

$

(31,019

)

 
Non-GAAP net loss per common share—basic and diluted

$

(0.23

)

$

(0.15

)

$

(0.38

)

$

(0.27

)

Weighted average basic and diluted common shares

 

121,242

 

 

115,326

 

 

120,295

 

 

114,733

 

Three months ended
June 30,

 

Six months ended
June 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Adjusted EBITDA
GAAP net loss

$

(16,437

)

$

(58,295

)

$

(80,701

)

$

(108,978

)

Stock-based compensation

 

34,978

 

 

33,426

 

 

75,000

 

 

64,264

 

Depreciation and other amortization

 

10,860

 

 

7,000

 

 

20,835

 

 

13,491

 

Amortization of acquired intangible assets

 

5,185

 

 

5,184

 

 

10,369

 

 

10,475

 

Acquisition-related expenses

 

1,912

 

 

1,298

 

 

1,970

 

 

2,227

 

Interest income

 

(1,502

)

 

(276

)

 

(2,183

)

 

(450

)

Interest expense

 

754

 

 

443

 

 

1,413

 

 

1,104

 

Amortization of debt discount and issuance costs

 

776

 

 

993

 

 

1,739

 

 

993

 

Net gain on extinguishment of debt

 

(54,391

)

 

-

 

 

(54,391

)

 

-

 

Other expense (income)

 

1,673

 

 

(178

)

 

1,952

 

 

(114

)

Income tax expense (benefit)

 

159

 

 

(155

)

 

199

 

 

14

 

Adjusted EBITDA

$

(16,033

)

$

(10,560

)

$

(23,798

)

$

(16,974

)

Condensed Consolidated Balance Sheets
(in thousands)
As of
June 30, 2022
As of
December 31, 2021
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents

$

62,510

 

$

166,068

 

Marketable securities, current

 

419,905

 

 

361,795

 

Accounts receivable, net of allowance for credit losses

 

68,218

 

 

64,625

 

Prepaid expenses and other current assets

 

29,037

 

 

32,160

 

Total current assets

 

579,670

 

 

624,648

 

Property and equipment, net

 

173,950

 

 

166,961

 

Operating lease right-of-use assets, net

 

69,861

 

 

69,631

 

Goodwill

 

670,186

 

 

636,805

 

Intangible assets, net

 

93,978

 

 

102,596

 

Marketable securities, non-current

 

284,951

 

 

528,911

 

Other assets

 

60,199

 

 

29,468

 

Total assets

$

1,932,795

 

$

2,159,020

 

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable

$

10,011

 

$

9,257

 

Accrued expenses

 

49,943

 

 

36,112

 

Finance lease liabilities, current

 

28,088

 

 

21,125

 

Operating lease liabilities, current

 

19,243

 

 

20,271

 

Other current liabilities

 

33,705

 

 

45,107

 

Total current liabilities

 

140,990

 

 

131,872

 

Long-term debt

 

703,375

 

 

933,205

 

Finance lease liabilities, noncurrent

 

26,479

 

 

22,293

 

Operating lease liabilities, noncurrent

 

60,657

 

 

55,114

 

Other long-term liabilities

 

7,556

 

 

2,583

 

Total liabilities

 

939,057

 

 

1,145,067

 

Stockholders’ equity:
Class A common stock

 

2

 

 

2

 

Additional paid-in capital

 

1,597,869

 

 

1,527,468

 

Accumulated other comprehensive loss

 

(12,542

)

 

(2,627

)

Accumulated deficit

 

(591,591

)

 

(510,890

)

Total stockholders’ equity

 

993,738

 

 

1,013,953

 

Total liabilities and stockholders’ equity

$

1,932,795

 

$

2,159,020

 

Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three months ended
June 30,
Six months ended
June 30,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cash flows from operating activities:
Net loss

$

(16,437

)

$

(58,295

)

$

(80,701

)

$

(108,978

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense

 

10,736

 

 

6,927

 

 

20,586

 

 

13,346

 

Amortization of intangible assets

 

5,309

 

 

5,257

 

 

10,618

 

 

10,620

 

Amortization of right-of-use assets and other

 

6,539

 

 

6,303

 

 

13,378

 

 

12,660

 

Amortization of debt discount and issuance costs

 

775

 

 

937

 

 

1,739

 

 

1,269

 

Amortization of deferred contract costs

 

2,138

 

 

1,535

 

 

3,989

 

 

2,946

 

Stock-based compensation

 

34,978

 

 

33,426

 

 

75,000

 

 

64,264

 

Provision for credit losses

 

402

 

 

225

 

 

529

 

 

(195

)

Interest on finance lease

 

(649

)

 

(405

)

 

(1,240

)

 

(735

)

Loss on disposals of property and equipment

 

586

 

 

-

 

 

854

 

 

27

 

Amortization and accretion of discounts and premiums on investments

 

894

 

 

-

 

 

1,851

 

 

-

 

Net gain on extinguishment of debt

 

(54,391

)

 

-

 

 

(54,391

)

 

-

 

Other adjustments

 

(67

)

 

749

 

 

61

 

 

813

 

Changes in operating assets and liabilities:
Accounts receivable

 

5,097

 

 

(3,927

)

 

(4,122

)

 

(5,612

)

Prepaid expenses and other current assets

 

(2,701

)

 

(3,814

)

 

(4,812

)

 

(5,494

)

Other assets

 

(3,948

)

 

(2,137

)

 

(6,399

)

 

(5,089

)

Accounts payable

 

3,336

 

 

(1,957

)

 

844

 

 

162

 

Accrued expenses

 

(3,729

)

 

(3,080

)

 

1,162

 

 

(3,835

)

Operating lease liabilities

 

(6,280

)

 

(6,491

)

 

(12,837

)

 

(12,856

)

Other liabilities

 

732

 

 

7,733

 

 

4,021

 

 

8,804

 

Net cash used in operating activities

 

(16,680

)

 

(17,014

)

 

(29,870

)

 

(27,883

)

Cash flows from investing activities:
Purchases of marketable securities

 

(207,286

)

 

(269,537

)

 

(355,479

)

 

(333,868

)

Sales of marketable securities

 

159,552

 

 

-

 

 

161,853

 

 

12,497

 

Maturities of marketable securities

 

127,333

 

 

31,750

 

 

367,880

 

 

57,253

 

Business acquisitions, net of cash acquired and other related payments

 

(25,224

)

 

-

 

 

(25,999

)

 

-

 

Advance payment for purchase of property and equipment

 

(29,310

)

 

-

 

 

(29,310

)

 

-

 

Purchases of property and equipment

 

(4,151

)

 

(2,934

)

 

(8,815

)

 

(11,013

)

Proceeds from sale of property and equipment

 

241

 

 

-

 

 

241

 

 

-

 

Capitalized internal-use software

 

(4,926

)

 

(1,691

)

 

(8,736

)

 

(2,680

)

Purchase of intangible assets

 

-

 

 

(2,093

)

 

-

 

 

(2,093

)

Net cash provided by (used in) investing activities

 

16,229

 

 

(244,505

)

 

101,635

 

 

(279,904

)

Cash flows from financing activities:
Issuance of convertible note, net of issuance costs

 

-

 

 

-

 

 

-

 

 

930,775

 

Payments of other debt issuance costs

 

-

 

 

-

 

 

-

 

 

(1,351

)

Net cash paid for debt extinguishment

 

(177,082

)

 

-

 

 

(177,082

)

 

-

 

Repayments of finance lease liabilities

 

(6,147

)

 

(3,628

)

 

(11,029

)

 

(6,579

)

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

)

 

-

 

Proceeds from exercise of vested stock options

 

1,721

 

 

2,886

 

 

4,769

 

 

5,605

 

Proceeds from employee stock purchase plan

 

1,571

 

 

1,493

 

 

3,977

 

 

4,564

 

Net cash provided by (used in) financing activities

 

(183,476

)

 

751

 

 

(175,747

)

 

933,014

 

Effects of exchange rate changes on cash and cash equivalents

 

(100

)

 

(29

)

 

(319

)

 

(141

)

Net increase (decrease) in cash and cash equivalents

 

(184,027

)

 

(260,797

)

 

(104,301

)

 

625,086

 

Cash and cash equivalents and restricted cash at beginning of period

 

246,687

 

 

949,763

 

 

166,961

 

 

63,880

 

Cash and cash equivalents and restricted cash at end of period

 

62,660

 

 

688,966

 

 

62,660

 

 

688,966

 

Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows:
Cash and cash equivalents

 

62,510

 

 

687,986

 

 

62,510

 

 

687,986

 

Restricted cash, current

 

150

 

 

87

 

 

150

 

 

87

 

Restricted cash, non-current

 

-

 

 

893

 

 

-

 

 

893

 

Total cash, cash equivalents, and restricted cash

$

62,660

 

$

688,966

 

$

62,660

 

$

688,966

 

Free Cash Flow  
(in thousands, unaudited)  
Three months ended
June 30,
  Six months ended
June 30,

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

Cash flow provided by (used in) operations

$

(16,680

)

$

(17,014

)

 

$

(29,870

)

$

(27,883

)

Capital expenditures(1)

 

(14,983

)

 

(8,253

)

 

 

(28,339

)

 

(20,272

)

Advance payment for purchase of property and equipment(2)

 

(29,310

)

 

-

 

 

 

(29,310

)

 

-

 

Free Cash Flow

$

(60,973

)

$

(25,267

)

 

$

(87,519

)

$

(48,155

)

__________  
(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) Advance payments for purchase of property and equipment relate to prepayments made for our capital expenditures in advance of receiving the asset, as reflected in our statement of cash flows.

Source: Fastly, Inc.

Investor Contact:
Vernon Essi, Jr.
ir@fastly.com

Media Contact:
press@fastly.com

Source: Fastly, Inc.