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Form 8-K Fastly, Inc. For: May 04

May 4, 2022 4:10 PM

Exhibit 99.1
Fastly Announces First Quarter 2022 Financial Results

Record quarterly revenue exceeds quarterly guidance range
First quarter revenue of $102.4 million, up 5% quarter-over-quarter
First quarter revenue Net Retention Rate (LTM) of 115%


SAN FRANCISCO, May 4, 2022 Fastly, Inc. (NYSE: FSLY), the world’s fastest global edge cloud network provider, today announced financial results for its first quarter ended March 31, 2022.

“We are pleased to kick off 2022 with strong revenue growth that exceeded guidance and a record-breaking quarter for Fastly as we passed the $100M milestone for the first time,” said Joshua Bixby, CEO of Fastly.

“The first quarter also brought strong analyst and customer validation for our product portfolio. These accolades showcase our customers' ongoing satisfaction and usage of Fastly’s products as we accelerate the delivery of our product roadmap,” continued Bixby. “We look forward to sharing further details on our differentiation, product roadmap, customer acquisition, and financial growth strategy at our Investor Day on May 12.”

Fastly today separately announced that the Board has initiated a search to identify the next CEO to lead the company through its next phase of growth. Once a successor is appointed, current CEO Joshua Bixby will step down as CEO and from the Fastly Board of Directors.

Three months ended
March 31,
20222021
Revenue$102,382 $84,852 
Gross Margin
GAAP gross margin47.3 %55.8 %
Non-GAAP gross margin52.6 %60.1 %
Operating loss
GAAP operating loss$(63,004)$(49,963)
Non-GAAP operating loss$(17,740)$(12,905)
Net loss per share
GAAP net loss per common share—basic and diluted$(0.54)$(0.44)
Non-GAAP net loss per common share—basic and diluted$(0.15)$(0.12)


First Quarter 2022 Financial Summary

Total revenue of $102.4 million, representing 5% sequential growth and 21% year-over-year growth.
GAAP gross margin of 47.3%, compared to 55.8% in the first quarter of 2021. Non-GAAP gross margin of 52.6%, compared to 60.1% in the first quarter of 2021.
GAAP net loss of $64.3 million, compared to $50.7 million in the first quarter of 2021. Non-GAAP net loss of $18.0 million, compared to $13.6 million in the first quarter of 2021.
GAAP net loss per basic and diluted shares of $0.54 compared to $0.44 in the first quarter of 2021. Non-GAAP net loss per basic and diluted shares of $0.15, compared to $0.12 in the first quarter of 2021.

Key Metrics

Trailing 12 month net retention rate (NRR LTM)1 decreased to 115% in the first quarter from 118% in the fourth quarter 2021.
Dollar-Based Net Expansion Rate (DBNER)2 decreased to 118% in the first quarter from 121% in the fourth quarter 2021.
Total customer count of 2,880 in the first quarter, of which 457 were enterprise3 customers.
Average enterprise customer spend of $722K in the first 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.





Recent Business Highlights

Recognized as the only vendor named as Gartner Peer Insights Customers’ Choice for web application and API protection for four consecutive years with the highest customer rating.
Acquired Fanout to unlock real-time app development at the edge with reduced time-to-market, reduced friction, and unprecedented scale.
Recognized as a leader by IDC MarketScape in the Worldwide Commercial CDN 2022 Vendor Assessment.
Launched a new Observability dashboard that brings end-to-end security, delivery, application and performance metrics into a unified view.
Accelerated edge adoption with a new Compute@Edge Partner Ecosystem, designed to help customers build a variety of edge computing use cases utilizing major cloud service provider integrations.

Second Quarter and Full Year 2022 Guidance:

Q2 2022Full Year 2022
Total Revenue (millions)$99.0 - $102.0$405.0 - $415.0
Non-GAAP Operating Loss (millions)($21.5) - ($18.5)($70.0) - ($60.0)
Non-GAAP Net Loss per share (4)(5)
($0.18) - ($0.15)($0.60) - ($0.50)

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, May 4, 2022.

Date: Wednesday, May 4, 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, May 4 through May 18, 2022 by dialing 800-770-2030 or 647-362-9199 and entering the passcode 7543239.

About Fastly
Fastly is upgrading the internet experience to give people and organizations more control, faster content, and more dynamic applications. By combining the world’s fastest global edge cloud network with powerful software, Fastly helps customers develop, deliver, and secure modern distributed applications and compelling digital experiences. Fastly’s customers include many of the world’s most prominent companies, including Pinterest, The New York Times, and GitHub. For more information on our mission and products, visit https://investors.fastly.com.


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 March 31, 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 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) 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 ongoing 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 ongoing non-GAAP performance and 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 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 expenses related to our debt obligations. 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. These are included in our total interest expense.

Capital Expenditures: cash used for purchases of property and equipment and capitalized internal-use software, 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 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.

Free Cash Flow: calculated as net cash used in operating activities less 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 and 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 Income: consists primarily of interest income related to our marketable securities. Management considers 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.

Non-GAAP Operating Loss: calculated as GAAP revenue less non-GAAP cost of revenue and non-GAAP operating expenses.

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 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. 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 121.4 million in Q2 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
March 31,
20222021
Revenue$102,382 $84,852 
Cost of revenue(1)
53,915 37,494 
Gross profit48,467 47,358 
Operating expenses:
Research and development(1)
40,437 28,988 
Sales and marketing(1)
41,480 34,872 
General and administrative(1)
29,554 33,461 
Total operating expenses111,471 97,321 
Loss from operations(63,004)(49,963)
Interest income681 174 
Interest expense(1,622)(661)
Other expense(279)(64)
Loss before income taxes(64,224)(50,514)
Income tax expense40 169 
Net loss$(64,264)$(50,683)
Net loss per share attributable to common stockholders, basic and diluted$(0.54)$(0.44)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted119,673 114,134 
__________

(1)Includes stock-based compensation expense as follows:
Three months ended
March 31,
20222021
Cost of revenue$2,946 $1,186 
Research and development18,589 7,958 
Sales and marketing10,094 5,008 
General and administrative8,393 16,686 
Total$40,022 $30,838 




















Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, unaudited)
Three months ended
March 31,
20222021
Gross Profit
GAAP gross profit$48,467 $47,358 
Stock-based compensation2,946 1,186 
Amortization of acquired intangible assets2,475 2,475 
Non-GAAP gross profit$53,888 $51,019 
GAAP gross margin47.3 %55.8 %
Non-GAAP gross margin52.6 %60.1 %
Research and development
GAAP research and development$40,437 $28,988 
Stock-based compensation(18,589)(7,958)
Non-GAAP research and development$21,848 $21,030 
Sales and marketing
GAAP sales and marketing$41,480 $34,872 
Stock-based compensation(10,094)(5,008)
Amortization of acquired intangible assets(2,709)(2,816)
Non-GAAP sales and marketing$28,677 $27,048 
General and administrative
GAAP general and administrative$29,554 $33,461 
Stock-based compensation(8,393)(16,686)
Acquisition-related expenses(58)(929)
Non-GAAP general and administrative$21,103 $15,846 
Operating loss
GAAP operating loss$(63,004)$(49,963)
Stock-based compensation40,022 30,838 
Amortization of acquired intangible assets5,184 5,291 
Acquisition-related expenses58 929 
Non-GAAP operating loss$(17,740)$(12,905)
Net loss
GAAP net loss$(64,264)$(50,683)
Stock-based compensation40,022 30,838 
Amortization of acquired intangible assets5,184 5,291 
Amortization of debt discount and issuance costs
963 — 
Acquisition-related expenses58 929 
Non-GAAP loss$(18,037)$(13,625)
Non-GAAP net loss per common share—basic and diluted$(0.15)$(0.12)
Weighted average basic and diluted common shares119,673114,134
Three months ended
March 31,
20222021
Adjusted EBITDA
GAAP net loss$(64,264)$(50,683)
Stock-based compensation40,022 30,838 
Depreciation and other amortization9,975 6,491 
Amortization of acquired intangible assets5,184 5,291 
Interest income(681)(174)
Interest expense1,622 661 
Other expense279 64 
Income tax expense40 169 
Acquisition-related expenses58 929 
Adjusted EBITDA$(7,765)$(6,414)





Condensed Consolidated Balance Sheets
(in thousands)
As of
March 31, 2022
As of
December 31, 2021
(unaudited)(audited)
ASSETS
Current assets:
Cash and cash equivalents$245,794 $166,068 
Marketable securities, current393,950 361,795 
Accounts receivable, net of allowance for credit losses73,717 64,625 
Prepaid expenses and other current assets23,616 32,160 
Total current assets737,077 624,648 
Property and equipment, net174,550 166,961 
Operating lease right-of-use assets, net63,455 69,631 
Goodwill637,570 636,805 
Intangible assets, net97,287 102,596 
Marketable securities, non-current394,464 528,911 
Other assets30,020 29,468 
Total assets$2,134,423 $2,159,020 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$8,248 $9,257 
Accrued expenses49,902 36,112 
Finance lease liabilities, current26,766 21,125 
Operating lease liabilities, current18,688 20,271 
Other current liabilities36,569 45,107 
Total current liabilities140,173 131,872 
Long-term debt934,121 933,205 
Finance lease liabilities, noncurrent28,867 22,293 
Operating lease liabilities, noncurrent52,334 55,114 
Other long-term liabilities2,205 2,583 
Total liabilities1,157,700 1,145,067 
Stockholders’ equity:
Class A common stock
Additional paid-in capital1,561,371 1,527,468 
Accumulated other comprehensive loss(9,496)(2,627)
Accumulated deficit(575,154)(510,890)
Total stockholders’ equity 976,723 1,013,953 
Total liabilities and stockholders’ equity $2,134,423 $2,159,020 








Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three months ended
March 31,
20222021
Cash flows from operating activities:
Net loss$(64,264)$(50,683)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense9,850 6,419 
Amortization of intangible assets5,309 5,363 
Amortization of right-of-use assets and other6,839 6,357 
Amortization of debt discount and issuance costs964 332 
Amortization of deferred contract costs1,851 1,411 
Stock-based compensation40,022 30,838 
Provision for credit losses127 (420)
Interest on finance lease(591)(330)
Loss on disposals of property and equipment268 27 
Amortization and accretion of discounts and premiums on investments957 — 
Other adjustments128 64 
Changes in operating assets and liabilities:
Accounts receivable(9,219)(1,685)
Prepaid expenses and other current assets(2,111)(1,680)
Other assets(2,451)(2,952)
Accounts payable(2,492)2,119 
Accrued expenses4,891 (755)
Operating lease liabilities(6,557)(6,365)
Other liabilities3,289 1,071 
Net cash used in operating activities(13,190)(10,869)
Cash flows from investing activities:
Purchases of marketable securities(148,193)(64,331)
Sales of marketable securities2,301 12,497 
Maturities of marketable securities240,547 25,503 
Business acquisitions, net of cash acquired(775)— 
Purchases of property and equipment(2,387)(8,079)
Capitalized internal-use software(3,810)(989)
Net cash provided by (used in) investing activities87,683 (35,399)
Cash flows from financing activities:
Issuance of convertible note, net of issuance costs— 930,775 
Payments of other debt issuance costs— (1,351)
Repayments of finance lease liabilities(7,159)(2,951)
Cash received for restricted stock sold in advance of vesting conditions10,655 — 
Cash paid for early sale of restricted shares(3,498)— 
Proceeds from exercise of vested stock options3,048 2,719 
Proceeds from employee stock purchase plan2,406 3,071 
Net cash provided by financing activities5,452 932,263 
Effects of exchange rate changes on cash, cash equivalents, and restricted cash(219)(112)
Net increase in cash, cash equivalents, and restricted cash79,726 885,883 
Cash, cash equivalents, and restricted cash at beginning of period166,961 63,880 
Cash, cash equivalents, and restricted cash at end of period246,687 949,763 
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows:
Cash and cash equivalents245,794 948,783 
Restricted cash, current— 87 
Restricted cash, non-current893 893 
Total cash, cash equivalents, and restricted cash$246,687 $949,763 








Free Cash Flow
(in thousands, unaudited)
Three months ended
March 31,
20222021
Cash flow provided by (used in) operations$(13,190)$(10,869)
Capital expenditures(1)
(6,197)(9,068)
Free Cash Flow$(19,387)$(19,937)
__________
(1)Capital Expenditures are defined as cash used for purchases of property and equipment and capitalized internal-use software, as reflected in our statement of cash flows.
























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

Media Contact:
press@fastly.com

Source: Fastly, Inc.






Exhibit 99.2
First Quarter 2022 Investor Supplement

Product Developments

Security:
Recognized as the only vendor named as Gartner Peer Insights Customers’ Choice for web application and API protection for four consecutive years.
Continued to innovate our Next-Gen WAF with new custom response codes and our GraphQL Inspection feature, and we became the first and only WAF to support Arm®-based environments at scale.
Leading Innovation:
Recognized as a leader by IDC MarketScape in the Worldwide Commercial CDN 2022 Vendor Assessment.
Announced a new Observability dashboard that is bringing end-to-end security, delivery, application and performance metrics into a unified view.
Deployed HTTP/3 and QUIC platform-wide, enabling customers with faster response times, better network performance, and built-in encryption with TLS 1.3.
Developer Relations:
Fastly acquired Fanout to unlock real-time, frictionless app development at the edge with unprecedented scale.
Fastly 101 launched on docs.fastly.com, a new project-based, hands-on tutorial showing how to set up Fastly’s CDN with a real website.

Key Metrics Highlights

Trailing 12 month net retention rate (NRR LTM)1 decreased to 115% in the first quarter from 118% in the fourth quarter 2021.
Dollar-Based Net Expansion Rate (DBNER)2 decreased to 118% in the first quarter from 121% in the fourth quarter 2021.
Total customer count was 2,880, of which 457 were enterprise customers4
Average enterprise customer spend of $722K in the first quarter, up 3% quarter-over-quarter.






Corporate Development

Announced that the Board has initiated a search to identify the next CEO to lead the company through its next phase of growth. Once a successor is appointed, current CEO Joshua Bixby will step down as CEO and from the Fastly Board of Directors.

Customer and Partner Developments

Accelerated edge adoption with a new Compute@Edge Partner Ecosystem designed to help customers build a variety of edge computing use cases utilizing major cloud service provider integrations.
A top Fortune 100 global financial platform chose Fastly’s unlimited RPS & Workspaces WAF package for its flexibility and scalability.
A top Fortune 100 ecommerce platform renewed and further expanded their partnership with Fastly to include Media Shield protection of critical infrastructure during live events.
A leading Spanish-language broadcaster sourced through Fastly’s Google Cloud Marketplace partnership, a leading Spanish-language broadcaster adopted Fastly’s Streaming for Live and VOD capabilities and token authentication to improve delivery performance.
A Fortune 500 apparel company expanding their digital footprint added Next-Gen WAF to their delivery, TLS, and image optimization products from Fastly.

First Quarter 2022 Financial Highlights
Record revenue of $102.4 million exceeded quarterly guidance range and grew 5% quarter-over-quarter.
GAAP net loss per basic and diluted shares of $0.54, compared to $0.44 in the first quarter of 2021.
Non-GAAP net loss5 per basic and diluted shares of $0.15, compared to $0.12 in the first quarter of 2021.

Second Quarter and Full Year 2022 Guidance:
Q2 2022Full Year 2022
Total Revenue (millions)$99.0 - $102.0$405.0 - $415.0
Non-GAAP Operating Loss (millions)(5)
($21.5) - ($18.5)($70.0) - ($60.0)
Non-GAAP Net Loss per share (6) (7)
($0.18) - ($0.15)($0.60) - ($0.50)



Calculations of Key and Other Selected Metrics – Quarterly
(unaudited)

Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Total Customer Count1,951 2,047 2,326 2,458 2,581 2,748 2,804 2,880 
Enterprise Customer Count(4)
304 313 378 395 408 430 445 457 
Enterprise Revenue % Total LTM88 %88 %88 %89 %89 %88 %88 %89 %
Enterprise Customer Average Spend LTM (in thousands)(8)
$716 $753 $681 $705 $702 $698 $704 $722 
Net Retention Rate (NRR) Quarter(9)
138 %122 %116 %110 %93 %112 %107 %114 %
Net Retention Rate (NRR) LTM(1)
136 %141 %137 %135 %121 %114 %118 %115 %
Dollar-Based Net Expansion Rate (DBNER)(2)
137 %147 %144 %141 %126 %118 %121 %118 %
Annual Revenue Retention Rate (ARR)(3)
— — 99.3 %— — — 99.2 %— 
Global Network Capacity100 TB/sec106 TB/sec117 TB/sec130 TB/sec145 TB/sec167 TB/sec184 TB/sec198 TB/sec
Countries 2626262628313234
Markets 5555565861687175

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 Annual revenue retention rate is calculated by subtracting the quotient of the Annual Revenue Churn from all of our Churned Customers divided by our annual revenue of the same calendar year from 100%. Our “Annual Revenue Churn” is calculated by multiplying the final full month of revenue from a customer that terminated its contract with us (a “Churned Customer”) by the number of months remaining in the same calendar year.
4 Enterprise customers are defined as those spending $100,000 or more in a twelve-month period.
5 For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this letter.
6 Assumes weighted average basic shares outstanding of 121.4 million in Q2 2022 and 121.8 million for the full year 2022.
7 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.
8 Calculated based on trailing twelve-months.
9 Net Retention Rate measures the net change in monthly revenue from existing customers in the last month of the period (the “current" period month) compared to the last month of the same period one year prior (the “prior" period month). The revenue included in the current period month includes revenue from (i) revenue contraction due to billing decreases or customer churn, (ii) revenue expansion due to billing increases, but excludes revenue from new customers. We calculate Net Retention Rate by dividing the revenue from the current period month by the revenue in the prior period month.


















Forward-Looking Statements

This investor supplement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, about us and our industry that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or Fastly's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates,” “going to,” "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue," “would,” or the negative of these words or other similar terms or expressions that concern Fastly's expectations, goals, strategy, priorities, plans, projections, or intentions. Forward-looking statements in this investor supplement include, but are not limited to, statements regarding Fastly’s future financial and operating performance, including its outlook and guidance; Fastly's strategies, product and business plans; and continued demand for future products from the combined Signal Sciences’ portfolio. Fastly's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: Fastly is unable to attract and retain customers; Fastly's existing customers and partners do not maintain or increase usage of Fastly's platform; Fastly's platform and product features do not meet expectations, including due to defects, interruptions, security breaches, delays in performance or other similar problems; Fastly is unable to adapt to meet evolving market and customer demands and rapid technological change; Fastly is unable to comply with modified or new industry standards, laws and regulations; Fastly is unable to generate sufficient revenues to achieve or sustain profitability; Fastly’s limited operating history makes it difficult to evaluate its prospects and future operating results; Fastly is unable to effectively manage its growth; and Fastly is unable to compete effectively. The forward-looking statements contained in this investor supplement are also subject to other risks and uncertainties, including those more fully described in Fastly’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and additional information that will be set forth in Fastly’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and other filings and reports that we may file from time to time with the SEC. The forward-looking statements in this investor supplement are based on information available to Fastly as of the date hereof, and Fastly disclaims any obligation to update any forward-looking statements, except as required by law.

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 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) 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 expense when evaluating its ongoing non-GAAP performance and its ongoing 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 ongoing non-GAAP performance and 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 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 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: cash used for purchases of property and equipment and capitalized internal-use software, 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 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.

Free Cash Flow: calculated as net cash used in operating activities less 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 and and 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 Income: consists primarily of interest income related to our marketable securities. Management considers 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.

Non-GAAP Operating Loss: calculated as GAAP revenue less non-GAAP cost of revenue and non-GAAP operating expenses.

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 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. 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.

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 investor supplement.













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

Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Revenue$74,663 $70,638 $82,649 $84,852 $85,026 $86,735 $97,717 $102,382 
Cost of revenue(1)
29,697 29,292 33,753 37,494 40,320 41,244 47,944 53,915 
Gross profit44,966 41,346 48,896 47,358 44,706 45,491 49,773 48,467 
Operating expenses:
Research and development(1)
16,655 18,271 25,590 28,988 30,346 32,528 34,997 40,437 
Sales and marketing(1)
24,680 22,568 34,765 34,872 36,334 39,288 42,151 41,480 
General and administrative (1)
18,069 23,961 45,885 33,461 35,494 28,609 29,281 29,554 
Total operating expenses59,404 64,800 106,240 97,321 102,174 100,425 106,429 111,471 
Loss from operations(14,438)(23,454)(57,344)(49,963)(57,468)(54,934)(56,656)(63,004)
Interest income378 353 178 174 276 280 552 681 
Interest expense, net(371)(410)(452)(661)(1,436)(1,555)(1,593)(1,622)
Other (income) expense, net(53)69 (697)(64)178 41 201 (279)
Loss before income tax expense (benefit)(14,484)(23,442)(58,315)(50,514)(58,450)(56,168)(57,496)(64,224)
Income tax expense (benefit)(24)336 (12,611)169 (155)30 25 40 
Net loss$(14,460)$(23,778)$(45,704)$(50,683)$(58,295)$(56,198)$(57,521)$(64,264)
Net loss per share attributable to common stockholders, basic and diluted$(0.14)$(0.22)$(0.40)$(0.44)$(0.51)$(0.48)$(0.49)$(0.54)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted99,835 105,942 112,902 114,134 115,326 116,475 118,161 119,673 
__________
(1)Includes stock-based compensation expense as follows:
Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Cost of revenue$1,090 $929 $1,255 $1,186 $1,828 $1,897 $2,316 $2,946 
Research and development4,053 4,371 7,017 7,958 8,634 14,752 15,675 18,589 
Sales and marketing7,076 3,194 5,275 5,008 5,631 9,121 11,399 10,094 
General and administrative4,062 3,648 16,134 16,686 17,333 10,866 10,198 8,393 
Total$16,281 $12,142 $29,681 $30,838 $33,426 $36,636 $39,588 $40,022 




Reconciliation of GAAP to Non-GAAP Financial Measures - Quarterly
(unaudited, in thousands, except per share amounts)

Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Gross Profit
GAAP gross Profit$44,966 $41,346 $48,896 $47,358 $44,706 $45,491 $49,773 $48,467 
Stock-based compensation1,090 929 1,255 1,186 1,828 1,897 2,316 2,946 
Amortization of acquired intangible assets— — 2,475 2,475 2,475 2,475 2,475 2,475 
Non-GAAP gross profit46,056 42,275 52,626 51,019 49,009 49,863 54,564 53,888 
GAAP gross margin60.2 %58.5 %59.2 %55.8 %52.6 %52.4 %50.9 %47.3 %
Non-GAAP gross margin61.7 %59.8 %63.7 %60.1 %57.6 %57.5 %55.8 %52.6 %
Research and development
GAAP research and development16,655 18,271 25,590 28,988 30,346 32,528 34,997 40,437 
Stock-based compensation(4,053)(4,371)(7,017)(7,958)(8,634)(14,752)(15,675)(18,589)
Non-GAAP research and development12,602 13,900 18,573 21,030 21,712 17,776 19,322 21,848 
Sales and marketing
GAAP sales and marketing24,680 22,568 34,765 34,872 36,334 39,288 42,151 41,480 
Stock-based compensation(7,076)(3,194)(5,275)(5,008)(5,631)(9,121)(11,399)(10,094)
Amortization of acquired intangible assets— — (2,603)(2,816)(2,709)(2,709)(2,710)(2,709)
Non-GAAP sales and marketing17,604 19,374 26,887 27,048 27,994 27,458 28,042 28,677 
General and administrative
GAAP general and administrative18,069 23,961 45,885 33,461 35,494 28,609 29,281 29,554 
Stock-based compensation(4,062)(3,648)(16,134)(16,686)(17,333)(10,866)(10,198)(8,393)
Acquisition-related expenses— (7,158)(13,625)(929)(1,298)(179)(149)(58)
Non-GAAP general and administrative14,007 13,155 16,126 15,846 16,863 17,564 18,934 21,103 
Operating income (loss)
GAAP operating loss(14,438)(23,454)(57,344)(49,963)(57,468)(54,934)(56,656)(63,004)
Stock-based compensation16,281 12,142 29,681 30,838 33,426 36,636 39,588 40,022 
Amortization of acquired intangible assets— — 5,078 5,291 5,184 5,184 5,185 5,184 
Acquisition-related expenses— 7,158 13,625 929 1,298 179 149 58 
Non-GAAP operating income (loss)1,843 (4,154)(8,960)(12,905)(17,560)(12,935)(11,734)(17,740)
Net income (loss)
GAAP net loss(14,460)(23,778)(45,704)(50,683)(58,295)(56,198)(57,521)(64,264)
Stock-based compensation16,281 12,142 29,681 30,838 33,426 36,636 39,588 40,022 
Amortization of acquired intangible assets— — 5,078 5,291 5,184 5,184 5,185 5,184 
Acquisition-related expenses— 7,158 13,625 929 1,298 179 149 58 
Acquisition-related tax benefit
— — (13,154)— — — — — 
Amortization of debt issuance costs— — — — 993 967 947 963 
Non-GAAP net income (loss)$1,821 $(4,478)$(10,474)$(13,625)$(17,394)$(13,232)$(11,652)$(18,037)
GAAP net income (loss) per common share—basic and diluted$(0.14)$(0.22)$(0.40)$(0.44)$(0.51)$(0.48)$(0.49)$(0.54)
Non-GAAP net income (loss) per common share—basic and diluted$0.02 $(0.04)$(0.09)$(0.12)$(0.15)$(0.11)$(0.10)$(0.15)
GAAP Weighted average basic common shares99,835 105,942 112,902 114,134 115,326 116,475 118,161 119,673 
Effect of dilutive securities(1)
10,054        
Non-GAAP Weighted average diluted common shares109,889 105,942 112,902 114,134 115,326 116,475 118,161 119,673 

(1) For periods presented with a net loss, the effect of the dilutive securities have been excluded from the calculation because their effect would have been anti-dilutive.



Reconciliation of GAAP to Non-GAAP Financial Measures - Quarterly (Continued)
(unaudited, in thousands, except per share amounts)

Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Adjusted EBITDA
GAAP net loss$(14,460)$(23,778)$(45,704)$(50,683)$(58,295)$(56,198)$(57,521)$(64,264)
Stock-based compensation16,281 12,142 29,681 30,838 33,426 36,636 39,588 40,022 
Depreciation and other amortization4,729 4,967 5,568 6,491 7,000 7,489 8,228 9,975 
Amortization of acquired intangible assets— — 5,078 5,291 5,184 5,184 5,185 5,184 
Interest income(378)(353)(178)(174)(276)(280)(552)(681)
Interest expense371 410 452 661 1,436 1,555 1,593 1,622 
Other (income) expense, net53 (69)697 64 (178)(41)(201)279 
Income taxes(24)336 543 169 (155)30 25 40 
Acquisition-related expenses— 7,158 13,625 929 1,298 179 149 58 
Acquisition-related tax benefit— — (13,154)— — — — — 
Adjusted EBITDA$6,572 $813 $(3,392)$(6,414)$(10,560)$(5,446)$(3,506)$(7,765)

Non-GAAP Consolidated Statements of Operations - Quarterly
(unaudited, in thousands, except per share amounts)
Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Revenue$74,663 $70,638 $82,649 $84,852 $85,026 $86,735 $97,717 $102,382 
Cost of revenue (1)(2)
28,607 28,363 30,023 33,833 36,017 36,872 43,153 48,494 
Gross profit46,056 42,275 52,626 51,019 49,009 49,863 54,564 53,888 
Operating expenses:
Research and development(1)
12,602 13,900 18,573 21,030 21,712 17,776 19,322 21,848 
Sales and marketing(1)(2)
17,604 19,374 26,887 27,048 27,994 27,458 28,042 28,677 
General and administrative (1)(3)
14,007 13,155 16,126 15,846 16,863 17,564 18,934 21,103 
Total operating expenses44,213 46,429 61,586 63,924 66,569 62,798 66,298 71,628 
Income (loss) from operations(1)(2)(3)
1,843 (4,154)(8,960)(12,905)(17,560)(12,935)(11,734)(17,740)
Interest income378 353 178 174 276 280 552 681 
Interest expense(4)
(371)(410)(452)(661)(443)(588)(646)(659)
Other income (expense), net(53)69 (697)(64)178 41 201 (279)
Income (loss) before income tax expense (benefit)1,797 (4,142)(9,931)(13,456)(17,549)(13,202)(11,627)(17,997)
Income tax expense (benefit)(5)
(24)336 543 169 (155)30 25 40 
Net income (loss)(1)(2)(3)(4)(5)
$1,821 $(4,478)$(10,474)$(13,625)$(17,394)$(13,232)$(11,652)$(18,037)
Net income (loss) per share attributable to common stockholders, basic (6)
$0.02 $(0.04)$(0.09)$(0.12)$(0.15)$(0.11)$(0.10)$(0.15)
Net income (loss) per share attributable to common stockholders, diluted(6)
$0.02 $(0.04)$(0.09)$(0.12)$(0.15)$(0.11)$(0.10)$(0.15)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic99,835 105,942 112,902 114,134 115,326 116,475 118,161 119,673 
Effect of dilutive securities(6)
10,054        
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted(6)
109,889 105,942 112,902 114,134 115,326 116,475 118,161 119,673 
(1) Excludes stock-based compensation. See GAAP to Non-GAAP reconciliations.
(2) Excludes amortization of acquired intangible assets. See GAAP to Non-GAAP reconciliations.
(3) Excludes acquisition-related and other expenses. See GAAP to Non-GAAP reconciliations.
(4) Excludes amortization of debt discount and issuance costs. See GAAP to Non-GAAP reconciliations.
(5) Excludes acquisition-related tax benefit. See GAAP to Non-GAAP reconciliations.
(6) For the period in which we had non-GAAP net income, diluted non-GAAP net income per share is calculated using weighted-average shares, adjusted for dilutive potential shares that were assumed outstanding during period.



Consolidated Balance Sheets - Quarterly
(unaudited, in thousands)
Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Assets
Current assets:
Cash and cash equivalents$257,418 $309,968 $62,900 $948,783 $687,986 $282,131 $166,068 $245,794 
Marketable securities126,607 92,302 131,283 147,793 241,744 361,290 361,795 393,950 
Accounts receivable, net58,331 42,593 50,258 52,363 56,065 54,234 64,625 73,717 
Restricted cash70,087 70,087 87 87 87 — — — 
Prepaid expenses and other current assets12,974 14,769 16,728 18,408 22,222 22,230 32,160 23,616 
Total current assets525,417 529,719 261,256 1,167,434 1,008,104 719,885 624,648 737,077 
Property and equipment, net65,836 83,498 95,979 98,608 116,471 147,729 166,961 174,550 
Operating lease right-of-use assets, net— — 60,019 63,305 62,630 70,149 69,631 63,455 
Goodwill347 362 635,590 635,645 635,646 635,635 636,805 637,570 
Intangible assets, net2,864 2,792 121,742 116,379 113,215 107,905 102,596 97,287 
Marketable securities, non-current— — 20,448 29,930 173,227 429,489 528,911 394,464 
Other assets13,400 15,147 24,917 26,993 27,578 28,142 29,468 30,020 
Total assets$607,864 $631,518 $1,219,951 $2,138,294 $2,136,871 $2,138,934 $2,159,020 $2,134,423 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$6,087 $12,273 $9,150 $12,019 $10,202 $7,766 $9,257 $8,248 
Accrued expenses22,631 38,559 34,334 36,320 28,609 36,063 36,112 49,902 
Current portion of long term debt5,188 6,060 — — — — — — 
Finance lease liabilities— — 11,033 10,910 14,773 18,675 21,125 26,766 
Operating lease liabilities— — 19,895 20,011 19,713 20,007 20,271 18,688 
Other current liabilities4,402 9,555 19,677 19,036 29,735 24,758 45,107 36,569 
Total current liabilities38,308 66,447 94,089 98,296 103,032 107,269 131,872 140,173 
Long-term debt, less current portion24,858 26,007 — 930,291 931,385 932,305 933,205 934,121 
Finance lease liabilities, noncurrent— — 14,707 13,648 19,685 24,659 22,293 28,867 
Operating lease liabilities, noncurrent— — 44,890 47,505 47,177 54,066 55,114 52,334 
Other long-term liabilities2,533 3,944 4,400 3,520 6,502 5,056 2,583 2,205 
Total liabilities65,699 96,398 158,086 1,093,260 1,107,781 1,123,355 1,145,067 1,157,700 
Stockholders’ equity:
Class A and Class B common stock
Additional paid-in capital760,237 777,231 1,350,050 1,384,045 1,426,520 1,469,366 1,527,468 1,561,371 
Accumulated other comprehensive income (loss)385 124 (137)(261)(420)(2,627)(9,496)
Accumulated deficit(218,459)(242,237)(288,193)(338,876)(397,171)(453,369)(510,890)(575,154)
Total stockholders’ equity542,165 535,120 1,061,865 1,045,034 1,029,090 1,015,579 1,013,953 976,723 
Total liabilities and stockholders’ equity$607,864 $631,518 $1,219,951 $2,138,294 $2,136,871 $2,138,934 $2,159,020 $2,134,423 









Consolidated Statements of Cash Flows – Quarterly
(unaudited, in thousands)

Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022
Cash flows from operating activities:
Net loss$(14,460)$(23,778)$(45,704)$(50,683)$(58,295)$(56,198)$(57,521)$(64,264)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization4,693 4,894 5,713 6,419 6,927 7,364 8,089 9,850 
Amortization of acquired intangibles36 73 4,933 5,363 5,257 5,309 5,309 5,309 
Amortization of right-of-use assets and other5,239 5,636 5,941 6,357 6,303 7,158 7,065 6,839 
Amortization of debt issuance costs19 20 161 332 937 966 950 964 
Amortization of deferred contract costs788 894 1,141 1,411 1,535 1,621 1,727 1,851 
Stock-based compensation16,281 12,142 29,681 30,838 33,426 36,636 39,588 40,022 
Provision for doubtful accounts and credit losses866 196 507 (420)225 236 155 127 
Interest paid on capital leases(149)(186)(234)(330)(405)(524)(495)(591)
(Gain) loss on disposal of property and equipment— (133)786 27 — (204)(123)268 
Tax benefit related to release of valuation allowance— — (12,950)— — — — — 
Amortization and accretion of discounts and premiums on investments— — — — — — — 957 
Other adjustments208 480 448 64 749 683 729 128 
Changes in operating assets and liabilities:
Accounts receivable(16,180)15,542 (2,595)(1,685)(3,927)1,595 (10,546)(9,219)
Prepaid expenses and other current assets(835)(1,795)(1,772)(1,680)(3,814)(8)725 (2,111)
Other assets(2,676)(2,641)(9,752)(2,952)(2,137)(2,231)(3,103)(2,451)
Accounts payable(1,748)5,682 (2,987)2,119 (1,957)(1,815)1,799 (2,492)
Accrued expenses4,121 14,598 (4,232)(755)(3,080)6,548 1,548 4,891 
Operating lease liabilities(4,141)(4,439)(5,412)(6,365)(6,491)(6,879)(6,712)(6,557)
Other liabilities(843)15 5,178 1,071 7,733 (2,948)2,908 3,289 
Net cash provided by (used in) operating activities(8,781)27,200 (31,149)(10,869)(17,014)(2,691)(7,908)(13,190)
Cash flows from investing activities:
Purchase of marketable securities(56,187)(148,174)(64,698)(64,331)(269,537)(443,701)(150,586)(148,193)
Sale of marketable securities— 143,241 — 12,497 — 51,739 2,291 2,301 
Maturities of marketable securities23,501 38,817 5,001 25,503 31,750 15,600 45,232 240,547 
Business acquisitions, net of cash acquired— — (200,988)— — — (1,169)(775)
Proceeds from sale of property and equipment— 150 425 — — 291 297 — 
Purchases of property and equipment(2,072)(11,361)(5,126)(8,079)(2,934)(20,254)(3,549)(2,387)
Capitalized internal-use software(744)(1,901)(2,049)(989)(1,691)(7,619)(3,180)(3,810)
Purchases of intangible assets(1,811)— — — (2,093)— — 
Net cash provided by (used in) investing activities(37,313)20,772 (267,435)(35,399)(244,505)(403,943)(110,664)87,683 
Cash flows from financing activities:
Proceeds from follow-on public offering, net of underwriting fees274,896 — — — — — — — 
Payments of costs related to follow-on public offering(173)(502)— —