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$FSLY: An Edge Over the Competition
Fastly, Inc. ($FSLY) is a leading developer-focused edge cloud platform (“Infrastructure-as-a-Service” or “IaaS”).
It's programmable edge network optimizes secure content delivery.
The stock fell 21% after Q2 ER; LT is strong
A thread
Fastly, Inc. ($FSLY) is a leading developer-focused edge cloud platform (“Infrastructure-as-a-Service” or “IaaS”).
It's programmable edge network optimizes secure content delivery.
The stock fell 21% after Q2 ER; LT is strong
A thread
1/ The Basics
Capabilities:
- Edge cloud platform
- Edge compute technology
- CDN
- Image optimization / video & streaming
- Cloud security
- Load Balancing
Leader because:
- Fastest solution
- High demand offerings
- Developer-focused
- Forward thinking
More resources
Capabilities:
- Edge cloud platform
- Edge compute technology
- CDN
- Image optimization / video & streaming
- Cloud security
- Load Balancing
Leader because:
- Fastest solution
- High demand offerings
- Developer-focused
- Forward thinking
More resources
2/ Competitive Market
Main Competitors: $AKAM $NET $LLNW
Cloud provider (AWS, Azure, Google, IBM) solutions not dynamic
- Multi-cloud trend favors independents
$AKAM leads CDN market, but antiquated solution
$FSLY & $NET have superior edge network architecture
- Room for both
Main Competitors: $AKAM $NET $LLNW
Cloud provider (AWS, Azure, Google, IBM) solutions not dynamic
- Multi-cloud trend favors independents
$AKAM leads CDN market, but antiquated solution
$FSLY & $NET have superior edge network architecture
- Room for both
3/ Expanding TAM (2019-2022)
Edge Computing: $2.7B to $6.7B (35.4% CAGR)
Content Delivery & Streaming: $7.3B to $16.7B (31.8%)
Cloud Security: $5.1B to $8.7B (19.5%)
ADC: $2.9B to $3.7B (8.1%)
Total: $18.8B to $35.8B (23.9%)
Key: $FSLY is NOT just a CDN
Edge Computing: $2.7B to $6.7B (35.4% CAGR)
Content Delivery & Streaming: $7.3B to $16.7B (31.8%)
Cloud Security: $5.1B to $8.7B (19.5%)
ADC: $2.9B to $3.7B (8.1%)
Total: $18.8B to $35.8B (23.9%)
Key: $FSLY is NOT just a CDN
4/ Strong Fundamentals (Q2 2020)
Total Rev: $74.7MM (+61.7%, +4.6% Beat)
- 38% Growth in Q1
Non-GAAP GM: 61.7% (+600 Bps) – leverage of SDN
Enterprise Rev: $67MM (+71%), 88% of Total Rev
T12 DBNER: 137.4% (+500 Bps)
NRR: 137.8% (vs. 110.9% Q2’19) – increased "stickiness"
Total Rev: $74.7MM (+61.7%, +4.6% Beat)
- 38% Growth in Q1
Non-GAAP GM: 61.7% (+600 Bps) – leverage of SDN
Enterprise Rev: $67MM (+71%), 88% of Total Rev
T12 DBNER: 137.4% (+500 Bps)
NRR: 137.8% (vs. 110.9% Q2’19) – increased "stickiness"
5/ Accelerating Metrics
Revenue growth accelerated in Q2 despite COVID headwinds
- Improvement from impacted customers is a tailwind
Margin expansion result of operating leverage from SDN architecture
- Revenue / Employee: $468K
FY 2020 Revenue Guidance: $290-300MM (+47.1%)
Revenue growth accelerated in Q2 despite COVID headwinds
- Improvement from impacted customers is a tailwind
Margin expansion result of operating leverage from SDN architecture
- Revenue / Employee: $468K
FY 2020 Revenue Guidance: $290-300MM (+47.1%)
6/ Customer Profile
304 Enterprise Customers (88% of Total Revenue)
Avg Enterprise Customer Spend: $716K (+29% YoY, +11.5% QoQ)
Best in class DBNER: 137% (up from 133% in Q2) result of scaling customer usage
Large customer focus --> efficiencies (i.e. higher POP utilization)
304 Enterprise Customers (88% of Total Revenue)
Avg Enterprise Customer Spend: $716K (+29% YoY, +11.5% QoQ)
Best in class DBNER: 137% (up from 133% in Q2) result of scaling customer usage
Large customer focus --> efficiencies (i.e. higher POP utilization)
7/ Compute@Edge – The Future
Leading edge compute solution (beta concept); 64% of beta customers have “project in mind” for this solution
Use Cases: Auth & Personalization, API Response Stitching, Localized Microservices, Entry Mgt, ML, IoT, 5G, etc.
Expanding network capacity
Leading edge compute solution (beta concept); 64% of beta customers have “project in mind” for this solution
Use Cases: Auth & Personalization, API Response Stitching, Localized Microservices, Entry Mgt, ML, IoT, 5G, etc.
Expanding network capacity
8/ Management
Founder Artur Bergman stepped down as CEO, now Chief Architect & Exec Chairman
Bergman “understands the internet at the protocol level.”
Former President Joshua Bixby now CEO, beat consensus both Qs
Excellent partnership: Bergman as Developer, Bixby as Leader
Founder Artur Bergman stepped down as CEO, now Chief Architect & Exec Chairman
Bergman “understands the internet at the protocol level.”
Former President Joshua Bixby now CEO, beat consensus both Qs
Excellent partnership: Bergman as Developer, Bixby as Leader
9/ Key Risks
- Quality competition into serverless compute space
- Commoditized CDN space
- Delayed adoption of edge compute use cases
- Slow down in digital transformation
- Difficulty attracting enterprise customers from incumbents
- Short-term technical stock damage
- Quality competition into serverless compute space
- Commoditized CDN space
- Delayed adoption of edge compute use cases
- Slow down in digital transformation
- Difficulty attracting enterprise customers from incumbents
- Short-term technical stock damage
