Read on Twitter
Stock is 30% DOWN 
from its ALL TIME HIGH BUT it grew 62% YoY and had a 137% DBNER
It was at the centre of Beijing 
Washington 
tensions
It’s business is HARD to UNDERSTAND 
But sounds like a TEN BAGGER 
Here is an EASY thread
$FSLY, a US Cloud Computing Services provider, processes, serves and secures its customer’s apps very close to the end users 
This happens through $FSLY Edge Platform
it provides a content delivery network, internet security, load balancing and video & streaming services
Cloud Computing Services provider, processes, serves and secures its customer’s apps very close to the end users This happens through $FSLY Edge Platform
it provides a content delivery network, internet security, load balancing and video & streaming services
This is PURE TECHNICAL JARGON Let’s break down what this means
The internet was designed according to the End-to-End Principle
This means that the core network’s KEY PRIORITY is to move the information to the network end-points (hosts and clients) as much as possible
Let’s break down what this means The internet was designed according to the End-to-End Principle This means that the core network’s KEY PRIORITY is to move the information to the network end-points (hosts and clients) as much as possible
The downside of this E2E principle is that the core network is rather “dumb” - It just forwards data packets to end-points without optimisation
The upside is that it prevents Internet Service Providers (they supply the core network) from choosing what content to prioritise
E.g. AT&T cannot choose to prioritise content from Youtube over other websites, meaning that the internet stays a fair place for every one (Net Neutrality)
Ok, so here we have an network that just forward data packets as much as possible to the end-points of the network
How could we improve that without altering the functioning of the whole network and compromising Net Neutrality?
Hint CDN
How could we improve that without altering the functioning of the whole network and compromising Net Neutrality?
Hint
CDN
CDNs augment the network by intelligently distributing & storing data
A CDN is a geographically distributed
network of proxy servers & their data centres
By distributing the information geograph. relative to the end-users, a CDN provides high availability & perf.
A CDN is a geographically distributed
network of proxy servers & their data centres By distributing the information geograph. relative to the end-users, a CDN provides high availability & perf.
A CDN is able to increase a networks’ performance (speed, reliability and availability) thanks to web caching, server load balancing, request routing and content services
Web caches store popular content on servers 
that have the greatest demand for the content requested
Web caches store popular content on servers that have the greatest demand for the content requested
Server load balancing shares the network traffic 
across different severs or web caches
Request routing directs clients requests 
to the content source best able to serve the request
Content Services Protocols provide a standard for accessing different servers
So, Content Delivery Networks store information in a smart and optimised way closer to the end user - Improving performance
Is there anything else they could do? Well, one of the main cyber threats are DDoS 
Distributed Denial of Service attack
Is there anything else they could do? Well, one of the main cyber threats are DDoS Distributed Denial of Service attack
This happens when a server is simply flooded with requests 
anyone with basic coding skills could orchestrate one Other common cyber threats 
Malicious bots are tasked to scrape web pages, create fake accounts, spread malware…
Man-In-The-Middle attacks happen on a network that was compromised (E.g. Wi-Fi at airports are sometimes hacked by a malicious third party) and on which two parties exchange private information
How is that linked to CDN’s?
DDoS attacks can be filtered and stopped by the CDN - in the worst case, the proxy server dies off while the origin server stays intact
Suspected bot activity 
can be identified and stopped with CDNs
DDoS attacks can be filtered and stopped by the CDN - in the worst case, the proxy server dies off while the origin server stays intact Suspected bot activity can be identified and stopped with CDNs
Data sent over networks can be encrypted 
using Transport Layer Security on a CDN - mitigating the risk of unsecured connections
By know you should see the performance and security benefits of CDNs Some key questions remain 
What is $FSLY offering?
What is the size of the market?
What is $FSLY moat?
Some key questions remain What is $FSLY offering? What is the size of the market? What is $FSLY moat?
What is $FSLY offering?
CDN and load balancing solutions optimised for speed of delivery with a query speed in the USA of 33ms (versus 43ms for $NET)
Solutions specially made for image and video delivery and streaming
Cloud security solutions for mitigating DDoS, malicious bots and a web application firewall (WAF)
What is the size of the market?
CDN market stood at $ 12B in 2019 and is expected to reach $ 50B in 2024 - CAGR of 27% 
Growth is driven by the increase in mobile #data consumption, rise of #video entertainment live #streaming #ecommerce online #media #telemedecine
What is $FSLY moat? First of all, $FSLY is fast - really fast. It is able to provide a query speed of 33ms in the USA (AWS Cloudfront 33ms, Google Cloud CDN 31.5ms)
$FSLY offers an uptime of 97% (AWS Cloudfront 96%, Google Cloud CDN 93%)
Despite being a bit more complex than $NET, $FSLY solutions are hugely configurable and offers numerous low levels controls
$FSLY is operating in a market growing at 27% over the next 5 years and is positioning itself as a leader for image and video delivery and streaming
It offers a solution that is more configurable while offering astonishing speed and excellent uptime
Financials
over the next 5 years and is positioning itself as a leader for image and video delivery and streamingIt offers a solution that is more configurable
while offering astonishing speed and excellent uptime Financials
Revenue grew 62% YoY and reached $ 75m with a DBNER of 137% (up from 133% in prev Q.) Net Retention Rate at 138% up from 130% in prev Q.
GMs of 60% up from 55% in prev Y. Current assets of $ 525m vs. Current Liab. of $ 38m
$FSLY financials do not offer too much cause for concern
Operating expenses represent 80% of revenues (stable YoY) - Causing short term losses
62% growth and outstanding Net Retention Rate - Creating a compelling long term story
Let’s look into $FSLY last acquisition
Operating expenses represent 80% of revenues (stable YoY) - Causing short term losses 62% growth and outstanding Net Retention Rate - Creating a compelling long term storyLet’s look into $FSLY last acquisition
$FSLY bought Signal Sciences for $ 200m in cash and $ 575m in stock on Aug 27
This completes $FSLY Secure@Edge offering with improved API Protection, Rate Limiting, Bot Mitigation, ATO Protection
This completes $FSLY Secure@Edge offering with improved API Protection, Rate Limiting, Bot Mitigation, ATO Protection
Maintaining $FSLY cyber security offering while acquiring a $ 28mm business with 85% GMs and 42 new $ 100k/year+ customers
The Bottom Line $FSLY is positioned in a FAST growing market - 27% over the next 5 YEARS 
$FSLY is growing at 62% YoY - meaning it is stealing market share from its competitors (Akamai’s CDN business is growing at 13%)
$FSLY speed, reliability, solutions for image, video and streaming are unique and its huge configurability gives it an edge
With the acquisition of Signal Sciences, $FSLY is consolidating its security offeringIts no a coincidence that $PINS #SHOP #TWTR #ETSY rely on $FSLY We enter $FSLY with a full stake (100% of full potential position)
$MELI is on our watchlist Coming WEDNESDAY Following the TikTok feud, we are gathering pieces on the political risks of tech stocks - Hint us! Please note that this is not a recommendation to buy - You are responsible for conducting your own research
Hope you liked this thread!
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Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ CDNComparison
✑ CDNPlanet
Sources
✑ Investor presentation
✑ Company website
✑ CDNComparison
✑ CDNPlanet
✑ MarketsAndMarkets
✑ MordoIntelligence
✑ GlobalDots
✑ Devopedia
✑ MordoIntelligence
✑ GlobalDots
✑ Devopedia
