Fastly, Inc. · NASDAQ:FSLY
Fastly — Investor Day (June 2023)
90 slides from Fastly's investor day presentation, Jun 22, 2023
Slide 1: Welcome
fastly Welcome Vernon Essi VP, Investor Relations Investor Day 2023
Slide 2: Safe Harbor and Other Information
Safe Harbor and Other Information This investor presentation 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 invo
Slide 3: Agenda
fastly Agenda ~ CEO Open Todd Nightingale, Chief Executive Officer A Differentiated Architecture Artur Bergman, Chief Architect and Founder Durable Innovation Engine Lakshmi Sharma, Chief Product and Chief Strategy Officer Laura Thomson, SVP Engineering Q&A Go-to-Market Brett Shirk, Chief Revenue Of
Slide 4: CEO Open
fastly CEO Open Todd Nightingale Chief Executive Officer Investor Day 2023
Slide 5: Making the internet a better place
fastly Making the internet a better place where all experiences are fast, safe, and engaging. fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 6: Long Term Goal
Long Term Goal & i | = User Experience Edge Cloud * ule Market Leadership fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 7: z=
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Slide 8: Edge Cloud Positioning
Edge Cloud Positioning / y Central Cloud at f f i 1 ' l I t t i \ \ q q fastly. Investor Day | 2023 ©2023 Fastly, Inc. | Confidential
Slide 9: Fastly's Global Network
Fastly’s Global Network fastly. ©2023 Fastly, inc. Confidential Investor Day | 2023
Slide 10: Lightning-Fast Time to First Paint (TTFP)
Lightning-Fast Time to First Paint (TTFP) 0.0s O.1s 0.2s 0.3s 0.4s 0.5s Hz-Tiiivae Test Run Details Fastly is the fastest CDN to start . bal | ' | displaying content to the end-user a Chas Cas Chees 0% 0% 16% 82% 82% 83% 2: CDN 2 (Test Run Details} Run Details He )\EeM Test Run Details] - Source: Ca
Slide 11: Daily Gbps traffic
75,000 2022 Max Daily Gbps 2023 Max Daily Gbps 65,000 2022 Daily Avg Gbps 2023 Daily Avg Gbps 55,000 45,000 35,000 25,000 15,000 01-Jan 06-Jan 11-Jan 16-Jan 21-Jan 26-Jan 31-Jan 05-Feb 10-Feb 15-Feb 20-Feb 25-Feb 02-Mar 07-Mar 12-Mar 17-Mar 22-Mar 27-Mar
Slide 12: Fastly's Edge Cloud Solution
Fastly’s Edge Cloud Solution Core Growth re Incubation | _ [= |] a Developer Experience Programmable Edge Platform fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 13: Our Opportunity is Big and Growing
Our Opportunity is Big and Growing Our TAM: The critical infrastructure and software that powers modern digital experiences $33B 15% CAGR TES ONE Edge Observability portion of $22B Observability TAM ee poccasancoqasoasocodoasasos50350) Compute 30% CAGR Edge Compute portion of $235B laaS TAM Security
Slide 14: 5,000 7,000 9,000 11,000 13,000 15,000 17,000 19,000
100 150 200 250 300 350 5,000 7,000 9,000 11,000 13,000 15,000 17,000 19,000
Slide 15: Fastly Security
Fastly Security Empowering future of application security at the edge Traditional Approach Gartner Point products Peer Insights Disjointed product experience Unprotected in monitoring mode Constant tuning The only & break fix Customers’ Choice Leader . Error-prone 5 years Ina row regular expressions
Slide 16: Transformation Principles
Transformation Principles ©2023 Fastly, Inc. One Fastly Simplify Everything tt Build to Scale fastly. Investor Day | 2023
Slide 17: Functional Groups Drive Productivity
Functional Groups Drive Productivity Products & Services Product Engineering Client Services Go-to-Market Sales Marketing Customer Success O One Fastly Operations People Finance & Legal IT & Business Systems fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 18: Fastly is the Premiere Edge Cloud Investment
Fastly is the Premiere Edge Cloud Investment | User Experience is our North Star J | Highly Performant, Differentiated Architecture J | Right Solution, Right Time J | Software Defined Platform, Efficient Growth J | Model Leverages Growth, Shareholder Returns J fastly. ©2023 Fastly, Inc. | Confidenti
Slide 19: Making the internet a better place
fastly Making the internet a better place where all experiences are fast, safe, and engaging. fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 20: Differentiated Architecture
fastly Differentiated Architecture Artur Bergman Chief Architect and Founder Investor Day 2023
Slide 21: Building Fastly for the Future
Building Fastly for the Future Old Internet New Internet Global DX spending is forecast to reach nearly $3.5 trillion in 2026 with a 5 year CAGR of 16.7% ' 1 Source: IDC Worldwide Digital Transformation Spending Guide V1 2023, April 2023 fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 22: (as of May 31, 2023) (as of March 31, 2023) (as of December 31,
99 265 74 (as of May 31, 2023) (as of March 31, 2023) (as of December 31, 2022)
Slide 23: Fastly's 1st POP, 2008 vs POPs today
Fastly’s 1st POP, 2008 Fastly POPs today fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 24: Refocus on What Makes Fastly Unique
Refocus on What Makes Fastly Unique Our global distributed platform, programmable by customers 1 i Software Architecture Innovation Velocity fastly. Investor Day | 2023
Slide 25: TTM / Server
$120,000 TTM / Server Fastly TTM / Server inc Signal Sciences $100,000 $80,000 $60,000 $40,000 $20,000 $0 Q1:19 Q3:19 Q1:20 Q3:20 Q1:21 Q3:21 Q1:22 Q3:22 Q1:23
Slide 26: Fastly Anywhere
Fastly Anywhere fastly. Investor Day | 2023
Slide 27: Making the internet a better place
fastly Making the internet a better place where all experiences are fast, safe, and engaging. fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 28: Durable Innovation Engine
fastly Durable Innovation Engine Lakshmi Sharma Product Strategy & Roadmap Sete oie outa Investor Day 2023
Slide 29: Product and Services Group
Product and Services Group Client Services Product Engineering fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 30: Developers of modern digital experiences face tradeoffs
Developers of modern digital experiences face a tradeoffs today Security Engaging fastly. Investor Day | 2023 ©2023 Fastly, Inc. | Confidential
Slide 31: Our platform is where fast, safe, and engaging meet
Our platform is where fast, safe, and engaging meet Engaging fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 32: Fastly's Platform and Product Portfolio
Fastly’s Platform and Product Portfolio Core Growth (Incubation — Future Modules e Fully programmable network e Real time control and observability e Industry-leading performance e High accuracy security e Developer-first Programmable Edge Platform j Fully configurable Hl . an i (open interfaces/ op
Slide 33: Product Strategy
Product Strategy User Experience is our North Star fastly. Investor Day | 2023
Slide 34: Key Solutions & Use Cases: Network Services
Network Services Opportunity Consumer Privacy ‘sae 82148 12% CAGR Two of the largest tech firms leverage Privacy Proxy to power private browsing experiences Mobile Performance What's Ahead Global website builder cut TTFB p75 in half with - Compliance Regions Fastly using HTTP/3, significantly improv
Slide 35: Security
Security Extending our portfolio to capture the larger market opportunities 2023 API Security, Bot Management, MSS 1 2020 $6.1B TAM Next-Gen WAF - TAM numbers are based on 2022 Gartner, 2022 IDC data, 2021 Forrester data supplemented with MarketsandMarkets, and Industry Research reports. 1 Estimated
Slide 36: Key Solutions & Use Cases: Security
Security Opportunity we i} NG-WAF Edge Deployment mm EE tex cace Edge deployment of Fastly’s NG-WAF enables e-commerce platform to migrate its delivery and security stack to Fastly from an edge cloud What’s Ahead competitor e Bot Management e Certainly (Certificate Authority) e API Security Enforcem
Slide 37: Key Solutions & Use Cases: Compute
Compute Opportunity mus «30% CAGR Edge Data Processing An observability leader migrated their compute workloads to Fastly’s Edge Cloud platform to optimize its data ingestion pipeline What’s Ahead Global Serverless e Expanded language and framework support DevOps platform turned to Fastly’s global +
Slide 38: Key Solutions & Use Cases: Observability
Observability Opportunity mu E.s«15% CAGR Origin Inspector E-commerce platform adopts Fastly’s new Origin Inspector product to quickly and efficiently diagnose performance and reliability What’s Ahead issues for its customers e Custom Metrics e Alerting e Regional Log Streaming e End User Perf. Metr
Slide 39: AI on Fastly's Edge Cloud Platform
Al on Fastly’s Edge Cloud Platform fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 40: Strengthening and Expanding Our Platform
Strengthening and Expanding Our Platform Platform e Privacy Proxy NG-WAF Edge Config Store e Origin Inspector e Automation Recent e Fanout + Deployment Languages and e Domain Tokens Websockets Managed Framework (JS Inspector e Expanded Launches ¢ Certainly CA Security Service SDK v1.0, © C@E Log Tai
Slide 41: Making It Easier to Buy and Sell
Making It Easier to Buy and Sell Simplifying packaging STARTER ADVANTAGE ULTIMATE e No bandwidth 5 Oc T5015 0 coe e Predictable pricing with no overages per second per second per second OWASP Top 10, Gold OWASP Top 1 0 OWASP Top 10, Custom Support Signal, ERL, Go 0 Signal, ERL, : e Transparent Ent.
Slide 42: Making It Easier for Developers to Build
Making It Easier for Developers to Build Putting the power back in developers’ hands sae, & developer.fastly.com Glitch Fast Forward Our new developer portal 2.4M developers Added 28 program members since 500K¢+ in the last 12 months! launch in Nov 2022, now supports 82 OSS initiatives As of May 31,
Slide 43: Durable Innovation Engine: Engineering & Infrastructure
fastly Durable Innovation Engine Lana Tiber Engineering & Infrastructure SE Investor Day 2023
Slide 44: Engineering Underpins a Complete Platform
Engineering Underpins a Complete Platform Programmable Edge Platform t ! 1 ! ! Fully configurable via APIs Durable Innovation Engine fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 45: Fastly's Environment Propels Innovation
Fastly’s Environment Propels Innovation Platform Product Lines Services >») > “Build Fastly with Network Services Security Fastly” > Enables adding new products easily Observability > Reduces time to market Scalable Edge Infrastructure fastly. astly, Inc. | Confidential Investor Day | 2023
Slide 46: Platform Unification Drives Leverage
Platform Unification Drives Leverage Y GTM Advantages e Seamless brand experience e Single user identity e¢ Common platform to launch and cross-sell Shared Framework fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 47: Innovation Acceleration
Innovation Acceleration fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 48: One Global Network
: _One Global Network . Pe Yo" » i bie ae
Slide 49: Thank you
fastly Thank investor Day I you: 2023 ©2023 Fastly, Inc. | Confidential
Slide 50: Q&A
fastly Q&A
Slide 51: Go-to-Market
fastly Go-to-Market Acquisition, Retention, & Expansion arett Shik re Ir Chief Revenue Officer Investor Day 2023 Inc. | Confidential
Slide 52: Go-to-Market Function
Go-to-Market Function Customer Success Sales Prospects & Customers Marketing fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 53: Segmentation and Coverage
Segmentation and Coverage Routes to Market cm ———_ Direct, Global & Regional Partners, —_> Hyperscalers, Sls Enterprise Mid Market SMB @>$1B in Revenue @ $50M-$1B in Revenue @ $50M in Revenue @$100K+ Fastly ARR @ $25-$100K Fastly ARR @ <$25K Fastly ARR < Media & Entertainment > - See definitions pro
Slide 54: Keys to Success
Keys to Success Customer Acquisition Sales Incentives Vertical Focus Simplified Pricing & Packaging Partner Activation Optimized Sales Experience fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 55: YTD May '23 Partner Results
YTD May ‘23 Partner Results <<. TEM B winner 2025 | Deal Registration Deal Registrations - Monthly Received 2022 ™ 2023 107 33 99% YTD Deal regs Partners engaged New Logo % il a (+128% YoY?) (+27% YoY’) (+29% YoY") 1 As of May 31, 2023 fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 56: Addressing Key Business Issues Across Verticals
Addressing Key Business Issues Across Verticals E-Commerce, lies & tet High Tech Finance Hospitality Entertainment BB lq al == T 4 Global Optimization by Geo Low Latency Video and Media Shield Global Traffic Fast Experimentation and A/B Testing Load Balancing Anti-Piracy (Watermarking, etc.) Account
Slide 57: Building Pipeline at Fastly
Building Pipeline at Fastly Expanding Brand Awareness Scaling Demand Generation Outbound Prospecting Deal Registrations Partner Marketing Cross-Sell Inbound Leads and Upsell fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 58: Putting It All Together
Putting It All Together Marketing e Brand awareness e Demand generation e Analyst relations e Content marketing Sales e New logo acquisition + e Vertical focus + e Partner leverage e Geographic expansion Customer Success Advocate for VoC Prevent churn Grow revenues Renew contracts Go-to-Market Team
Slide 59: Go-to-Market: Customer Success
fastly Go-to-Market Kim Ogletree Customer Success Chief Customer Officer Investor Day 2023
Slide 60: Drive Customer Satisfaction, Grow Wallet Share
Drive Customer Satisfaction Grow Wallet Share
Slide 61: Land and Expand Motion
Land and Expand Motion Onboard Discover Explore Advocate Expand Account team Cultivate Increase Sponsor and Cross-sell and strategy relationships adoption engage upsell fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 62: Account Management
Account Management Engagement model is right sized to account — Customer Insights Panel = Executive Sponsorships — Voice of Customer (VoC) product use cases = Support Model fastly. Investor Day | 2023 ©2023 Fastly, Inc. | Confidential
Slide 63: Edge Development Worldwide CDN Web App/API Protection
Edge Development Worldwide CDN Web App/API Protection
Slide 64: Results
Results Employee Transactional Revenue Engagement' CSAT2 Retention? Client Services Employee Engagement score as of April 1, 2023 2 Annual average CSAT as of May 31, 2023 3 Annual Revenue Retention rate as of December 31, 2022 fastly. 23 Fastly, Inc. | Confidential Investor Day | 2023
Slide 65: Scaling Operations
fastly Scaling Operations Nick Rockwell EVP, Strategy and Operations Investor Day 2023
Slide 66: The Network is at Scale
The Network is at Scale ( # of POPs: 991 ) Total Egress: 265 tbps? # of caches: 56772 As of May 31, 2023, 2s of March 31, 2023 \ J \ ( Annualized Growth: Total volume: +40%3 Utilization: +30%4 3 Jan. 2023 actual vs. Dec. 2023 projected “Trailing 12 months as of March 2023 \ S fastly. ©2023 Fastly, I
Slide 67: Transit Cost
NA/EU Transit Cost $ ROW Transit Cost $ Transit Backbone
Slide 68: The Biggest Lever is Innovation
The Biggest Lever is Innovation
Slide 69: One Cloud, Software Defined
One Cloud, Software Defined All products benefit Compute e More CPU capacity e Higher performance on every cache e Improved memory utilization f+) End user <joo0o &-) | End user End user +. Delivery e Higher throughput e Avoid link congestion for improved performance e More storage = higher < origin
Slide 70: Scale Drives Data Drives Optimization
Scale Drives Data Drives Optimization Scale Smarter Investment Consistency Predictability fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 71: Engineering the Business
Engineering the Business ~ Understand production adoption ~ Streamline Quote-to-Cash process ~ Instrument the customer journey ~ Optimize demos, free trials, PoC’s performance ~» Maximize cross-sell & upsell > Pipeline visibility fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 72: Simplify Everything
Simplify Everything % Y Reduce Cost Reduce Friction Stop Spending on Complexity Free Sales Team to Sell fastly. Investor Day | 2023 ©202;
Slide 73: Financial Overview
fastly Financial Overview Ron Kisling Chief Financial Officer Investor Day 2023
Slide 74: Drivers to our Financial Model
Drivers to our Financial Model al Revenue Growth * Customer acquisition * Revenue expansion * Retention « Revenue mix and cross-sell y,Inc. | Confidential stl Platform Leverage & Scale GM leverage with scale Platform efficiency gains through software updates Improved investment planning 2; Financial
Slide 75: Growth by Customer Cohort
$300 Growth $250 $200 $150 $100 $50 $0 2017 2018 2019 2020 2021 2022 2017 Cohort 2018 Cohort 2019 Cohort 2020 Cohort 2021 Cohort 2022 Cohort
Slide 76: Enterprise Customer Count, Revenue, RPO
Enterprise Customer Count Revenue RPO LTM NRR RPO Growth YoY Q4:21 Q1:22 Q2:22 Q3:22 Q4:22 Q1:23 Q4:21 Q1:22 Q2:22 Q3:22 Q4:22 Q1:23 ▪ ▪ ▪ ▪ ▪ ▪
Slide 77: Revenue, Cost of Revenue, Gross Profit
2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 Revenue Cost of Revenue Gross Profit GM% Incremental GM% YoY
Slide 78: 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2021 2022
2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 • • •
Slide 79: 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23
2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 76.7% 71.9% -10.1% -12.0% 67.6% 67.0% -18.3% -15.6% -17.7% -26.2% 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2021 2022 Q2:22 Q3:22 Q4:22 Q1:23
Slide 80: Adjusted EBITDA, Cash Capex, FCF
2021 2022 Q2:22 Q3:22 Q4:22 Q1:23 2023F Adjusted EBITDA 1 Cash Capex FCF
Slide 81: Cash Flow From Operations and Free Cash Flow
2022 Cash Flow From Operations 2023 2024 2025 2026 Cash Capex1 Repayments of lease Other 2 Free Cash Flow
Slide 82: Incremental Gross Margin
Incremental Incremental Gross Operating Gross Operating Gross Operating Margin Margin Margin Margin Margin Margin G&A S&M R&D
Slide 83: Closing Comments, Q&A
fastly Closing Comments, Q&A Investor Day 2023
Slide 84: Thank you
fastly Thank investor Day I you: 2023 ©2023 Fastly, Inc. | Confidential
Slide 85: Appendix
APPENDIX fastly. ©2023 Fastly, inc. | Confidential Investor Day | 2023
Slide 86: Key Metrics Definitions
Key Metrics Definitions Adjusted EBITDA - Excludes stock-based compensation expense, depreciation and other amortization expenses, amortization of acquired intangible assets, acquisition-related expenses, executive transition costs, interest income, interest expense, including amortization of debt d
Slide 87: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (in $ thousands, except percentages) Revenue Cost of revenue [GAAP gross profit kcbased compensatios zation of acquired intangible asscts 2475. 2475 3.300 Non-GAAP cost of revenue 79,575 Non-GAAP gross profit z 203,455 [GAAP gross margin 32.95% Non-GAAP gress margin
Slide 88: Adjusted EBITDA
Adjusted EBITDA (in $ thousands, except percentages) Adjusted E1 GAAP net In Adjusted EBITDA Adjusted EBITDA as a percentage of revenue fastly. ©2023 Fastly, Inc. | Confidential Investor Day | 2023
Slide 89: Free Cash Flow
Free Cash Flow (in $ thousands, except percentages) Cash flow used in operations and equipment erty and equipment of finance lease liabilities, Free cash flow Deployments of prepaid capital equip Cash capex Cash flow used in operations as a percenta Cash capex as a percentage of revenue Repayments o
Slide 90: Thank you
fastly Thank investor Day I you: 2023 ©2023 Fastly, Inc. | Confidential