Fastly, Inc.

Good afternoon. My name is Carmen, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Fastly first quarter 2026 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 11 on your telephone. You will then hear a message advising your hand is raised. If you would like to withdraw your question, press star 11 again. Thank you. And I would like to turn the conference over to Vern Essie, investor relations at Fastly. Please go ahead.

Thank you. And welcome, everyone, to our first quarter 2026 earnings conference call. We have Fastly's CEO, Kip Compton, and CFO, Rich Wong, with us today. The webcast of this call can be accessed through our website, Fastly.com, and will be archived for one quarter. A copy of today's earnings press release, related financial tables, and supplement, all of which are furnished in our 8K filing today, can be found in the investor relations portion of Fastly's website, along with the investor presentation. During this call, we will make forward-looking statements, including statements related to the expected performance of our business, future financial results, product and services, sales and growth, strategy, long-term growth, and overall future prospects. These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected or implied during the call. For further information regarding risk factors for our business, please refer to our filings with the SEC. including our most recent annual report filed in Form 10-K and quarterly reports filed in Form 10-Q filed with the SEC and our first quarter 2026 earnings release and supplement for discussion of the factors that could cause our results to differ. Please refer in particular to the sections entitled risk factors. We encourage you to read these documents. Also note that the forward-looking statements on this call are based on information available to us as of today's date. We undertake no obligation to update any forward-looking statements except as required by law. Also during this call, we will discuss certain non-GAAP financial measures. Unless otherwise noted, all numbers we discuss today, other than revenue, will be on an adjusted non-GAAP basis. Reconciliations and the most directly comparable GAAP financial measures are provided in the earnings release and supplement on our investor relations website and filed with the SEC. These non-GAAP measures are not intended to be a substitute for our GAAP results. Before we begin our prepared comments, please note that during the second quarter, we will be attending the William Blair 46th Annual Growth Stock Conference in Chicago on June 2nd and the D.A. Davidson 2026 Technology Consumer Conference in Nashville on June 11th. And also mark your calendars for our Investor Day, taking place on September 23rd at the NASDAQ Market Site in New York. Now I'll turn the call over to Kip.

Good afternoon, everyone, and thank you for joining us. We had a great start to the year at Fastly. In Q1, we delivered $173 million in revenue, up 20% year over year and near the high end of our guidance range. Fastly's value proposition is resonating with our customers, driving strong performance and growth in security and compute. Our focus on traffic engineering and platform efficiency continues to deliver results with another quarter of record gross margins. Security growth accelerated 47% year over year and represented 22% of our total revenue. Our industry-leading WAF continues to perform well, and we're also seeing increasing momentum across our portfolio. In fact, among instances of security products sold to new customers in the quarter, almost half were of our newer products, DDoS protection, bot management, and API discovery and inventory. We believe these are clear signals that our broader security suite is opening opportunities for wallet share expansion with existing customers while attracting new customers to the Fastly platform. Increased demand for our compute offering drove the other category up 67% year over year, marking our largest quarter-on-quarter revenue step-up ever in this category. We expect continued momentum in compute as customers address increasingly demanding edge workloads and prove out high value AI use cases. On a combined basis, security and other saw impressive growth of 50% year over year, and we anticipate these product lines will exceed the 200 million annual run rate milestone by late 2026. In network services, our platform's superior performance, reliability and value are driving continued share gains and delivered 11% year-over-year growth in the quarter, roughly double the market growth rate. We believe the Fastly platform's appeal is fueling momentum across the portfolio as customers increasingly prioritize secure, reliable and innovative solutions where performance matters. Our go-to-market execution continues to deliver strong results including growth and new customers across key verticals in Q1. At the same time, our continued expansion within our existing base remains robust and drove LTM NRR to 113%, as Rich will discuss later in the call. We also saw broad base strength year over year across all geographies. We are continuing our investment in APJ, highlighted by the recent opening of our new office in Singapore. Following key leadership hires in Q1, we remain committed to scaling our regional presence with additional strategic talent this year. To further accelerate the momentum of our go-to-market transformation, we hired Joan Jenkins as our new chief marketing officer. Joan brings over two decades of experience leading global marketing organizations at world-class companies, including Informatica, Druva, Oracle, and Cisco. Joan has a proven track record of building high-performing teams, driving category leadership, and importantly, strengthening the AI narrative to drive growth. Joan will be instrumental in bringing the Fastly platform story to a global audience, and we are excited to have her on the leadership team. Turning to AI, we see the rise of autonomous agents as a long-term growth driver. The edge has become critical for scaling and securing AI across multi-cloud environments. Fastly's flexible, programmable platform is built for this moment. For our customers, traffic generally passes through the Fastly platform regardless of where agents are hosted. We are co-innovating with them to secure and scale their AI use cases and helping them manage and optimize a massive new wave of automated traffic. AI bot management is an early example of this. Most importantly, this strategy is working. It is actively building our pipeline. As a result, we believe AI is a tailwind for our business. Now let me shift gears and provide details on some outstanding customer wins in Q1, including several seven-figure deals. We closed a multimillion-dollar AR full-platform win to support a large social media platform's API and video-on-demand operations. By meeting rigorous availability and security standards, we mitigated downtime and data breach risks and enabled 24-7 continuity for millions of users. To enhance user trust, a privacy-first browser customer leveraged our platform to power a native in-browser VPN. The Fastly platform enabled them to fulfill their core privacy promise, critical to their brand, at global scale and support long-term user retention. A global social media corporation chose Fastly in a critical cross-sell security win. After a high-profile industry outage, the customer turned to Fastly, an established and reliable partner, to help secure its global API traffic. By adding Fastly, the customer reduced their infrastructure risk, improved reliability, and supported uninterrupted platform availability. Lastly, a multinational tech company chose Fastly for our network security and privacy offerings to accelerate and secure their critical workloads. We're also seeing momentum in AI bot management wins in conjunction with our leading NGWAP offering, including an enterprise cloud storage provider replaced a fragmented legacy setup by consolidating app security and delivery on the Fastly platform. Deploying our next-gen WAF and advanced bot management provided robust, scalable security compliance without sacrificing performance. Facing daily malicious AI bot traffic, a longstanding media customer added ContentGuard, a new product in the Fastly security portfolio introduced this quarter, to protect their intellectual property without compromising the reader experience. A leading digital payment conglomerate expanded its Fastly footprint by adding 10 new products and services on our platform. With this expansion, they maximized network availability, safeguarded revenue, and enabled 24 by 7 availability against cyber incidents. We were especially pleased to see a partner-enabled deal with a Japanese financial services provider. Working through a regional partner offering 24-7 local support, this customer chose the Fastly platform to enable and secure a critical international expansion. Through the adoption of Fastly's security and network services offerings, the customer was able to build a highly reliable, compliant infrastructure for its regulated business-critical payment systems. This is an example of our international go-to-market expansion at work. As these wins illustrate, our flexible platform and continuous innovation uniquely positioned Fastly to capture growing AI demand and our expanded security portfolio directly drives customer wins and growth. Highlights of our expanding security portfolio from Q1 include ContentGuard. Managing the exploding AI bot landscape requires more than just a simple switch. It requires continuous intelligence. We launched ContentGuard to give publishers precise control over access to their content. Leveraging Fastly's pre-cache inspection, customers can stop unauthorized AI agents without sacrificing the speed or performance of their authorized traffic. This unmatched visibility provides the critical data our customers need to secure and monetize their intellectual property. API security. As AI accelerates code delivery, it creates security blind spots through shadow APIs. We've addressed this customer need by enriching our web application API protection portfolio, enabling enhanced API discovery and inventory tools. Automated API cataloging gives enterprises continuous at scale visibility to secure their ecosystems without slowing developer velocity. Fastly Agent Toolkit. We released a toolkit that equips AI coding agents with Fastly specific skills. This toolkit accelerates the customer development lifecycle, enabling customers to build, deploy, and secure edge services faster and with expert-level precision, ultimately driving quicker time to value on the Fastly platform. We also enhanced our compute and security offerings by adding support for additional programming languages. This completes the core suite of languages requested by our enterprise customers, extending our premium security layer to a wider set of edge applications. Given these highlights, we are proud that Fastly was named one of only two leaders in the Forrester wave for edge development platforms. Fastly also earned a perfect score for innovation and was the only vendor to receive a top five out of five rating for workload and network isolation, as well as observability. This recognition underscores our platform's differentiated strength, built-in resilience, and the observable, actionable insights we deliver to customers. Additionally, Fastly was the only company to receive a Halo designation, highlighting superior customer feedback and our continued commitment to delivering business value for our customers. Next month marks my first year as CEO of Fastly, and I'm incredibly proud of what we have accomplished. We have a leadership team in place that is deeply committed to our core mission, making the Internet a better place where all experiences are fast, safe and engaging. We believe our platform is the gold standard for flexibility and resilience without compromising performance. We see our story resonating with the market, and we are delivering tangible value through our expanded portfolio and relentless customer-centric approach. As we scale, Fastly is positioned to drive better business outcomes for our customers and long-term value for our shareholders. Rich will now walk through our Q1 financial results and guidance in more detail. Rich, over to you.