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spk01: Good evening. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Fastly third quarter 2021 earnings conference call. 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to Stephanie Flegel, Investor Relations at Fastly.
spk08: Please go ahead.
spk00: Hi, everyone. Thank you for joining our third quarter 2021 earnings call. We have Fastly CEO Joshua Bixby and CFO Ron Kisling with us today. Before we start, I want to remind everyone about the usual format of our call. We published a shareholder letter on our investor relations website with the SEC about an hour ago. Since the letter provides a lot of detail, we'll make some brief opening remarks and reserve the rest of the time for your questions. During this call, we will make forward-looking statements, including statements related to the expected performance of our business, future financial results, strategy, long-term growth, and overall future prospects. These statements are subject to known and unknown risk uncertainties, and assumptions that could cause actual results to differ materially from those projected or implied during the call. Please take a look at our filing with the SEC and our third quarter 2021 shareholder letter for a discussion of the factors that could cause our results to differ. Also note that the forward-looking statements on this call are based on information available to us as of today's date We disclaim any obligation to update any forward-looking statements except as required by law. Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures are provided in the shareholder letter on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call is being webcast and will be archived on our website shortly afterwards. With that, I'll turn the call over to Joshua.
spk08: Thanks, Stephanie.
spk03: Hi, everyone, and thanks for joining us today. And a particular welcome to Ron, who has been on board since August, and I can truly say has hit the ground running. We are thrilled to have him on board. I hope you've all had a chance to read this quarter's shareholder letter. Before we jump into our results for the quarter, I want to take a step back and discuss where the business is today in the context of our long-term goals. With so many trends affecting Fastly in recent quarters, we thought it would be helpful to refresh everyone on the big picture. We have faced some unique tailwinds and challenges and navigated ever-changing market conditions over the past two years, so our trajectory has not been linear. Today, though, we are extremely confident that our edge cloud network is going to be the future of how content is created, secured, and delivered on the internet. Our computed edge platform continues to provide mission-critical stability and support to the companies fueling our digital lives, including news, e-commerce, entertainment, and many more verticals for billions of users globally. We continue to invest against these opportunities and believe that successful execution will lead to a billion-dollar business by 2025. One billion dollars in revenue by 2025 will be one of our primary business goals as we head into our next phase of growth. With our new CRO, Brett Shirk, now fully on board, we are aggressively accelerating our customer acquisition through clarity of direction, accountability, and unrelenting focus. To drive success, we have defined three key priorities and outlined additional key goals. First, increase our edge computing platform usage by 50x from current levels by the end of 2022. Second, reduce friction for developer-led enterprise adoption and secure 100,000 enterprise developers on our platform by 2023. And third, 10x revenue for our security business by 2025. We believe that the market is shifting as enterprise developers are increasingly playing a critical role delivering always-on, instant experiences with security and privacy embedded into all aspects of the user experience. During the quarter, we reached an important milestone of processing over a trillion requests on Computed Edge. But this is just a start, and we will continue to invest in new products and capabilities within our platform to win over developers. In order to remove barriers and accelerate adoption for enterprise developers, we introduced the start of a much broader incentive and brand program. We're offering customers that are willing to build on Computed Edge nearly a million dollars in credit. We also launched our fully functional trial version of Computed Edge. We know from our self-service experience that rapid developer success and self-reinforcing positive experiences are critical to driving enterprise-wide adoption. Customers and developers can now explore and experiment on Computed Edge. Alongside delivering compute, we want to accelerate the success of our security-led go-to-market motion. The strong pipeline of new products that we will introduce in the coming quarters will further fuel that strategy and lead to further growth from new and existing customers. Moving forward, we are focused on execution, bringing lasting growth to our business and delivering the value to our shareholders that we outlined from the very beginning. Now that you have a context for our path forward, let me walk you through our third quarter results. Following the outage in Q2 and over the course of Q3, our top customers returned traffic and continued to ramp following significant stability and resiliency work for our infrastructure and engineering teams. And alongside this return, we successfully executed against our go-to-market motion and had the largest organic quarter-over-quarter increase in both enterprise and total customers since IPO. We saw great traction in edge computing and security over the quarter with broader customer adoption across all geographies and industries. Their innovative use of our security edge computing platform is defining the future. I'd like to highlight three of our customers. EdgeMesh, an online e-commerce acceleration company rewrote their e-commerce acceleration stack onto computed edge and saw 5X performance improvement. Mercari, a Japanese consumer to consumer company leverages Computed Edge to pre-process data from their iOS apps before sending it on to their central warehouse. And Webflow, the leading visual development platform for websites, chose to double down on Fastly's security offerings through the next phase of their growth. I would encourage you to read our shareholder letter where we outline additional exciting customer use cases. We know there is more work to be done, and we are confident in our ability to continue to execute against the plan we have laid out. Lastly, I am thrilled to welcome Vanessa Smith and Richard Daniels to our board of directors. They bring vast experience across security, healthcare, and digital transformation, which makes them extraordinarily qualified to help us accelerate our leadership in edge computing and security. I'd also like to thank Kelly Rice and Sunil Dhaliwal for their incredible work. With that, I'll turn it over to Ron to go over the financial results for the quarter.
spk02: Thank you, Joshua, and good afternoon, everyone. It's great to be on board, and I look forward to continuing to build relationships with each of you on the call today. In the first couple of months, I've had the opportunity to observe, listen, and learn with this talented team. This has only reinforced my excitement for Fastly's potential. It is clear that digital transformation is here to stay. As I get into the numbers, I want to remind everyone that the contribution of Signal Sciences has been consolidated into our third quarter financial results, as well as our key metrics. In Q3, we generated $87 million in revenue, net of $900,000 deferred revenue write-down associated with the acquisition of Signal Sciences, representing 23% year-over-year top-line growth. In Q3, our NRR was 112% up compared to 93% in the prior quarter. Our LTM NRR remained strong at 114%, and our dollar-based net expansion rate was 118%. Our gas gross margin was 52.4% for the quarter compared to 58.5% in the same quarter a year ago. Our non-gas gross margin, which excludes stock-based compensation and intangible amortization expenses, was 57.5% for the quarter compared to 59.8% in the same quarter last year. This decline in non-gas gross margin primarily reflects the return to traditional seasonal usage patterns as compared to the increased traffic we experienced in the prior year due to the onset of the COVID pandemic, which favorably impacted gross margins in 2020. As we have previously outlined, we have a tremendous opportunity to invest in our edge cloud network and plan to do so to position Fastly for future growth. Our operating expenses were down 3.8 million, largely due to increased capitalization of internal use software. The amount of capitalization of internal use software fluctuates on a quarter to quarter basis based on the stage of development of certain projects. Turning to the balance sheet, we ended the quarter with $1.1 billion in cash, restricted cash and investments. We remain well capitalized to invest in the future growth of Fastly. Now, on to guidance. For the fourth quarter, we expect revenue in the range of $90 to $93 million, non-GAAP operating loss in the range of $18 to $15 million, and non-GAAP net loss per share in the range of 19 to 16 cents. For the full year 2021, we have raised the low end and the midpoint of guidance to align with our Q4 guidance outlook and expect revenue in the range of 347 to $350 million. We expect non-GAAP operating loss in the range of 63 to $60 million. non-GAAP net loss per share in the range of 58 to 55 cents. We will invest in our network given the large opportunity in front of us. We expect our gross margin to be relatively flat to down slightly in the short to medium term and capital expenditures as a percentage of revenue to be at the high end of our previously disclosed range of 12 to 14% for the full year. As Joshua described, we have seen some ups and downs over the past few quarters due to both challenges and some big successes. But as I stand here, the new person in the room, I am extremely confident in our ability to execute and believe we are well positioned to achieve the goals we have laid out for you today. With that, I'll turn the call back over to the operator to take your questions.
spk01: Thank you. And just as a reminder, if you would like to ask a question, please press star then one on your telephone keypad. Our first question is from Will Power with Baird.
spk08: Your line is open. Will Power with Baird.
spk01: Your line is open. Please go ahead.
spk08: Oh, great.
spk10: Thanks for taking the question. Good afternoon. Yeah, let me, I guess, try to sneak in a couple of here. You know, Ron, I guess on the guidance commentary, would love to get some perspective on the drivers of the, you know, the flat, the slightly down gross margins and the higher capex. It sounds like that's probably success-based driven or driven by you know, the growth opportunities, but we'd love to better understand the key drivers there and then have a second question. Okay.
spk02: So I think, you know, gross margin, I think the declining gross margin that we saw primarily reflects in the current quarter-over-year basis. The return is on the traditional seasonal usage patterns as compared to the increased traffic we experienced in the prior year, you know, to the onset of the COVID pandemic, which, you know, favorably impacted gross margins, you know, in 2020. I think As we talked about previously, we see a great opportunity to invest in the Edge cloud network this year, and we intend to do that to be well positioned for growth. And we're continuously leveraging our investments in infrastructure capacity and customer mix to build a long-term vision of gross margin accretion with products like Security and Edge. But if we intend to invest in this structure, we do expect some declines going into Q4. One of the drivers is particularly as we expand internationally, A lot of that capacity, sites, and bandwidth needs to be brought online and in place ahead of traffic. And so you do see a little bit of that buy ahead that's affecting our gross margins as we do this investment.
spk10: Okay. And then maybe just to follow up on the success you're seeing in computed edge, I mean, I think you referenced the trillion requests. It seems like you're seeing and you alluded to some of the early customer use cases. Is there any way to kind of frame revenue contribution or growth rate from that segment where we sit today, either quantitatively or qualitatively? I guess it would be the same question for security, just trying to better understand kind of the growth rates and magnitude of those key pieces of the business.
spk02: Yeah, so I think security is probably the first one to talk about because it's been out there and it's been a big contributor since the acquisition of Signal Sciences back in Q4 of 2020. In Q3, Signal Sciences procured about 11% of our revenues. That's up from 8% in Q4 of last year, which was the first combined quarter. And I think importantly, if you kind of look at the growth rate we're seeing, on a quarter-to-quarter basis, we're seeing growth of 12%. So we're seeing healthy growth. And I think what we see is it's important to customers And as we cross-sell and up-sell, that is an opportunity that's helping to drive that growth and see it contributing a bigger piece of our revenues over time. I think on the compute, it's still nascent. It's early days, and it's not a material amount of revenue thus far, but we believe it has a great opportunity as we attract developers and add more applications to the Edge compute network.
spk08: That's great. Thank you. Thanks, Will.
spk01: Our next question is from James Fish with Piper Sandler. Your line is open.
spk09: Hey, guys. Thanks for the questions here. I guess maybe starting on the signal scientist side, I guess how is the integration of signal scientists and Fastly going? Is security at edge now generally available, or what's left to integrate still to make it more broadly available? And I guess why the confidence in going up 10x here reaching about 400 million in four years because really when you think about it very few companies have actually been able to have that growth rate and security and usually they're in the big endpoint or network markets compared to where you're at today so trying to understand also how much of that is going to come from inorganic opportunities as well as where these new products are being launched in sure hey jim is joshua here i think you know let me start on the 6i integration side so
spk03: You know, it's been three quarters, as Ron talked about earlier. We've had really strong success. We have launched the first phase of having SIGSCI be available at the edge, and that has gone well, and we're going to continue to invest there. We haven't fully completed that plan. You know, we're looking at a target in the Q2 range to have that ready and out in broader availability. I think the important aspect, when you actually look at signal science, is one of the things that attracted us and certainly attracted our customers to that platform was the variability of implementation options. So this can be implemented on premise. It can be implemented in the cloud. It can be implemented through a variety of ways. And I think the success that we've seen in that revenue growth and what we, as you can tell from our ambitious goals, speak to the continued broad adoption, we think that that's one of the assets. So we're not stalled here. We're seeing that growth. We definitely want to get something that at the edge that is in general availability, but it also has to meet the requirements that we have, which is massive scale, and we need to make sure that it fits in with the portfolio. So I tell you there's some work to do. We're making good progress. I think we all wish it would be faster, but we're seeing that progress. I think in terms of the overall arching goal, and if we step back here a little bit, we see – We see ourselves being at the start of this journey. So we talk about 400 on enterprise customers. If you just go and look at our largest direct competitor, they have 8,000 to 10,000. But if you cast your eyes over the legacy software and appliance vendors, you're talking about companies that have 20, 30, 40, 50,000 enterprise customers. So when we look at the position that we're in today and we look at the trends, which are all of these security trends, components, appliances, legacy infrastructure is all disappearing and it's all coming to the edge cloud. We feel extremely confident. We are in the dawning of this new era where every appliance we believe over the next few years is going to be replaced. We believe that this idea of having this proliferation of many appliances all with specialized workloads is something our customers don't want. So we are looking at billions of dollars in revenue that we feel is up for grabs. And when we look at the 10X target, we certainly feel like that's ambitious, but it's something that we feel we're well-situated for. This is all coming to the cloud.
spk09: All right, and if I can sneak another one in there, doing what Will did in talking about computed edge. You brought up an example with Macari of pre-processing the data via computed edge, but then it gets sent on to a central data warehouse Do you guys feel like you need to do more on the storage side at the edge like some of your competitors have done in the edge space or even kind of a centralized storage environment to really bring on the full developer suite?
spk03: You know, our perspective on storage hasn't changed, which is that our customers are looking for us to provide that high-value service of manipulation of data and ensuring and adding value to that data. And they want us to offload their origins from as much work as possible. You know, we've got these amazing partnerships with, you know, the large clouds and other companies that are really, really good at storage. And we feel like those, you know, we see an ecosystem of partnerships here. So I think the answer is we are going to continue to invest in ensuring that we have the data that our customers need us to have. But we also acknowledge and recognize that there's a place for the central clouds here. And we have a different perspective in terms of looking at it as an ecosystem. It's how we've looked at our entire business. If you think about all the partnerships that we have across logging, across data, across you know, the broader portfolio that we're doing in compute. We believe in an ecosystem. We do not believe in a walled garden. And I think that approach you will see also on data. So we have a job to do, which is to make sure that we have the content that our customers want and the origins are getting as few requests as possible. We are best in the world at that. We intend to keep staying best in the world at that.
spk08: Thanks, Josh. Appreciate the questions, Jim. Thank you.
spk01: Our next question is from Phil Rigby with RBC Capital Markets. Your line is open.
spk07: Hey, guys. Thanks for taking the question. I want to start on this promotion you announced for Computed Edge. And first, I know we're in early days here, but can you give us a sense on what you're seeing in terms of adoption or interest or maybe your expectations there? And then second – Any idea you can give us on how we should be thinking about this in terms of revenue impact over the next 12 months?
spk03: Sure. Hey, Phil. It's Joshua here. I think on the computed edge motion, we have a long – our entire company's experience is based on this idea that developers at time of inspiration can use our product, try our product, and they can have this sort of self-referential and self-reinforcing process where developers they don't have to go through an arduous enterprise sales cycle. They don't have to go through all these hoops. They just get to try it. And that's been the case for our delivery product and the first generation of our compute product. It's now true for the second generation of our compute product. And what we know is that that seeds the future of innovation. And so I would tell you that the motion that we announced recently around come try it, which is a really big step for us, The continued investment in the recipes and the additional sort of use cases, this is just the start. You are going to see more and more as we build out these ecosystems in terms of us feeding that developer mindset and showing the path for how compute is going to change the world. And so I would tell you that, you know, that motion, we've been doing this in our In our own little ecosystem, that's changed. We believe that the next year is a very important year in terms of getting that enterprise traction, the enterprise developer traction. You saw us set some ambitious goals of getting 100,000 enterprise developers by 2023. And again, the enterprise developers that are really important to the work that we do. So I would tell you that we are unleashing that capability. and it's something that our customers have been demanding. It's something we're truly excited about, and we're certainly going to be reporting back to you and others on how we're progressing. I'll hand it off to Ron on the revenue side.
spk02: Yeah, I think from a downside perspective, there's no – these are new things that people are going to be trying that they wouldn't have necessarily launched So ultimately, as more and more experimentation and these things get built out, they will bring them into production. And so we believe this will add traffic, this will add applications to the edge over the course of the year. And it's really going to be additive or incremental revenue as these things get deployed. From a cost perspective, I think the cost of actually supporting this is really nominal over that period of time.
spk07: Got it. That's super helpful, guys. And Josh, you talked about circling back on kind of progress, I guess, on these three goals. What should we expect in terms of future disclosures or milestones to kind of track how you're executing there?
spk03: Yeah, I mean, we set out some pretty clear milestones. Obviously, you know, a couple of them we already have been reporting revenue growth course and security. I think we're looking to formalize that in terms of, you know, what we've already done with Signal Sciences, formalize that into a cadence that we think is appropriate. Obviously, with the new goal around, you know, new published goal today around going from one to 50 trillion requests on the platform and getting to 100,000 enterprise developers. We'll be giving you a regular update and cadence on those as well. We didn't get to this position in our business by not setting audacious goals. We've always set important goals for the business. We think we're at a stage where it would be really helpful to give a little bit more visibility and be more public with them. That's a decision that we made and we will be updating you and others regularly on that progress.
spk01: Got it. Thanks, everyone.
spk08: Appreciate it. Thanks, Bill.
spk01: Our next question is from Tal Liani with Bank of America. Your line is open.
spk12: Hi, guys. I want to ask about gross margin. You said in the press release that margins are going to be flat. And if I understand your recent acquisition, the margins are higher. So does it mean that your core business, there is margin pressure or any pricing pressure?
spk02: Yeah, so I think there's two drivers. As you know, the acquisition, the Signal Sciences product does have a higher gross margin. Some of that is mitigated a little bit by purchase price adjustments that tend to get pretty de minimis as you go into 2022. What's largely offset that has been our investment in the edge cloud network, both in bandwidth and in infrastructure, to support the growth that we've seen in new customers and to be prepared for additional growth going forward. And as I indicated, particularly if we're looking at a global expansion, a lot of those costs in the international markets are costs that you incur before the traffic hits. And so that's been the bigger driver. I think from a price perspective, while there are price declines, we've actually seen a deceleration in the rate of price declines in 2021. So I think from that perspective, we feel that it's not really pricing as much as investment. There is this big year over year comparison where because of the COVID pandemic and the very quick spike in traffic, we saw exceptionally good increases in our gross margin in 2020. And, you know, what we're seeing this year is kind of returning to where we were before, and investment offset some of the benefits from the signal science's higher gross margins. I think as you look at the medium to long term, you know, as we grow security business, as we spoke about earlier, grow other products and computed edge applications, and continue to add and accelerate enterprise customers, Those are things that will be accreted in gross margins over the long term.
spk08: But to bring those customers on, we need to have a global, robust network. Got it. Thank you. Thanks, Tom.
spk01: Our next question is from Frank Laufman with Raymond James. Your line is open. Great, thank you.
spk11: What's the pace of new customer acquisitions we can expect going forward? And give us an idea of what sort of percentage of sales that you have that comes from existing customers, and then I've got to follow up.
spk03: Sure. You know, from a customer acquisition perspective, you know, Brett came into the role of Chief Revenue Officer about six months ago, and he's been making some profound and important changes in that organization. I think historically you can see the trends. I think over the medium and long term, we expect that trend to uptick. Now, is it going to be linear? It won't be. If you look at how we count, for example, enterprise customer growth, it's a backward-looking metric where we're looking back in time and adding up that revenue. So I would say over the short term, I think we will continue to see progress, but it won't necessarily be linear. But our expectation is that in the medium and long term, we will continue to see that growth as Brett transforms that organization. We're already seeing that. Obviously, this quarter showed some real strength on the enterprise count number, and that is not surprising. It sort of times with what he's done and how he's come in. He's a real hard-nosed sort of traditional sales leader who has brought a tremendous amount of discipline. Now, with that discipline comes change, and with change, you have to let that change play through. You have to let those players get on the field, and you have to let them play the game. So I think we're going to really see in Q2 and beyond, we'll see that consistent, steady growth. This is part of the transformation we're in, and those numbers speak to real progress at this time. In terms of what percentage of sales from existing customers, I think that's something that we haven't disclosed. We haven't disclosed that.
spk02: We do focus on the new customers as kind of the metric of how we're adding to that base. Okay, great.
spk08: And then...
spk02: Quick follow-up.
spk11: When you're winning Computed Edge customers, who are you competing with? Who are you seeing out there in the market? Where is this traffic coming from?
spk03: A lot of the Computed Edge use cases are new use cases. If you think about what we shared in the shareholder letter, these are use cases that traditionally were done in the central cloud or central data center. These are things that are optimized and certainly made much faster and more effective at the edge. And because the capabilities that we have in the enterprise so far exceeds anyone else that's able to play at the scale and the sophistication, this isn't a takeaway game. I mean, our major competitors or certainly competitor in the enterprise does not have a computed edge offering that we feel is competitive. And so most of these use cases are impossible to do other than on ours. on our solution at the edge. So this is a lot of new use cases. And as Ron said, I think that's really encouraging for us. I think that's something that we see as a strong differentiator. You see the progress that we've made in, for example, the Forrester report that came out recently. It really speaks to the core differentiation and the enterprise readiness of our product, particularly around the things that the enterprise cares about, like security.
spk08: So novel use cases for the most part. All right, great. Thank you very much. Thanks, Frank.
spk01: Our next question is from Rudy Kessinger with DA Davidson. Your line is open.
spk11: Hey, guys. Thanks for taking my questions. I want to start with the customers that had taken the traffic away and then read in the letter that they've all since come back. I guess any more details you could share on that? Have all of them come back? Just to what extent have they brought their traffic back? What do you expect them to kind of be back at the run rate that they were prior to when they turned it off, et cetera, that kind of stuff?
spk02: Yeah, so I think, you know, as we've said, our top customers didn't return traffic. They returned to traffic. They do continue to ramp. I think, you know, the larger customers, you know, when they come back, typically ramp their traffic back over time. You know, I don't have a specific timeline, but they are back.
spk08: And, you know, that will increase over time.
spk11: Got it. And then, you know, the $1 billion revenue target by 2025, you know, that kind of assumes a 30% revenue CAGR. You know, your Q4 guide implies about 11% growth year-over-year at the midpoint. So I guess, you know, that $1 billion target, again, should we think of that as an organic target or should we assume that includes maybe some M&A? And then just how quickly do you think you can get back up to kind of that 30%-ish growth range?
spk02: So one thing I would add, I think, as we look at kind of that growth rate is, you know, 2020 was sort of an outside growth rate. So some of the comps do tend to negatively impact our growth rates on a year-over-year basis versus 2020. If you do look at just kind of the existing growth rate going back to 2019, you know, that tagger is closer to that 30% that kind of is in line with kind of that ramp to get there. So I think, you know, that's one thing to keep in mind as you do it.
spk03: And then Rudy's Joshua here. On the inorganic versus organic side, I think we're looking at this and looking at the market opportunity, right? So we're stepping back over this long horizon and saying, does the market, what's the size of this market opportunity and how quickly can we grow? I don't think we rule in or out M&A in general. What you saw is we were very opportunistic and very thoughtful at the same time when it came to augmenting our security. And I think we will continue to do so if the opportunity arises. presents itself. But this is really about how the incredible transformation that's occurring in spend. The number of dollars that are being thrown up from traditional vendors who are not meeting the needs, who are locking people into solutions that worked in the 2000s and certainly don't work today is unprecedented. I would say we're at this incredible inflection point. So regardless of sort of exactly how it's achieved. I think right now we firmly believe that growth is there, organic or inorganic, and we will certainly be pursuing what's in the best interest of customers. But I don't think today we have significant plans on the inorganic side.
spk08: Got it. Great. Thanks for taking my questions.
spk01: Thanks, Rudy. Our next question is from Tim Horan with Oppenheimer. Your line is open.
spk06: Thanks, guys. Joshua, can you maybe just talk about the overall product offering and go-to-market? Are you thinking this is going to be like a bundled strategy where customers come in, they start using more computed edge, and the security is easy to add on, and website acceleration, and the developers almost become your go-to-market strategy? Just any thoughts about how you envision this playing out, both from the product and the go-to-market? Sure.
spk03: Yeah, Tim, it's a great question. I think it's great to have 10 years of history here where we can look back and just see what works. And, you know, when you look at the 400 plus enterprise customers that we have, most of them we've gained the same way, which is, you know, there's this dual motion, which we talked about at the IPO, which stays, you know, it's central today to our thesis as ever, which is developers at the moment of inspiration are able to play, build and dream with Fastly. And that's with Fastly Compute. That's with Fastly on the delivery side. That's with Fastly on the security side. And they are solving problems. They're not out looking for Fastly. They're out trying to solve problems. And that's where we come in. And we come in at moments of inspiration at 2 a.m. And we're built for them. We work the way they want to work. We give them control. So that's the first element of the motion. And if you look at what's happening, the enterprise motion, which has to come on top of that, because we are so central, we are so core to these organizations that we do need senior executives often to come into this process. That is a top-down process that needs to combine with the bottoms-up process. So our go-to-market is really different than a lot of other companies. You either have one or the other. There aren't a lot of companies that have both. And in that top-down motion, what you see is important is people are out solving a problem. And so what you're going to see from us and what you'll continue, what you have seen from us and continue to see from us is putting this in the perspective of here's a problem and we solve it. So you see that from some of the use cases that we talked about. You need pre-processing at the edge? Great. Because you want it to be faster, you want to send less data, you want to make smarter decisions? Great. That's a problem? Fastly solve it. And then we get into this really virtuous cycle, this flywheel where customers come in. One of the things they experience is our world-class support of all of the work that we do to work with that customer. They trust us. They start coding on us. And then the circle loops back. And if you look at this circle with some of our largest customers, there are hundreds of developers who are now in that loop for an individual customer. And that's the loop that really leads to the long-term success. And so I think the go-to-market motion for us is slightly unique, something that Brett and that entire team is working and continuing to experiment in how we Tighten that loop. How do we get it faster? But we're seeing some really encouraging numbers. And so I would say the pillars are delivery, compute, security. And it depends on what problem you're going to solve. Many of our customers have to solve them all at the same time. And that's what makes our solution unique.
spk06: And to be clear, I guess, can your services leverage one infrastructure fabric primarily at this point, or where are you with that? And secondly, can developers kind of access all these products off of one platform?
spk03: So absolutely one network, every server does everything, and that's a huge asset to us and something that has differentiated us from the start. And the idea is that it's a fully integrated experience, and that is very important to our customers.
spk01: Thank you.
spk03: Thanks, Tim.
spk01: Our next question is from Jonathan Ho with William Blair. Your line is open.
spk05: Hi, this is John Watermore for Jonathan. Thanks for taking the questions. Just a question on your perspective on the COVID-19 roll-off, the follow-on effect of the COVID-19 rolling off. Can you talk about your expectations for the normalization of activities now versus where you think it might be? You know, COVID caused us to change the way we do things. Can you talk a little bit about some of your assumptions of end user activity and such? Sure.
spk03: Yeah, I mean, we've said over the last couple of calls that we are predicting the world getting back to normal. That's what we're seeing. I'm in a room with Ron today, which feels like it's back to normal. It's nice to be in the same room. And I think a lot of people are getting back to normal. However, the processes that kicked off during COVID the digital transformation, the drive to do things differently, none of that has abated. And I think we are at a new normal. We see that with our customers and we see that with the pace of their innovation. So I believe we are not predicting that consumer behaviors, which obviously have a large impact to us, have any variation other than traditional seasonality going forward. We are not predicting any more lockdowns. We're not predicting anything that would be outside the normal course of business or normal seasonality. So none of that's baked into how we're looking at the future. It's generally back to normal. And it's a new normal, but it's generally back to normal.
spk05: Okay, thank you. And last question. You mentioned that in forthcoming quarters you'll be talking about a roadmap of new products. Are you at liberty to tell us what areas might be more focused, like security delivery versus compute, or do you think it will be even-handed across the board?
spk03: I think that for us, there's development going on in all areas. I think the ones that will probably attract the most attention are on the security and the compute side. And you're absolutely right. We have a nice pipeline. We have a lot of work that's come out of the brilliant engineers that we've brought in from Signal Sciences that will augment, for example, the security platform. So there's a lot coming. We're not at liberty to disclose them until they come out, but it's something that our customers – are asking us to take the leadership position that we are in and do even more. One of our commitments to our customers is we're going to keep the modern and the security space. The world changes all the time. So I do think security and compute are the two areas where you will continue to see innovation because you actually saw a number of things over the last six months on that as well.
spk01: All right. Thank you very much. Thank you so much. showing we have no further questions at this time. Mr. Bixby, I'll turn the call back over to you. Great. Thank you.
spk03: Before we sign off, I want to thank our employees, our customers, our partners, and our investors. We remain as committed as ever to fueling and securing digital experiences. And moving forward, we remain focused on execution, bringing lasting growth to our business, and delivering the value to our shareholders that we outlined from the very beginning. as we continue to execute against our long-standing goal of being a billion-dollar business in 2025. We look forward to connecting with many of you and hope to see many of you at the upcoming Needham, RBC, and Raymond James conferences.
spk01: Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
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