Fastly(US:FSLY)2025-05-07 20:37Financial Performance - For the three months ended March 31, 2025, revenue was $144.5 million, an increase of 8% from $133.5 million in the same period of 2024[154]. - The company incurred a net loss of $39.1 million for the three months ended March 31, 2025, compared to a net loss of $43.4 million in the same period of 2024[154]. - Total revenue for the three months ended March 31, 2025, was $144.5 million, an increase of 8% from $133.5 million in the same period of 2024[200]. - Gross profit for the three months ended March 31, 2025, was $76.8 million, with a gross margin of 53%, down from 55% in the same period of 2024[197][199]. - The net loss attributable to common stockholders for the three months ended March 31, 2025, was $39.1 million, compared to a net loss of $43.4 million in 2024[197]. - Interest income fell to $3.0 million, a decrease of 23% from $3.8 million in Q1 2024, attributed to lower interest rates and investment balances[211]. - Interest expense surged to $3.2 million, an increase of 448% from $0.6 million in Q1 2024, primarily due to the coupon interest of the 2028 Notes issued in December 2024[212]. - As of March 31, 2025, the company had cash and cash equivalents totaling $307.3 million, indicating a strong liquidity position[215]. - Net cash provided by operating activities was $17.3 million for the three months ended March 31, 2025, compared to $11.1 million in Q1 2024[225]. Customer Metrics - The top 10 customers contributed 32% of total revenue for the trailing 12 months ended March 31, 2025, down from 38% in 2024[154]. - The total customer count decreased to 3,035 as of March 31, 2025, down from 3,290 in 2024, indicating a decline in customer adoption[175][177]. - The enterprise customer count increased to 595, contributing 93% of total annualized current quarter revenue, up from 577 customers contributing 91% in the previous year[178]. - The Last-Twelve Months Net Retention Rate (LTM NRR) was 100.0% for the trailing twelve months ended March 31, 2025, down from 114.0% in 2024, reflecting challenges in customer retention[179][180]. Revenue Breakdown - Network Services revenue was $113.3 million, a 7% increase from $106.0 million in the same period of 2024, driven by growth in usage from existing customers[200][202]. - Security revenue also increased by 7% to $26.4 million, compared to $24.6 million in the prior year[200]. - U.S. revenue reached $110.5 million, accounting for 77% of total revenue, a 12% increase from $98.5 million in Q1 2024, while international revenue decreased by 3% to $33.9 million[204]. Expenses and Investments - Research and development expenses as a percentage of revenue were 26% for the three months ended March 31, 2025, compared to 29% in the same period of 2024[171]. - Research and development expenses were $37.4 million, accounting for 26% of revenue, a decrease from 29% in the previous year[197][199]. - Cost of revenue rose to $67.7 million, an increase of $7.4 million or 12% compared to $60.3 million in Q1 2024, primarily due to higher bandwidth costs[205]. - Total operating expenses decreased by 4% to $114.98 million from $119.49 million in Q1 2024, with general and administrative expenses down 11%[207]. - The company expects to continue incurring operating losses in the foreseeable future due to ongoing investments and strategic initiatives[217]. Strategic Initiatives - The company plans to continue investing in its platform and network infrastructure to support revenue growth and customer needs[171]. - The company aims to expand its customer base across diverse industry verticals by enhancing product experience and leveraging its partner ecosystem[157]. - The company is focused on increasing its sales and marketing efforts globally, particularly targeting enterprise customers[168]. - The company intends to expand its international presence, which may increase complexity and costs[166]. - The company has acquired Glitch to enhance its product offerings and support developer project management[171]. Risk Factors - The company is closely monitoring geopolitical events that could impact its business, particularly concerning customers operating in regions affected by conflict[167]. - The company does not currently engage in hedging activities to reduce exposure to currency fluctuations, although it may consider this in the future[242]. - The company identified certain triggering events for goodwill impairment, including a decrease in stock price and market capitalization, but concluded that fair value exceeds carrying amount[237]. - A hypothetical 10% change in interest rates or foreign exchange rates would not have had a material impact on the company's financial statements[241][242].