Fastly(US:FSLY)2023-08-01 16:00Revenue Performance - Revenue for the three months ended June 30, 2023, was $122.8 million, a 20% increase from $102.5 million in the same period of 2022[154]. - For the six months ended June 30, 2023, revenue was $240.4 million, up 17% from $204.9 million in the same period of 2022[154]. - U.S. revenue for the three months ended June 30, 2023, was $89.9 million, accounting for 73% of total revenue, an 18% increase from $76.1 million in the same period of 2022[213]. - International revenue for the three months ended June 30, 2023, was $33.0 million, representing a 25% increase from $26.5 million in the same period of 2022[213]. - Revenue is primarily derived from usage-based fees and fixed-rate recurring revenue from security and other products and services[192]. Customer Metrics - The company's 10 largest customers accounted for 36% of revenue in the trailing 12 months ended June 30, 2023, compared to 33% in 2022[155]. - As of June 30, 2023, the Total Customer Count using the new methodology was 3,072, an increase from 3,025 in the same period of 2022, while the prior methodology reported 2,965 customers compared to 2,894 in 2022[175][178]. - The Enterprise Customer Count under the new methodology reached 551 as of June 30, 2023, up from 499 in 2022, while the prior methodology reported 520 enterprise customers compared to 471 in 2022[182][181]. - The Average Enterprise Customer Spend increased to $818 thousand under the new methodology as of June 30, 2023, compared to $742 thousand in 2022, while the prior methodology reported $809 thousand versus $730 thousand in 2022[185][184]. Financial Loss and Profitability - Net loss for the three months ended June 30, 2023, was $10.7 million, an improvement from a net loss of $16.4 million in the same period of 2022[155]. - Gross profit for the three months ended June 30, 2023, was $64.2 million, representing a 39% increase from $46.1 million in the same period of 2022[219]. - Operating expenses for the three months ended June 30, 2023, totaled $114.0 million, a slight decrease of 1% compared to $115.0 million in the same period of 2022[221]. - The net loss attributable to common stockholders for the three months ended June 30, 2023, was $10.7 million, compared to a net loss of $16.4 million in the same period of 2022[207]. Research and Development - Research and development expenses as a percentage of revenue were 30% for the three months ended June 30, 2023, down from 38% in the same period of 2022[169]. - Research and development expenses for the three months ended June 30, 2023, were $37.4 million, a decrease of 3% from $38.7 million in the same period of 2022[222]. - Research and development expenses decreased by $4.3 million, or 5%, to $74.9 million for the six months ended June 30, 2023, compared to $79.2 million for the same period in 2022[223]. Cash Flow and Liquidity - As of June 30, 2023, cash, cash equivalents, and marketable securities totaled $475.4 million[236]. - Net cash provided by operating activities was $16.1 million for the six months ended June 30, 2023, compared to cash used of $29.9 million for the same period in 2022[243]. - The company expects cash and cash equivalents, along with available borrowing capacity, to be sufficient for anticipated cash needs for at least the next 12 months[238]. - Cash provided by investing activities for the six months ended June 30, 2023 was $324.5 million, mainly from $342.9 million of maturities and sales of marketable securities[247]. - Cash used in financing activities for the six months ended June 30, 2023 was $210.9 million, primarily for debt extinguishment of $196.9 million[249]. Cost Structure - Cost of revenue includes fees paid to network providers and third-party data centers, with expectations for a decrease in cost as a percentage of revenue over the long term[195]. - Cost of revenue for the three months ended June 30, 2023, was $58.6 million, a 4% increase from $56.5 million in the same period of 2022[217]. - Gross margin for the three months ended June 30, 2023, improved to 52%, up from 45% in the same period of 2022[219]. - General and administrative expenses are expected to decline as a percentage of revenue as the company implements sales tax collection mechanisms[202]. Expansion and Strategy - The global network spans 79 markets across 35 countries as of June 30, 2023[170]. - The company plans to continue investing in its platform and network infrastructure to support revenue growth and customer needs[169]. - The company aims to expand its customer base across diverse industry verticals by enhancing product experience and leveraging its partner ecosystem[157]. - International expansion efforts are ongoing, with the edge network present in 58 markets and 34 countries outside the United States as of June 30, 2023[164]. Debt and Interest - Net gain on extinguishment of debt was $36.8 million for both the three and six months ended June 30, 2023, a decrease of $17.6 million, or 32%, compared to $54.4 million for the same periods in 2022[228]. - Interest income increased by $6.5 million, or 298%, to $8.7 million for the six months ended June 30, 2023, compared to $2.2 million for the same period in 2022[230]. - Interest expense decreased by $0.8 million, or 22%, to $2.4 million for the six months ended June 30, 2023, compared to $3.2 million for the same period in 2022[232]. - Other expense, net decreased by $0.9 million, or 46%, to $1.1 million for the six months ended June 30, 2023, compared to $2.0 million for the same period in 2022[234]. Accounts Receivable - The company experienced a net increase in accounts receivable of $10.2 million due to business growth and timing of cash receipts[245].