Fastly (NYSE:FSLY) Conference December 08, 2025 08:40 AM ET Company ParticipantsVernon Essi - VP of Investor RelationsRich Wong - CFOConference Call ParticipantsFrank Louthan - Senior Telecom AnalystFrank LouthanAll right. Good morning. Thanks, everybody, for being here. Thanks, everybody, on the webcast. My name's Frank Louthan. I'm the senior telecom analyst here at Raymond James. We're very pleased to have Fastly, Rich Wrong, and Vernon Essi here from the company. So maybe we just, you know, start out, R ...

Summary of Fastly's Conference Call Company Overview - **Company**: Fastly - **Industry**: Cybersecurity and Content Delivery Network (CDN) Key Points Management Changes and Leadership - Rich Wong joined Fastly as CFO in August 2023, bringing experience from previous roles in the CDN space [7][9] - Kip, the new CEO, has been instrumental in enhancing product offerings and operational execution [12][13] Product Development and Security Offerings - Fastly expanded its security product suite from one core product in early 2024 to five by 2025, including DDoS and bot mitigation products [12][13] - Security revenues grew by 30% year-on-year, indicating strong demand for their expanded security offerings [28] Market Dynamics and Traffic Growth - The CDN market has seen volatility, with some competitors exiting, leading to a more rational pricing environment [14][16] - Fastly experienced traffic headwinds in 2024 due to customers opting for multi-CDN strategies but has seen a rebound as customers recognize Fastly's superior performance [15][16] Customer Base and Revenue Growth - Top 10 customers now represent 32% of total business, down from nearly 40% 12-18 months ago, with non-top 10 customers growing at a rate of 17% year-on-year [24][25] - Fastly is focusing on cross-selling security products to existing customers, with about half of customers purchasing multiple products [27][28] Financial Performance - Gross margins improved to 62.8%, with a normalized figure of 61.8%, driven by network efficiency and pricing discipline [49][50] - The company anticipates continued gross margin improvement, projecting 61.5% for Q4 [53] Future Outlook - Fastly is optimistic about 2026, focusing on execution and leveraging its expanded product portfolio and management team to drive growth [56][57] - The company is also exploring opportunities in the compute and observability sectors, although these areas are still in early stages [44][45] Additional Insights - Fastly is adopting an open-source approach to content licensing through the Really Simple Licensing (RSL) initiative, contrasting with competitors' closed systems [47][48] - The company is investing in operational excellence and enhancing its go-to-market strategies, particularly in verticals like travel and fintech [35][37] This summary encapsulates the key insights from Fastly's conference call, highlighting the company's strategic direction, product developments, and financial performance.