Fastly, Inc. (FSLY) UBS Global Technology and AI Conference (Transcript)

Company and Industry Overview * Company: Fastly, Inc. (NYSE:FSLY) * Industry: Cloud Computing, Content Delivery Network (CDN), Edge Computing, Security Key Points and Arguments 1. Platform Evolution: Fastly has focused on broadening its platform functionality, unifying solutions, and offering a complete edge solution including content delivery, security, observability, and edge compute [5]. 2. Customer Diversification: Fastly aims to diversify its business beyond large media customers, targeting verticals like e-commerce, high tech, transportation, retail, healthcare, and hospitality [10]. 3. Growth Dynamics: Outside the top 10 customers, the segment grew 20% year-over-year in Q3, driven by share gains and higher attach rates of various products [9]. 4. Media Customer Challenges: Fastly faced volatility in large media customers, but implemented a high-touch customer success motion to address their needs and improve profitability [11]. 5. Edgio Bankruptcy: The bankruptcy of Edgio presents an opportunity for Fastly to capture traffic and contracts, potentially accelerating growth in the large media sector [15]. 6. New Chief Revenue Officer: Scott Lovett, with experience from Imperva, Akamai, and Cisco, has been instrumental in driving customer acquisition and focusing on security [19]. 7. Security Focus: Fastly has invested in security offerings, including DDoS protection, bot mitigation, and web application firewalls, aiming to become a one-stop solution for edge security [26]. 8. Compute Opportunities: Fastly's compute architecture focuses on serverless solutions using WebAssembly, offering high performance and developer flexibility [47]. 9. AI Accelerator: Fastly launched the AI Accelerator, a product designed to improve user experience for chatbots by reducing latency and costs [50]. Other Important Content * Financials: Fastly has repurchased a significant portion of its debt, resulting in a net cash position of over $100 million for the 2024 maturity [37]. * Operating Margin: Fastly aims to achieve 35% to 40% incremental operating margin on incremental revenue, driven by organizational efficiency and strategic investments [40]. * Gross Margin: Fastly targets 75% to 80% incremental gross margin, supported by scale and revenue from security and compute [41]. * Free Cash Flow: Fastly expects to achieve free cash flow breakeven in 2025, despite taking on additional interest expense [43].