Fastly, Inc. (FSLY) September 22, 2026 Capital Markets Day Transcript

All good? All right. Okay, everybody. I wanted to welcome all of you. I'm Vern Essie, Vice President of Investor Relations here at Fastly. I want to thank all of you for joining us today, those of you here at NASDAQ Market Site, and also those of you joining us on the webcast. Obviously, we appreciate your interest and time spending on our story, and I'm glad you all made it here today. A couple of quick housekeeping notes. Our Investor Day presentation is on our IR website. It was posted there about 15 minutes ago. You can go there and download it and follow along with us today. Also, we engaged Corbin Advisors to help us with this Investor Day. They're going to be conducting a survey, so you'll get an email after our conference concludes. Please participate in that. We'd appreciate it. We also value your input and, of course, your support. So this Investor Day is a long time in the making. Last time we did this was about three years ago, and I would say we definitely appreciate your commitment and patience as we've evolved over that time. We've seen a lot of changes in our ranks, and change, of course, is never easy, but I think we've had a lot of positive outcomes as a result. Yes, we've grown in revenue and scale, but I think we've also grown as a company in ways that you can't measure financially. We're much more mature. We've been able to tackle challenges, solve customer problems, and I think put a good foot forward with a high level of confidence. I think you're going to see that today here at Our Investor Day. I spent the earlier part of my career on the sell side sitting in the same seat as some of you and wanted to say that I really respect the equity research craft. I mean no disrespect to the buy side as well. You're all working hard there as well. But I do want to say, like, I really appreciate you all looking into companies, doing your analysis, challenging, you know, management teams, certainly having differences of opinions. But I do want to say that, you know, whatever you want on your ratings, whether it's bullish or bearish, know that you can trust us to always be neutral on how we behave with you, just as neutral as our cloud strategy. I also want to say that we do also like to say that we move fast and we play safe. And on that note, we also want to play by the rules. So Safe Harbor here is on the screen for those of you who know it. We encourage you to read the disclosures and risk statements in our SEC filings. I think you all know how this works. Let me turn to the agenda today. We're going to start off with Kip Compton, our CEO. He's going to kick off our strategic positioning and growth opportunity and walk through that. He'll then host a fireside chat with our founder and CTO, Archer Bergman. Our chief product officer, Kelly Shortridge, is going to discuss our product platform and opportunities. We're then going to host a Q&A session, and then the first half will conclude with a small break. Our president at Go-To-Market, Scott Lovell, will kick off the second half. He's going to talk about his Go-To-Market playbook as well as his commercial engine. Our CFO, Rich Wong, will then provide a financial overview and target model. And then Kip's going to take the stage again to close things out, and then we're going to open up again to Q&A. We anticipate wrapping all this up around 4 p.m. Eastern. For those of you here at NASDAQ, you're welcome to join us for a small reception thereafter. And as the day goes on, and this conference goes on, there'll be plenty of opportunities for you to find reasons to love Fastly. But maybe you should hear from our customers first.

Fastly by name, Fastly by nature is what I would say. It was 20 working days from the point of deciding to use Fastly, signing the contract, and that very next day, using it for a World Cup match. Fastly allows us to be more agile than we normally would in terms of deployments.

Every time we've come to Fastly, we're able to talk to the people that are actually building those things and designing those things. We have just an incredibly healthy engineering partnership, and that's really game-changing.

Since we've onboarded to Fastly in our first 90 days, we've delivered more than 115 petabytes of content, and we've lowered our operating costs on our storage layer by 68%.

During our last major fare sale, you know, we had Fastly's bot management in place. We were able to drop about 30 to 50% of some of these major attacks.

Serving the news to the real customer while controlling the bot traffic efficiently is very tricky. You need to find the right balance. We've been able to achieve this with Fastly bot management.

We serve hundreds of petabytes of data every month. Fastly is able to withstand huge surge in traffic. There's no way that Giphy would be the popular platform that we are nowadays without Fastly.

That's great. Okay, so I'd like to welcome Kip Compton to Take the Stage. Thank you. Thank you.

Thanks, Vern. We're proud of a lot of things you do at Fastly, but it's always great to hear straight from customers. First of all, thank you for being here today or for joining us online. As Vern said, this Investor Day has been a little while in the making. We've been looking forward to today and having an opportunity to share with you where we've been, but perhaps more importantly, where we're going as a company. Certainly, the business has evolved in really important ways over the last three years that we'll outline today. I think you'll also have an opportunity to meet our leadership team. A bunch of the key members of our leadership team are here today. You'll be able to hear from them directly in presentations as well as Q&A. And that's one of the other big changes at Fastly is the leadership team evolution over the last three years. There's a few things that you're going to hear today. One is how we win through performance with a differentiated edge cloud platform. Now, when we say performance, often it is about speed. We do believe that speed matters in business. We believe it matters in the experiences that customers and users get. But sometimes performance is in terms of the efficacy of our security products or in the reliability and resilience that our distributed platform delivers. You're going to hear about how we have one platform, one network on a global basis, and how that enables us to deliver multiple product suites and enable customer outcomes in ways that are easier for our customers and, frankly, operationally and financially more efficient for Fastly. You're going to hear about how our platform is positioned to where the market is going, about how AI and other trends are evolving in a direction where performance and latency and resiliency will become more important as they're deployed to more mission-critical applications. And then last, but certainly not least, you're going to hear from Rich Wong, our CFO, about how we're going to convert the momentum that we've got with our platform into long-term value creation. Before I dig in, I think I'd just share a few numbers about Fastly. We identify a TAM of $22 billion. We're somewhat disciplined in the way that we approach the question of TAM. This is TAM that we have products today in these markets to participate in. We do believe that given where things are going and the quality of our platform, that over time, this TAM will grow as we address additional markets. Obviously, given our revenue, we have relatively small market share, and we like to see this as tremendous runway for us. With the products we have today, we can grow substantially faster than a market for many years. You can see across the top here, some numbers reflecting the momentum that we've gotten in the business, but I thought I'd mention the over 5 trillion requests that we process on an average day at Fastly. That's an enormous amount of volume at scale that's being handled very efficiently, and it provides us with a tremendous amount of data as we go forward. To be honest with you, though, the number that a lot of Fastlians are most proud of on this chart is the 97% average customer SAT score. That's obviously an incredibly high number as an average, and it's something that we take very seriously, and I think it's one of the reasons that some of the largest and most important companies in the world rely on Fastly. So I said I'd talk a little bit about where we've been and where we're going. I want to take a moment to do that. A couple years ago, we said that we were going to accelerate growth and profitability. We said that we were going to do it through cross-sell and up-sell within our existing base. And we said that we thought that one of the absolute key things for our success was multi-product adoption. Because as we drive multiple products on our platform with a given customer, our relationship with them deepens, and the value that we deliver increases. We took a bunch of actions. One is we retooled our innovation engine. We have new leadership for engineering and product, and we've accelerated the pace of innovation and of product releases and are driving a much more iterative model that's much closer to our customers so that we're more assured of delivering customer value with each release. We refocus on platform-led value. We don't sell products that much anymore. Scott will talk about it. It's really how a combination of product suites on our platform come together to solve a customer's problem and deliver an outcome. Of course, we've talked about our go-to-market transformation that Scott's been leading now for some time, and we've made tremendous strides there. He'll share with you where we're going, but that's been a pretty extensive program. There's been a lot of leadership change, structural change, incentive change, change in what segments we focus on, change in geographical focus, all designed to make sure that we're focused where performance matters and we have our highest win rates. Last but not least, we focused on disciplined execution. I think you've seen that with things like margins and OPEX over the last several quarters, but my entire leadership team is committed to disciplined execution where everything that we're investing in and everything that we're working on moves our strategy forward. And we've gotten results. We've now posted three Three consecutive quarters of 20% or higher year-over-year growth. We've had five straight quarters of improving NRR capped off at 117% last quarter. We've driven the company to profitability. Last year was the company's first year of profitability with operating margin of 15%. And we continue to drive capital efficiency with six straight quarters of positive free cash flow. And we'll have a chance today to discuss why we think we can continue to do that with the capital efficiency of our platform. I don't say this to say, oh, we're done. This is merely where we are today, and we're going to keep driving improvements in the business and keep building on the momentum that we have today. So to understand Fastly's story, you need to understand what we mean when we say edge cloud. So if you follow us, you know we keep talking about how we play at the edge and what happens at the edge. So I thought I'd just take a moment to explain what we mean by it, because it's a term that's used in a lot of different contexts. And when you hear If you're about cloud, almost certainly what people are referring to are the hyperscalers. And this is an incredible engine, huge data centers. In fact, it's in the news, the data centers are so large recently. And the play there is to drive an enormous economy of scale, drive an enormous amount of transactions and traffic to one place where you can get enormous efficiencies. And there's no doubt that those clouds are the best place to run a lot of applications. It's an incredibly efficient and incredibly flexible environment. That said, there are some applications and some functions that are not a great match for the cloud, and they require things that are only available at the edge of the network in a more distributed system that's closer to users. Being close to the user means a few things. One is lower latency, faster response time. Another is more bandwidth. It's a shorter link to the user. And then lastly, it means that you can process requests right as they're entering the network, which can be important in terms of routing requests to the optimal place to ultimately serve them, can be important for security use cases where you want to or need to intercept something like a DDoS attack before it gets back to your cloud, because if it makes it back to your cloud, you're already done because your cloud is overloaded by handling all those requests. So the edge is where we play, and we believe that there's very specific functions and capabilities there that distinguish it from traditional clouds. And we tend to work with the traditional clouds because almost all of our customers have both cloud and edge aspects to their applications and deployments. So let's talk about what we think is important at the edge as fastly. Now, it won't surprise you to hear us say that performance and speed is incredibly important. If you think about it, it makes sense. If you're going out to the edge in a distributed system, because you're getting lower latency and more throughput, what's the point in having anything less than a very performant system? It would blunt the whole reason you're even dealing with the edge. That's why speed and performance is so important to us at the edge. Security is obviously critical. We deal with attacks every day, attacks on our customers, as well as attacks on our own infrastructure. Resiliency is important. One of the things about the edge being a distributed system is that a lot of our customers are able to use our services to increase the reliability and resiliency of their services. We'll talk a lot about unified platform today and how that has tangible benefits for our customers and also for Fastly. We'll also touch on edge compute and AI inferencing. We see this coming with new models just in the last few weeks, released that now respond in less than a second, in hundreds of milliseconds. I'm thinking of JEV, but there are many others. We see AI evolving to a place where performance is going to matter, where responses are not measured in the minutes, and the edge has significant value to offer. So I've talked about what's important at the edge. What is the edge? Like, physically, what are we talking about here? This is the Fastly Global Network. We talk about POPs. Those are points of presence. One thing you'll notice is we have 166 POPs. If you look around, that's actually a small number compared with a lot of our competitors. And that's actually quite deliberate. From day one, we've spent a lot of time thinking strategically about the balance of how many POPs we have and where we place them to get the best outcome. If you put too many POPs, you end up so fragmented that it's very difficult to get good asset utilization, and it's difficult to get high performance on things like cash hit rates because the POPs are too small. Obviously, if you're too few, you lose the benefits I talked about at the edge. So we've been very deliberate over the years in how we designed this network, and I think if you look at any statistics, you'll see the efficiency. Recently, I had an experience that kind of reminded me of this and brought it home for me. We have a major retailer that moved off of one of our competitors to Fastly. By the way, they were a full-platform win, so they came across not just with delivery but with our security, compute, bot, DDoS, everything. And, you know, they got everything configured, and most enterprises don't move all their global traffic at once. They'll move a piece at a time to make sure that that transition's going well. So they picked their Icelandic traffic for their initial transition. And Iceland, I assume everyone knows that that's the little island there in the middle of the ocean south of Greenland. You'll note there is no Fastly Pop in Iceland. That was not one of the places that we strategically decided And they cut the traffic over. Everything looked good. But the next day, they called us and said, we have some questions for you. And we were kind of surprised because it looked good on our side. A team got on the phone with them, and they said, look, what we want to know is how are you delivering better performance to our users in Iceland than the people we moved off of, given that you don't have a pop, and they do have a pop in Iceland. So I think that lands like what we've done here. I would encourage you not to measure us by the number of POPs and to realize that one of the ways that we're able to drive both the efficiency and the outcomes is with this very strategic balance of POPs around the world. So on top of this edge cloud, we deliver product suites. And these are, if you will, the tools in the toolbox that our customers use in combination to solve business problems and get business outcomes. And this is where a lot of innovation has taken place, and we've been accelerating. The company, of course, started with network services or delivery, CDN. In a few minutes, our founder will join me on stage, and we'll have an opportunity to talk about that and how this has evolved. But we've then added quite a bit to the platform over the years, including edge compute capabilities, of course, our next-gen WAF, the observability, bot and DDoS, which kind of completed the web application API protection suite and has led to a lot of the growth we've seen in security recently. And then just yesterday, we announced some AI-focused products as part of Fastly for AI, and our chief product officer will be here to talk about that later today. So as we increase the number of product suites on the platform, we add to the value that we bring to our customers. It's kind of a combinatorial thing. The vast majority of our customers use multiple of these suites. And as we deploy more and more suites on the platform, because it's one platform, it actually tends to get more and more efficient as these things are able to share resources. And we've gotten some momentum. You know, 30% of our large customers today use four or more of those product suites. That's roughly doubled each year for the last two years. Two years ago, it was 7%. A year ago, it was 14%. Today, it's 30%. So that cross-sale is working, and that gives us deeper, stickier relationships with our customers. Of course, we're the highest-rated by Gartner for edge distribution platforms. But we've also won customer's choice for seven years in a row on web application and API protection. That's a security award for our security products. So we're very proud of the momentum we have, both in terms of how our customers view us, How industry analysts view us, as well as the business results that we've been able to drive. Now, I've talked about the customer value of this unified platform, but I want to take a moment to talk about why it's so important to us in our actual strategy and our operations. One is, as I said, greater wallet share and the ability to just grow faster by having one platform. Because it's one platform, it's easier for Scott's team to help customers onto additional product suites because they're already on the platform. It gives us, over time, greater pricing power and more strategic relationships as we cross-sell, and we have more customers using more product suites. We believe that that's one of the key predictors and indicators of our business success. Of course, higher retention as customers are using more services and solving more business problems. And then more efficient use of our common network. I think this is something that we don't talk about, perhaps, as much as we should. If you look at the significant improvement in our gross margins over the last year, which I'm sure Rich will be happy to discuss, one of the key things is the fact that on Thursday night, our network might be delivering Thursday night football. On Black Friday, the exact same network is handling e-commerce. The next week, it might be handling video game release. That's all the same resources, and those resources are dynamically allocated in real time to whatever the load is on a global basis. That enables us to deliver a much more efficient network outcome than a competitor or an alternative who has siloed networks for security and for compute and for delivery and so forth. It also makes it easier for us to launch more products more quickly. There's no need when we launch new products to deploy specialized capital or have a physical deployment process. We can just launch them onto our multi-product platform. So I talked about how we view AI as evolving. I wish that it was going to be as straight and linear a line as you see on this chart. Actually, Arthur and I will share a chart of what it really looks like in a little bit. But conceptually, we see AI evolving from things like generative AI, obviously, to agentic today, and we see a lot of agentic traffic on our network. But heading towards new applications, whether it's physical AI, where latency really matters, or it's the things I mentioned earlier with Jev, where we're trying to get immediate decisions out of models. We see that as something that will create more opportunities for inference at the edge. We're not believing that running frontier-level LLM models with trillions of parameters at the edge is a great idea. It takes a lot of resources. You don't concentrate as much capacity to it. And frankly, if it's going to take a minute for the model to react, the benefit of being at the edge just isn't there, and the efficiencies of the cloud win. That said, we're seeing a bunch of use cases on our platform today. We've talked before about the fact that we see AI traffic growing six and a half times faster than human traffic. But here's some additional snapshots of things that we're seeing on our platform. We've seen, actually, I think this first statistic is just in the last month, a 7x increase in the distribution of AI models across the platform. I think this is interesting in terms of, you know, traffic on our network, if you will. It's also interesting because it starts to suggest that these modelers are being run in more environments, and I think that's an opportunity. So far this year, we've seen 11 times growth in MCP traffic and services on our network. If you're not familiar, MCP is Model Context Protocol. It's how models integrate with each other, with agents, as well as with resources like databases. We've seen a 12x growth in essentially content authenticity, using AI to authenticate content as, I guess, not generated by AI at some point, and we've seen the 34x. Code generation is incredible, so 34x growth just in the last couple of months in that use case. I'll emphasize, these are snapshots of what we see today. We don't have a crystal ball for AI. I don't think anyone does. But we're seeing these use cases come onto the network and start small and scale rapidly. Now, why we win? I mean, we have right at the top of the slide there performance, and there's no doubt that that's our calling card. As our retailers in Iceland noted, it can be quite a contrast and astounding. But there are a bunch of other reasons why we win. Certainly foundational to that is resiliency. That's something that I think has been in the news a little bit in the industry. We've architected our network as a distributed system with resiliency in mind. Cloud-neutral flexibility is important. We are not offering cloud computing services or competing with hyperscalers in that way, and that means that it's easier and more natural for us to work together to get customer outcomes, as almost all of our customers use the cloud as well. Strategic engagement with enterprise customers, you heard a little bit of that in the customer video. These large customers view the Fastly team as the extension of their team, and we love that, and we think that's incredibly important to them. And then last but not least, the unified programmable edge platform. Our platform is more configurable and more customizable than our competitors, which means some of the most advanced engineering teams in the world use it to do things that they can't do anywhere else. And any one of these enables us to win, But our strongest deals are usually when multiple of these come into play. And these are some examples of the sophisticated customers that we win with. I don't think anyone who follows Fastly would be surprised to hear that eight of the ten largest streaming platforms are customers. I'll leave it for you to guess which two are not. But also, six of the seven largest technology companies in the world rely on Fastly. So it's broader than just streaming. And, of course, six of ten of the largest video game providers. So we're very proud of the large customers that we serve. They're some of the most sophisticated and demanding customers in the world. And I think one of the things you'll hear about today from the team is how we're going to bring the power of the Fastly platform to more customers. We have a few clear long-term strategic priorities that you'll hear about throughout today. First of all, how we lead with the platform. And Archer and I are going to have a moment to discuss that in just a few minutes. Second of all, how we're scaling outcome-driven solutions. Our chief product officer will come up right after me and Archer to discuss that. And then how we expand our market reach. And our president of GoToMarket will be up to discuss that. So you'll hear about each of these priorities through the day as we go forward. Now, after that, Rich is going to get up, and he's going to present our plan for growth for the next three years, which drives our revenue well over a billion dollars and has an 18% CAGR at the midpoint for the next three years. So we're excited about that, and Rich will share more details when he takes the stage. Now, I mentioned the team, so I wanted to introduce the team here. All of the leaders across the top are presenting here today and will be available for Q&A. Some of the leaders across the bottom are in the room as well, so you may run into them. They don't have a formal presentation role. But this is a team that's evolved quite a bit over the last year, and I'm incredibly proud of the team that we've built, and I think the results that we've begun to deliver illustrate why. So this is how we'd like you to think about Fastly. We're a market leader with a differentiated platform. I think the growth and the gross margins that we're driving at this point are evidence that support that. We've re-accelerated the business, three quarters in a row of 20 or higher percent growth. We now have momentum. We've improved our product diversification and revenue diversification. I mentioned how we've, in the last two years, quadrupled the proportion of our customers who use four or more product suites. We have multiple pathways to drive growth above the market rate, whether that's expanding our product portfolio, upsell and cross-sell within our existing customers, new logos, geographical expansions. We have a number of ways to get there. And then last but not least, we believe the edge is going to become an increasingly important control point in AI over the next several years. So with that, I'd like to invite our founder and CTO, Archer Bergman, up, and we're going to have a fireside chat. Thank you.

Thank you, Kip.

So I met Archer for the first time when I was considering whether or not to join Fastly as the chief product officer. Spoiler alert, I did, obviously. But I met Archer in a sushi restaurant in San Francisco. I did not know, I didn't have a particular set of expectations for the dinner, but it went on, I think, for four hours. In fact, it ended when they kicked us out, and we became somewhat self-conscious of the fact that we were the only people left in the restaurant. And over that discussion, I came to believe that Fastly had a really unique platform, and there are a lot of people who have contributed to that over the years, but probably no single person has contributed to it more than Archer. And I just felt like the company had an incredible opportunity in the marketplace given the quality of the platform. So Arter played a key role in my decision to come to Fastly and has been an incredible partner ever since. But you founded Fastly to solve a problem that there was no solution to in the marketplace. Maybe you can talk a little bit about what was different and distinctive about that approach and how it kind of flows through to today's world.

Absolutely. And it was a long and very good, and I think for Fastly, a very valuable dinner, if you're sitting here. And good to see you all. I know some of you from a long time and other new faces, But it's good to be here. We started Fastly in 2011. And 2011, AWS had existed for a whole couple of years and had changed how developers wanted to use infrastructure. And we needed fast performance around the world. We had a very slow, low time in Europe, and we knew that performance drove usage. So I co-founded the Velocity Conference, which was the first conference on SRE and performance in 2007. And all these metrics on performance we knew, but we had a very dynamic site. And the edge providers at the time, where maybe you could describe them as the anti-cloud, everything you wanted out of a cloud, you got the opposite. And so you had no visibility and no control. And we ended up building our own. We dropped our page load time from 22 seconds in the UK to less than three seconds, I think. And then we ended up starting Fastly based on that technology. Because it turns out that a lot more people wanted access to this, and the only people who kind of had that power were someone who worked for a hyperscaler, because they already had their own networks. Otherwise, you were kind of out of luck. That was the founding story, to provide the real-time, instant aspects of a platform in a modern, developer-friendly edge environment.

And a lot of that platform still is in place today, because you guys took an incredibly software-centric approach, that was, I think, one of the things that was different.

Yeah, the entire founding team, the entire founding team were software engineers, not network engineers or hardware engineers or data center engineers. And so we solved problems, we solved problems with software. I hate spending money on dedicated hardware, and we built it from scratch up with the software on the servers, but also how we architected the networking infrastructure, the networking stack. We ended up with a very hyper-converged architecture where we control everything from From the software that runs on the switches all the way back.

Now, some would say that CDN is commoditized, and I'm wondering, given your long experience in that market and that technology, what your thoughts are on that?

Yeah, you know, there is one legacy provider that has a very large market share, as we have I've been taking it over time. They still have it, and it's not typically a commoditized market behavior, unless you have a natural monopoly, which would argue that does not fully exist here. The reality is that there is plenty of bandwidth delivered that I would say is commodity. If you're downloading something in the middle of the night, does performance matter? Not really. If you're waiting for a game patch so that you can actually play the game with everyone else, then performance does matter, and that is not commoditized the same way. There's certainly plenty of video out there that is commoditized, but World Cup live streams, not really commoditized. People pay a lot, and if you don't deliver it, you are a broadcaster in trouble. On the API side, from day one, Fastly was designed to handle API traffic. API traffic is not really a commodity. Some of it is, some of it is not. So CDN is a very, very wide term, and I wouldn't say it's increasingly commoditized. I think there are the buckets, and those buckets have just existed. I think some of the non-commoditized buckets have actually grown over the last 10 years.

So, a new class of traffic is agentic traffic, and they generate a ton of activity. What do you see in there?

Yeah, I mean, this is so exciting. The entire technology space, I feel blessed. I didn't think I would get the chance to experience another 95 to 2,000. And, you know, that's what's happening, if not even more, though that was a long time ago, so I don't fully remember it. And it's changing the traffic. You know, we've been trying to answer the question, what does agentic traffic mean? And we went on to look for data around this, and we found this lovely chart. So PyPy, for people who don't know, is the Python package index. They happen to be on Fastly, but this is a public data set that you can query. It's on BigQuery. And this is all the software modules that you download so you don't have to rewrite code. And you can kind of see it grew 4.8% before. It's been kind of It was slowly, steadily growing. That is like human usage of Python going up, right? So it kind of grew as more and more people started using Python, and as the more and more developers in the world. Then this thing happened, Cloud Code Research Preview, and traffic took off. And if you ever watch what your agents do, the first thing an agent does is it downloads stuff from PyPy, because for some reason, pretty good reasons, Python is the preferred language of every LLM on the planet, and to avoid writing code, they download things from PyPy. That is not human behavior that is driving that increase. That is agentic behavior, and so we kind of like, this is a great chart kind of showing what I've been calling, talking to customers about the tsunami of traffic that's coming this way, their way, because once this code is written, it then has to do things, and And a lot of the things it does is API calls and other things on the internet, and that means that as this continues, and as you can see, that curve is actually accelerating still, those agents are going to talk to our customers. And so I've been calling it the tsunami of traffic, and it's super exciting.

Yeah, that's fine. We have disconnected internet usage from human time, right? Like, there's only so much we could code Python or watch video or surf the web and buy things or do whatever, and now the AI doesn't sleep, and they work when we do other things, so. So how does this influence the importance of the edge, or what kinds of things do you see? How do you see the edge participating in some of this?

There used to be a pretty strong correlation with, you know, increased visitors to your website and increased revenue, right? I'm selling things online. More people come to my website. I know my conversion rates. Now we're looking at a situation, or if it's ad-driven, similar. Now we're looking at a situation where, you know, agents can go around and shop on a lot of websites. And so you might see a significant increase in the amount of eyeballs or viewers, eyeballs is the wrong word, agent viewership, for the same amount of transactions. You can't really opt out because then you won't have any transactions eventually. So you have to drive down the cost of serving these users. And the best way of driving down costs to serving people looking at your things is caching. And doing it from the edge means, you know, less bandwidth traversing long distances, and serving it from an SSD or memory is cheapest and fastest. But you still need to be able to instantly cache invalidate, instantly change everything. And so all these attributes that FAFSA has from day one and is built into our architecture becomes even more important. It is also a lot of traffic to load balance, to send it to the right place. You need to secure it, so you need to run WAF, you need to run BOT, you have to have great DDoS, you have to be able to personalize it somewhat, and all of that just is what customers have been doing today, but at a much greater scale, which makes it more important, because otherwise you will not handle these massive spikes.

So where do you see inference at the edge going?

At some point, technology will probably reach a point where running larger models everywhere makes somewhat sense. But today, the large models are not multi-tenants, GPUs are not multi-tenant, and they take quite a while to respond. So I think in the immediate term or next couple years, especially given the shortage or, you know, both data center and power and so on, where we are, the data center power is not an issue, but if we needed to put much more GPUs, it would be, is small models. So you can use a large LLM to train small models. Historically, training models was very annoying because you had to have a data scientist team and you had to interact with a data scientist team. And now, like, LLMs are great data scientist teams. Like, you can have them, you know, classify data and then build models. Like, I just trained a model at home to tell me if the pool cover is open and any kids are near the pool, and I think I paid less than $100 to open AI to train a model, and now it can tell me with very, very high confidence at 92% confidence at 20 to 30 frames per second in a model that's less than 4 megabytes. So those models you can run at the edge, right? Tyler, who is my co-founder and distinguished engineer at Fastly, last week gave a talk where he showed a 3.3 megabyte chess model, and he was kind of upset because it consistently beat him at chess, but a very small model, still really powerful, but was running in our compute on the edge. So if you can couple large models in a central location with small models at the edge, which kind of fits how caching has been working, you know, if we don't have something, we go back to origin. I think that is the answer of what inference at edge actually is over the next couple of years.

That makes sense, and it's exciting. Now, I had an interesting conversation with Scott, our president of GoToMarket, yesterday, and one of the things that came out is he said that you spend more time with customers than he does. So can you tell us a little bit about that?

Yeah. We only exist because of customers. We don't have a business for some academic reason or because it's fun to have a business. We have a business because customers buy from us and use us, and we deliver value to them, and it's super fun, right, because I get to work with customers and see what they do, what we help them do for their users, whether it is, like, a massive spike in traffic that they can handle or protecting them from attacks, protecting them from being hacked, or, you know, tons of kind of cool use cases out there. The only way I learn about those is by going out and speaking with customers and them bringing back to Fastly what we need to do to help them do more creative and more innovative things on the edge. And so that is really a large part of the drive for me is spending time with our customers. We're also so critical to them that we end up spending sometimes a lot of time with them, and it's been 15 years now, so some of them I've got to know quite a lot, and I've seen them switch companies and immediately bring Fastly with them. I kind of see it's kind of a personal KPI. Like, when we help our customers get promoted, it feels really good.

Absolutely. Absolutely. So looking ahead in terms of tech investments and platform capabilities at Fastly, what do you see kind of on the agenda for the next couple of years?

I think underlying all of it is efficiency, right? Because of where we are with the hardware cycle and so on, we have to make sure that the platform stays highly efficient so that we can then deliver all these amazing things on top of it. Efficiency also goes very much to get a performance of an inefficient system is rarely a performance system. Like, if our WAF can filter for an attack 10 times faster than our competitor, it typically means we use significantly less resources to do so. And all that comes down to, you know, this passion and focus on performance and efficiency. On top of that, helping customers deal with this tsunami of traffic and the complexities of this traffic, you can no longer have humans in the loop if the attackers do not have humans in the loop. If traffic is not directly human-driven, steering it, low-balancing it also needs to not have humans in the loop. It used to be pretty easy to, easy is the wrong word, but you could predict the max usage of an internet website based on the amount of people in that country, if you were launching something in that country. That's no longer true. You see the shoe bots, and I think they're Pokemon bots now, because apparently that's the new cool thing, but it's just a lot more to do that, and then we have the small model, large model, how to help people reason about that and think that, and then give lots more visibility into how all these systems work together, From a security, delivery, acceleration, resiliency, reliability point of view, to tie it all together. And, you know, it's just super exciting. It's like these are hard problems. I spent 15 years, you know, at Fastly. I kind of had thought that some of these core internet performance security scaling problems were solved, and, you know, turns out they aren't, and there's still a lot more room for improvement, which, yeah, that's pretty fun. And certainly, agents have helped us find and analyze and fix issues much faster and at a scale we haven't been able to do before.

That's amazing. You know, you are an incredibly successful entrepreneur. Or, at this point, could probably be doing anything you want, but I guess it's what you just described that keeps you at Fastly, because you're just as engaged as ever.

Yeah, the access to the data we have, the technologies we have, would be hard to replicate anywhere else, and the same with the customers and the relationships there and then the team. And I feel very lucky to have those components to work with on a daily basis. And going out and hearing customer stories, and you mentioned the Iceland story. There is a long-term customer that for nearly a decade, I've been trying to convince them to move all their small, high-value API traffic to us. And they moved a lot to us, but that part was like, this is complicated, it's working, and I'm like, you should move, you should move. And then I think they used some agents to help them move, and they moved, and they're like, it's nine times faster. Our app is showing a nine-time performance improvement for when users are moving around inside the app. We should have moved nine years ago, and I'm like, I told you. I wish you would have believed But I'm really happy that you finally moved, and then I'm looking at it, and I'm like, you know, we can probably make it even faster. There's still opportunity. We could put up, wonder how fast Iceland would be if we put a pop there. But, yeah, I mean, all these things are just super exciting and super fun, and I get to work with amazing customers and amazing co-workers, so.

No, it's remarkable to have a founder and former CEO so engaged in the business and so engaged with our customers and with the team. So I think Fastly is lucky to have you as well.

Thank you. And thanks, everyone. I'll be around here if anyone wants to talk to me. I'm not particularly scary. So, and yeah, this is, I mean, this chart kind of sums it up, the challenge, but also the excitement and why I'm here. Thank you. Thank you, Kip. Thank you, everyone.

Thank you. So that was fantastic. Thank you, Archer. I'd like to bring Kelly Shortridge, our chief product officer, up to talk about our product strategy. Thank you.

Thanks, Kip. I love that fireside chat, illuminating our journey. There's a lot to be proud of, how we're taking it to the next phase, and also how we're going to drive differentiated growth across the whole platform. I'm Kelly Shortridge. I've had the privilege of serving as Fastly's chief product officer since last November, but I've been at Fastly for five years and worked across both engineering and product, where I led the security business, and during that tenure, drove growth to 53%, And what I bring to this is really a resilience mindset. I think everybody at Fastly agrees how foundational resilience is to our platform, to the company, just like Kip said. Also bring hands-on prototyping and a relentless focus on ROI as well. And it's not just my mindset, it's the mindset of our customers. Like Archer said, there's nothing more rewarding than talking to dozens of customers every month. And what we see is that they win by continuously adapting based on evidence, based on insights. And they don't win by standing still. And customers choose fastly because our platform unlocks that for them. It's not because the technology is clever for its own sake, just like Archer said, it's because we help them transform their business. We help make sure that their business keeps improving. So now that you know where I'm coming from, I want to talk to you about how we're evolving the platform. Kip just walked through the platform journey, the company journey. It's my pleasure to show you how we're going to transform to tackle our biggest opportunity yet. So first, by building a broader, more accessible portfolio that brings our industry-leading technology to a larger group of users and industries. And second, by delivering a platform that meets customers where they operate. Across a variety of cloud environments, private infrastructure environments, and also agnostic of which AI models that they use. And third, by advancing our platform innovation, the innovation engine Kip talked about. By using the knowledge we gain, that data that Archer talked about from across our platform, because we are that centralized service provider that's so trusted, to deliver differentiated products and solutions to our clients. And then fourth, by extending our reach into the always-on industries that need us most and that we haven't penetrated today. So doing this well is what gives us the right to win in these markets where we are under-penetrated today. So with these four pillars in mind, let's talk about where this journey started. Now, as you heard from Kip and Archer, this has been a journey. I want to talk about how we're evolving our product portfolio, but it's important to level set on where we were. Where we started, as you heard from Artur, it was a heavy networking focus. Differentiated architecture, but a networking focus. We only had one security product when I joined Fastly. It was sold piecemeal and really on a platform for developers who craved that raw technical power. We were a platform that was ultimately built by developers for developers. But where we stand today is an enterprise-ready, multi-product portfolio. It's a platform with the breadth and configurability that meet a wide variety of customer needs. We have a security portfolio now with five products, and that includes patented differentiators as well. And it serves as an on-ramp into the platform sale, which Scott is going to talk about later, too. Now, over the last four quarters, I think this is a very important point to keep in mind, is that half of our new business deals included security products. That's real proof that security is that new on-ramp. It's that new entry point into the platform sale, and it's also a value driver of our platform. As Skip pointed out, we're increasingly complementing our delivery security solutions with other solutions as well. You saw that yesterday with the Fastly for AI announcement I'm going to dig into in a little bit. This involves a full suite of solutions that also complements where we're going next, and that's really what excites me the most, and I know excites everybody at Fastly the most, too, and that's we're running that same playbook that we ran for security again. We're running it again for the whole platform. Now, we're continuing to invest in technical differentiation, for sure, but we're going beyond that to provide the experience-driven capabilities like reporting and insights that enterprises need. And as we do so, we're attracting the world's most complex companies to our platform, and that's because of our outcome-driven approach. Now, these are companies where downtime stops a manufacturing line. It halts a trade. It stops the revenue spigot from flowing at the end of the day. Always-on businesses have to be available 24-7, regardless of what the Internet throws at them or what their AI agents do. So we're no longer building a platform for people who love technology for its own sake. We're really building for executives, their teams, and their AI agents who need the platform to just work at the end of the day. So that's where we've been. Let's talk about what that means for our customers today. Our customers want a unified platform. They don't want disparate point solutions. They want a unified platform. The unified platform that we've built for them is really all about enhancing the outcomes they can achieve as a business. What we hear in the market is that every enterprise and every industry, no matter the industry, they face two key questions, Which is, is this technology investment paying off, and is it helping me win in my own market? That's especially true in this AI era. What this looks like in the specifics varies industry by industry, but it's the same shape, which is that enterprises want their teams to spend more time on what makes them special in their own market, less time fighting the complexity that comes from distributed software systems that they have to build to succeed. And that's where Fastly comes in. It's delivering, again, not just discrete point solutions, but it's a unified and integrated platform that's intentionally built to enhance these customer outcomes. It's a platform that's reliable, that's fast, that's safe, secure, that really, crucially, is also resilient from design all the way through the solutions that we offer. And, crucially, that it's meeting customers wherever they want to run their software, wherever they want their workloads to operate as well. And so when we combine that technical mastery that Archer talked about with a set of integrated configurable solutions, the results are really powerful. Let me give you a very specific example. So take a large retailer client. I love this example. They first added, they were a platform customer. They first added bot management on top of the existing solutions leading into the holiday season. What's fantastic about this story is they literally thought there was a statistical anomaly because they saw double-digit conversion rate increases during the holiday period because they adopted our bot management solution. And that's what's special about our platform, is we have security solutions that are driving business outcomes. And those are the outcomes that matter to our customers. It's not security for its own sake. It's aligned to their business outcomes. And now we have the opportunity to go even deeper with this customer and all the other customers who have adopted this multi-product platform, bringing them more sophisticated solutions to meet their emerging and very complex needs. And one key takeaway here is that this is all about expanding beyond our historical niche in delivery services to bring a broader, more configurable platform to enterprises with a more compelling value proposition as well. And we've had this recap of what customers need. Let's talk about our long-term priorities. And Kepti did cover these. Scott's going to build on them again after the break. Lead with the platform, scale with outcomes-based solutions, and crucially, expand market reach. So let me show you how we're bringing it to life through investments into the product portfolio. Let's start with the portfolio itself and how we're making it broader and more configurable as well. So a few years ago, again, one security product, that was it. When I took over that business, I realized we had a lot of work to do. We had to roll up our sleeves. We did get it done, and crucially, we've also sustained it. You saw last quarter that we had 43% growth year over year in the security business, and like Kip and Rich talked about, both DDoS protection and bot management are growing in the triple digits. That's a really powerful outcome of that portfolio expansion in the security business. So now we're going to run that same playbook across the entire platform. It's six suites, each a significant product and value driver in their own right, plus cross-platform add-ons and services that enhance that overall platform value proposition. And each of these suites is an on-ramp into the platform. It's a way that a new customer can come into Fastly, Start gaining value from our platform. It's also a way that customers that are already with us can expand the value that they get from our portfolio as well. It's the way we'd like you to think about Fastly as this ever-expanding sticky portfolio of on-ramps that customers buy into and never leave. And the configurability of the platform means we have this, I think Kip referred to it as this combinatorial value, this virtually unlimited combination of product suites, add-ons, And here's the number I want you to take away above all others, which is that 72% of our customers now use at least two product suites or more. And 30% use four or more. And that's up, that 30% number is up from 7% just two years ago. So that means it's doubling two years in a row. That's really powerful, and it's a tangible proof point that this portfolio strategy has been working in practice. So that's the clearest signal, and it's not just about how much we sell any one product. It's really about how many of our six suites each customer adopts. It's about the overall value that each customer is getting from the platform itself. And that is a shift for us, I think many of you have seen. Our technology has always been excellent, but for years we sold it one product at a time, and our financial results didn't compound the way that our technology really deserved. And that's what a portfolio fixes. Because today, when a customer is adopting a second suite, a third suite, a fourth suite, fifth, that's not just growing wallet share, but it's really becoming an infrastructure that they rely on in their business. Just like Archer said, they bring them to their next employer because of how much they know they can depend on us. And that's a fundamentally stickier and more durable revenue relationship with customers than any single product could deliver in isolation. And it's also how our technical excellence finally starts compounding into the financial excellence we feel we deserve, too. What we've also learned is it's not enough to just have a large portfolio of technically differentiated or even patented differentiated solutions. The experience we create around this portfolio and around these products also matters to enterprises. So let's talk about usability. We're investing heavily and democratizing and simplifying the platform. Today, our platform is really powerful, but it works best for the deeply technical user and developers who already know how to drive it. We want it to work well for everyone who touches it, the executive who needs to know the exact insights right now to make some sort of decision. We want it to work really well for the AI agents building on our platform who need to harness the full power of what we offer on our customers' behalf. That's core to our transformation. It's from power that works only for experts, who understands the technical weeds, to power that works for however our customers actually operate, however enterprises actually operate in practice. So what does this mean, concretely? It means simplifying the user experience, both for human users and coding agents, like Cloud Code, quite famously, that we see quickly growing in prevalence. It also means automating expertise across the portfolio, so customers don't have to be experts. They can You can push a button, and it just works. Fastly handles it for them. And we're building dashboards and reporting that make it easy for busy executives to get those answers right now. Translating technical insights into business decisions. And we're leveraging our cross-platform insights deliver actionable business intelligence to help our customers make better decisions. We'll talk about a concrete customer case study in a second on that. So we're investing in making every single user's experience as simple as possible, and as we do so, we're meeting a broader range of customer needs, including supporting the standards that let coding agents seamlessly interoperate with our whole portfolio and platform, just the same way a human would, and again, leveraging the full capabilities that we offer. To be democratized and simplified the platform well, we're going to expand this platform into that broader customer base that Scott's going to talk about. So, this is how we're enhancing usability. Let's ground this in a customer story. Making it concrete with a customer case study, let's take a national newspaper. This national newspaper brought us an existential threat. AI crawlers that were scraping their journalism that they monetized with no licensing agreement, and that threatened their entire business. We co-innovated with them, linking ARMS to deliver content guard less than a year later, helping them detect, classify, allow, block, otherwise monetize and manage bots that were engaged in that unwanted content scraping and consuming significant bandwidth as well. Our platform really critically gave them the business intelligence that they needed to negotiate watershed licensing agreements with AI companies and gain a lucrative, new, enduring revenue stream that transformed their business. This is a publisher with hundreds of thousands of digital subscribers. They have hundreds of millions in revenue. This is real scale. And we protected their intellectual property. We helped them create these new monetization paths, and we gave them greater control over their own business model. And as their business grows in size and complexity, as they adopt their own AI internally, we have integrated the platform capabilities to grow with them. We make sure that with our platform, customers never outgrow us. What we build for one, we can now do for tens of thousands of enterprises facing this exact same challenge, each in their unique way. This is a customer case study in action, but let's talk about the architecture that makes it possible. Now, architecture is cloud and model neutral by design. Let's talk about what we mean by that. So what we see is that enterprise infrastructure today and enterprise software architecture is not this neat and tidy environment. It's only becoming more complex. More and more, we see our customers using a multiple kind of mix of clouds. They have private infrastructure, and now they have AI agents, especially coding agents, from multiple providers. And they all need to work in harmony. They all need to interoperate. And with these AI agents that are now shipping and writing code into this messy multi-model, multi-cloud world, that multiplies interconnectivity and interdependency faster than any human team can actually keep track. They need new solutions, and it's why every executive I talk to out there, that's a CIO, CTO, CISO, they describe the same feeling, which is that they feel like they've lost control, and they feel like they can't keep up, and they feel like they don't know what's even running in their environment anymore. And I think of it like a Wild West that's forming, where it's not, you know, just one messy environment. It's a patchwork of clouds, private infrastructure held up by this swarm of coding agents with no consistent way to see, control, or make sense of any of it. They need a partner who can help them manage their intertwined needs, who can help evolve with them as they need to evolve their business across this increasingly complex environment. And that's where we come in. Our platform is built from day one, and also especially now to meet customers wherever they are, whether it's cloud-based, whether they have private infrastructure. We're cloud neutral, so we work across every major cloud and across every type of private infrastructure that they have. We're also AI model neutral, which is an increasingly important point here. We work with whatever AI model that customers choose, which, from what we see, is usually multiple AI model providers as well. It's not locking our customers into any one AI vendor's roadmap or pricing structure. In other words, we're helping them traverse that Wild West that they see forming by giving them the flexibility for wherever their software is operating, for whatever AI models that they're And that architecture is a tremendous advantage where we see a massive opportunity going forward. This is an important point about our cloud-neutral model-neutral architecture, and it leads into Welcome to us talking about how we're governing AI. What we see is that AI is touching every single part of our value chain. Every part of our value chain. We see it the same way that we saw security just a couple years ago, which is an enormous opportunity and one we know how to capture because we've done it before. Yesterday, we, I hope you saw the press release, we announced three advancements that help strengthen and our role in governing AI, which is AI runtime control, the AI firewall, and API enforcement. These reflect our initial steps in the forecasting, the resilience, and the steering that we hear loud and clear in our customer base and the enterprise market that they need for this new world. That's the forecasting, resilience, and steering they need to adopt coding agents at scale, with much more to come as we build for a future where enterprises have to confront the wild They're the wild west of increasingly probabilistic software, which is very different than the world they've known to date. But none of this stands alone. It plugs directly into our capabilities that they already trust, like the next-gen WAF, bot management, content card, DDoS protection. We're applying that same playbook and security that got us those great products, that took us from one product to five, that took us to being present in over half of our new business deals. And just like security, where we see this longer-term, massive opportunity and upside, we're just getting started with these Fastly for AI solutions. This is step one. But here's the point to remember. Our opportunity with AI is platform-wide. It's platform-wide. It creates more interactions to accelerate. AI creates more software to secure and govern and more complexity to control. That's what enterprises have to contend with. Now, before I close with this discussion about how we're leaning into this platform approach, let's talk about one area where we see significant opportunity as well, which is compute. And this relates to how we're strengthening our role in governing AI, because compute and AI runtime control work as a synergistic pair. We're investing more in that strategy of where products combined create more value than Enterprises in both products alone. So Compute handles the first efficient, fast logic pass, so then AI runtime control only routes a workload or a query to the rare case that needs a large generative model. That's what the field calls Cascade Inference, and that's core to our approach going forward. That cascading inference, that symbiosis between compute and AI runtime control, is what makes AI economically viable to adopt at scale for enterprises. Pairing AI runtime control and compute is really just step one of us marching towards this vision of collective computation and cascade inference. It's early, but the direction is clear, and also our priorities are very focused right now. We're starting with solution enhancements, extending compute into other workload types, extending it to interoperate with our existing solution suites that we talked about, and expanding also how we improve our execution. And as part of the portfolio play here, which we're applying to compute as well, we want compute to be a critical on-ramp, too. We do that by finding repeatable use cases, just like we linked arms on that bot management case study. We'll roll out experience improvements to assist this as well with more push-button solutions where it just works, faster ramp-up times as well, and also recommendations that are automatically tailored to the customer's needs. And we're going to deepen our value prop, especially on that front, in that tailoring, by leveraging that unique data we collect from our platform that Archer touched on as well. We really see data and intelligence as a differentiator here going forward that we infuse across the whole platform. The point is, we feel we're truly defining this next era of edge compute solutions. We're also excited about what this is going to mean as we continue to evolve towards this portfolio and platform-driven approach. Talked a lot about the platform, how we're expanding it, how we're creating that synergistic value here. Before I hand things back to Vern for some Q&A, I want to quickly touch on the other two pillars of our strategy. Now, the second pillar of our strategy is, again, about scaling outcome-driven solutions for our customers. From a product standpoint, the best example of this is how we have this customer-driven innovation loop. What you're going to hear from Rich as well is this customer flywheel that we've been operating. As we've grown and matured as an organization, we've learned to leverage customer-driven innovation to power that flywheel. This doesn't happen by accident or chance. It's actually a result of a lot of discipline. It's a result of the Discipline approach that we're showing on the slide here, where we observe customer behaviors across the platform based on our unique vantage point. We pattern match the common challenges we see across the market and across every enterprise, no matter the industry. We co-develop solutions with customers to validate real world demand. We productionize that capability of the platform. Then we roll out and scale the new solution across our installed base. So let me give you an example. There's a high-growth payment experience management company that partnered with us for nearly a year as we built out multiple products and formed API discovery, API inventory, and then API enforcement. That one came out yesterday in that exact sequence, and they even handed us their API schemas to make sure that we built it right. That's real trust from a customer, and that's the magic of a design partnership. It's making sure that a product has market fit before it ships. It's making sure that we can sell it, standardize it across all enterprises to thousands of them. It creates new on-ramps into the platform, new entry points into the portfolio, and expands the existing set of products that our customers can adopt and get more value from as well. We can do this again and again, focused on scaling these outcome-driven solutions here. So now let's talk about how we're expanding our customer reach. And Scott's going to cover this in a lot more detail in his section after the break. But I want to touch on how this really links with this multi-product play that's at the heart of what we're talking about here today. First, we're protecting the core. We're deepening our relationships with our largest customers built on years of trust, while we're making our technical depth radically more usable as well. But at the same time, we're expanding into segments we barely touched, like I said, where we're under-penetrated today, where they're hungry for a portfolio that solves their thorniest resilience challenges because they're 24-7 businesses. I think a good way to illustrate this is considering the difference between an e-commerce customer and an industrials one. You know, an e-commerce customer adopted the public internet early. They chased speed and scale. Now, if you think about industrials or financial services or pharmaceuticals, where we're under-penetrated today, they've been slower to adopt this. It's not because they're less sophisticated, though. I think we all know that. It's because their stakes are different. It's not just an independent shopping cart. You know, it's, again, a halted trade. It's a stopped plant. These are serious consequences to their business, and it's precisely for this reason that customers need more than just a vendor. They need a trusted and unified platform. They need an integrated solutions provider with a configurable, multi-product approach that meets their evolving needs. We feel that these 24-7 industries are exactly where we're poised to win next, and we're going to do that with innovative products that specifically target these under-penetrated industries that up-level the insights they need to succeed and evolve in the AI era. Now, let's bring it all together. Recapping the Fastly opportunity, a broader, more accessible platform, meeting customers wherever they operate, in the messy reality of how they operate, innovating with new outcomes-driven products and solutions, and extending our reach into always-on industries that really need a platform just like us. They're hungry for our solutions. The number to remember is the one I gave you earlier, which is more of our customers are adopting more of our portfolio. They're adopting it really fast, quarter over quarter. And that's the clearest evidence that this portfolio strategy is working. Again, that security playbook I talked about that drove that 43% growth every year we saw last quarter, that's the playbook we're going to be running across the whole platform going forward. And this is how we turn technical excellence into durable, compounding growth going forward. I speak on behalf of all of Fastly. We're very energized by this platform opportunity and this multi-product play here. We're ready to deliver it. So that, Byrne, please come back to the stage as we prepare to take your questions. Thank you very much.

Okay. Thank you. Great job, Kelly. Thank you so much. So now is our Q&A portion. For those of you on the webcast, please submit questions. We'll be rolling through there. We also have mics here in the room for those live in the audience. A couple of hands up here. Let's start with Jonathan here. Thank you, everybody.

I really appreciate the presentation so far. Jonathan Ho with William Blair. One thing I wanted to start out with is on the chart that you showed with the exponential growth in AI traffic and connections, Can you help us understand how that maybe translates into potential revenue opportunity and maybe specifically, you know, what types of product add-ons and expansion in capacity utilization that can drive, you know, over time?

I can start and then maybe Kelly can talk about the product there. It's early. I think, I don't know if Kip or Rich can talk about some of the revenues we have seen around this space, but it is early. And as a percentage of the traffic, it is not that much yet. But it is growing. I think Kip had a slide, you had a slide on this, Kip, about how much faster

I think of it in sort of three legs. First is just volume. As there is more traffic on Fastly's platform, there is more volume, there is more opportunity, and that happens sort of automatically, frankly. The second part is things like what Kelly talked about with AI runtime control, where, in addition to volume, we provide value-added products that help manage the new types of traffic. And I think that's, for example, bot and DDoS, we think, are being driven in part by agentic traffic, and we're seeing the triple-digit growth rates that we've talked about there. The third leg is what Archer and I talked about a little bit, for example, edge inference, but where we start actually running some of the AI functions on or in the Fastly network, like edge inference, for instance. So that's kind of how I think about the opportunity. We're seeing increased volume, for sure, and that's what that slide, you know, the slide that I used was traffic and request volume, not revenue. So we're seeing that volume already, and then you can see us rolling out products that capture that. And then we, for the reasons Archer outlined, we see inference and some of the other things coming down the road. I mean, it's tricky. I feel like I didn't answer your question, but we don't have, like, a separate AI revenue bucket where, you know, we can say, well, these dollars are because of AI. But what we see is the traffic volumes being driven by AI, and that, in turn, drives revenue.

Next question for Fatima here.

Fatima Balani from Citi, thank you so much for taking my question. Artur, I wanted to go back to some of your commentary around this, the period that we're in right now for Fastly, both from a technological standpoint and for your customers, is not something that you've seen since 1995 to 2000 era. And then you also characterized CDN as maybe misperceived, As a broadly a commoditized arena, but you delineated that there's commoditized buckets and non-commoditized buckets, and I'm wondering if you can give us a crystal ball from your perspective on how you expect that mix to change, especially as I think about some of the revenue targets that you have, which, you know, are slightly lower than what you're realizing today, but I just kind of wanted to get some of the ingredients on how you think about the compliance. Reflection of the traffic over the next three years, commoditized versus non-commoditized.

I think the bucket of non-commoditized, or like higher value, is growing faster. And part of the way you can also see that is that traffic tends to need all the security features. Like, the commoditized traffic doesn't need WAF. It probably needs DDoS, but that's about it, and so with the WAF or the security products in general growing faster, that tends to be highly correlated with the higher-value traffic, and that's probably the best way for me to look at that. In the media space, you kind of see something similar, the higher value traffic needs anti-piracy, protection, content protection, and much higher rigor around that, and so a while ago we had a joint announcement with LaLiga on the privacy side, that content is much more valuable than other content. You kind of see that as well, and on the changes, I mean, what is so exciting for me is that it's changing so fast, and I was reflecting on, I was talking to a customer, and they're like, you know, it feels like Fable came out a year ago, but it was actually only three months ago, right? It was a big deal. And so it's very hard to predict. It's kind of, it feels like on a weekly basis, something new or changing. In all of it, though, is that the complexity is going up, counterbalanced with our ability to use agents to manage that complexity. And part of what we really have to do internally and help our customers is to make sure that we use all the gentile abilities to manage the dramatically increased complexity that the agents are adding. You know, I'll loop there, but thank you.

Thank you. I have a question online. This is a product question regarding a release yesterday, probably for Kelly. How does AI runtime control and AI firewall work architecturally? Specifically, how they differ from injection products that run on endpoints? With runtime control specifically, does it run from an endpoint device or cover the network as traffic is delivered?

The answer is it runs on the platform. It runs on the differentiated network architecture that Artur and Kip talked about. I believe the spirit of the question is, is it similar to kind of where some of the endpoint detection response players are playing? That's really the world of employee laptops. We're playing in the world that, like Artur said, is the one becoming especially complex, which is the world of enterprise production software. So we're looking at prompt injection attacks coming in to the software companies are building to differentiate in their own markets, not so much the employee laptop space that you might associate with traditional endpoint protection. It's all running on the network. It's part of that multi-product play where everything interoperates And customers are able to gain leverage by adopting multiple solutions together.

Jackson. Thank you. Jackson, Ader at KeyBank Capital Markets. Does Fastly benefit directly from consumer AI use cases like Muse, OpenClaw, whatever might be coming? If so, how? And which products, which revenue streams?

Yes. I'm pausing because we have a lot of respect for our customers' confidentiality. But we do benefit from those things, and we're seeing use cases across delivery and security, including privacy capabilities for agents.

It's relatively easy if you go look at the major hyperscalers and consumer product brands, how they are implementing privacy with regard to server-side inference versus client-side inference as well as consumer agents, and they mention us. We're part of that, so it is. And I think the privacy aspect of this is also going to increase quite a lot over the next five, ten years, both driven by consumer demand and driven by regulation in Europe and other places.

Take our next question from Peter over here.

Peter, living here with Evercore. Maybe to piggyback off of Belinda's question, you talked about a tsunami of traffic that's coming. What does that look like? When does it happen? Obviously, we're seeing the speak now. And then second, when you think about traffic, you know, as MCP adoption grows, like, do you expect it to create a meaningfully new layer of, like, traffic for you all? Or is that just mostly just in API, you know, in that type of bucket? But just curious, like, what that looks like in the traffic.

Yeah, I'll comment, and then Archer can add on. I think others in the industry have noted that while the AI traffic is growing rapidly, purely on a volumetric basis in terms of bytes, agents aren't watching videos yet. So the volume of bytes is not as large as the volume of requests, for instance. What we're seeing is, you know, we launched the API schema enforcement yesterday. So what we're seeing is, you know, there are side effects of AI, like everyone's creating a lot of code with agentic coding tools. That code is calling network APIs. That goes through our platform, and we can apply our API products to that. So I think it is more traffic. It's also, as I said before, kind of that second leg, which is, okay, whether it's existing types of traffic like API traffic that we can earn additional revenue based on value that we deliver, or whether it's new kinds of things in terms of AI traffic. You know, MCP is a very interesting example of where we may be able to add value. We see opportunities in both of those areas. But I don't know if you have... I can't predict when the tsunami... I think to some degree the tsunami is already kind of coming, but Artur, I don't know if you have a view on that.

Yeah, the when is hard. I mean, we just had Muse and GrokBok show up in the last four weeks, I think, right, and that's probably the first real, like, super consumer-friendly agent environment. I mean, OpenClaw is cool, but it is significantly harder for people to set up. So I think the question on when is hard. The privacy traffic that we're seeing is new. There's a new type of traffic that, I mean, started a couple years ago, small. But that is certainly something that five years ago or six years ago wasn't really, I mean, we didn't have it, it didn't exist, and it's a different type of traffic, for sure. On the API side, and MCP, depending on where you sit in the stack, MCP is just another API. But there are some subtle differences, the agents tend to be chattier, and they're doing the self-discovery, right? They're also using more streaming API interfaces, which is quite different from how a lot of traditional, like, REST-based APIs have worked in the past. I think it puts more demand on the functionality of the platform over time, but it is also, like, so new, and it keeps changing weekly, so the when is the hard part to predict here.

Thanks. Frank Loudon with Raymond James. So where does the unified platform put you guys relative to the competition? How much of an advantage is that? And then I had another question on your Fastly for AI platform product. What's kind of new and different about that?

Maybe I'll talk a little bit about the platform question, and then, Kelly, you can take the announcement we made yesterday. We believe it puts us at a pretty significant advantage. If you compare us with some of our competitors who are operating at larger scales than us, we're driving at this point higher gross margins than they are, and we trace that right back to the fact that We're running one network and one platform where they tend to have a platform for sometimes for each product, frankly. The feedback we get from customers is it's a more consistent experience. So they like that. So we think it's a pretty significant advantage. I mean, one thing I would note is in a time where hardware is harder to come by and more expensive, the value of that efficiency is even higher. So I think as we're going forward, and as you noticed, I think we started the year with questions about how our gross margins would withstand the more expensive hardware. I think we've basically done nothing but raise our gross margins since then. So I think it may be a bigger advantage right now, given the current economics around hardware as well. By the way, that's another thing about our platform is when Rich talks about CapEx, almost virtually 100% of that is going into expanding the network rather than maintenance just because of the way we built the network. But Kelly, you want to talk about yesterday's announcement and what's new?

Yes. Very exciting announcement yesterday with Fastly for AI. I'll point back to that stat we talked about going from 7% to 30% in terms of customers who adopted four or more solutions. It's for a reason, because it's, yes, there are some companies who have an AI firewall, some, to some extent, doing AI runtime control, some doing API enforcement. None are bringing the platform that we have. None have the compute flexibility that we have. None are able to have that elegant, again, cascade inference, where you're able to have that efficiency of logic pass, graduate to whatever models you're using in your own cloud along the way. That's really the heart of the cloud-neutral, model-neutral element that we see driving, again, the platform-wide adoption. So I wouldn't think of those as individual products in isolation. It's how they fit into the platform where customers can use them in conjunction with other products there as well.

Rudy? Rudy Kessinger, DA Davidson. I'm curious, Todd or Archer, if you could expand on compute. You know, it's very clear you guys aren't taking a You know, cloud approach, like some of your competitors, but, like, just what role do you have to play in compute for these edge applications? And what's the monetization opportunity there?

Yeah, I can, I'll talk to that. We believe, as I kind of outlined, that there's a bunch of functions that belong at the edge. And as you said, we're not, some of our competitors are offering essentially cloud compute services. We don't think we can do a better job than, say, AWS at offering centralized cloud compute services. So we're focused on how do we support our customers with the use cases and functionality that actually benefits from being at the edge and actually running those workloads at the edge in our high-performance network. So that's kind of a high-level how we frame that. Today, we essentially have one compute platform. It's an exceptional product. We have customers who tell us that they're able to do things on it from a performance and security and resiliency perspective that they're not able to do any other way. But it's one product that addresses only one sort of sliver of the use cases, right? And there are a bunch of technical things, but it's essentially an event-driven, high-performance WASM at the edge. We have customers who want to run long-running processes at the edge. We actually do that for a large customer on a somewhat bespoke basis because they wanted access to the performance and the resiliency and the global footprint that we can offer close to users. So what you're going to see, and I think Kelly alluded to it, is kind of what we did with the security portfolio. If you go back, we had one product. We said we needed to get to critical mass. We needed to complete web API and application protection. We did that. Now you can see the growth and the more material business side coming from compute. You should anticipate the same trajectory with our compute, where we're starting with one product, and we'll be adding, based on what our customers want and need, more compute models so that they can support all of their edge workloads on Fastly.

I think Parham was first there on the back.

Yeah, hi. Thank you for taking my question. Parham, staying with Oppenheimer. So I really appreciate that, you know, all the AI products that you've introduced and, of course, you've expanded your portfolio over the last few years. How do you think your portfolio sits today and what are some of the missing pieces you want to address in the next few years, especially in this agentic world? Thank you.

Probably Kelly.

Yes. I think the way we think about the agentic opportunity again is where does our platform make sense? Kip just touched on that from the perspective of things like edge inferencing, where that makes sense. One interesting thing that Archer touched on as well is that, yes, agents at the end of the day, they're software programs. They also have interactions. We have our chief legal officer in the back. She knows the importance of contracts very well. The agents don't create their own contracts, and that's what we mean by governance, is how do we make sure that for every enterprise in this new world, like you said, where it's expanding very rapidly, creating more complexity, We're able to help them make sense of it, able to help them enforce what they expect from that software, which is an echo of what Archer built with the delivery business to date that we plan on extending across the portfolio as well. And again, thinking about where we can expand our compute offerings, continue to invest on the security side, still thinking very much on the delivery side about what enterprises need next to grapple with, again, the Wild West. That's the terms we heard from them. So I think you're going to see it really, again, across the whole portfolio, certainly building out, again, was just step one of Fastly for AI, but I would say probably no part of our portfolio will be untouched by helping our customers navigate this.

Yeah. So we had some questions come in on the webcast. Thank you for those of you out there. A lot of them I think we covered around traffic patterns. We'll follow up on those. I think we've got time for one more. We'll take it in the back there with Vijay.

Hey, guys. Vijay Hellman from Craig Callum Capital Group. Just with respect to security, we've seen some transformational models like Mythos come out. They seem to be changing things a lot. Just how do you see AI transforming that security space, and do you see any role for AI in providing dynamic, real-time defenses?

No, absolutely. I'll comment, and then actually I'm sure Artur and Kelly would have perspectives on this as well. I think it was interesting when Mythos first came out, they're seeing this vibe that somehow people would need less security software. We didn't quite understand that. We don't think that's the case. I think what I would say is it's just the speed and the volume of exploits has shifted, and I think that's been publicly reported. But a lot of our customers turn to things like the next-gen WAC because they can't or don't want to patch all of their systems, And so they can have one kind of front door that protects it, and as long as they are able to detect the new exploits and vulnerabilities there, they're able to keep running their business without being in a perpetual state of trying to patch various microservices and things like that. In terms of real time, you know, the AI is used for a lot of things. A lot of those systems aren't quite real time, but as I mentioned in my talk, that's where it appears to be going. I've been very interested in some of the models that have come out even in the last few weeks that have sub-second response time, and I think that's going to be the kind of next frontier, and that'll be applied in real time to security, but potentially in real time to all kinds of requests and transactions at the edge of the network. But I know both Archer and Kelly would have a lot to say about this, so.

Listen, with Mythos, I think there's been a huge focus on the vulnerability piece, but I think taking a step back, the concept of defense in depth has been common. It's an enterprise favorite for a reason. You see that in the security portfolio that we built out. We have these layers, and that's what enterprises are buying into, hence the triple-digit bot management DDoS growth on top of the great growth we already saw in the next-gen WAF. I think we expect that to continue as enterprises need those multifaceted defenses because Mythos is strengthening attackers' ability to change some parts of their operations more than the vulnerability piece, and that means, frankly, a combinatorial explosion of potential actions they can take. That's where the visibility piece, even with something like API enforcement, becomes very critical. Certainly the existing security products, and as we continue to invest in more, providing more flexibility is the name of the game for enterprises. And to Kip's point, we're certainly exploring how we can leverage models also to give them better insights because that their own understanding of their software becomes an asymmetric advantage in the mythos world that we want to help bolster with the platform as well.

I can finish up with, you know, I spent time last week with customers, a whole bunch of CISOs, and at our conference we had a talk by an open source developer of a software called libcurl, which is probably, it's in everyone's device, like everyone, every device has it, and the number of, like, vulnerabilities filed has gone up dramatically, as you would say. I think, and one of the measures they tracked was how long the vulnerability had existed in the code base, and it's staying at nine years. He's like, eventually, we'll run out of the old ones, but we'll create new ones. All of these need patching, and one of the things that the CISOs were saying is that we can't keep up, so we need agents on our side, right? So it can't be, the attackers now have much more time because they have agents, just like we have more time because we have agents. So you need the agent out of the loop. And this is where, there was a question earlier about the kind of platform advantage. All the real-time aspects or instant aspects of our platform, the fact that the log files show up in less than a second, the fact that you can push new configuration, new app rules very, very fast out, What are all things that have been very beneficial in the past for people that operate, but in a world where attackers can change what they're doing nonstop, continuously, all those real-time aspects that the platform have and that apply to the things we've built on top of the platform becomes even more important. It's like, if it takes, you know, 10 minutes to change a config, that was annoying in the past, but better than four hours, but still doable, maybe. I would have found it unusable, but that's me. But in an agent world where an attacker can try so many things, then 10 minutes is an eternity, right? And that is, I think, part of the platform advantage that we can build, whatever we are building upon, and why customers come to us is they know these core capabilities of the platforms translate to better fundamentals for all the products that we build on top. And it will just be way more important as agents get better at everything, including attacking and defending.

Thank you, Archer. So that concludes the first half of our presentation. We're going to take a 10-minute break and we'll start back up at 2.55 Eastern. So stick around. Thank you, everybody. Thank you. Okay. I've got some folks still coming back here, but we're going to continue the second half of the session. And it is my pleasure to introduce to you all Scott Lovett, our president of GoToMarket. Take it away, Scott. Scott.

Great. Thanks, everybody. I'm really excited to have this spot that everybody cherishes after the break. My name is Scott Lovett. I'm president of GoToMarket. They told me I'm supposed to tell you a few interesting things about me, so I'm a Leo. I'm not afraid to cry. I've been at Fastly two years. Previously, I was CRO at Imperva, Akamai, and McAfee, and then before that, I was 20 years at Cisco. And you'll see some of all those companies kind of weaved into my presentation. Really, really excited to talk to you about the transformation that we started a couple of years ago and the impact that it's having. And, you know, we always, as CROs, tend to talk about growth, but I really want to focus on what's sustainable, durable growth for Fastly moving forward. So I'm going to start with you've heard performance matters. What does that really mean to my sales organization and where are we focused in and how are we identifying those types of customers out there? And I'll walk you through what that looks like, not only from a feature standpoint, but also the verticals that we think it plays well in. My team gets sick of me talking about this because I'm going to deep dive on what customer intimacy means. And what I really mean is trusted advisor status. I bring it up all the time. When I chose to join Fastly, I joined because of one reason. First of all, I'm very old, and I've been doing this a long time, and you find very few companies where the customers love the company as much as the customers that love Fastly do. And you saw that in the beginning of the tape. You've heard it from Artur, who's talked to a lot of these customers. It's really important that we leverage that relationship moving forward and get deeper and become trusted advisors, not just a vendor selling another security product into their infrastructure. And then I'll talk about, really, what's the operational goal of the organization? So how do we build a high-performance commercial engine here and make it a repeatable process? This has been an evolution for the company, for the sales organization over the last couple of years. And then lastly, how do we broaden our market presence? Not only geographically, where are we looking to expand, but what are additional segments that we're going to use? What are additional types of partnerships that'll expand the reach that we've got and also increase the performance that we have on the network? So this is where I'm going to spend my time today. Okay. Winning where performance matters. So when I look at why customers love Fastly, and I made that comment there, it really comes down to a few key things, right? We deliver top performance when it comes to things like bot blocking rates and uptime and cash clearing, right, for retailers. This, you know, is critical to them. I was just over in Europe for a couple of months, in Spain and Germany. The number one issue every single customer that I sat with brought up was data sovereignty. For every SaaS company that's based in North America, they want to talk about data sovereignty. What can you do? And so we're delivering by the end of the year a bifurcated control plane. And in doing that, that opens up other market segments for us, like public sector in North America, right? So with FedRAMP certification and other things that we're doing there. And so these are kind of the on-ramps, and you'll hear me use this term a lot, to some key verticals where we see a lot of these, you know, I would say product benefits really impactful, where performance does matter to them. And those are really the verticals on the right, and traditionally where Fastly has always been, you know, Kip to talk about how well we've done in some of these key critical verticals. The interesting thing about this is I think most people tend to think that these are only your top ten customers, they're the biggest streamers in the world, et cetera. I would remind all of you, six years ago, OpenAI was a commercial account in a lot of places. There are a lot of emerging digitally native customers that are evolving in the commercial model where performance matters. And the reason that's so, so important is the market is essentially kind of coming to us. You know, when I first got in, I came from the security side when I was at Cisco as enterprise. I was at the security side. I went to McAfee in the endpoint game. I got brought in to Akamai because I was a security expert, per se, but it was really my exposure to the CDN side of the business. And what we saw then when I first joined, which was roughly 2018, it was still a market being, you know, really driven by what was the cost factor. I can tell you those conversations have changed drastically now with our customers. Because when you're looking at performance, cost isn't the first thing that they care about. It is the ability to clear cash quickly. It is your uptime that we've got there. And I'll walk through examples of customers who pivoted back towards us because of that. And so I bring that up saying it feels like since I got here, the market has turned to us with these high critical workloads that exist out there and looking for vendors that can deliver that on a regular basis. So that's where we're focusing our resources in. Talking about desire for deeper partnerships, I always tell this story. So like I said, I've been doing this a long time. I'm based in Chicago. I have a lot of relationships with CISOs and CIOs for a long, long time through many companies. And there was a CISO that worked for a large hamburger distributor in Chicago. You guys can maybe figure out who that is. I know I'm not going to use his name, but he's no longer there. But he was a really good friend. And a few years ago, I was with him. He was a CISO there. And I said, what's the number one challenge you're facing? And he said, Scott, we did an audit. We had 86 discrete security appliances in our infrastructure. And every breach statistic that we look at shows that we haven't gotten any tighter with regards to the black hats getting in. As a matter of fact, I'm convinced because we've gone best of breed with all these different vendors out there That they're able to exploit the gaps between the products that exist. So my goal is really to get down to a few key vendors that have platform solutions that I can leverage, right, moving forward. So true part of the story that I have to tell you is six months later, I got together with him. We were out at RSA, and I had a beer, and I was literally like, how's the transformation going? He's like, oh, it's great. Great, we have 123 security appliances now. We've gone the exact opposite direction, but I now have a strategy kind of moving forward. And it ultimately worked. He got down to 27 vendors that he has out there, but what he really did was kind of divvy up security providers into buckets, whether it was the edge of the network, whether it was endpoint, whether it was the traditional CDN side that he had out there, and he looked for key partners that he could work with, and again, that plays to the strength that we have with these relationships with these customers. I heard Archer and Kip and Kelly talk about, you know, the reason the stakes have changed so much is these are high-stake workloads, so deals that used to start with procurement The government coming to us asking for bit pricing now starts with the end users, right, coming to us saying, these are critical workloads that the board care about, okay? And it allows us to gain better commitments from customers on that. So when you're competing against, you know, when I first started in CDN, nobody ever wanted to give commitments on products, right, on terms or length, et cetera. We don't do commitments, customers would say all the time. Now in this environment, if you're going to deliver performance to customers, we need We need to know what their traffic shapes look like. We need to know what's coming our direction. It's super, super critical that we deliver the performance that we're expecting. In order to do that, we need to understand what that workload's going to look like and build an infrastructure that supports that. And when you walk customers through that logically, they're more than glad to invest longer term with you. We've seen that in the uptick in multi-year deals and multi-product deals that we have out there. So how do I get, you know, customer intimacy is really leveraging our strength, which is we start at the core of the network, right, that we've got out there. It doesn't mean we don't have customers that, you know, jump on and with a security product and then shift back and look at CDN, but really we know that that's where we've grown up and that's our heritage that we have out there. So there's a natural motion to go to these customers, and I'll walk through a couple of examples that we have of, you know, leveraging the network space that we've got, but move to the market adjacency that we've got in security next to it. They've seen the high-performance delivery that we've delivered for video on the network. Now they need that same high level on the security side with API security that we've got out there. And so it's a natural flow to walk there. And then the other thing is, like, we're now looking at the next wave, and I thought Archer was brilliant. He said, we don't know when it's coming. It's here. How big it gets? How long it lasts? I don't think any of us know. But what we do know is that the customers are coming to us saying, what workloads can I move to the edge out there? I need your help in really defining and embedding fastly in the infrastructure we're building out to support this wave of technology. And you'll see I have a little comment down that field CTOs and specialized technical products expertise are helping customers translate this. The reason I bring this up is I went to Rich as her CFO and said, I don't need a lot more salespeople. What I really need are people that can go out and help customers through this transition. So you heard Kip make the joke about Archer making more sales calls than I do, which is actually 100% true, because nobody ever wants to talk to the chief revenue officer unless something got broke or something. They want the guy who built the network and the infrastructure to come out and talk to him about what he's seeing from customers. That translates at every level of our company. They want technical resources that have been out in the marketplace that are in specific verticals that can help them guide towards where they need to go and what they need to build in their infrastructure. And so those are the types of resources that we're embedding in the field to really build this intimacy with customers that we've got out there. So you've seen this slide three times. I'm going to walk through kind of each one of what this means to sales of how we lead with the platform, scale-outcoming-driven solutions that we've got out there, and what we think that expanded market reach looks like. So the first thing I've got to call out is there's an obvious conflict at this slide. If you look at it, it says, you know, we're going to lead with the platform, but we're doubling down on best-of-breed solutions. Now, it may seem like those two things kind of conflict with each other. They don't. And bear with me for a second on this. How many people own an ego blower? Only three? How many own an ego product in general? Okay, we're clearly in the city. Anybody that has a driveway has an ego. Yeah, that exists out there. The reason I bring it up is it really is a good analogy for what we're seeing kind of from our customers out there. So like last week I had to buy a hedge trimmer for a tall hedge. I went to the hardware store. I have an Ego blower. It's the only product that I have from Ego. I looked at all the hedge clippers. I kind of glanced at the price. They were all in a similar category. But I looked at the hedge trimmer from Ego and said, well, I've already got a battery system that works with that. I can already charge it on that. I can already bring it in. So, by the way, I spent $299 and bought the hedge trimmer. Full disclosure, I then bought the little chainsaw attachment that displaces the hedge trimmer for thicker branches. I then bought the extension pole. I then bought the high-performance batteries, which once you get sucked into the ego hemisphere, you will find out those are $500 a piece. So, my wife came back and said, you spent $1,700 at true value on ego stuff. And I said, yeah, exactly, because it all worked together. Now, she did look at me like I was completely crazy, but she kind of understood the fact that now you can grab one battery and you can input it in any solution. And by the way, I didn't come in looking to buy a complete platform of Ego products. Nobody does. Nobody goes in and buys the power washer and everything. They come in because I had a specific need that I had to trim a hedge that I couldn't reach. But I leveraged the platform that I had already invested in. So the analogy is we're seeing that with our customers a lot. The telemetry data that's shared from the network side of the business with the security products that we've got out there, that ties back to what the CISO at the hamburger distributor talked about, which is how do I find folks with key platforms that I can build upon? Doesn't mean I'm going to start buying the whole platform at once. There's going to be multiple on-ramps that we use out there. There's a couple of examples on this slide I just wanted to walk through of recent customer wins that we've had out there. You look at enterprise reliability, and this is probably the number one thing we've seen over the last six months is we've had a number of customers, both that have been customers before and new customers that have come in and said, simply network uptime makes a difference. And one of them was a large global financial institution that I had worked with and just said, simply the board came to us and said the amount of downtime that we've seen over the last six months specifically We have a multi-CDN strategy there, so they really shifted just the majority of traffic over to us. If you look at the bottom one, it was almost the same story of what opened the door was the network outages. The interesting thing about the customer down there and this large commerce customer that we have in a home decor space, the really interesting thing about their play was the CISO and the CIO actually there said to me, Everybody gets a turn in the pickle barrel. So outages are going to occur. And he said our belief in why we're moving away was not because the outage happened. It's because how was the outage handled? Who are the people behind it that you worked with? Could we get to the engineering folks? Were your engineers that were there? You know, cable cuts are going to occur in the Atlantic, right, was his point. How do you respond to that? And it wasn't about the products. It was actually about the people at Fastly and their ability to respond there. So, same business issue, but two different reasons that they wanted to pivot back to Fastly. And then, really, the one above that, the real-time control, I'd like to thank Artur for bringing up the large weather company in Atlanta that he had met with and stole that story. But it's a great example of, by the way, it took 10 years of talking to that customer. And now that customer, right, moving the API traffic over and the performance that they've seen there, is now willing to talk to other customers about it. You know, they were an existing customer on other sides of the platform. They hadn't moved API traffic to us. Now they're sitting here saying, God, we should have done this more. We'll be glad to talk to other customers about that. By the way, one of the individuals that's recently left there and is now replicating this same story at another company. Archer brought this up. I've never seen anything occur more often in my career than people that use Fastly at a company go to another company and bring in Fastly there. That's how trusted we are. So that's really how we're winning in this space right now. I use this chart actually with my sales organization. I do a quarterly sales call. I pulled this out because I wanted to share it with you, which is telling folks that you want to become a trusted advisor and you want to move up the executive food chain is really easy. Doing it is really complex. If you're a sales rep calling the CIO's office to say, hey, I just want to get in front of you. I've been meeting with your data, you know, analysts down below and the folks that are embedding products. A CIO doesn't go, oh, that's great. I've been waiting for your call. When can I get you in here? They pawn you off to somebody else in the network that they've got. And so part of what I wanted to do was try and explain to the sales organization, here's where you start. We all know there's an on-ramp. The customer has a pain point. They have a hedge that needs to be trimmed, right? And so they're going to come to you and ask you for a product, and they're going to come in. They're going to ask for pricing on that product. But it is so important at that point that you position the value of the platform, of what they're getting access to. If you try and sell the platform up front, good luck. Somebody's not going to swallow the elephant. You'll find customers that will go with multi-product, but they're not buying the entire platform as it exists out there. So find out what the Fastly products are, identify to that, then look at the operational impact that occurs there. So go back to the folks that you've been working at. Here's the operational impact that we've got and tie it to the business outcome. And the glory of some of these AI tools for sales right now is for account planning, it'll actually go in and do all this for you. It's amazing what it spits out. And then you have a business-relevant story that you can go into a CIO with and talk about the impact. As a matter of fact, you can give them the slides to use for their board deck on the impact it's having to the business as it exists out there. That's how you get to the end, which is really, you know, a broader relationship with the customer and expand that. And where we get deep and wide with customers, and we've certainly seen it with our top ten, we know we get more business out there. So how do we expand that through the enterprise sales organization? And this is kind of the roadmap to how we do that. Great example here of a customer that we've had for a long time. It is a top ten customer that we have out there. Social media company has an entity, an APJ, a separate entity in North America. You can see if you can figure it out on your own. But long-time customer for us on the traditional CDN side of the business itself. So they were familiar with our ability to scale, to deliver high-performance video traffic, et cetera. The executive team there came back, and they had done an analysis of their API traffic and said, the reality is we don't know where it is, and we don't know what it is. And there were so many departments that were going out, right, buying connections to LLMs, buying connections to third-party software vendors. They had no idea what was secure, wasn't what was secure. They had no idea where these connections existed out there. And so for us, it was that natural market adjacency that we could go expand with. So, we did that. You can see the impact it's had kind of already, but I'm projecting, and I can only give ranges now, an increase with this customer from a revenue perspective, depending on what utilization, you know, how many APIs move over, et cetera, a revenue increase of roughly 25 to 38 percent this year. And this is a play, by the way, that's completely repeatable. We've got two other opportunities within the top ten alone and multiple ones It's where we're running this API security play, as we call it out there. And these are issues that customers have, business problems they're facing that we're able to get in and kind of solve them with. This is a slide I gave to my management last week in Chicago. I had an offsite there. I'm really focused on segmenting our customers into key verticals where we know, you know, performance does matter, and that's where we're focusing our resources on. We've got a limited number of resources that we can leverage here effectively. How do we put them on the deals that can have the biggest impact? One of the things I think we've done poorly that we've gotten way better at in the last year is doing what Arter does, which is how do we get executives engaged with other executives? Even giving account executives, you know, relative information to go in and talk to a CIO, they want to talk to a peer, and they want to develop those relationships. So folks like Arter, I mean, our CFO, Rich, got a big deal done for us last quarter. He doesn't get commissioned, but I gave him a pat on the back, and kips in front of customers all the time. So like we're really trying to strengthen those executive level relationships. Sales enablement, I just want to plug this, I won't do the last two, is so critical because we're really in three different markets. And when you think about it, being a salesperson, talking to three technical influencers, different technical advisors, different buying entities, and different motions like network security and compute can be really, really hard. So enabling them to really understand what are the stories in each of these, you know, technical verticals that we play in is really, really helpful. And then giving them key analytics, that's propensity to buy information. If companies have product X, they're most likely to buy product Y at what point? When do you introduce it? How do you support that? And what do you do? We're expanding globally. The first year I was here, we added resources in France and Mexico, and you can see how this is color-coded, coded where we added sales resources. You can see the new POP activation where we've got. You can also see, you know, the planned POPs that are opening later in the year. So, you know, in 26, India, Middle East, Thailand, Southeast Asia. Archer and I just got back from India, by the way. We spent a couple weeks there. I'll talk about that in a second. But I see it as a huge growth market and a growth opportunity for us and a different delivery mechanism I'll talk about. And then Latin America is the one this year. We just hired a new vice president to work down there. We're going to add resources. We're going to add three POPs. We see a significant opportunity there as well. So this is the trip Archer and I made to, I'll start with this, to India. And it was fascinating because we did two customer roundtables, and we met with a large service provider there that we've got a partnership with, and we're essentially embedding our software on their servers there. So it scales the infrastructure and the POPs. When we sat up there, Archer got on stage and said, I think it was seven months ago, we had 12 POPs, Archer, wasn't that in India? Five pops. And we now have 62 pops. And every enterprise customer sitting in both rooms stopped, put their pencils down, and started paying attention. The scale of infrastructure that they could get, leveraging hardware from their service provider, but our software running on top of it, was super impactful. They could not wait to talk to him. Again, nobody wanted to talk to me. But they wanted to talk to Arter because they were so impressed with the ability to scale that. And so how we embed in these service providers, it's going to be a play that we're going to run in Latin America, and one we're already running in North America as well. Great opportunity. The other thing we're looking for is the days of resale. I came from the hardware side of the business, obviously coming from Cisco. It's really a services-led, you know, play right now. And so what customers want from partners is very different. It's technical expertise. It's the human capital to integrate multiple diverse products from diverse vendors. So finding, you know, partners who want to play in the solution endgame and will stitch products together from multiple vendors and provide those services because customers don't have those bodies to do that are the types of partners that we want to bring in. You know, partners who want to resell and fulfill demand that's already created, that market's gone. It doesn't exist anymore. So, the key things I kind of wanted to walk through today was what performance matters and how we're focusing the organization around that, and hopefully you got a flavor of what that looks like. How we're becoming trusted advisors, and this is what I'm most proud of because this was the easiest button to activate because customers love us. So, going in there and saying, great, how can we partner together moving forward? What does that mean? And you've seen that in the increase from commits and the cross-sell and up-sell that we've got there. You've also seen it. I feel like sometimes we have to apologize for the top 10 customers growing as quick as they are. I got news for you. I walked you through that API story. They're going to grow more. They trust us more. They're going to give us more traffic. They're going to see them grow more. I've got to grow the rest of the business as well that we're doing there, but you should expect to see those top 10 continue to grow because they trust us more than anybody else out there. Talked about, you know, the KPIs that we want to run within the sales organization and just creating an operational cadence of pipeline review and all that stuff that we've got out there. And then lastly, what we think the market reach looks like for us, whether it's geographical expansion, So with that, I think you understand why I was so excited to kind of get to Fastly and why I'm so excited about the opportunity that we've got in front of us. So I appreciate the time. With that, I would like to – no, no, no, hold your applause. Thank you. I appreciate it, Chris. With that, I'd like to bring up my partner in crime. He's the MVP, I think, since he's joined the company. And like I said, it's great to have a CFO that talks to customers and works with them. Rich Wong.

Hey, thank you, Scott. And thank you for the go-to-market transformation that you've done. It's been an amazing story, and I love hearing those customer stories from you, and I love being a part of that customer journey. Thank you, everyone in the audience, for coming. I've been very fortunate because I've been the CFO for the last 13 months. I've had a chance to meet most of you guys. But for those of you who have not met, I'm Rich Wong, the Chief Financial Officer here at Fastly. I spent the last 20 years in finance roles across a few Silicon Valley companies. This is my third time as CFO, and prior to being in finance for companies, I spent eight years on Wall Street doing both M&A and capital raising. So I joined Fastly in August 2025, and I joined because I was a true believer in the Edge platform that we built. And I actually believe that the edge becomes an increasingly important part of the Internet going forward. I think we have a world-class team, a world-class product, a world-class platform, and we're very uniquely positioned at the edge. So I'm excited to spend maybe the next 15 minutes to walk you through the Fastly financial journey and where we are headed. I'm going to focus on five key themes that are laid out on this page. One, that we have really scaled growth durably, profitably, and in a free cash flow positive environment. I think that we've really laid the foundation that should sustain continued growth and profitability. Two, we're really deepening our platform. You've heard from Kelly, you've heard from Artur and Kip about the unified platform that we built and the kind of six product suites we have. Customers are buying more, and you'll see that in the multi-product adoption metrics that you see. Three, the network that we have built is very unique. It provides us with real structural and economic advantages, especially versus our competitors. And four, the incremental margin model that we've developed has really worked. It gives us the confidence that we need in the continuing quarters as we scale profitably and durably. And then five, as we generate free cash flow, like we've been doing for the past six quarters, we will continue to redeploy that capital with an eye toward long-term value creation. So let's start first on the business transformation that we've undergone. Kip, Scott, and Kelly have talked about this. I'm going to focus more on that financial journey. From my perspective, we've really reset the business and strengthened the foundation. We've consolidated it into one platform with six product suites. We've streamlined the go to market operations and motions, really brought in executive selling really deep in that customer partnership. And then we've also embedded financial discipline throughout the company. So we're on this journey, and we've made tremendous progress. If you look at where we were a year ago, and where we are now, we've accelerated revenue from 12% a year ago to 23% in the most recent quarter. We've taken gross margins from 59% a year ago to 66% in the most recent quarter, and we've turned an operating loss of negative $5 million a year ago to positive $27 million in the most recent quarter. And then very importantly, we've done this with existing customers and new logos, but with existing customers on the last 12-month net retention rate basis, we've taken that from 104% to 117%. Now that the foundation is laid, we've demonstrated operating momentum. We're focused on scaling for the future. And that means durable, diversified growth. We talked about the multi-product adoption. We're focused on deepened customer relationships and continued margin expansion and financial discipline as a company. You've heard about our platform strategy from fragmented point solutions to a unified edge platform. The unified edge platform has six key products that you see here on the upper left, the network services, the next-gen WAF, the bot management, DDoS protection, compute, and observability and other products. Given our unified edge platform today, we're actually going to change our reporting to better reflect how our customers buy and use fastly and how we operate internally. So beginning in 2027, we're going to move from three revenue line reporting, which is network services, security, and other, down to one. And then we're going to introduce a multi-product adoption metric. We want to show investors and be transparent and better align with that multi-product platform that we've been speaking about today. And it really matches how we operate and how we sell and how our customers buy. So we're going to introduce a multi-product adoption metric around the percentage of customers that buy two products or more, and the percentage of customers who buy four product suites or more. And so to help with this transition, we're going to ease investors in. For the next two earnings released in Q3 and Q4, we're going to report under the old way with those three revenue lines, and we're going to also report on the new way. So we'll have two quarters We will do them in parallel. We hope this change better shows to investors the breadth of our product suites and the breadth of our customer adoption across our product suites. Kip mentioned a $22 billion TAM, about 3% share of the market, so there's ample room to grow. The way I've been thinking about this is that we have four pillars of long-term shareholder value creation. First is the above-market revenue growth, which is share gains with existing customers and multi-product adoption. Continued go-to-market execution and expansion into new markets and geographies. Second is the modern network economics. Our modern network architecture really results in higher capacity utilization and lower capital intensity. Third is the disciplined operating leverage, the ability to expand incremental margins through overall cost discipline, and improve productivity as we scale our platform and as we add more products and traffic without proportional leverage. And fourth would be the strong free cash flow and capital redeployment. We're going to be strategic in how we reinvest free cash flow generation into the highest return opportunities. So let's dive deeper into each of these pillars. The first pillar I mentioned was above market revenue growth. We talked about a deepening unified edge platform, the six key product suites, and the percent that adopt two plus and four plus product suites. We're going to start reporting this every quarter going forward. We've made tremendous progress. As of the second quarter of this most recent quarter, 72% have adopted two-plus product suites. This is up from 58% two years ago. And then from a four-plus product suite perspective, it's 30%, and that's over four times from 7% two years ago. This multi-product adoption really leads to what I call a customer flywheel. So the more that customers are buying on our product suites, the stronger retention we're seeing, and the stronger the upsell and cross-sell is. It also results in stronger diversified revenue fastly and really greater revenue visibility. And it provides us multiple avenues for growth, market share gains, international expansion, And Kelly mentioned the longer-term kind of AI and compute opportunities. Our unified platform is real, and the customer flywheel we are seeing has really underpinned the past seven quarters of continued improved execution of the company. The second pillar of long-term value creation is leveraging economics from a modern network. Arctur started vastly to solve some of the modern complexities of the Internet, Really, like, the demand for high-speed performance reliability, the explosion of user-generated content and shared content, and the mass adoption of e-commerce and financial services transactions. Our architecture was built for that modern Internet. And so, as a result, we see significant operational advantages from our network. We see higher throughput per server. We have software-defined traffic engineering and fleet-wide upgrade capabilities. And then the unified structure in single network, unlike some of our peers, we have the same CapEx that serves all of our products, and under what we call a hyper-converged architecture. This has resulted in key results for Fastly, non-gap gross margins of 66% in the most recent quarter, and the ability to grow our capacity by 65% with approximately 10% cumulative CapEx spend over that period. Prior to joining Fastly, I knew we had infrastructure advantage, but it's amazing to see as a CFO that infrastructure efficiency and advantage really playing out as we've grown and scaled the business. On to the third pillar of long-term value creation, disciplined operating leverage. Since our last investor day in 2023, we introduced the incremental margin model. We've executed on that since 2023. Three. For this investor day, we're actually going to refine the long-term model. So for every dollar of incremental revenue we generate, we're going to tighten the range on gross profit. We previously said 65 to 80%. We're now tightening it to 70 to 80%. From a last 12-month perspective, we were at 96%. So we've benefited tremendously from that. And then from an operating income perspective, an operating income flow through, we're tightening the range. We previously said 25% to 40%, and now we're talking about tightening that range to 30% to 40%. And from our last 12-month perspective, we had 79% flow through. Why do we feel comfortable doing that? I think from an operations perspective on a gross profit, we've been much better about predicting our network utilization and partnering with our customers, and we get better visibility now. We've also instituted better deal and pricing discipline throughout the company, and we've also introduced multiple products that have higher margins, and so that really helps the flow-through perspective. From an operating expense perspective, which is improving sales productivity, automating the customer workflows, and just being smart about how we manage headcount at the company. So overall, we put in the right operating and financial processes to really feel comfortable about achieving the tightened incremental margin model we've laid out here. The fourth pillar of long-term value creation is strong free cash flow and ROI-based capital deployment. We're confident in our abilities to continue to be free cash flow positive. I talked about the lower capital intensity of our network. I've talked about the efficient infrastructure investments we have. I've talked about the strong P&L execution, and then very importantly, we've also seen efficient cash conversion. So here's the free cash flow results we've seen thus far. Six quarters of positive non-GAAP free cash flow, $34 million in the last 12 months free cash flow, and $120 million in operating cash flow. And then we get to maintain our FY26 free cash flow guide of $40 to $50 million. From a capital allocation strategy, here's how we're thinking about it. Priority one continues to be invest in the core delivery network, maintain that leadership position that we currently have versus our competitors. Priority two is continued strategic investments in growth areas like security, compute, and the more nascent AI space. And then priority three is if available and if it makes sense, look at opportunities to take potential tech in M&A. We believe this free cash flow strategy will expand our free cash flow generation over the next few years. So how does this long-term shareholder value creation model I've walked through manifest in a 2029 target? Here's what we're laying out. Revenues of $1.1 to $1.3 billion, that implies 14% to 21% revenue CAGR from 2026 to 2029. Gross margins expanding to 67% to 71%, which is a 70% to 80% incremental gross profit flow through. Operating margins reaching 20% to 22%, which implies a 30% to 40% flow through. And then free cash flow yielding 12% to 15%. And this is based on an assumption of CapEx spend of 10% to 12% of revenues. But note that we plan to spend this level based on the growth we're seeing today, but we may adjust the capex spend up and down. We feel good about our 2029 financial model, and we've laid the foundation to achieve it. So how do we hit the 2029 revenue target of $1.1 to $1.3 billion? So we have multiple vectors of growth through 2029. The first vector is existing customer expansion. With existing customers we have, we have lots of room to grow. We currently have a 117% NRR, and we're going to continue to focus on the existing customers. The second vector is net new customer wins, competitive displacements in high-stakes verticals like fintech, media, e-commerce. Scott's talked a lot about the go-to-market transformation and how the team is set up for that. Kelly's talked about democratizing and simplifying the platform, making it more broadly available. We think those two, and the efforts we've And then finally, the third vector would be new products and platform capabilities. Broadening our reach. We talked about Latin AM, Canada, Middle East, and we've also talked about expanding customer use cases. This gives us the confidence we have on the 14 to 21% CAGR implied in the 1.1 to 1.3 billion. And then from an operating income perspective, how do we expect to achieve 700 to 1,000 basis point improvement, taking our op margin from 12% to 13% in 2026 to 20% to 22%? I've talked about the capital-efficient architecture and the one network, the one network that runs all of our products that underpin the six product suites we have today, and that allows us to continue to be using our network very efficiently. We have benefited from machine learning and AI around traffic routing and improving fleet utilization. And then we've talked about the go-to-market sales productivity, digital onboarding, and AI automation across all the different cost types, sales and marketing, R&D, and G&A. So I've covered a lot in the last 15 minutes, but if I had to leave you with some key messages, here's the five I hope to leave you with. We have scaled profitable growth. The strong foundation has been laid, and we've shown consistent operating profitability. Two, the deepening platform adoption is real. We are a full-edge network platform with six key product suites, and we continue to deepen that platform. Three, we truly have a network advantage, especially versus our peers. I've talked about the hyper-converged architecture we have. That really helps us. And four, the incremental margin model. We've embraced that, and it's shown those returns, and we're confident in the ability going forward. And then five, just the deployment of capital for long-term value. You know, we will be very strategic with that. So thank you for spending time with us today. With that, I'd like to bring Kip back up to close this out.

Thanks, Rich. I'm going to kind of recap the day real quickly, and then we're going to move to the final Q&A section. You know, I kicked it off with kind of a framing, and I told you how I thought you should think about Fastly as an investment. Then you heard from Archer firsthand about the technology and the platform and the relevance to our customers, as well as some of the agentic use cases. Kelly shared with you our product plans and how we're democratizing the platform to bring the power of Fastly to more customers. Scott told you about our go-to-market transformation and how we're accelerating revenue. And then Rich just took us through our plans for durable, profitable growth. So, again, I would say the way we think about Fastly is as a market leader with a differentiated platform. We've seen that with some of the profitability and growth that we've been able to drive. We've clearly re-accelerated the business and have significant momentum now based on three-quarters in a row of 20% or higher growth. We've improved the product mix as exemplified by the 4x growth in the proportion of products or customers who are using four or more products. We have multiple ways to drive above market growth, and Scott covered this, but it's geographical expansion, upsell and cross-sell, new logos, portfolio expansion are all opportunities for us in terms of growth. Then last but not least, we believe that as performance becomes more and more important in AI and agentic traffic, the strengths of our platform and our products will become more and more relevant as a control point for AI at the edge. So with that, I'd like to bring Vern up, and I think we'll get some chairs on stage, and the whole leadership team will come up and take your questions. Thank you. Okay.

We'll kick off the Q&A session. For those of you online, please input your questions. We'd be happy to take them. And we'll kick off the second round with Jackson.

Great. Thank you. Jacksonator at KeyBank again. So if we think about, Rich, sustaining this kind of high teens, possibly 20% plus growth rate, I know that we're not going to report it. But if you think about those six product suites, and maybe under the old reporting or current reporting, breaking it out between what you think security portfolio versus compute, other, and network services, what is factored into those 20, 29 targets across the different suites?

Thank you, Jackson, for the question. So, right now, you know, when we think about the different kind of suites that we have, you know, we assume from a growth perspective, especially going out to 2029, you know, what we look at is we look at existing customers and where we think we can expand with those customers. And then we also kind of layer in kind of the incremental opportunities with new logos. And so I just think that, like, as we think about individually of the six, like, there's a lot of upsell capabilities within those. But the cross opportunities are pretty significant as well, and so I think that, you know, we don't break it out between, like, where we think adoption will be within the six, but I do think that the opportunity is there.

I mean, I would just add, if you look at the market growth rates, we think the security markets that we play in are growing mid to high teens. The delivery business, frankly, is probably growing closer to six or seven percent, and so I would expect us to grow faster in security than in the core business over time. And I would expect that to become a larger proportion of our revenue over time as a result. One thing I'd highlight, it was actually a point someone made to us during this event. We were talking about, Archer was talking about the importance of privacy with the agents. And it's like, okay, what is that? Is that security or is it delivery or what is it? So part of the challenge is as we bring more and more products, Like Arc is another example that doesn't necessarily fit into one box. You know, it can be a little bit harder to answer questions like that.

Can I add one comment to it? I think we're seeing customers, too, that want more flexible ability to spend. So they're willing to allocate dollars towards you but say, hey, we're not sure what agentic AI is going to bring to us. Can we spend it in this bucket versus this bucket? So we're looking at, you know, flexibility in packages that allow them to consume the way they want. Because I don't think they know what that growth is going to look like. So we want to offer them that flexibility.

Okay, we have a question online from Webcast. There's been a large increase in the percentage of multi-product adoption. Can you give us a sense of the penetration of the different suites into the base today? And then secondly, on top of that, how should we think about what amount of NRR is tied to cross-sell and what's embedded in the 2029 guide in that aspect?

Rich, do you have numbers on that one?

So we are going to look at multi-product adoption in a lot of detail. I think that right now we're trying to balance the information that we have. We have not yet talked about the adoption by-product suite with our customer base. I think that for us, there's a lot of headroom to grow, and so we're not very focused on that. I think what we are focused on right now, even from our suite perspective, is when we go solve customer problems, we actually don't think about what suite solves their problems. We look at our whole product portfolio together as a group, and we think about the problems we're trying to solve, and we bring the right product suites to the table. And I just think that we have so much headroom to grow within each of the suites, and so we have lots of space to continue to grab that. In terms of, like, upsell and cross-sell, like, I think, you know, and even new logos, when I think about the NRR and the contribution for that, you know, I think that when you think about, like, a $22 billion TAM market and you think about, like, you know, implied $739 million, that's about a 3% share. And so within existing customers alone, lots of upsell and cross-sell opportunities, especially given the market sizing. When we think about the number of logos, we talk about large customers being 624, there's, like, a lot more customers to go. And so even having the new logo, I mean, they're going to all kind of continue to drive. I do think that the opportunity within existing customers is quite high just because the opportunity is there in terms of their wallet share spend.

I'll give you to Frank, actually. Go ahead. Sorry.

Thanks. Frank Loudon with Raymond James. So, Rich, when you look at your pace of your CAGR, as we're modeling this out, how should we think about that? Is that going to be growing? Are you going to get to that CAGR growing a lot, seeing a lot at the higher end, and then kind of taper down, or is it going to accelerate there? And then what's kind of giving you the confidence in maintaining this level of growth that you've done through this next few-year period?

Yeah. So based on the midpoint of our guide for 2026, I think we're at like an 18.4% kind of year-over-year growth rate for the 2026 period. When I think about, you know, where we're going, you know, I think that, you know, and we're now working on 2027 planning, and so we can't, you know, obviously give too much. You know, we feel – I have my chief legal officer back, too. You know, we can't give out, like, what 2027 guide is going to be and how that kind of shapes up. We just feel confident that, like, you know, it's going to be in a range. I do recognize that range is quite wide, but the range is wide purposely because we think that there's a lot of variables that go into that, right? Like, there's some macro uncertainty that's happening. We know that AI is going to take, you know, has the opportunity to really take off. We have compute offerings and potential new, and so it's, you know, I can't say what 2027 will be, but I will say that, you know, the range is wide on purpose because there is, you know, a lot of variables that go into it.

I think to the question about just, I don't think we can comment on the shape, but I think to the question about what gives us confidence in providing this forward growth projection. You know, I think when we look at the new products that we've introduced, and I'll take Bot and DDoS because we've talked about those growth rates, you know, we've been able to introduce new products, grow them at triple digits, cross-sell them to a large number of customers, and get a lot of momentum there. So we feel like with the work we've done over the last couple years and we described today, that we kind of have a foundation and a platform, not just our technical platform, but a business platform that enables us to launch new products and expand over the next several years. And so when we look at that, plus the geographical expansion that Scott talked about, as well as Rich has made the point, even within our current customer base, there's significant growth opportunity. That's what gives us the confidence to put that projection out. I'll go with Rudy here.

Rudy Kessner, D.A. Davidson. Rich, what are your assumptions on the growth in your top ten customers within that Kager target? Are you assuming they grow at a similar rate to that range or slower or faster?

So I think the most recent quarter, you know, we saw a 48% kind of year-over-year growth on our top ten. And I think when you hear Scott talk about his go-to-market transformation, he's focused a lot on the top customers we have and how do we continue to grow and add more value to that. We're definitely seeing continued value creation and be able to serve their needs. I think in Q3 of last year, we talked about a big security win. Since then, we've had multiple cross-sell wins with those top 10 customers. I think that the opportunity to grow with them is still quite significant, and so we still have a lot of share. We can't tell you what the percentage year-over-year growth will be, but I do think that the top 10 will continue to grow just because the share is quite high. Having said that, Scott is also very focused on the non-top 10. You know, he's also focused on the non-top 50, and I think that the 12% year-over-year last quarter we saw, like, you know, it's not where we want it to be. I think Scott's very focused on getting that non-top 10 and even the non-top 50 growth up higher.

Jonathan's fast, fast there with a hand there. Sorry.

This is the Fastly Analyst Day, so you've got to have the faster hands. Jonathan Ho with William Blair. So, yeah, I wanted to sort of reconcile your CapEx investment plans just given, you know, the higher costs of components and infrastructure out there as well as the ability to, you know, sort of add on some of the new capabilities that you're talking about on the edge side. Can you help us understand sort of that balance and, you know, how you're able to achieve, you know, that level of leverage? Thank you.

So, you know, I think from a CapEx, we've been, for the year, we've guided 10 to 12 percent of revenues on CapEx. You know, the way we've been rolling out our products, you know, specifically security and compute, they're using, because we're on one unified architecture, one kind of hyper-converged architecture, we're able to roll out those new products using existing servers, And, you know, you see that through kind of a 96% incremental gross profit flow through. You know, I think from a CapEx perspective, that really plays to our advantages because as those new product rolls out, you know, we're using kind of stranded CPU capacity when we were I.O. bound previously, right? And so we've been able to, like, really manage our infrastructure CapEx spend for the year. And I think that, you know, as we go forward, unlike our peers, we still continue to operate one network. And as a result, we feel confident that, like, from a, you know, CapEx efficiency perspective, you know, we feel good with where we stand and how we're able to, like, spend on a CapEx relative to our peers.

I can add a little bit there on the efficiency side. I would say, you know, spending time and money on making things more efficient pays off more or less depending on the cost, right? And so as we saw these hardware challenges, we switched some engineering effort into making the system more efficient. And as, you know, we'll continue doing so, and I think there's always room to make things more efficient. Fatima.

Fatima Balani from Citi. Thank you so much for taking our questions. Rich, I was wondering if you could give us a little bit of a deeper dive to the extent you are able on the net retention rate trends from customers using two-plus products and then who graduate on to four-plus products, and to the extent that is giving you and underpinning some of your confidence around, hey, we've seen the data, and when customers do kind of see the light from going from two to four, that's when we kind of see the massive accretion. And to the extent that's true in that retention rate, and then just kind of as a related question, just to piggyback off of something Jackson asked earlier, you know, as you collapse and streamline some of the reporting, right, you're not sort of artificially trifurcating how you're selling the portfolio and disclosing it, but how do you sort of manage what may end up being loss-leading behavior? I'm going to ask you a question about the behavior from network services and maybe not being able to double dip on some of the same traffic, right? Because to your commentary and to your point, there's API traffic that you can monetize from a quote-unquote network services perspective, but that maybe manifests more in the security dollars, right? And Kip just mentioned that agent privacy, I mean, what bucket does that fall into, right? So does that diminish your ability to maybe have two bites at the apple, both from a classic delivery site? and our security side. I know there was a lot there, but wanted to get that out there.

Yeah, on your first question, you know, I think that we have seen a correlation, right? You know, I talked about that customer flywheels. So the more product suites they're adopting, the higher the net retention rate and, you know, the more that they will buy from us. They're seeing more value, right? And as a result of seeing more value, you know, we should be seeing, like, higher net retention rates with them. I think that when you go to the four, you're still seeing that as well. I just think that there's diminishing returns at some point where it gets there. I think this is a learning process for us in terms of the new revenue disclosure. We're going to do it in parallel for the next two quarters. I think the goal is to really give investors as much transparency around the multi-product adoption metrics, and that's why we're going to run it in parallel, Because as you guys are building your models, we'll work together, and we'll talk about, like, what makes the most sense from a disclosure perspective. But, you know, I just think that, for me at least, you know, that correlation exists and is very high. And I think that, you know, we'll kind of continue to play over the next two quarters around, like, what we talk about, especially in our earnings scripts. But what we feel really good about is this aligns with how we operate. This aligns with our one network architecture approach, right? Like, it also aligns with the way our customers buy from us. They don't come to us and say, like, you know, we want to buy this, you know, like, you know, they're not thinking about it as distinct. They're just coming to us with problems, and then our teams are coming with a solution that kind of pulls among all of our different SKUs and product suites.

So on that, I think we just elaborate. One was a good question that came in online. It was around what you just said, Rich, but I think it's an opportunity to double down on your answer here. The question is, if security is such a large contributor to achieving the fiscal 29 targets, why remove the key line item and instead roll it into total revenue? What is the thinking behind this? Hit the point maybe one more time here.

Yeah. I think that with the introduction of new modules and more suites across our SKUs, what we're finding is that they don't fall cleanly into either security or delivery or compute sometimes. And I think that when we come and introduce the products, you know, it becomes a messier, like, revenue allocation process. You know, I think some of you guys have come and asked me around even gross margins by those line items. We have one network. And being one network, we're running kind of, like, delivery and security, and we're kind of providing intelligence on that delivery traffic, whether that intelligence is security or compute, but it becomes a very blurred line. I think that blurred line becomes really messy and misleading sometimes. We just think that because of that, shifting to multi-product adoption will be much more helpful. I think that the multi-product adoption, it doesn't become a suite until it becomes a sizable product. We're purposely trying to make sure that we put hygiene and scaling around how we think about products and the product suites that we introduce.

This is maybe for Scott. How do you think your sales seems aligned to sell the expanded security portfolio today, and what needs to happen, both from a sales alignment and from a compensation perspective, to maybe even cross-sell more of the security portfolio? Thank you.

Yeah, great question. So it's one of the reasons I brought up enablement as such a critical thing, because if folks have come from kind of, you know, the legacy CDN environment, but they're not as versed in security, how we get them up to speed to be able to talk to a CISO about, you know, the API security play, the ARC challenge that potentially exists out there, and what they can go after becomes critical. So training is absolutely important. I will also tell you, like, I mentioned that I came from Imperva. We hired the ex-CISO from Imperva, who also, he sits out here in the East Coast, worked for lots of banks out here. He spends more time in front of customers, because I mentioned, customers are saying, what are you seeing people, you know, how are they responding to these challenges that they're facing with security right now? How are they researching their APIs? How are they securing them? It's that expertise that they really, really want. And then the last piece, which is really the most important piece when it comes to a sales organization, is how do you compensate reps to drive the behavior that you want? And one of the things that we've kind of put together is a pyramid of value, is what we've said, and we're building comp plans around this, which is what is the most valuable sale to Fastly that we've got? It's a net new logo, and it's automatically a new product. Then past that, what's next for an existing customer to move into a cross-sell? Because it opens another product line, and we know they get stickier that way. So how do we incent, right, multi-product adoption? And then the other thing is HIPS, how, you know, important products that we launch out there that we want to put a multiplier on, how do we weigh them so they get the focus, even though it may be a smaller market segment that may exist out there, or the reps aren't as comfortable talking to influencers and technical decision makers, how do I weight that more so they're willing to go after that? So those are all components that we've built into the plan this year, and we're also expanding into next year as well. Hey, guys.

BJ Hellman from Craig Hallam again. Just in your revenue growth bridge, you talked about net new customer wins as one of the three pillars. Just if you look over the last kind of five years, the first three, you saw a ton of growth. I think it was around 17% in net new customers, and then the last two, it's run more closer to like 2%. So I'm just curious, you know, what are you underwriting there in kind of the forward model, and what gives you that confidence? Thanks.

Yeah, so, you know, I think that if I understood your question correctly, yeah, I think that, you know, from a model perspective, you know, I think that I do see an opportunity with existing customers. You know, I think we're going to continue to focus on them, and we're going to continue to drive that NRR high. I think, you know, from a modeling perspective in terms of, like, net new logo wins, like, I think that, you know, we the 624 that we have from a large customer perspective, we do make assumptions that we will continue I think I've been working with Scott around what that opportunity is like, especially as we broaden. We talked about investments in Asia Pacific. We hired Nicola, who is building out a sales organization out there. We talked about expanding POPs in the right locations. I think that should help with new logo wins, especially internationally as we expand.

I'll add two things, and then I think, Scott, you can let me know if you think I'm on the right track because I have a perspective on this. You know, Scott's talked about refocusing us on where we win, where performance matters, right? So I wouldn't assume that the customer base is static even if the number isn't changing that much. As we refocus on where we're most differentiated and where we believe we have the best long-term results, that can mean de-emphasizing certain things. So I think that's an important part of our thinking there. The other thing I would say is, you know, if you think about the go-to-market transformation that Scott's been driving, you know, he's taken a lot of actions, a lot of positive moves. They don't all have an impact on the business in the same way at the same time. And what I would say is that the way that we've gotten better at handling or serving our top customers over the last two years has happened faster, as you might expect, than, for example, our new logo generation. For example, we just brought in a new chief marketing officer earlier this year. So I think you should expect that go-to-market transformation to have an impact at different times on different parts of our go-to-market motion, and our top customers were the first part to feel the impact. I don't know if you would comment.

No, and I agree with everything you guys said. The only other thing I would add to this is the work that we've done in the enterprise space, so think of past the top 70 accounts, traditional enterprise customers as they exist out there. We've seen great adoption, but it starts small. And part of the reason is, you know, it's the dirty little secret in this space is that the complexity that exists of migrating off of previous providers to new vendors is designed on purpose, right, in some cases to make it highly complex and difficult to move away. AI has changed that. So what would take weeks before from a services organization and, you know, at certain competitors, it's 28% of their annual, you know, bill from their customers is based on service changes, etc. AI has changed that. We can now move, you know, configurations over in two days, whether it's WAF rules, whether it's anything else. And so I'm excited now that we've got these seeds of, you know, essentially paid proof of concepts, which is how most all enterprise customers kind of start. Now we can start to see those accelerate, and we can do it in a way where we can say, we can absorb those, you know, that service dollar cost, and more importantly, do it much quicker. And so we're seeing customers feel really, really comfortable with that more, because it's really been a sticking point in the past.

Okay. I think our last question from Jackson here. I'm going to wrap it up.

Thank you. Just circling back, Kelly, with you on the products, if I think about the, just like the growth rebound that we've seen over the last kind of 12, 18 months, A lot of it, I think, came from the maturing of the security products, like adding DDoS, bot mitigation, right? That kind of rounded out those three chunky security products that end up going with network services. The marginal product launches. Can they be as impactful as rounding out those core security, or are they going to be kind of more ones and twos?

I think we'll see how different products evolve. Certainly, the launches you saw yesterday we think are very important as part of that Fastly for AI story. I think as everybody on stage has said, it's still very early days for that part of the market. With that said, I would say behind the scenes, once we launch management, DDoS protection, we have continued to launch other features, other products on top of those, which is part of that co-innovation with customers. So that's part of the platform stories. They know when they buy into us, we're going to keep delivering value even for the solutions they've adopted. And it gives them confidence to adopt more and more. And that's part of the reason why you saw that quadrupling in our customers with four plus modules. So I think when we talk about that compounding value, think of it as yes, especially in partnership with Joan, who's come on board, you will see more of these bundled launches together. But there's a lot of releasing happening all the time. Co-innovation happening all the time, and all of that leads us to be that platform, like the, what was it, hedge trimmer you talked about? The customers know once they're bought in, they can tap into our innovation in a variety of ways to get value.

Well, and I think, I mean, there'll always be products that have a bigger or smaller impact, but I just point out the compute portfolio might be about where security was when it had one product, And our opportunity to round that out and have some significant impact on, frankly, a market that could be even bigger for us than security if we get it right, are examples of where we may have outsized impact. So, you know, a given product launch might have outsized impact. It might be more fine-tuning or finishing off something in a more fine-grained way. But we're quite confident, given our market share and given opportunities like compute, that there are many high-impact products for us to launch.

All right. Well, thank you, everybody, everybody here at NASDAQ MarketSite, as well as those of you online. Great questions, and we're going to wrap it up. For those of you here at NASDAQ, we're going to have a reception that's kicking off in just a minute. Thank you.