EX-99.1 2 ex991-fslypressrelease63023.htm EX-99.1 Document

Exhibit 99.1
Fastly Announces Second Quarter 2023 Financial Results

•Record second quarter revenue of $122.8 million grew 20% year-over-year and exceeded the high end of our guidance range.
•Expanded market reach with new packaging and pricing for our core services, making it easy for companies of all sizes to try, buy, and use the powerful Fastly platform.
•Repurchased $236.4 million in aggregate principal amount of convertible debt for $195.7 million, reflecting a 17% discount to par, and resulted in a $36.8 million net gain.

SAN FRANCISCO, August 2, 2023 — Fastly, Inc. (NYSE: FSLY), one of the world’s fastest edge cloud platforms, today announced financial results for its second quarter ended June 30, 2023.
“I am pleased with the enormous progress the team has made and we’re proud of the revenue and operating performance of the second quarter, exceeding the top end of our guidance,” said Todd Nightingale, CEO of Fastly.
“We continue to execute on our strategic initiatives to simplify our go-to-market, increase our innovation velocity, and drive a new operational rigor and cost control throughout our business,” continued Nightingale. “All of this progress helps us drive our mission to make every user experience fast, safe, and engaging…fueling growth and delivering a strong financial result.”

Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Revenue$122,831 $102,518 $240,395 $204,900 
Gross margin
GAAP gross margin52.3 %44.9 %51.8 %46.1 %
Non-GAAP gross margin56.6 %50.4 %56.1 %51.5 %
Operating loss
GAAP operating loss$(49,827)$(68,968)$(97,102)$(131,972)
Non-GAAP operating loss$(7,785)$(26,893)$(21,859)$(44,633)
Net loss per share
GAAP net loss per common share—basic and diluted$(0.08)$(0.14)$(0.44)$(0.67)
Non-GAAP net loss per common share—basic and diluted$(0.04)$(0.23)$(0.12)$(0.38)
Second Quarter 2023 Financial Summary
•Total revenue of $122.8 million, representing 20% year-over-year growth and 4% sequential increase.
•GAAP gross margin of 52.3%, compared to 44.9% in the second quarter of 2022. Non-GAAP gross margin of 56.6%, compared to 50.4% in the second quarter of 2022.
•GAAP net loss of $10.7 million, compared to $16.4 million in the second quarter of 2022. Non-GAAP net loss of $4.6 million, compared to $28.0 million in the second quarter of 2022.
•GAAP net loss per basic and diluted shares of $0.08 compared to $0.14 in the second quarter of 2022. Non-GAAP net loss per basic and diluted shares of $0.04, compared to $0.23 in the second quarter of 2022.
Key Metrics
•Trailing 12 month net retention rate (LTM NRR)1 remained flat at 116% in the second quarter compared to the first quarter.
•Dollar-Based Net Expansion Rate (DBNER)2 increased to 123% in the second quarter from 121% in the first quarter.
•Total customer count was 3,072 in the second quarter, down 28 from the first quarter; 551 were enterprise customers3 in the second quarter, up 11 from the first quarter.
•Average enterprise customer spend4 of $818 thousand in the second quarter, up 3% quarter-over-quarter.
For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this press release.




Second Quarter Business and Product Highlights
•Expanded market reach with new packaging and pricing for our core services, including flat-rate pricing and tiered packages, making it easy for companies of all sizes to try, buy, and use the powerful Fastly platform.
•Repurchased $236.4 million in aggregate principal amount of convertible debt for $195.7 million, reflecting a 17% discount to par, and resulted in a $36.8 million net gain.
•Peter Alexander joined Fastly as Chief Marketing Officer, bringing his experience from Check Point as CMO in addition to CMO of Harmonic and marketing roles at Cisco.
•Marshal Erwin joined Fastly as Chief Information Security Officer, bringing his experience from Mozilla as Chief Security Officer in addition to roles in the US intelligence community.
•Karen Greenstein was promoted to General Counsel, joining Fastly in 2019 and serving as interim GC in addition to legal roles in digital media and entertainment.
•Support for Mutual TLS two-way authentication released, providing a higher security posture requiring both the client and server to present trusted digital certificates, saving time and resources for our customers.
•Released Dynamic Backends, enabling customers to create new backend server definitions seamlessly.
•Introduced Core Cache API, a powerful set of API Primitives, enabling developers building on our Edge Compute platform to have access to our powerful, globally distributed cache network.
•Premier Edge Deployment of our Next-Gen WAF released, bringing Advanced Rate Limiting and the Site Flagged IP signal for the Next-Gen WAF to the edge.
•Limited availability of Certainly released, providing domain validated TLS certificates that are fully automated in our Fastly managed TLS services and enabling trusted identification of websites, improving security and reliability.

Third Quarter and Full Year 2023 Guidance

Q3 2023Full Year 2023
Total Revenue (millions)$125 - $128$500 - $510
Non-GAAP Operating Loss (millions)($15.0) - ($13.0)($49.0) - ($43.0)
Non-GAAP Net Loss per share (5)(6)
($0.09) - ($0.07)($0.27) - ($0.21)
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Fastly’s future GAAP financial results.

Conference Call Information

Fastly will host an investor conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, August 2, 2023.

Date: Wednesday, August 2, 2023
Time: 1:30 p.m. PT / 4:30 p.m. ET
Webcast: https://investors.fastly.com
Dial-in: 888-330-2022 (US/CA) or 646-960-0690 (Intl.)
Conf. ID#: 7543239

Please dial in at least 10 minutes prior to the 1:30 p.m. PT start time. A live webcast of the call will be available at https://investors.fastly.com where listeners may log on to the event by selecting the webcast link under the “Quarterly Results” section.

A telephone replay of the conference call will be available at approximately 5:00 p.m. PT, August 2 through August 16, 2023 by dialing 800-770-2030 or 647-362-9199 and entering the passcode 7543239.







About Fastly
Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver the fastest online experiences possible, while improving site performance, enhancing security, and empowering innovation at global scale. With world-class support that achieves 95%+ average annual customer satisfaction ratings, Fastly’s beloved suite of edge compute, delivery, and security offerings has been recognized as a leader by industry analysts such as IDC, Forrester and Gartner. Compared to legacy providers, Fastly’s powerful and modern network architecture is one of the fastest on the planet, empowering developers to deliver secure websites and apps at global scale with rapid time-to-market and industry-leading cost savings. Thousands of the world’s most prominent organizations trust Fastly to help them upgrade the internet experience, including Reddit, Pinterest, Stripe, Neiman Marcus, The New York Times, Epic Games, and GitHub. Learn more about Fastly at https://www.fastly.com/, and follow us @fastly.


Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, our operation and cost management, our ability to innovate, our go-to-market efforts and our ability to deliver on our long-term strategy. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.
Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses the following non-GAAP measures of financial performance: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP basic and diluted net loss per common share, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, free cash flow and adjusted EBITDA. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings releases.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss and non-GAAP basic and diluted net loss per common share, non-GAAP research and development, non-GAAP sales and marketing, and non-GAAP general and administrative differ from GAAP in that they exclude stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, executive transition costs, net gain on extinguishment of debt and amortization of debt discount and issuance costs.

Adjusted EBITDA: excludes stock-based compensation expense, depreciation and other amortization expenses, amortization of acquired intangible assets, acquisition-related expenses, executive transition costs, interest income, interest expense, including amortization of debt discount and issuance costs, net gain on extinguishment of debt, other income (expense), net, and income taxes.

Acquisition-related Expenses: consists of acquisition-related charges that are not related to ongoing operations. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because these charges may not be reflective of our core business, ongoing operating results, or future outlook.





Amortization of Acquired Intangible Assets: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases and acquisitions. Management considers its operating results without this activity when evaluating its ongoing non-GAAP performance and its adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and acquisitions and may not be reflective of our core business, ongoing operating results, or future outlook.

Amortization of Debt Discount and Issuance Costs: consists primarily of amortization expense related to our debt obligations. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook. These are included in our total interest expense.

Capital Expenditures: consists of cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.

Depreciation and Other Amortization Expense: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and may not be reflective of our core business, ongoing operating results, or future outlook.

Executive Transition costs: consists of one-time cash and non-cash charges recognized with respect to changes in our executive’s employment status. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Free Cash Flow: calculated as net cash used in operating activities less purchases of property and equipment, net of proceeds from sale of property and equipment, principal payments of finance lease liabilities, capitalized internal-use software costs and advance payments made related to capital expenditures. Management specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Management considers non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in Fastly's business and strengthening its balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

Income Taxes: consists primarily of expenses recognized related to state and foreign income taxes. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Expense: consists primarily of interest expense related to our debt instruments, including amortization of debt discount and issuance costs. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Income: consists primarily of interest income related to our marketable securities. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.
Net Gain on Debt Extinguishment: relates to net gain on the partial repurchase of our outstanding convertible debt. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.
Other Income (Expense), Net: consists primarily of foreign currency transaction gains and losses. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.
Stock-based Compensation Expense: consists of expenses for stock options, restricted stock units, performance awards, restricted stock awards and Employee Stock Purchase Plan ("ESPP") under our equity incentive plans. Although stock-based




compensation is an expense for the Company and is viewed as a form of compensation, management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance, primarily because it is a non-cash expense not believed by management to be reflective of our core business, ongoing operating results, or future outlook. In addition, the value of some stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control.
Management believes these non-GAAP financial measures and adjusted EBITDA serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors' overall understanding of our current financial performance.
In the financial tables below, the Company provides a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this press release.
Key Metrics
1 We calculate LTM Net Retention Rate by dividing the total customer revenue for the prior twelve-month period (“prior 12-month period”) ending at the beginning of the last twelve-month period (“LTM period”) minus revenue contraction due to billing decreases or customer churn, plus revenue expansion due to billing increases during the LTM period from the same customers by the total prior 12-month period revenue. We believe the LTM Net Retention Rate is supplemental as it removes some of the volatility that is inherent in a usage-based business model.
2 We calculate Dollar-Based Net Expansion Rate by dividing the revenue for a given period from customers who remained customers as of the last day of the given period (the “current” period) by the revenue from the same customers for the same period measured one year prior (the “base” period). The revenue included in the current period excludes revenue from (i) customers that churned after the end of the base period and (ii) new customers that entered into a customer agreement after the end of the base period.
3 Under our new methodology, our number of customers are calculated based on the number of separate identifiable operating entities with which we have a billing relationship in good standing, from which we recognized revenue during the current quarter. Under our prior methodology, our number of customers are calculated based on the number of separate identifiable operating entities with which we have a billing relationship in good standing, from which we recognized revenue during the last month of the quarter. Under our new methodology, our enterprise customers are defined as those with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue for each customer within the quarter and multiplying it by four. Under our prior methodology, our enterprise customers are defined as those with revenue in excess of $100,000 in the trailing 12-month period. Under our prior methodology, our total customer count was 2,965 in the second quarter, down 36 from the first quarter of 2023; 520 were enterprise customers in the second quarter, up 6 from the first quarter of 2023.
4 Under our new methodology, our average enterprise customer spend is calculated by taking the annualized current quarter revenue contributed by enterprise customers existing as of the current period, and dividing that by the number of enterprise customers as of the current period. Under our prior methodology, our average enterprise customer spend is calculated by taking the sum of the trailing 12-month revenue contributed by enterprise customers existing as of the current period, and dividing that by the number of enterprise customers as of the current period. Under our prior methodology, our average enterprise customer spend was $809 thousand in the second quarter, up 4% quarter-over-quarter.
5 Non-GAAP Net Loss per share is calculated as Non-GAAP Net Loss divided by weighted average basic shares for 2023.
6 Assumes weighted average basic shares outstanding of 129.9 million in Q3 2023 and 128.6 million for the full year 2023.





Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)

Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Revenue$122,831 $102,518 $240,395 $204,900 
Cost of revenue(1)
58,617 56,466 115,927 110,381 
Gross profit64,214 46,052 124,468 94,519 
Operating expenses:
Research and development(1)
37,421 38,717 74,852 79,154 
Sales and marketing(1)
47,797 46,760 92,068 88,240 
General and administrative(1)
28,823 29,543 54,650 59,097 
Total operating expenses114,041 115,020 221,570 226,491 
Loss from operations(49,827)(68,968)(97,102)(131,972)
Net gain on extinguishment of debt36,760 54,391 36,760 54,391 
Interest income4,508 1,502 8,694 2,183 
Interest expense(1,232)(1,530)(2,445)(3,152)
Other income (expense)(803)(1,673)(1,053)(1,952)
Loss before income taxes(10,594)(16,278)(55,146)(80,502)
Income tax expense 110 159 245 199 
Net loss$(10,704)$(16,437)$(55,391)$(80,701)
Net income (loss) per share attributable to common stockholders, basic and diluted$(0.08)$(0.14)$(0.44)$(0.67)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted127,863 121,242 126,648 120,295 

__________

(1)Includes stock-based compensation expense as follows:
Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Cost of revenue$2,837 $3,188 $5,518 $6,134 
Research and development12,205 13,889 23,686 32,478 
Sales and marketing9,877 10,184 16,582 20,278 
General and administrative12,073 7,717 19,357 16,110 
Total$36,992 $34,978 $65,143 $75,000 







Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, unaudited)
Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Gross Profit
GAAP gross profit$64,214 $46,052 $124,468 $94,519 
Stock-based compensation2,837 3,188 5,518 6,134 
Amortization of acquired intangible assets2,475 2,475 4,950 4,950 
Non-GAAP gross profit$69,526 $51,715 $134,936 $105,603 
GAAP gross margin52.3 %44.9 %51.8 %46.1 %
Non-GAAP gross margin56.6 %50.4 %56.1 %51.5 %
Research and development
GAAP research and development$37,421 $38,717 $74,852 $79,154 
Stock-based compensation(12,205)(13,889)(23,686)(32,478)
Non-GAAP research and development$25,216 $24,828 $51,166 $46,676 
Sales and marketing
GAAP sales and marketing$47,797 $46,760 $92,068 $88,240 
Stock-based compensation(9,877)(10,184)(16,582)(20,278)
Amortization of acquired intangible assets(2,575)(2,710)(5,150)(5,419)
Non-GAAP sales and marketing$35,345 $33,866 $70,336 $62,543 
General and administrative
GAAP general and administrative$28,823 $29,543 $54,650 $59,097 
Stock-based compensation(12,073)(7,717)(19,357)(16,110)
Acquisition-related expenses— (1,912)— (1,970)
Non-GAAP general and administrative$16,750 $19,914 $35,293 $41,017 
Operating loss
GAAP operating loss$(49,827)$(68,968)$(97,102)$(131,972)
Stock-based compensation36,992 34,978 65,143 75,000 
Amortization of acquired intangible assets5,050 5,185 10,100 10,369 
Acquisition-related expenses— 1,912 — 1,970 
Non-GAAP operating loss$(7,785)$(26,893)$(21,859)$(44,633)
Net loss
GAAP net loss$(10,704)$(16,437)$(55,391)$(80,701)
Stock-based compensation36,992 34,978 65,143 75,000 
Amortization of acquired intangible assets5,050 5,185 10,100 10,369 
Acquisition-related expenses— 1,912 — 1,970 
Net gain on extinguishment of debt(36,760)(54,391)(36,760)(54,391)
Amortization of debt discount and issuance costs803 776 1,519 1,739 
Non-GAAP loss$(4,619)$(27,977)$(15,389)$(46,014)
Non-GAAP net loss per common share—basic and diluted$(0.04)$(0.23)$(0.12)$(0.38)
Weighted average basic and diluted common shares127,863121,242126,648120,295




Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Adjusted EBITDA
GAAP net loss$(10,704)$(16,437)$(55,391)$(80,701)
Stock-based compensation36,992 34,978 65,143 75,000 
Depreciation and other amortization13,030 10,860 25,210 20,835 
Amortization of acquired intangible assets5,050 5,185 10,100 10,369 
Acquisition-related expenses— 1,912 — 1,970 
Interest income(4,508)(1,502)(8,694)(2,183)
Interest expense429 754 926 1,413 
Amortization of debt discount and issuance costs803 776 1,519 1,739 
Net gain on extinguishment of debt(36,760)(54,391)(36,760)(54,391)
Other expense803 1,673 1,053 1,952 
Income tax expense110 159 245 199 
Adjusted EBITDA$5,245 $(16,033)$3,351 $(23,798)




Condensed Consolidated Balance Sheets
(in thousands)
As of
June 30, 2023		As of
December 31, 2022
(unaudited)(audited)
ASSETS
Current assets:
Cash and cash equivalents$273,742 $143,391 
Marketable securities, current123,605 374,581 
Accounts receivable, net of allowance for credit losses78,295 89,578 
Prepaid expenses and other current assets29,500 28,933 
Total current assets505,142 636,483 
Property and equipment, net179,045 180,378 
Operating lease right-of-use assets, net56,733 68,440 
Goodwill670,356 670,185 
Intangible assets, net72,550 82,900 
Marketable securities, non-current78,042 165,105 
Other assets95,550 92,622 
Total assets$1,657,418 $1,896,113 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$5,561 $4,786 
Accrued expenses47,001 61,161 
Finance lease liabilities, current22,233 28,954 
Operating lease liabilities, current20,575 23,026 
Other current liabilities36,234 34,394 
Total current liabilities131,604 152,321 
Long-term debt472,369 704,710 
Finance lease liabilities, non-current7,026 15,507 
Operating lease liabilities, non-current51,448 61,341 
Other long-term liabilities7,217 7,076 
Total liabilities669,664 940,955 
Stockholders’ equity:
Common stock2 2 
Additional paid-in capital1,747,959 1,666,106 
Accumulated other comprehensive loss(3,152)(9,286)
Accumulated deficit(757,055)(701,664)
Total stockholders’ equity 987,754 955,158 
Total liabilities and stockholders’ equity $1,657,418 $1,896,113 







Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Cash flows from operating activities:
Net loss$(10,704)$(16,437)$(55,391)$(80,701)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense12,920 10,736 24,960 20,586 
Amortization of intangible assets5,175 5,309 10,350 10,618 
Non-cash lease expense5,648 5,608 11,763 11,522 
Amortization of debt discount and issuance costs803 775 1,519 1,739 
Amortization of deferred contract costs3,746 2,138 7,171 3,989 
Stock-based compensation36,992 34,978 65,143 75,000 
Provision for credit losses567 402 1,100 529 
Loss on disposals of property and equipment296 586 547 854 
Amortization and accretion of discounts and premiums on investments298 894 747 1,851 
Impairment of operating lease right-of-use assets187 — 187 — 
Net gain on extinguishment of debt(36,760)(54,391)(36,760)(54,391)
Other adjustments(85)(67)(328)61 
Changes in operating assets and liabilities:
Accounts receivable6,482 5,097 10,183 (4,122)
Prepaid expenses and other current assets217 (2,701)(417)(4,812)
Other assets(4,771)(3,948)(11,983)(6,399)
Accounts payable1,119 3,336 944 844 
Accrued expenses234 (3,729)(6,593)1,162 
Operating lease liabilities(6,682)(5,349)(12,432)(10,981)
Other liabilities9,308 83 5,419 2,781 
Net cash provided by (used in) operating activities24,990 (16,680)16,129 (29,870)
Cash flows from investing activities:
Purchases of marketable securities— (207,286)— (355,479)
Sales of marketable securities774 159,552 774 161,853 
Maturities of marketable securities114,884 127,333 342,095 367,880 
Business acquisitions, net of cash acquired— (25,224)— (25,999)
Advance payment for purchase of property and equipment— (29,310)— (29,310)
Purchases of property and equipment(4,464)(4,151)(7,958)(8,815)
Proceeds from sale of property and equipment14 241 36 241 
Capitalized internal-use software(6,230)(4,926)(10,439)(8,736)
Net cash provided by investing activities104,978 16,229 324,508 101,635 
Cash flows from financing activities:
Cash paid for debt extinguishment(196,934)(177,082)(196,934)(177,082)
Repayments of finance lease liabilities(6,557)(6,147)(15,202)(11,029)
Cash received for restricted stock sold in advance of vesting conditions— — — 10,655 
Cash paid for early sale of restricted shares— (3,539)— (7,037)
Payment of deferred consideration for business acquisitions(4,393)— (4,393)— 
Proceeds from exercise of vested stock options535 1,721 871 4,769 
Proceeds from employee stock purchase plan2,191 1,571 4,787 3,977 
Net cash used in financing activities(205,158)(183,476)(210,871)(175,747)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash469 (100)585 (319)
Net increase in cash, cash equivalents, and restricted cash(74,721)(184,027)130,351 (104,301)
Cash, cash equivalents, and restricted cash at beginning of period348,613 246,687 143,541 166,961 
Cash, cash equivalents, and restricted cash at end of period273,892 62,660 273,892 62,660 
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows:
Cash and cash equivalents273,742 62,510 273,742 62,510 
Restricted cash, current150 150 150 150 
Total cash, cash equivalents, and restricted cash$273,892 $62,660 $273,892 $62,660 






Free Cash Flow
(in thousands, unaudited)
Three months ended
June 30,		Six months ended
June 30,
2023202220232022
Cash flow provided by (used in) operations$24,990 $(16,680)$16,129 $(29,870)
Capital expenditures(1)
(17,237)(14,983)(33,563)(28,339)
Advance payment for purchase of property and equipment(2)
— (29,310)— (29,310)
Free Cash Flow$7,753 $(60,973)$(17,434)$(87,519)
__________
(1)Capital expenditures are defined as cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, and capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.
(2)As reflected in our statement of cash flows. In the six months ended June 30, 2023, we received $1.6 million of capital equipment that was prepaid prior to the current quarter.













Contacts:
Investor Contact:
Vernon Essi, Jr.
ir@fastly.com

Media Contact:
press@fastly.com

Source: Fastly, Inc.