EX-99.2 3 ex992-investorsupplement33.htm EX-99.2 Document
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First Quarter 2023 Investor Supplement

Product Developments
•Introduced Config Store, giving developers the ability to create key/value pairs that their edge logic can reference to make near real-time decisions from every server in Fastly’s platform.
•Released into GA support for Brotli, a next-generation lossless HTTP compression algorithm designed for text compression to improve website performance.
•Introduced into beta the Fastly Oblivious HTTP Relay, an architecture that allows receipt of critical request data from end users without any of the identifying metadata to ensure privacy.
•Released into GA WebSockets support, providing customers the ability to open a two-way interactive communication session between the end user's browser and the origin server.
•Launched a managed security service to protect enterprises from rising web application attacks with 24/7 threat detection and response service.
Key Metrics Highlights
•Trailing 12-month net retention rate (LTM NRR)1 decreased to 116% in the first quarter from 119% in the fourth quarter of 2022.
•Dollar-Based Net Expansion Rate (DBNER)2 decreased to 121% in the first quarter from 123% in the fourth quarter of 2022.
•Our total customer count was 3,100 in the first quarter, up 38 from the fourth quarter 2022; 540 were enterprise customers3 in the first quarter, up 7 from the fourth quarter of 2022. Please refer to footnote 3 for the updates made to our methodology.
•Our average enterprise customer spend7 was $795 thousand in the first quarter, down 3% quarter-over-quarter. Please refer to footnote 7 for the updates made to our methodology.
Calculations of Key and Other Selected Metrics – Quarterly (unaudited)
Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Total Customer Count(3)
2,695 2,848 2,929 2,965 3,025 3,039 3,062 3,100 
Enterprise Customer Count(3)
431 457 467 488 499 511 533 540 
Average Enterprise Customer Spend (in thousands)(7)
$701 $676 $751 $758 $742 $771 $822 $795 
Enterprise Customer Revenue %89 %89 %90 %90 %90 %91 %92 %91 %
Total Customer Count (prior methodology)(3)
2,581 2,748 2,804 2,880 2,894 2,925 2,958 3,001 
Enterprise Customer Count (prior methodology)(3)
408 430 445 457 471 482 493 514 
Average Enterprise Customer Spend (in thousands; prior methodology)(7)
$702 $698 $704 $722 $730 $759 $782 $778 
Enterprise Customer Revenue % (prior methodology)89 %88 %88 %89 %88 %89 %89 %89 %
Net Retention Rate (NRR) Quarter(8)
93 %112 %107 %114 %128 %115 %111 %105 %
Net Retention Rate (NRR) LTM(1)
121 %114 %118 %115 %117 %118 %119 %116 %
Dollar-Based Net Expansion Rate (DBNER)(2)
126 %118 %121 %118 %120 %122 %123 %121 %
Annual Revenue Retention Rate (ARR)(9)
— %— %99.2 %— %— %— %99.2 %— %
Global Network Capacity145 TB/sec167 TB/sec184 TB/sec198 TB/sec215 TB/sec233 TB/sec252 TB/sec265 TB/sec
Countries 2831323434353535
Markets 6168717578797979
*Note: The reporting of the dual key metrics with respect to Total Customer and Enterprise Customer counts and associated key metrics will be disclosed through the fourth quarter of fiscal year 2023, ending December 31, 2023.

Exhibit 99.2
Customer and Partner Highlights
•Google selected Fastly’s oblivious HTTP relay for its privacy sandbox initiative to enhance online privacy for billions of Chrome users via its FLEDGE solution.
•Fastly's streaming bandwidth reached a record 81.9 Tbps during a successful livestream of the Super Bowl supported by its automated traffic routing systems, Autopilot and Precision Path. This consistent track record with livestreaming led to major sporting event wins in international regions.
•Introduced a new partner program to deliver greater value for customers and partners, featuring a new tiered model with simplified pricing and packaging, enhancing resources to drive growth and success. The program was awarded CRN's 5-star rating.
•Sotheby’s, the world's largest, most trusted and dynamic marketplace for art and luxury chose Fastly’s network services for its advanced programmability.
•Plaid, a leading-edge Japanese e-commerce provider, chose Fastly’s network services over an incumbent competitor due to its advanced functionality.
•CareRev, a career and staffing technology platform for healthcare professionals, chose Fastly’s Next-Gen WAF.
•Fandom, a wiki hosting service focused on fan-based end user entertainment experiences chose Fastly’s network services over an incumbent competitor.
Second Quarter and Full Year 2023 Guidance:
Q2 2023Full Year 2023
Total Revenue (millions)$117 - $120$495 - $505
Non-GAAP Operating Loss (millions)(4)
($18.0) - ($16.0)($53.0) - ($47.0)
Non-GAAP Net Loss per share (5) (6)
($0.11) - ($0.09)($0.27) - ($0.21)




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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 3,001 in the first quarter, up 43 from the fourth quarter of 2022; 514 were enterprise customers in the first quarter, up 21 from the fourth quarter of 2022.
4.For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this letter.
5.Assumes weighted average basic shares outstanding of 127.6 million in Q2 2023 and 128.3 million for the full year 2023.
6.Non-GAAP Net Loss per share is calculated as Non-GAAP Net Loss divided by weighted average basic shares for 2023.
7.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 $778 thousand in the first quarter, down 1% quarter-over-quarter.
8.Net Retention Rate measures the net change in monthly revenue from existing customers in the last month of the period (the “current" period month) compared to the last month of the same period one year prior (the “prior" period month). The revenue included in the current period month includes revenue from (i) revenue contraction due to billing decreases or customer churn and (ii) revenue expansion due to billing increases, but excludes revenue from new customers. We calculate Net Retention Rate by dividing the revenue from the current period month by the revenue in the prior period month.
9.Annual revenue retention rate is calculated by subtracting the quotient of the Annual Revenue Churn from all of our Churned Customers divided by our annual revenue of the same calendar year from 100%. Our “Annual Revenue Churn” is calculated by multiplying the final full month of revenue from a customer that terminated its contract with us (a “Churned Customer”) by the number of months remaining in the same calendar year.












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Forward-Looking Statements

This investor supplement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, about us and our industry that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or Fastly's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates,” “going to,” "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue," “would,” or the negative of these words or other similar terms or expressions that concern Fastly's expectations, goals, strategy, priorities, plans, projections, or intentions. Forward-looking statements in this investor supplement include, but are not limited to, statements regarding Fastly’s future financial and operating performance, including its outlook and guidance; the growth and success of Fastly's partner program; and Fastly's strategies, product and business plans. Fastly's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: Fastly is unable to attract and retain customers; Fastly's existing customers and partners do not maintain or increase usage of Fastly's platform; Fastly's platform and product features do not meet expectations, including due to defects, interruptions, security breaches, delays in performance or other similar problems; Fastly is unable to adapt to meet evolving market and customer demands and rapid technological change; Fastly is unable to comply with modified or new industry standards, laws and regulations; Fastly is unable to generate sufficient revenues to achieve or sustain profitability; Fastly’s limited operating history makes it difficult to evaluate its prospects and future operating results; Fastly is unable to effectively manage its growth; and Fastly is unable to compete effectively. The forward-looking statements contained in this investor supplement are also subject to other risks and uncertainties, including those more fully described in Fastly’s Annual Report on Form 10-K for the year ended December 31, 2022, and Fastly’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and other filings and reports that we may file from time to time with the SEC. The forward-looking statements in this investor supplement are based on information available to Fastly as of the date hereof, and Fastly disclaims any obligation to update any forward-looking statements, except as required by law.
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.

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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 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.


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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 investor supplement.









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

Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Revenue$85,026 $86,735 $97,717 $102,382 $102,518 $108,504 $119,321 $117,564 
Cost of revenue(1)
40,320 41,244 47,944 53,915 56,466 55,825 56,738 57,310 
Gross profit44,706 45,491 49,773 48,467 46,052 52,679 62,583 60,254 
Operating expenses:
Research and development(1)
30,346 32,528 34,997 40,437 38,717 38,957 37,197 37,431 
Sales and marketing(1)
36,334 39,288 42,151 41,480 46,760 47,006 44,623 44,271 
General and administrative (1)
35,494 28,609 29,281 29,554 29,543 32,481 29,225 25,827 
Total operating expenses102,174 100,425 106,429 111,471 115,020 118,444 111,045 107,529 
Loss from operations(57,468)(54,934)(56,656)(63,004)(68,968)(65,765)(48,462)(47,275)
Net gain on extinguishment of debt— — — — 54,391 — — — 
Interest income276 280 552 681 1,502 1,967 2,894 4,186 
Interest expense(1,436)(1,555)(1,593)(1,622)(1,530)(1,381)(1,354)(1,213)
Other income (expense)178 41 201 (279)(1,673)1,877 46 (250)
Loss before income taxes(58,450)(56,168)(57,496)(64,224)(16,278)(63,302)(46,876)(44,552)
Income tax expense (benefit)(155)30 25 40 159 118 (223)135 
Net loss$(58,295)$(56,198)$(57,521)$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)
Net loss per share attributable to common stockholders, basic and diluted$(0.51)$(0.48)$(0.49)$(0.54)$(0.14)$(0.52)$(0.38)$(0.36)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted115,326 116,475 118,161 119,673 121,242 122,339 123,587 125,418 
__________
(1)Includes stock-based compensation expense as follows:
Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Cost of revenue$1,828 $1,897 $2,316 $2,946 $3,188 $2,978 $2,938 $2,681 
Research and development8,634 14,752 15,675 18,589 13,889 14,488 11,469 11,481 
Sales and marketing5,631 9,121 11,399 10,094 10,184 10,920 7,885 6,705 
General and administrative17,333 10,866 10,198 8,393 7,717 10,992 9,126 7,284 
Total$33,426 $36,636 $39,588 $40,022 $34,978 $39,378 $31,418 $28,151 












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Reconciliation of GAAP to Non-GAAP Financial Measures - Quarterly
(unaudited, in thousands, except per share amounts)

Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Gross Profit
GAAP gross Profit$44,706 $45,491 $49,773 $48,467 $46,052 $52,679 $62,583 $60,254 
Stock-based compensation1,828 1,897 2,316 2,946 3,188 2,978 2,938 2,681 
Amortization of acquired intangible assets2,475 2,475 2,475 2,475 2,475 2,475 2,475 2,475 
Non-GAAP gross profit49,009 49,863 54,564 53,888 51,715 58,132 67,996 65,410 
GAAP gross margin52.6 %52.4 %50.9 %47.3 %44.9 %48.6 %52.4 %51.3 %
Non-GAAP gross margin57.6 %57.5 %55.8 %52.6 %50.4 %53.6 %57.0 %55.6 %
Research and development
GAAP research and development30,346 32,528 34,997 40,437 38,717 38,957 37,197 37,431 
Stock-based compensation(8,634)(14,752)(15,675)(18,589)(13,889)(14,488)(11,469)(11,481)
Non-GAAP research and development21,712 17,776 19,322 21,848 24,828 24,469 25,728 25,950 
Sales and marketing
GAAP sales and marketing36,334 39,288 42,151 41,480 46,760 47,006 44,623 44,271 
Stock-based compensation(5,631)(9,121)(11,399)(10,094)(10,184)(10,920)(7,885)(6,705)
Amortization of acquired intangible assets(2,709)(2,709)(2,710)(2,709)(2,710)(2,897)(2,575)(2,575)
Non-GAAP sales and marketing27,994 27,458 28,042 28,677 33,866 33,189 34,163 34,991 
General and administrative
GAAP general and administrative35,494 28,609 29,281 29,554 29,543 32,481 29,225 25,827 
Stock-based compensation(17,333)(10,866)(10,198)(8,393)(7,717)(7,959)(9,126)(7,284)
Executive transition costs— — — — — (4,207)— — 
Acquisition-related expenses(1,298)(179)(149)(58)(1,912)— — — 
Non-GAAP general and administrative16,863 17,564 18,934 21,103 19,914 20,315 20,099 18,543 
Operating loss
GAAP operating loss(57,468)(54,934)(56,656)(63,004)(68,968)(65,765)(48,462)(47,275)
Stock-based compensation33,426 36,636 39,588 40,022 34,978 36,345 31,418 28,151 
Executive transition costs— — — — — 4,207 — — 
Amortization of acquired intangible assets5,184 5,184 5,185 5,184 5,185 5,372 5,050 5,050 
Acquisition-related expenses1,298 179 149 58 1,912 — — — 
Non-GAAP operating loss(17,560)(12,935)(11,734)(17,740)(26,893)(19,841)(11,994)(14,074)
Net loss
GAAP net loss(58,295)(56,198)(57,521)(64,264)(16,437)(63,420)(46,653)(44,687)
Stock-based compensation33,426 36,636 39,588 40,022 34,978 36,345 31,418 28,151 
Executive transition costs— — — — — 4,207 — — 
Amortization of acquired intangible assets5,184 5,184 5,185 5,184 5,185 5,372 5,050 5,050 
Acquisition-related expenses1,298 179 149 58 1,912 — — — 
Net gain on extinguishment of debt — — — — (54,391)— — — 
Amortization of debt issuance costs993 967 947 963 776 714 716 716 
Non-GAAP net loss$(17,394)$(13,232)$(11,652)$(18,037)$(27,977)$(16,782)$(9,469)$(10,770)
GAAP net loss per common share—basic and diluted$(0.51)$(0.48)$(0.49)$(0.54)$(0.14)$(0.52)$(0.38)$(0.36)
Non-GAAP net loss per common share—basic and diluted$(0.15)$(0.11)$(0.10)$(0.15)$(0.23)$(0.14)$(0.08)$(0.09)
Weighted average basic common shares115,326 116,475 118,161 119,673 121,242 122,339 123,587 125,418 


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Reconciliation of GAAP to Non-GAAP Financial Measures - Quarterly (Continued)
(unaudited, in thousands, except per share amounts)

Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Adjusted EBITDA
GAAP net loss$(58,295)$(56,198)$(57,521)$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)
Stock-based compensation33,426 36,636 39,588 40,022 34,978 36,345 31,418 28,151 
Executive transition costs— — — — — 4,207 — — 
Depreciation and other amortization7,000 7,489 8,228 9,975 10,860 10,786 11,903 12,179 
Amortization of acquired intangible assets5,184 5,184 5,185 5,184 5,185 5,372 5,050 5,050 
Acquisition-related expenses1,298 179 149 58 1,912 — — — 
Interest income(276)(280)(552)(681)(1,502)(1,967)(2,894)(4,186)
Interest expense443 588 646 — 754 667 638 497 
Amortization of debt discount and issuance costs993 967 947 963 776 714 716 716 
Net gain on extinguishment of debt— — — — (54,391)— — — 
Other (income) expense, net(178)(41)(201)279 1,673 (1,877)(46)250 
Income tax (benefit) expense(155)30 25 40 159 118 (223)135 
Adjusted EBITDA$(10,560)$(5,446)$(3,506)$(7,765)$(16,033)$(9,055)$(91)$(1,895)





































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Non-GAAP Consolidated Statements of Operations - Quarterly
(unaudited, in thousands, except per share amounts)
Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Revenue$85,026 $86,735 $97,717 $102,382 $102,518 $108,504 $119,321 $117,564 
Cost of revenue (1)(2)
36,017 36,872 43,153 48,494 50,803 50,372 51,325 52,154 
Gross profit49,009 49,863 54,564 53,888 51,715 58,132 67,996 65,410 
Operating expenses:
Research and development(1)
21,712 17,776 19,322 21,848 24,828 24,469 25,728 25,950 
Sales and marketing(1)(2)
27,994 27,458 28,042 28,677 33,866 33,189 34,163 34,991 
General and administrative (1)(3)(7)
16,863 17,564 18,934 21,103 19,914 20,315 20,099 18,543 
Total operating expenses66,569 62,798 66,298 71,628 78,608 77,973 79,990 79,484 
Income (loss) from operations(1)(2)(3)(7)
(17,560)(12,935)(11,734)(17,740)(26,893)(19,841)(11,994)(14,074)
Interest income276 280 552 681 1,502 1,967 2,894 4,186 
Interest expense(4)
(443)(588)(646)(659)(754)(667)(638)(497)
Other income (expense), net178 41 201 (279)(1,673)1,877 46 (250)
Income (loss) before income tax expense (benefit)(5)
(17,549)(13,202)(11,627)(17,997)(27,818)(16,664)(9,692)(10,635)
Income tax expense (benefit)(6)
(155)30 25 40 159 118 (223)135 
Net income (loss)(1)(2)(3)(4)(5)(6)(7)
$(17,394)$(13,232)$(11,652)$(18,037)$(27,977)$(16,782)$(9,469)$(10,770)
Net income (loss) per share attributable to common stockholders, basic and diluted$(0.15)$(0.11)$(0.10)$(0.15)$(0.23)$(0.14)$(0.08)$(0.09)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted115,326 116,475 118,161 119,673 121,242 122,339 123,587 125,418 
(1) Excludes stock-based compensation. See GAAP to Non-GAAP reconciliations.
(2) Excludes amortization of acquired intangible assets. See GAAP to Non-GAAP reconciliations.
(3) Excludes acquisition-related and other expenses. See GAAP to Non-GAAP reconciliations.
(4) Excludes amortization of debt discount and issuance costs. See GAAP to Non-GAAP reconciliations.
(5) Excludes net gain on extinguishment of debt. See GAAP to Non-GAAP reconciliations.
(6) Excludes acquisition-related tax benefit. See GAAP to Non-GAAP reconciliations.
(7) Excludes executive transition costs. See GAAP to Non-GAAP reconciliations.




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Consolidated Balance Sheets - Quarterly
(unaudited, in thousands)
Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Assets
Current assets:
Cash and cash equivalents$687,986 $282,131 $166,068 $245,794 $62,510 $87,897 $143,391 $348,463 
Marketable securities241,744 361,290 361,795 393,950 419,905 445,048 374,581 198,116 
Accounts receivable, net56,065 54,234 64,625 73,717 68,218 72,914 89,578 85,344 
Prepaid expenses and other current assets22,309 22,230 32,160 23,616 29,037 31,321 28,933 29,717 
Total current assets1,008,104 719,885 624,648 737,077 579,670 637,180 636,483 661,640 
Property and equipment, net116,471 147,729 166,961 174,550 173,950 179,080 180,378 179,922 
Operating lease right-of-use assets, net62,630 70,149 69,631 63,455 69,861 72,374 68,440 60,615 
Goodwill635,646 635,635 636,805 637,570 670,186 670,158 670,185 670,192 
Intangible assets, net113,215 107,905 102,596 97,287 93,978 88,482 82,900 77,725 
Marketable securities, non-current173,227 429,489 528,911 394,464 284,951 186,066 165,105 117,518 
Other assets27,578 28,142 29,468 30,020 60,199 73,258 92,622 94,798 
Total assets$2,136,871 $2,138,934 $2,159,020 $2,134,423 $1,932,795 $1,906,598 $1,896,113 $1,862,410 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$10,202 $7,766 $9,257 $8,248 $10,011 $8,265 $4,786 $4,668 
Accrued expenses28,609 36,063 36,112 49,902 49,943 54,186 61,161 42,311 
Finance lease liabilities14,773 18,675 21,125 26,766 28,088 27,807 28,954 24,763 
Operating lease liabilities19,713 20,007 20,271 18,688 19,243 20,919 23,026 20,516 
Other current liabilities29,735 24,758 45,107 36,569 33,705 33,422 34,394 32,942 
Total current liabilities103,032 107,269 131,872 140,173 140,990 144,599 152,321 125,200 
Long-term debt, less current portion931,385 932,305 933,205 934,121 703,375 704,042 704,710 705,378 
Finance lease liabilities, noncurrent19,685 24,659 22,293 28,867 26,479 21,027 15,507 10,858 
Operating lease liabilities, noncurrent47,177 54,066 55,114 52,334 60,657 62,750 61,341 56,275 
Other long-term liabilities6,502 5,056 2,583 2,205 7,556 7,201 7,076 6,144 
Total liabilities1,107,781 1,123,355 1,145,067 1,157,700 939,057 939,619 940,955 903,855 
Stockholders’ equity:
Class A and Class B common stock2 2 2 2 2 2 2 2 
Additional paid-in capital1,426,520 1,469,366 1,527,468 1,561,371 1,597,869 1,634,666 1,666,106 1,710,498 
Accumulated other comprehensive loss(261)(420)(2,627)(9,496)(12,542)(12,678)(9,286)(5,594)
Accumulated deficit(397,171)(453,369)(510,890)(575,154)(591,591)(655,011)(701,664)(746,351)
Total stockholders’ equity1,029,090 1,015,579 1,013,953 976,723 993,738 966,979 955,158 958,555 
Total liabilities and stockholders’ equity$2,136,871 $2,138,934 $2,159,020 $2,134,423 $1,932,795 $1,906,598 $1,896,113 $1,862,410 







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Consolidated Statements of Cash Flows – Quarterly
(unaudited, in thousands)

Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Cash flows from operating activities:
Net loss$(58,295)$(56,198)$(57,521)$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense6,927 7,364 8,089 9,850 10,736 10,662 11,371 12,040 
Amortization of intangible assets5,257 5,309 5,309 5,309 5,309 5,496 5,582 5,175 
Non-cash lease expense5,379 6,176 6,085 5,914 5,608 8,133 5,793 6,115 
Amortization of debt discount and issuance costs937 966 950 964 775 715 715 716 
Amortization of deferred contract costs1,535 1,621 1,727 1,851 2,138 2,031 2,896 3,425 
Stock-based compensation33,426 36,636 39,588 40,022 34,978 39,378 31,418 28,151 
Provision for credit losses225 236 155 127 402 1,253 624 533 
(Gain) loss on disposals of property and equipment— (204)(123)268 586 — — 251 
Amortization and accretion of discounts and premiums on investments— — — 957 894 771 515 449 
Impairment of operating lease right-of-use assets — — — — — — 2,083 — 
Net gain on extinguishment of debt— — — — (54,391)— — — 
Other adjustments749 683 729 128 (67)(353)3,980 (243)
Changes in operating assets and liabilities:
Accounts receivable(3,927)1,595 (10,546)(9,219)5,097 (5,949)(17,288)3,701 
Prepaid expenses and other current assets(3,814)(8)725 (2,111)(2,701)(975)(971)(634)
Other assets(2,137)(2,231)(3,103)(2,451)(3,948)(13,505)(15,492)(7,212)
Accounts payable(1,957)(1,815)1,799 (2,492)3,336 (4,301)(1,267)(175)
Accrued expenses(3,080)6,548 1,548 4,891 (3,729)3,328 3,799 (6,827)
Operating lease liabilities(5,567)(5,897)(5,732)(5,632)(5,349)(7,462)(4,335)(5,750)
Other liabilities7,328 (3,472)2,413 2,698 83 (3,436)5,102 (3,889)
Net cash used in operating activities(17,014)(2,691)(7,908)(13,190)(16,680)(27,634)(12,128)(8,861)
Cash flows from investing activities:
Purchases of marketable securities(269,537)(443,701)(150,586)(148,193)(207,286)— — — 
Sales of marketable securities— 51,739 2,291 2,301 159,552 — 65 — 
Maturities of marketable securities31,750 15,600 45,232 240,547 127,333 72,857 94,303 227,211 
Business acquisitions, net of cash acquired — — (1,169)(775)(25,224)(1,746)1,843 — 
Advance payment for purchase of property and equipment— — — — (29,310)(1,964)(10,923)— 
Purchases of property and equipment(1)
(2,934)(20,254)(3,549)(2,387)(6,428)(2,631)(8,529)(3,494)
Proceeds from sale of property and equipment— 291 297 — 241 125 126 22 
Capitalized internal-use software(1,691)(7,619)(3,180)(3,810)(4,926)(5,120)(4,290)(4,209)
Purchases of intangible assets(2,093)1 — — — — — — 
Net cash provided by (used in) investing activities(1)
(244,505)(403,943)(110,664)87,683 13,952 61,521 72,595 219,530 
Cash flows from financing activities:
Net cash paid for debt extinguishment— — — — (177,082)— — — 
Repayments of finance lease liabilities(1)
(3,628)(3,985)(3,004)(7,159)(3,870)(7,076)(4,427)(8,645)
Cash received for restricted stock sold in advance of vesting conditions— — — 10,655 — — — — 
Cash paid for early sale of restricted shares— — — (3,498)(3,539)(3,618)— — 
Proceeds from employee stock purchase plan1,493 1,430 2,075 2,406 1,571 1,749 (949)2,596 
Proceeds from exercise of vested stock options2,886 3,489 3,532 3,048 1,721 555 364 336 
Net cash provided by (used in) financing activities(1)
751 934 2,603 5,452 (181,199)(8,390)(5,012)(5,713)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash(29)(242)(94)(219)(100)(110)39 116 
Net increase (decrease) in cash, cash equivalents, and restricted cash(260,797)(405,942)(116,063)79,726 (184,027)25,387 55,494 205,072 
Cash, cash equivalents, and restricted cash at beginning of period949,763 688,966 283,024 166,961 246,687 62,660 88,047 143,541 
Cash, cash equivalents, and restricted cash at end of period$688,966 $283,024 $166,961 $246,687 $62,660 $88,047 $143,541 $348,613 
__________
(1)Amounts disclosed for Q1 2022 and Q2 2022 have been revised from the amounts disclosed in our previous investor supplements to match amounts reported in the applicable Quarterly Reports on Form 10-Q.

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Free Cash Flow
(in thousands, unaudited)
Quarter ended
Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023
Cash flow used in operations$(17,014)$(2,691)$(7,908)$(13,190)$(16,680)$(27,634)$(12,128)$(8,861)
Capital expenditures(1):
Purchases of property and equipment(2,934)(20,254)(3,549)(2,387)(6,428)(2,631)(8,529)(3,494)
Proceeds from sale of property and equipment— 291 297 — 241 125 126 22 
Capitalized internal-use software(1,691)(7,619)(3,180)(3,810)(4,926)(5,120)(4,290)(4,209)
Repayments of finance lease liabilities(3,628)(3,985)(3,004)(7,159)(3,870)(7,076)(4,427)(8,645)
Advance payment for purchase of property and equipment (2)
— — — — (29,310)(1,964)(10,923)— 
Free Cash Flow$(25,267)$(34,258)$(17,344)$(26,546)$(60,973)$(44,300)$(40,171)$(25,187)
__________
(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 three months ended March 31, 2023, we received $1.4 million of capital equipment that was prepaid prior to the current quarter.