EX-99.2 3 ex992-investorsupplement12.htm EX-99.2 Document
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Fourth Quarter 2023 Investor Supplement
Corporate Highlights
•Fastly was named a Leader in The Forrester Wave™: Edge Development Platforms, Q4 2023 report, highlighted by Fastly’s Compute platform receiving the highest rating possible (5/5) in 22 criteria.
•Kip Compton joined Fastly as Chief Product Officer, bringing 25 years of senior leadership experience driving innovation, most recently as SVP of Strategy at Cisco Networking where he led teams responsible for strategy, portfolio management, investments and acquisitions.
•Repurchased $130.9 million of our convertible notes’ principal balance in the fourth quarter for $113.6 million in cash or approximately 87 cents on the dollar.
•Launched our new annual global cybersecurity report, The Race to Adapt, uncovering the impacts of cyber attacks on leading businesses across the globe and how 76% of the businesses surveyed plan to increase their cybersecurity budgets in the next year.
Customer and Partner Highlights
•Channel partner deal registration continues to expand as our 2023 deal registration more than tripled 2022 levels and we grew our partner engagement by over 65%.
•Our packaging motion is accelerating as more customers purchased package deals in the fourth quarter of 2023 than the first nine months of 2023 combined.
•BeReal, a social media app that emphasizes authenticity and winner of the 2022 iPhone app of the year, chose Fastly’s platform due to its edge compute capabilities.
•MoxiWorks, a revolutionary real estate brokerage and agent tech platform, selected Fastly for its delivery requirements to replace an incumbent provider exiting the business.
•The E.W. Scripps Company, a diversified media company focused on creating a better-informed world, selected Fastly’s Next-Gen WAF solution.


Calculations of Key and Other Selected Metrics – Quarterly (unaudited)
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Total Customer Count(2)
2,965 3,025 3,039 3,062 3,100 3,072 3,102 3,243 
Enterprise Customer Count(2)
488 499 511 533 540 551 547 578 
Average Enterprise Customer Spend (in thousands)(3)
$758 $742 $771 $822 $795 $818 $858 $880 
Enterprise Customer Revenue %90 %90 %91 %92 %91 %92 %92 %92 %
Annual Revenue Retention (ARR) Rate(8)
— %— %— %98.9 %— %— %— %99.2 %
Total Customer Count (prior methodology)(2)
2,880 2,894 2,925 2,958 3,001 2,965 3,019 3,097 
Enterprise Customer Count (prior methodology)(2)
457 471 482 493 514 520 530 532 
Average Enterprise Customer Spend (in thousands; prior methodology)(3)
$722 $730 $759 $782 $778 $809 $832 $859 
Enterprise Customer Revenue % (prior methodology)89 %88 %89 %89 %89 %90 %90 %90 %
Net Retention Rate (NRR) Quarter(9)
114 %128 %115 %111 %105 %106 %110 %110 %
Net Retention Rate (NRR) LTM(1)
115 %117 %118 %119 %116 %116 %114 %113 %
Dollar-Based Net Expansion Rate (DBNER)(10)
118 %120 %122 %123 %121 %123 %120 %119 %
Global Network Capacity198 TB/sec215 TB/sec233 TB/sec252 TB/sec265 TB/sec277 TB/sec291 TB/sec313 TB/sec
Countries 3434353535353535
Markets 7578797979797979
*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
Product Innovation and Developments
•Released multiple new features to Fastly’s Next-Gen WAF solution to improve performance and simplify the user experience, including Hashicorp Vault Integration, Agent Auto-Update, WAF Simulator, New Anomaly Signal: Out-of-Band Domain, and Simplified Attack Signal Thresholds.
•Released our updated observability page, allowing customers to monitor their Fastly Delivery and Compute services via system or customizable dashboards.
•Released our Bot Mitigation solution in limited availability to select customers.
Key Metrics Highlights
•12-month net retention rate (LTM NRR)1 decreased to 113% in the fourth quarter from 114% in the third quarter.
•Total customer count2 was 3,243 in the fourth quarter, up 141 from the third quarter; 578 were enterprise customers2 in the fourth quarter, up 31 from the third quarter.
•Average enterprise customer spend3 of $880 thousand in the fourth quarter, up 3% quarter-over-quarter.
•Annual revenue retention rate (ARR)7 was 99.2% in 2023, increasing from 98.9% in 2022.
•Remaining performance obligations (RPO)4 were $245 million, down 1% from $248 million in the third quarter of 2023 and up 24% from $198 million in the fourth quarter of 2022.
First Quarter and Full Year 2024 Guidance:
Q1 2024Full Year 2024
Total Revenue (millions)$131 - $135$580 - $590
Non-GAAP Operating Loss (millions)(5)
($14.0) - ($10.0)($20.0) - ($14.0)
Non-GAAP Net Income (Loss) per share (6)(7)
($0.09) - ($0.05)($0.06) - $0.00






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Key Metrics
1.We calculate LTM Net Retention Rate by dividing the total customer revenue for the prior 12-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.Under our new methodology, our number of customers is 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 is 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 3,097 in the fourth quarter, up 78 from the third quarter of 2023; 532 were enterprise customers in the fourth quarter, up 2 from the third quarter of 2023.
3.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 $859 thousand in the fourth quarter, up 3% quarter-over-quarter.
4.Remaining performance obligations include future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied.
5.For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this supplement.
6.Assumes weighted average basic shares outstanding of 134.3 million in Q1 2024 and 137.5 million for the full year 2024.
7.Non-GAAP Net Income (Loss) per basic share is calculated as Non-GAAP Net Income (Loss) divided by weighted average basic shares for 2024.
8.Annual Revenue Retention rate is calculated by first calculating "Annual Revenue Churn", which 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. Our ARR rate is calculated by subtracting the quotient of the Annual Revenue Churn from all of our Churned Customers from which we recognized revenue during the last quarter of the prior year divided by our annual revenue of the same calendar year from 100%. Under the prior methodology, our ARR rate is calculated by subtracting the quotient of the Annual Revenue Churn from all of our Churned Customers from which we recognized revenue during the last month of the prior year divided by our annual revenue of the same calendar year from 100%. Under our prior methodology, our ARR was 99.1%, down 0.1% year-over-year.
9.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.
10.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

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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.




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 performance of our products; 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and additional information set forth in Fastly's Annual Report on Form 10-K for the year ended December 31, 2023 and other filings and reports that Fastly 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 income (loss), non-GAAP basic and diluted net income (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 income (loss) and non-GAAP basic and diluted net income (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, impairment expense 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, impairment expense, 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 income (loss) performance and its adjusted EBITDA performance because these charges may not be reflective of our core business, ongoing operating results, or future outlook.

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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 income (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 income (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.
Impairment Expense: consists of impairment charge related to our computer and networking equipment, including software, we expect to not be used. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (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.
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 income (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 income (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 income (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.

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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 income (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 investor supplement.









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

Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Revenue$102,382 $102,518 $108,504 $119,321 $117,564 $122,831 $127,816 $137,777 
Cost of revenue(1)
53,915 56,466 55,825 56,738 57,310 58,617 61,730 62,003 
Gross profit48,467 46,052 52,679 62,583 60,254 64,214 66,086 75,774 
Operating expenses:
Research and development(1)
40,437 38,717 38,957 37,197 37,431 37,421 39,068 38,270 
Sales and marketing(1)
41,480 46,760 47,006 44,623 44,271 47,797 51,043 48,662 
General and administrative (1)
29,554 29,543 32,481 29,225 25,827 28,823 30,001 31,426 
Impairment expense— — — — — — 4,316 — 
Total operating expenses111,471 115,020 118,444 111,045 107,529 114,041 124,428 118,358 
Loss from operations(63,004)(68,968)(65,765)(48,462)(47,275)(49,827)(58,342)(42,584)
Net gain on extinguishment of debt— 54,391 — — — 36,760 — 15,656 
Interest income681 1,502 1,967 2,894 4,186 4,508 4,908 4,584 
Interest expense(1,622)(1,530)(1,381)(1,354)(1,213)(1,232)(862)(744)
Other income (expense)(279)(1,673)1,877 46 (250)(803)(16)(763)
Loss before income taxes(64,224)(16,278)(63,302)(46,876)(44,552)(10,594)(54,312)(23,851)
Income tax expense (benefit)40 159 118 (223)135 110 (1)(465)
Net loss$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)$(10,704)$(54,311)$(23,386)
Net loss per share attributable to common stockholders, basic and diluted$(0.54)$(0.14)$(0.52)$(0.38)$(0.36)$(0.08)$(0.42)$(0.18)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted119,673 121,242 122,339 123,587 125,418 127,863 129,873 131,843 
__________
(1)Includes stock-based compensation expense as follows:
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Cost of revenue$2,946 $3,188 $2,978 $2,938 $2,681 $2,837 $2,860 $3,278 
Research and development18,589 13,889 14,488 11,469 11,481 12,205 12,122 12,019 
Sales and marketing10,094 10,184 10,920 7,885 6,705 9,877 9,061 8,060 
General and administrative8,393 7,717 10,992 9,126 7,284 12,073 11,670 12,090 
Total$40,022 $34,978 $39,378 $31,418 $28,151 $36,992 $35,713 $35,447 











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Reconciliation of GAAP to Non-GAAP Financial Measures - Quarterly
(unaudited, in thousands, except per share amounts)
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023
Q4 2023
Gross Profit
GAAP gross Profit$48,467 $46,052 $52,679 $62,583 $60,254 $64,214 $66,086 $75,774 
Stock-based compensation2,946 3,188 2,978 2,938 2,681 2,837 2,860 3,278 
Amortization of acquired intangible assets2,475 2,475 2,475 2,475 2,475 2,475 2,475 2,475 
Non-GAAP gross profit53,888 51,715 58,132 67,996 65,410 69,526 71,421 81,527 
GAAP gross margin47.3 %44.9 %48.6 %52.4 %51.3 %52.3 %51.7 %55.0 %
Non-GAAP gross margin52.6 %50.4 %53.6 %57.0 %55.6 %56.6 %55.9 %59.2 %
Research and development
GAAP research and development40,437 38,717 38,957 37,197 37,431 37,421 39,068 38,270 
Stock-based compensation(18,589)(13,889)(14,488)(11,469)(11,481)(12,205)(10,426)(11,728)
Executive transition costs— — — — — — (2,406)(385)
Non-GAAP research and development21,848 24,828 24,469 25,728 25,950 25,216 26,236 26,157 
Sales and marketing
GAAP sales and marketing41,480 46,760 47,006 44,623 44,271 47,797 51,043 48,662 
Stock-based compensation(10,094)(10,184)(10,920)(7,885)(6,705)(9,877)(9,061)(8,060)
Amortization of acquired intangible assets(2,709)(2,710)(2,897)(2,575)(2,575)(2,575)(2,576)(2,300)
Non-GAAP sales and marketing28,677 33,866 33,189 34,163 34,991 35,345 39,406 38,302 
General and administrative
GAAP general and administrative29,554 29,543 32,481 29,225 25,827 28,823 30,001 31,426 
Stock-based compensation(8,393)(7,717)(7,959)(9,126)(7,284)(12,073)(11,670)(12,090)
Executive transition costs— — (4,207)— — — — — 
Acquisition-related expenses(58)(1,912)— — — — — — 
Non-GAAP general and administrative21,103 19,914 20,315 20,099 18,543 16,750 18,331 19,336 
Operating loss
GAAP operating loss(63,004)(68,968)(65,765)(48,462)(47,275)(49,827)(58,342)(42,584)
Stock-based compensation40,022 34,978 36,345 31,418 28,151 36,992 34,017 35,156 
Executive transition costs— — 4,207 — — — 2,406 385 
Amortization of acquired intangible assets5,184 5,185 5,372 5,050 5,050 5,050 5,051 4,775 
Impairment expense
— — — — — — 4,316 — 
Acquisition-related expenses58 1,912 — — — — — — 
Non-GAAP operating loss(17,740)(26,893)(19,841)(11,994)(14,074)(7,785)(12,552)(2,268)
Net loss
GAAP net loss(64,264)(16,437)(63,420)(46,653)(44,687)(10,704)(54,311)(23,386)
Stock-based compensation40,022 34,978 36,345 31,418 28,151 36,992 34,017 35,156 
Executive transition costs— — 4,207 — — — 2,406 385 
Amortization of acquired intangible assets5,184 5,185 5,372 5,050 5,050 5,050 5,051 4,775 
Acquisition-related expenses58 1,912 — — — — — — 
Net gain on extinguishment of debt — (54,391)— — — (36,760)— (15,656)
Impairment expense— — — — — 4,316 — 
Amortization of debt issuance costs963 776 714 716 716 803 502 456 
Non-GAAP net income (loss)
$(18,037)$(27,977)$(16,782)$(9,469)$(10,770)$(4,619)$(8,019)$1,730 
GAAP net loss per common share—basic and diluted$(0.54)$(0.14)$(0.52)$(0.38)$(0.36)$(0.08)$(0.42)$(0.18)
Non-GAAP net income (loss) per common share—basic and diluted$(0.15)$(0.23)$(0.14)$(0.08)$(0.09)$(0.04)$(0.06)$0.01 
Weighted average basic common shares119,673 121,242 122,339 123,587 125,418 127,863 129,873 131,843 
Weighted average diluted common shares119,673 121,242 122,339 123,587 125,418 127,863 129,873 141,162 



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

Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Reconciliation of GAAP to Non-GAAP diluted shares:
GAAP diluted shares119,673 121,242 122,339 123,587 125,418 127,863 129,873 131,843 
Other dilutive equity awards— — — — — — — 9,319 
Non-GAAP diluted shares119,673 121,242 122,339 123,587 125,418 127,863 129,873 141,162 
Non-GAAP diluted net income (loss) per share
(0.15)(0.23)(0.14)(0.08)(0.09)(0.04)(0.06)0.01 

Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Adjusted EBITDA
GAAP net loss$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)$(10,704)$(54,311)$(23,386)
Stock-based compensation40,022 34,978 36,345 31,418 28,151 36,992 34,017 35,156 
Executive transition costs— — 4,207 — — — 2,406 385 
Net gain on extinguishment of debt— (54,391)— — — (36,760)— (15,656)
Impairment expense
— — — — — — 4,316 — 
Acquisition-related expenses58 1,912 — — — — — — 
Depreciation and other amortization9,975 10,860 10,786 11,903 12,179 13,030 13,202 13,727 
Amortization of acquired intangible assets5,184 5,185 5,372 5,050 5,050 5,050 5,051 4,775 
Amortization of debt discount and issuance costs963 776 714 716 716 803 502 456 
Interest income(681)(1,502)(1,967)(2,894)(4,186)(4,508)(4,908)(4,584)
Interest expense659 754 667 638 497 429 360 288 
Other (income) expense, net279 1,673 (1,877)(46)250 803 16 763 
Income tax (benefit) expense40 159 118 (223)135 110 (1)(465)
Adjusted EBITDA$(7,765)$(16,033)$(9,055)$(91)$(1,895)$5,245 $650 $11,459 


























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Non-GAAP Consolidated Statements of Operations - Quarterly
(unaudited, in thousands, except per share amounts)
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Revenue$102,382 $102,518 $108,504 $119,321 $117,564 $122,831 $127,816 $137,777 
Cost of revenue (1)(2)
48,494 50,803 50,372 51,325 52,154 53,305 56,395 56,250 
Gross profit53,888 51,715 58,132 67,996 65,410 69,526 71,421 81,527 
Operating expenses:
Research and development(1)(7)
21,848 24,828 24,469 25,728 25,950 25,216 26,236 26,157 
Sales and marketing(1)(2)
28,677 33,866 33,189 34,163 34,991 35,345 39,406 38,302 
General and administrative (1)(3)(7)
21,103 19,914 20,315 20,099 18,543 16,750 18,331 19,336 
Total operating expenses(8)
71,628 78,608 77,973 79,990 79,484 77,311 83,973 83,795 
Loss from operations(1)(2)(3)(7)
(17,740)(26,893)(19,841)(11,994)(14,074)(7,785)(12,552)(2,268)
Interest income681 1,502 1,967 2,894 4,186 4,508 4,908 4,584 
Interest expense(4)
(659)(754)(667)(638)(497)(429)(360)(288)
Other income (expense), net(279)(1,673)1,877 46 (250)(803)(16)(763)
Income (loss) before income tax expense (benefit)(5)
(17,997)(27,818)(16,664)(9,692)(10,635)(4,509)(8,020)1,265 
Income tax expense (benefit)(6)
40 159 118 (223)135 110 (1)(465)
Net income (loss)(1)(2)(3)(4)(5)(6)(7)(8)
$(18,037)$(27,977)$(16,782)$(9,469)$(10,770)$(4,619)$(8,019)$1,730 
Net income (loss) per share attributable to common stockholders, basic and diluted$(0.15)$(0.23)$(0.14)$(0.08)$(0.09)$(0.04)$(0.06)$0.01 
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic119,673121,242122,339123,587125,418127,863129,873131,843
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted119,673121,242122,339123,587125,418127,863129,873141,162
(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.
(8) Excludes impairment expense. See GAAP to Non-GAAP reconciliations.




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Consolidated Balance Sheets - Quarterly
(unaudited, in thousands)
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Assets
Current assets:
Cash and cash equivalents$245,794 $62,510 $87,897 $143,391 $348,463 $273,742 $270,300 $107,921 
Marketable securities393,950 419,905 445,048 374,581 198,116 123,605 158,055 214,799 
Accounts receivable, net73,717 68,218 72,914 89,578 85,344 78,295 98,622 120,498 
Prepaid expenses and other current assets23,616 29,037 31,321 28,933 29,717 29,500 24,481 20,455 
Total current assets737,077 579,670 637,180 636,483 661,640 505,142 551,458 463,673 
Property and equipment, net174,550 173,950 179,080 180,378 179,922 179,045 171,914 176,608 
Operating lease right-of-use assets, net63,455 69,861 72,374 68,440 60,615 56,733 52,927 55,212 
Goodwill637,570 670,186 670,158 670,185 670,192 670,356 670,356 670,356 
Intangible assets, net97,287 93,978 88,482 82,900 77,725 72,550 67,375 62,475 
Marketable securities, non-current394,464 284,951 186,066 165,105 117,518 78,042 32,280 6,088 
Other assets30,020 60,199 73,258 92,622 94,798 95,550 94,353 90,779 
Total assets$2,134,423 $1,932,795 $1,906,598 $1,896,113 $1,862,410 $1,657,418 $1,640,663 $1,525,191 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$8,248 $10,011 $8,265 $4,786 $4,668 $5,561 $5,723 $5,611 
Accrued expenses49,902 49,943 54,186 61,161 42,311 47,001 56,595 61,818 
Finance lease liabilities26,766 28,088 27,807 28,954 24,763 22,233 19,250 15,684 
Operating lease liabilities18,688 19,243 20,919 23,026 20,516 20,575 21,533 24,042 
Other current liabilities36,569 33,705 33,422 34,394 32,942 36,234 40,234 40,539 
Total current liabilities140,173 140,990 144,599 152,321 125,200 131,604 143,335 147,694 
Long-term debt, less current portion934,121 703,375 704,042 704,710 705,378 472,369 472,823 343,507 
Finance lease liabilities, noncurrent28,867 26,479 21,027 15,507 10,858 7,026 3,860 1,602 
Operating lease liabilities, noncurrent52,334 60,657 62,750 61,341 56,275 51,448 47,775 48,484 
Other long-term liabilities2,205 7,556 7,201 7,076 6,144 7,217 4,298 4,416 
Total liabilities1,157,700 939,057 939,619 940,955 903,855 669,664 672,091 545,703 
Stockholders’ equity:
Class A and Class B common stock2 2 2 2 2 2 2 3 
Additional paid-in capital1,561,371 1,597,869 1,634,666 1,666,106 1,710,498 1,747,959 1,781,870 1,815,245 
Accumulated other comprehensive loss(9,496)(12,542)(12,678)(9,286)(5,594)(3,152)(1,934)(1,008)
Accumulated deficit(575,154)(591,591)(655,011)(701,664)(746,351)(757,055)(811,366)(834,752)
Total stockholders’ equity976,723 993,738 966,979 955,158 958,555 987,754 968,572 979,488 
Total liabilities and stockholders’ equity$2,134,423 $1,932,795 $1,906,598 $1,896,113 $1,862,410 $1,657,418 $1,640,663 $1,525,191 







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

Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Cash flows from operating activities:
Net loss$(64,264)$(16,437)$(63,420)$(46,653)$(44,687)$(10,704)$(54,311)$(23,386)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense9,850 10,736 10,662 11,371 12,040 12,920 13,055 13,587 
Amortization of intangible assets5,309 5,309 5,496 5,582 5,175 5,175 5,175 4,899 
Non-cash lease expense5,914 5,608 8,133 5,793 6,115 5,648 5,464 5,451 
Amortization of debt discount and issuance costs964 775 715 715 716 803 501 456 
Amortization of deferred contract costs1,851 2,138 2,031 2,896 3,425 3,746 4,082 4,295 
Stock-based compensation40,022 34,978 39,378 31,418 28,151 36,992 35,713 35,447 
Deferred income taxes
— — — — — — — (900)
Provision for credit losses127 402 1,253 624 533 567 211 714 
(Gain) loss on disposals of property and equipment268 586 — — 251 296 (42)— 
Amortization and accretion of discounts and premiums on investments957 894 771 515 449 298 (403)(990)
Impairment of operating lease right-of-use assets — — — 2,083 — 187 401 156 
Impairment expense
— — — — — — 4,316 — 
Net gain on extinguishment of debt— (54,391)— — — (36,760)— (15,656)
Other adjustments128 (67)(353)3,980 (243)(85)71 905 
Changes in operating assets and liabilities:
Accounts receivable(9,219)5,097 (5,949)(17,288)3,701 6,482 (20,538)(22,590)
Prepaid expenses and other current assets(2,111)(2,701)(975)(971)(634)217 5,019 4,107 
Other assets(2,451)(3,948)(13,505)(15,492)(7,212)(4,771)(4,286)(6,868)
Accounts payable(2,492)3,336 (4,301)(1,267)(175)1,119 314 (876)
Accrued expenses4,891 (3,729)3,328 3,799 (6,827)234 340 (1,603)
Operating lease liabilities(5,632)(5,349)(7,462)(4,335)(5,750)(6,682)(4,505)(5,137)
Other liabilities2,698 83 (3,436)5,102 (3,889)9,308 1,033 612 
Net cash provided by (used in) operating activities(13,190)(16,680)(27,634)(12,128)(8,861)24,990 (8,390)(7,377)
Cash flows from investing activities:
Purchases of marketable securities(148,193)(207,286)— — — — (73,091)(59,142)
Sales of marketable securities2,301 159,552 — 65 — 774 1 24,850 
Maturities of marketable securities240,547 127,333 72,857 94,303 227,211 114,884 86,030 5,642 
Business acquisitions, net of cash acquired (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)
(2,387)(6,428)(2,631)(8,529)(3,494)(4,464)(325)(2,693)
Proceeds from sale of property and equipment— 241 125 126 22 14 13 — 
Capitalized internal-use software(3,810)(4,926)(5,120)(4,290)(4,209)(6,230)(4,951)(5,902)
Net cash provided by (used in) investing activities(1)
87,683 13,952 61,521 72,595 219,530 219,530 219,530 (37,245)
Cash flows from financing activities:
Cash paid for debt extinguishment— (177,082)— — — (196,934)— (113,606)
Repayments of finance lease liabilities(1)
(7,159)(3,870)(7,076)(4,427)(8,645)(6,557)(6,041)(5,932)
Cash received for restricted stock sold in advance of vesting conditions10,655 — — — — — — — 
Cash paid for early sale of restricted shares(3,498)(3,539)(3,618)— — — — — 
Payment of deferred consideration for business acquisitions— — — — — (4,393)— — 
Proceeds from exercise of vested stock options3,048 1,721 555 364 336 535 1,137 161 
Proceeds from employee stock purchase plan2,406 1,571 1,749 (949)2,596 2,191 2,222 1,550 
Net cash provided by (used in) financing activities(1)
5,452 (181,199)(8,390)(5,012)(5,713)(205,158)(2,682)(117,827)
Effects of exchange rate changes on cash, cash equivalents, and restricted cash(219)(100)(110)39 116 469 (47)70 
Net increase (decrease) in cash, cash equivalents, and restricted cash79,726 (184,027)25,387 55,494 205,072 (74,721)(3,442)(162,379)
Cash, cash equivalents, and restricted cash at beginning of period166,961 246,687 62,660 88,047 143,541 348,613 273,892 270,450 
Cash, cash equivalents, and restricted cash at end of period$246,687 $62,660 $88,047 $143,541 $348,613 $273,892 $270,450 $108,071 
__________
(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
Q1 2022Q2 2022Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023
Cash flow provided by (used in) operations$(13,190)$(16,680)$(27,634)$(12,128)$(8,861)$24,990 $(8,390)$(7,377)
Capital expenditures(1):
Purchases of property and equipment(2,387)(6,428)(2,631)(8,529)(3,494)(4,464)(325)(2,693)
Proceeds from sale of property and equipment— 241 125 126 22 14 13 — 
Capitalized internal-use software(3,810)(4,926)(5,120)(4,290)(4,209)(6,230)(4,951)(5,902)
Repayments of finance lease liabilities(7,159)(3,870)(7,076)(4,427)(8,645)(6,557)(6,041)(5,932)
Advance payment for purchase of property and equipment (2)
— (29,310)(1,964)(10,923)— — — — 
Free Cash Flow$(26,546)$(60,973)$(44,300)$(40,171)$(25,187)$7,753 $(19,694)$(21,904)
__________
(1)Capital expenditures are defined as 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.
(2)As reflected in our statement of cash flows. In the year ended December 31, 2023, we received $8.7 million of capital equipment that was prepaid prior to the current year.