๐Ÿšจ Stock is 30% DOWN ๐Ÿ“‰ from its ALL TIME HIGH ๐Ÿšจ

BUT it grew 62% YoY and had a 137% DBNER ๐Ÿ”ฅ

๐Ÿคบ It was at the centre of Beijing ๐Ÿ‡จ๐Ÿ‡ณ Washington ๐Ÿ‡บ๐Ÿ‡ธ tensions

โ›”๏ธ Itโ€™s business is HARD to UNDERSTAND ๐Ÿคฏ But sounds like a TEN BAGGER ๐Ÿ’ฐ

Here is an EASY thread ๐Ÿ‘‡
$FSLY, a US ๐Ÿ‡บ๐Ÿ‡ธ Cloud Computing Services provider, processes, serves and secures its customerโ€™s apps very close to the end users ๐ŸŒ

This happens through $FSLY Edge Platform โšก๏ธ it provides a content delivery network, internet security, load balancing and video & streaming services
This is PURE TECHNICAL JARGON ๐Ÿคฏ Letโ€™s break down what this means

๐ŸŽ› The internet was designed according to the End-to-End Principle

๐Ÿ“Ÿ This means that the core networkโ€™s KEY PRIORITY is to move the information to the network end-points (hosts and clients) as much as possible
โ›”๏ธ The downside of this E2E principle is that the core network is rather โ€œdumbโ€ - It just forwards data packets to end-points without optimisation

โœ… The upside is that it prevents Internet Service Providers (they supply the core network) from choosing what content to prioritise
๐Ÿ‘‰ E.g. AT&T cannot choose to prioritise content from Youtube over other websites, meaning that the internet stays a fair place for every one (Net Neutrality)
Ok, so here we have an network that just forward data packets as much as possible to the end-points of the network ๐ŸŒ

How could we improve that without altering the functioning of the whole network and compromising Net Neutrality? โšก๏ธ

Hint ๐Ÿ‘‰ CDN ๐Ÿ”ฅ
CDNs augment the network by intelligently distributing & storing data

A CDN is a geographically distributed ๐ŸŒ network of proxy servers & their data centres ๐Ÿ“Ÿ

By distributing the information geograph. relative to the end-users, a CDN provides high availability & perf. ๐Ÿ“ก
A CDN is able to increase a networksโ€™ performance (speed, reliability and availability) thanks to web caching, server load balancing, request routing and content services

๐Ÿ’พ Web caches store popular content on servers ๐Ÿ’ฝ that have the greatest demand for the content requested
๐Ÿ”‹Server load balancing shares the network traffic ๐Ÿ›ฃ across different severs or web caches

๐Ÿงญ Request routing directs clients requests ๐Ÿง‘โ€๐Ÿ’ป to the content source best able to serve the request

๐Ÿ“‘ Content Services Protocols provide a standard for accessing different servers
So, Content Delivery Networks store information in a smart and optimised way closer to the end user - Improving performance ๐Ÿ”ฅ

๐Ÿค” Is there anything else they could do? Well, one of the main cyber threats are DDoS โ˜ ๏ธ Distributed Denial of Service attack
๐Ÿ’€ This happens when a server is simply flooded with requests ๐ŸŒŠ anyone with basic coding skills could orchestrate one

๐Ÿšจ Other common cyber threats ๐Ÿšจ

๐Ÿค– Malicious bots are tasked to scrape web pages, create fake accounts, spread malwareโ€ฆ
๐ŸŽญ Man-In-The-Middle attacks happen on a network that was compromised (E.g. Wi-Fi at airports are sometimes hacked by a malicious third party) and on which two parties exchange private information
How is that linked to CDNโ€™s?

โœ… DDoS attacks can be filtered and stopped by the CDN - in the worst case, the proxy server dies off โ˜ ๏ธ while the origin server stays intact

โœ… Suspected bot activity ๐Ÿ•ต๏ธ can be identified and stopped with CDNs
โœ… Data sent over networks can be encrypted ๐Ÿ”‘ using Transport Layer Security on a CDN - mitigating the risk of unsecured connections
By know you should see the performance and security benefits of CDNs ๐ŸŒ Some key questions remain ๐Ÿ‘€

1๏ธโƒฃ What is $FSLY offering?

2๏ธโƒฃ What is the size of the market?

3๏ธโƒฃ What is $FSLY moat?
1๏ธโƒฃ What is $FSLY offering?

๐ŸŽ CDN and load balancing solutions optimised for speed of delivery with a query speed in the USA of 33ms (versus 43ms for $NET)

๐Ÿ“บ Solutions specially made for image and video delivery and streaming
๐Ÿ”‘ Cloud security solutions for mitigating DDoS, malicious bots and a web application firewall (WAF)
2๏ธโƒฃ What is the size of the market?

๐Ÿ“Š CDN market stood at $ 12B in 2019 and is expected to reach $ 50B in 2024 - CAGR of 27% ๐Ÿ”ฅ

๐Ÿ“ˆ Growth is driven by the increase in mobile #data consumption, rise of #video entertainment live #streaming #ecommerce online #media #telemedecine
3๏ธโƒฃ What is $FSLY moat?

๐ŸŽ First of all, $FSLY is fast - really fast. It is able to provide a query speed of 33ms in the USA (AWS Cloudfront 33ms, Google Cloud CDN 31.5ms)

๐Ÿ’Ž $FSLY offers an uptime of 97% (AWS Cloudfront 96%, Google Cloud CDN 93%)
๐Ÿ›  Despite being a bit more complex than $NET, $FSLY solutions are hugely configurable and offers numerous low levels controls
$FSLY is operating in a market growing at 27% ๐Ÿ“ˆ over the next 5 years and is positioning itself as a leader for image and video delivery and streaming๐ŸŒ

It offers a solution that is more configurable ๐Ÿ›  while offering astonishing speed ๐ŸŽ and excellent uptime ๐Ÿ’Ž

Financials ๐Ÿ‘‡
๐Ÿ’ธ Revenue grew 62% YoY and reached $ 75m with a DBNER of 137% (up from 133% in prev Q.)

๐Ÿ”‘ Net Retention Rate at 138% up from 130% in prev Q.

โš™๏ธ GMs of 60% up from 55% in prev Y.

๐Ÿ’ฐ Current assets of $ 525m vs. Current Liab. of $ 38m
$FSLY financials do not offer too much cause for concern

๐Ÿ“‰ Operating expenses represent 80% of revenues (stable YoY) - Causing short term losses

๐Ÿ“ˆ 62% growth and outstanding Net Retention Rate - Creating a compelling long term story

Letโ€™s look into $FSLY last acquisition๐Ÿ‘‡
$FSLY bought Signal Sciences for $ 200m in cash and $ 575m in stock on Aug 27

๐ŸŒ This completes $FSLY Secure@Edge offering with improved API Protection, Rate Limiting, Bot Mitigation, ATO Protection
๐Ÿคบ Maintaining $FSLY cyber security offering while acquiring a $ 28mm business with 85% GMs and 42 new $ 100k/year+ customers
๐Ÿ‘‡ The Bottom Line ๐Ÿ‘‡

๐Ÿ“ˆ $FSLY is positioned in a FAST growing market - 27% over the next 5 YEARS โ€ผ๏ธ

๐Ÿ’Ž $FSLY is growing at 62% YoY - meaning it is stealing market share from its competitors (Akamaiโ€™s CDN business is growing at 13%)
๐Ÿ”ฅ $FSLY speed, reliability, solutions for image, video and streaming are unique and its huge configurability gives it an edge
๐Ÿ›ก With the acquisition of Signal Sciences, $FSLY is consolidating its security offering

๐ŸšจIts no a coincidence that $PINS #SHOP #TWTR #ETSY rely on $FSLY

โœ… We enter $FSLY with a full stake (100% of full potential position)
๐Ÿšจ $MELI is on our watchlist ๐Ÿ‘‰ Coming WEDNESDAY ๐Ÿšจ

๐Ÿ‘€ Following the TikTok feud, we are gathering pieces on the political risks of tech stocks - Hint us! ๐Ÿ‘€

โ€ผ๏ธ Please note that this is not a recommendation to buy - You are responsible for conducting your own research โ€ผ๏ธ
Hope you liked this thread!

โœ… For more content, follow us on Twitter

โœ… Want to get UNDER HYPED companies delivered straight to your inbox? Subscribe now!

getbenchmark.substack.com
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.

Sources

โœ‘ Investor presentation

โœ‘ Company website

โœ‘ CDNComparison

โœ‘ CDNPlanet
โœ‘ MarketsAndMarkets

โœ‘ MordoIntelligence

โœ‘ GlobalDots

โœ‘ Devopedia

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More from @GetBenchmarkCo

22 Sep
#Ecommerce ๐Ÿ› penetration reached 27% ๐Ÿ“ˆ in Q2 '20

This BOOSTED ๐Ÿ’ป ๐Ÿ“ฆ ๐ŸŒ

But who has ALSO benefited from the shift to this VIRTUAL WORLD โ‰๏ธ

๐Ÿ’ณ Payment & Financial Solutions ๐Ÿ’ฐ

Letโ€™s talk about ๐Ÿ”ฅ Image
was founded in 2006 by Arnout Schuijff and Pieter van der Does ๐Ÿ‘ฅ

Before starting Adyen, Pieter was the Chief Commerce Officer ๐Ÿ‘จโ€๐Ÿ’ผ at Bibit and Arnout was a Systems Architect ๐Ÿ‘จโ€๐Ÿ’ป

Fair to say, was founded by industry veterans โš™๏ธ
But what does do? Letโ€™s dive into payment solutions ๐Ÿ’ณ

Letโ€™s say you want to start selling the beautiful clothes ๐Ÿ‘š๐Ÿ‘• you design as a side project

First things first, you set up a website ๐Ÿ’ป and start accepting payments with Shopify Payments ๐Ÿ’ณ
Read 31 tweets
21 Sep
๐Ÿšจ DISRUPTION ALERT ๐Ÿšจ

This company has grown by 60 to 250% ๐Ÿš€ in the last 6 quarters ๐Ÿ”ฅ

It is DISRUPTING food chains and tastes on a GLOBAL level ๐ŸŒŽ

It is now targeting CHINA ๐Ÿ‡จ๐Ÿ‡ณ by opening a PRODUCTION facility ๐Ÿญ

Letโ€™s see if this is all HYPE or a potential MULTI BAGGER ๐Ÿ’ฐ
๐Ÿฅฉ Beyond Meat was founded in 2009 by Ethan Brown ๐Ÿ‘ค (current CEO) and started selling its plant-based meat alternatives in the USA in 2012 ๐Ÿ‡บ๐Ÿ‡ธ

๐Ÿ”‘ Key for Beyond Meat products is to emulate as closely as possible the structure, smell, taste and cooking of real meat ๐Ÿ€
๐Ÿ›’ only counted around 1.500 distribution points in the USA only in 2013

This has now reached over 112.000 outlets by Q2 โ€™20 on a GLOBAL scale ๐ŸŒŽ
Read 20 tweets
21 Sep
๐Ÿšจ CONVICTION LIST ๐Ÿšจ

๐Ÿ“ก Networks & Comms $API $BAND $FSLY $NET $RNG $TWLO
๐Ÿ›ก Cyber security $ZS $CRWD $OKTA
๐Ÿ› E-Commerce $SHOP $ETSY $SE $MELI $VRM $BABA $FTCH $WIX
๐Ÿฅ‘ Food $BYND $CELH $SHAK
๐Ÿข Entreprise $COUP $DOCU
๐Ÿ“Š Data $AYX $DDOG $ESTC $IDN $MDB
๐Ÿฉบ Health $LVGO $TDOC
๐Ÿ“บ Media $PINS $ROKU $TTD $APPS
๐Ÿฆ Finance $SQ $STNE $PAGS
๐Ÿ‘ค Gig economy $FVRR $UBER
๐Ÿ›’ Consumer Products $AAPL $PTON
Some other names we have picked up ๐Ÿ‘‡
$WKHS $OTRK $MGNI $MTCH $RDFN $SI $JD $NVCR $TEAMS $ADEY $MED $CVS $TGT $LMND $NIO $BYD $U

These names were given by YOU. A massive thank you for that ๐Ÿ™Œ

Of course, feel free to suggest NEW stocks ๐Ÿ“ˆ we should add to โ€œThe Listโ€ ๐Ÿ“ƒ
Read 5 tweets
20 Sep
is playing the long game - An unpopular opinion

It owns

๐Ÿ‡ท๐Ÿ‡บ 37% of Yandex Taxi
๐Ÿ‡ธ๐Ÿ‡ฌ 18% of Grab
๐Ÿ‡จ๐Ÿ‡ณ 15% of Didi
๐Ÿ‡ฆ๐Ÿ‡ช 100% of Careem

Becoming the "mobility holding" of the future ๐Ÿš•
Of course it is affected by #COVID

๐Ÿš• Bookings revenue down to $ 790m for Q2 '20 from $ 2.4B a year earlier

๐Ÿ” Delivery revenue up to $ 1.2B for Q2 '20 from $ 595m a year earlier
Some interesting reads

๐Ÿ“ฐ reuters.com/article/us-didโ€ฆ

๐Ÿ“ฐ techcrunch.com/2019/04/11/ubeโ€ฆ

๐Ÿ“บ
Read 4 tweets
17 Sep
๐Ÿš€ UNITY IPO ๐Ÿš€

The ENGINE behind 50% of games on #AppStore and #GooglePlayStore ๐Ÿ›

With a TAM of over $90B ๐Ÿ’ฐ 40% revenue growth ๐Ÿ“ˆ 79% gross margins ๐Ÿ’ต

Is this the next IPO to SKYROCKET ๐Ÿš€ when the BELL rings๐Ÿ”” ?

A SHORT thread โฌ‡๏ธ Image
Unity Software was founded in Denmark ๐Ÿ‡ฉ๐Ÿ‡ฐ in 2004 with the ambition to democratise ๐Ÿ’ต game development and 2D & 3D interactive content

The company is now headquartered in San Francisco ๐Ÿ‡บ๐Ÿ‡ธ and led by John Riccitiello since 2014, former CEO of
โœ… Unity enables developers to create๐Ÿง‘โ€๐ŸŽจ operateโš™๏ธ and monetise๐Ÿ’ต interactive & real-time 2D & 3D games on iOS๐Ÿ“ฑAndroid ๐Ÿค– Playstation ๐ŸŽฎ or Windows ๐Ÿ’ป

โœ… Its customers range from amateurs developing games in their garage ๐Ÿ˜ to the largest publishers like ๐Ÿš€
Read 27 tweets
16 Sep
๐Ÿšจ61% GROWTH ALERT ๐Ÿšจ

#Ecommerce ๐Ÿ› is GROWING by 20% in 2020 in this REGION ๐ŸŒŽ of 635m inhabitants

Overall #Ecommerce sales will reach $ 116B by 2023 ๐Ÿ“ˆ Coming from $ 70B in 2019

Here is a company that has many DETRACTORS โ˜ ๏ธ But is HARD to IGNORE ๐Ÿ‘‘

Here is an EASY thread ๐Ÿ‘‡
$MELI Mercado Libre was founded in 1999 by Marcos Galperin (current CEO) ๐Ÿ‘ค

It operates an online marketplace and auctions in 18 countries in LATAM ๐ŸŒŽ

$MELI also offers shipping solutions ๐Ÿšš for marketplace users, digital payments ๐Ÿฆ and advertising solutions ๐Ÿ“ฃ
Looking good? Well there is much more ๐Ÿ‘€

๐Ÿ› Mercado Libre - Marketplace

๐Ÿ’ป Mercado Shops - Online storefronts / website builder for sellers

๐Ÿ“ฃ Mercado Libre Publicidad - Advertising

๐Ÿ  Mercado Classificados - Real Estate and automotive
Read 32 tweets

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