Thread by @plantmath1

$FSLY Call

CEO: Despite reopening comps we expect continued growth in Q2.

Typically Q2 is flat from Q1 followed by growth into the second half of the year.

It is now possible to buy Fastly and SS in one contract reducing sales cycles.

(reuploaded, bad typo)

Highlights privacy as a focus of efforts, separate from security. Edge compute + security + privacy is the focus.

Several wins across different verticals fin services, a cryptocurrency platform, insurance technology company, etc. [didn't catch them all]

As we mentioned, CFO is stepping down after 5 years. He will remain as an advisor to Fastly following the transition.

Reviewing financials now. I won't retype these.

Contribution of SS has been consolidated into financials and operations. Expect to report consolidated revenue later in 2021.

Q&A: What are you looking for in the next CFO?

We have been very successful at recruiting C suite team members as people are excited to work at a leader in a new industry.

Looking for someone with experience at a much larger company.

Q: What did you see in your outlook to update guidance for the FY?

It starts with our business cycles. Large companies land in Q1 or Q2, by Q2 they are up and running and ready to go
We are seeing opportunities in greenshoot industries we didn't have in industries hurt by covid/

/ and we aren't seeing much loss from those that were winners. So except for a few industries with extraordinary usage in Q2 2020, we aren't seeing too much impact.

Now that we are into the year, we have more visibility through the sales cycle. In the beginning of the year, we like to be conservative because we can't see as well and can grow it over time.

Q: There is significant growth in 2nd half, why?

Like we said, there are many reasons, new adds, increased pipeline, etc. We have seen improved operational rigor with Brett [new CRO], we are seeing renewed and strong growth in channels.

Q: Confidence in C@E?

Compute remains strong in our view of the market. Ours is very differentiated in the market. It is scaled and worldwide for customers testing now. It is becoming important in buying decisions for the platform.

Its a combination of compute and security stories that are coming together for unique differentiation.

We are seeing that as our lead compared to other legacy players.

Q: Circle back to the guide, In past years, Q3/Q4 saw a 7-8% growth sequentially but this would mean 30% growth in Q4 if Q3 is 7-8%?

Both of those parameters are improving, so its not all one quarter but there will be much higher growth in the second half.

Q: SS integration

We have completely integrated the two companies. All sales members are now trained to sell our products together. On the other hand, we can use one product to get into an organization if that is what they need, and then introduce to the other businesses.

Q: Gross margin step down from Q4.

Few new investments at the beginning of this year. New investments in resiliency at PoP locations. Fairly normal in Q1 as we make annual investments. You will see that roll off in the later part of the year so GMs will ramp back up.

Signal Sciences will also improve gross margins as that becomes a more important part.

Q: How has CDN traffic overall grown?

Been growing steady, is an important business still and growing strong.

Signal Sciences was 10% [need to double check quote] and grew sequentially 15% QoQ. We think this is where the world is going and we have the best solution.

Still expecting SS to be in that 10% range. We are encouraging for cross selling and training for it.

Q: How much of the guide is considering sport events?

Its not an event in particular that drives revenue, what you see in the guide is additional revenue uptick from cross selling, etc.

Q2 will be the low point of growth for the foreseeable future.

If you adjust for TikTok and SS, organic growth estimate against the pandemic spike is 20% growth YoY.

[Interesting they provided this]

[Conversation about DBNER and NRR couldn't catch]
Q: Are there certain verticals you see working on C@E? When will it be large enough to disclose?

E-commerce, security, we mentioned the HUMAN win with C@E. We previously mentioned 2021 is the year of building and developing cases

Customers are writing code at our edge now, primarily in VCL, but they are soon able to write in many languages.

Q: M&A outlook?

We are thinking about it. We haven't been a company that grows with M&A so if you see anything it will be similar to SigSci. It was a very unique asset that we wanted. So if you see anything it will be something like this.

Closed with comments on Fastly's 10 year anniversary.

Call over/

That call felt A LOT different than the stock price. Mgmt seems upbeat. They are seeing success across different verticals. Looks like Q2 will be the low point and then continued growth moving forward.