Fastly (FSLY) Intro

Hi all,

I wanted to bring forth a recently-IPO’d cloud computing provider to the board. Bert just wrote an interesting article:… that led me to dig into it myself. I haven’t seen it brought here before- if it has, my apologies and feel free to ignore.

Fastly is using Edge Computing to reduce customer latency on high-demand applications, streaming video, or any application or site. Edge computing at its simplest is the concept of bringing the computing geographically closer to the customer. If Computer A asks something from Computer B which is a continent away, it takes some time to come back with the answer. An ‘edge location’ is a cache of information much closer to Computer A, hence the reduction in latency. LIke TWLO and AYX, this is another developer-focused company.

Some current customers include: New York Times, BuzzFeed, GitHub, Spotify, and TicketMaster.

2017 to 2018 revenue increase was ~38.5%
Dollar based retention rate is ~130%
Total Customer Growth YoY was 10%
Customer Growth for those spending over $100K was 33%
Gross Margins are at 56%, which is below some of the SaaS companies we invest it, but remember this is not a purely SaaS company; there are infrastructure costs to caching capabilities around the world.

This is my first time bringing forth a stock here, I would love as much constructive criticism as the board can offer. Learning from you all has been a pleasure.



I really don’t see much, if anything, that distinguishes Fastly from Akamai or any of its many competitors in the CDN space. One big problem with CDNs is that they routinely serve up malicious ads as part of reputable web sites. If FSLY was even talking about solving that problem, they might pique my interest. Bert mentions bot detection and DDoS protection as differentiators; Akamai already does that as well.


This looks like a niche product suited for sites that stream content or need to be updated/purged frequently and quickly. If you just have a static page with infrequent updates, then Amazon S3/CDN will do the job just fine. Judging from the reddit discussion Bert linked to, it appears Fastly is more expensive.