DEF: Fastly's 2025 Annual Meeting: Stockholders to Vote on Director Elections, Auditor Ratification, and Executive Compensation

Fastly, Inc. is holding its 2025 annual meeting of stockholders virtually on June 11, 2025, to vote on key proposals including the election of directors, ratification of the independent auditor, and an advisory vote on executive compensation.

Summary

• Fastly, Inc. will hold its annual meeting of stockholders virtually on June 11, 2025.
• Stockholders will vote on the election of three Class III directors: Artur Bergman, Paula Loop, and Christopher B. Paisley, each for a term expiring in 2028.
• The meeting will also include a vote to ratify the selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the year ending December 31, 2025.
• An advisory vote will be conducted to approve the compensation of Fastly's named executive officers.
• The record date for determining stockholders eligible to vote is April 14, 2025.
• The Notice of Internet Availability of Proxy Materials was mailed on or about April 23, 2025.
• In 2024, Fastly reduced the revenue concentration of its top-ten customers from 40% to 32% while growing total revenue year-over-year.
• Total revenue for 2024 was $543.7 million, a 7% increase year-over-year.
• The U.S. GAAP gross margin was 54.4%, and the non-GAAP gross margin was 57.8% in 2024.
• The U.S. GAAP operating loss was $167.9 million, while the non-GAAP operating loss was $27.0 million in 2024.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there's revenue growth and improved gross margins, there are also increased net losses and demand headwinds. The company is taking steps to address these challenges, but the overall outlook is cautiously optimistic.

Positives

• Total revenue increased by 7% year-over-year to $543.7 million in 2024.
• U.S. GAAP gross margin improved from 52.6% to 54.4% in fiscal 2024.
• The company reduced its reliance on top customers, decreasing revenue concentration from 40% to 32% in 2024.
• The company introduced new products like Fastly Bot Management, DDoS Protection, AI Accelerator, and Object Storage to enhance its platform capabilities.
• The company is actively engaging with stockholders to address concerns about executive compensation and governance.
• The company has enhanced stock ownership guidelines for executives, requiring the CEO to hold 6x their base salary and other executives to hold 3x their base salary in company stock.

Negatives

• The company experienced demand headwinds from some of its largest customers in 2024.
• The U.S. GAAP operating loss was $167.9 million in 2024.
• The U.S. GAAP net loss increased to $158.1 million in 2024, compared to $133.1 million in 2023.
• The annual incentive (bonus) and PSUs were achieved at 25.0% of target based on the financial goals established at the beginning of 2024.
• The say-on-pay proposal received low stockholder support, with 51.6% of votes in favor of the executive compensation program.

Risks

• The company's ability to address defects, interruptions, outages, and delays in performance with its platform could impact results.
• Attracting new customers and increasing usage from existing customers is crucial for growth.
• Component delays, shortages, and price increases could affect the company's ability to deliver products.
• The company must respond to rapidly changing technology to remain competitive.
• General market, political, economic, and business conditions could impact the company's performance.

Future Outlook

The company is focused on building community among the builders and maintainers of a faster, safer, and more inclusive internet and continues to enhance its platforms ease of use by expanding the number of industry partners and open-source industry consortium participation.

Management Comments

• The company was challenged by demand headwinds at a small number of its largest customers and took appropriate measures to align its cost structure and go-to-market efforts to the changing environment.
• The company expanded its platform capabilities to meet expectations by continuing to invest in product innovation and feature velocity.
• The company simplified the new platform developer onboarding experience by introducing in-app purchases for Fastly DDoS Protection, Object Storage, and AI Accelerator to streamline and simplify its go-to-market.

Industry Context

Fastly operates in the competitive edge cloud platform market, where companies are increasingly seeking higher performance, best-in-class security, and low latency for their applications.

Comparison to Industry Standards

• The peer group used for compensation benchmarking includes companies like 8x8, Inc., JFrog Ltd., Alteryx, Rapid7, Inc., AppFolio, Inc., Semrush Holdings, Inc., BigCommerce Holdings, Inc., Smartsheet, Inc., BlackLine, Inc., Tenable Holdings, Inc., DigitalOcean Holdings, Inc., Varonis Systems, Inc., Everbridge, Inc., Yext, Inc., Five9 Inc., and Zuroa, Inc.
• The peer group had median trailing four-quarter revenues of approximately $545 million and a 30-day average market capitalization as of July 31, 2023 of approximately $2.9 billion compared to Fastly's trailing four-quarter revenues of $468 million and a 30-day average market capitalization of $2.2 billion.

Related Party Transactions

• The company employs Per Alexander Bergman, the brother of Chief Technology Officer Artur Bergman, and Angela Noell, the sister-in-law of Artur Bergman, with compensation exceeding $120,000 each.

Stakeholder Impact

• Stockholders will have the opportunity to vote on key decisions affecting the company's direction and governance.
• Executive compensation decisions are designed to align management's interests with those of stockholders.
• The company's performance impacts employees through compensation, benefits, and job security.
• Customers benefit from the company's investments in platform capabilities and product innovation.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will announce preliminary voting results at the annual meeting.
• Final voting results will be reported on a current report on Form 8-K within four business days after the annual meeting.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, directors, stockholders, governance, Fastly, compensation