Q3 2021 Fastly Inc Earnings Call
Good evening My name is Christian and I'll be your conference operator today.
This time I'd like to welcome everyone to the <unk> third quarter 2021 earnings conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there'll be a question and answer session.
If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
And if you'd like to withdraw your question. Please press star one again.
As projected or implied during the call.
Please take a look at our filing with the SEC and our third quarter 2021 shareholder letter for a discussion of the factors that could cause our results to differ.
Also note that the forward looking statements on this call are based on information available to us as of today's date.
We disclaim any obligation to update any forward looking statements, except as required by law.
Also during this call we will discuss certain non-GAAP financial measures.
Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website.
These non-GAAP measures are not intended to be a substitute for our GAAP results.
Finally, this call is being webcast and will be archived on our website shortly afterwards.
With that I'll turn the call over to Joshua.
Thanks, Stephanie.
Hi, everyone and thanks for joining us today.
Youre welcome to wrong.
<unk> been on board since August and I can truly say it has hit the ground running we're thrilled to have him on board.
I hope you've all had a chance to read this quarter shareholder letter.
Before we jump into our results for the quarter I want to take a step back and discuss where the business is today in the context of our long term goals.
With so many trends affecting fastly in recent quarters, we thought it would be helpful to refresh everyone on the big picture, we have faced in unique tailwind and challenges and navigated ever changing market conditions over the past two years. So our trajectory has not been linear.
Today, though we are extremely confident that our edge cloud network is going to be the future of how content is created secured and delivered on the internet.
Our computed edge platform continues to provide mission critical stability and support for the company's fueling our digital lives, including news E Commerce Entertainment and many more verticals for billions of users globally.
We continue to invest against these opportunities and believe that successful execution will lead to a $1 billion business by 2025.
$1 billion in revenue by 2025 will be one of our primary business goals as we head into our next phase of growth.
With our new CRO, Brett Shirk now fully on board, we are aggressively accelerating our customer acquisition through clarity of direction accountability and unrelenting focus to.
To drive success, we have defined three key priorities and outlines additional key goals first increase our edge computing platform usage by 50 X from current levels by the end of 2022.
Reduce friction for developer led enterprise adoption and secure 100000 enterprise developers on our platform by 2023 and third Tenex revenue for our security business by 2025.
We believe that the market is shifting as enterprise developers are increasingly playing a critical role delivering always on instant experiences with security and privacy embedded into all aspects of the user experience.
During the quarter, we reached an important milestone for processing over a trillion requests on compute at edge, but this is just the start and we will continue to invest in new products and capabilities within our platform to win over developers.
In order to remove barriers and accelerate adoption for enterprise developers, we introduced the start of a much broader incentives and brand programs. We're offering customers that are willing to build an computed edge nearly $1 million in credits. We also launched our fully functional trial version of compute at edge.
We know from our self service experience that rapid developer success and self reinforcing positive experiences are critical to driving enterprise wide adoption.
Customers and developers can now explore and experiment on compute at edge.
Alongside delivery of compute we want to accelerate the success of our security led go to market motion.
The strong pipeline of new products that we will introduce in the coming quarters will further fuel that strategy and lead to further growth from new and existing customers.
Moving forward, we are focused on execution, bringing lasting growth to our business and delivering the value to our shareholders that we outlined from the very beginning.
Now that you have the context for our path forward, Let me walk you through our third quarter results.
Following the outage in Q2 and over the course of Q3, our top customers returned traffic and continue to ramp following significant stability and resiliency work for our infrastructure and engineering teams.
And alongside this return we successfully executed against our go to market motion and had the largest organic quarter over quarter increase in both enterprise and total customers since IPO.
We saw great traction and edge computing and security over the quarter with broader customer adoption across all geographies and industries. They are innovative use of our security edge computing platform is defining the future I'd like to highlight three of our customers edge mesh and online E Commerce acceleration company rewrote their e-commerce acceleration stack.
Onto computed edge and saw five ex performance improvement.
Our card a Japanese consumer to consumer company Leverages computed edge to pre process data from their iOS apps before sending it onto their central warehouse and wed flow the leading visual development platform for web sites chose to double down on Fastly security offerings through the next phase of their growth.
I would encourage you to read our shareholder letter, where we outline additional exciting customer use cases.
We know there's more work to be done and we are confident in our ability to continue to execute against the plan we have laid out.
Lastly, I am thrilled to welcome Vanessa Smith, and Richard Daniels to our board of directors, they bring fast experienced across security healthcare and digital transformation, which makes them extraordinarily qualified to help us accelerate our leadership in edge computing and security.
I'd also like to thank Kelly Wright, and Sunil Dhaliwal for their incredible work.
With that I'll turn it over to Ron to go over the financial results for the quarter.
Thank you Joshua and good afternoon, everyone. It's great to be on board and I look forward to continuing to build relationships with each of you on the call today and the first couple of months I've had the opportunity to observe listen and learn with this talented team.
This has only reinforced my excitement for pathway potential it is clear that digital transformation is here to stay.
As I get into the numbers I want to remind everyone that the contribution of signal Sciences has been consolidated into our third quarter financial results as well as our key metrics.
In Q3, we generated $87 million in revenue net of 900000 deferred revenue write down associated with the acquisition of signal sciences, representing 23% year over year topline growth.
In Q3, our NR was 112% up compared to 93% in the prior quarter.
Our LTM <unk> remained strong at 114% and our dollar based net expansion rate was 118%.
Our GAAP gross margin was 52, 4% for the quarter compared to 58, 5% in the same quarter a year ago.
Our non-GAAP gross margin, which excludes stock based compensation and intangible amortization expenses was 57, 5% for the quarter compared to 59, 8% in the same quarter last year.
This decline in non-GAAP gross margin, primarily reflects the return to traditional seasonal usage patterns as compared to the increased traffic we experienced in the prior year due to the onset of the Covid pandemic, which favorably impacted gross margins in 2020.
As we have previously outlined we have a tremendous opportunity to invest in our edge cloud network and plan to do so to position fastly for future growth.
Our operating expenses were down $3 8 million largely due to increased capitalization of internal use software.
The amount of capitalization of internal use software fluctuate on a quarter to quarter basis based on the stage of development of certain projects.
Turning to the balance sheet, we ended the quarter with $1 1 billion in cash restricted cash and investments, we remain well capitalized to invest in the future growth of Fastly.
Now onto guidance.
For the fourth quarter, we expect revenue in the range of $90 million to $93 million.
Non-GAAP operating loss in the range of $18 million to $15 million.
And non-GAAP net loss per share in the range of 19 to 16.
For the full year 2021, we have raised the low end and the midpoint of guidance to align with our Q4 guidance outlook and expect revenue in the range of $347 million to $350 million.
We expect non-GAAP operating loss in the range of $63 million to $60 million and non-GAAP net loss per share in the range of 58 to 55.
We will invest in our networks given the large opportunity in front of US we expect our gross margin to be relatively flat to down slightly in the short to medium term and capital expenditures as a percentage of revenue to be at the high end of our previously disclosed range of 12% to 14% for the full year.
As Josh will describe we have seen some ups and downs over the past few quarters due to both challenges and some big successes, but as I stand here the new person in the room I am extremely confident in our ability to execute and believe we are well positioned to achieve the goals. We have laid out for you today.
With that I will turn the call back over to the operator to take your questions.
Thank you and just as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad. Our first question is from will power with Baird. Your line is open.
Will power with Baird. Your line is open. Please go ahead.
Oh, great. Thanks for thanks for taking my question good afternoon.
Yeah, Let me I guess.
Try to sneak in a couple of here.
Ron I guess on the guidance commentary would love to get some perspective on the drivers of the year.
The flat to slightly down gross margins and the higher capex. It sounds like that's probably success based driven or driven by the growth opportunities, but would love to better understand the key drivers there and then I have a second question.
Okay.
Gross margin I think the decline in gross margin that we saw primarily reflects in the current quarter of a year over basis to return to the traditional seasonal usage patterns and compare it to the increased traffic we experienced in the prior year to the onset of the Covid pandemic, which favorably impacted gross margins.
In 2020, I think as we talked about previously we see a great.
Great.
In the edge cloud network this year, and we intend to do that.
To be well positioned for growth.
And we're continuously leveraging our investments in infrastructure capacity and customer mix.
To build a long tradition of gross margin accretion with products like security and edge, but we intend to invest in this structure would you expect.
You'll recall that going into Q4, what are the drivers as particularly expand internationally a lot of that capacity sites in bandwidth needs to be brought online in in place ahead of traffic and so you do see a little bit of that buy ahead that is affecting our gross margins.
We view this investment.
Okay, and then maybe just to follow up on the success Youre seeing in compute at edge I mean, I think you referenced the trillion requests.
You know it seems like you're saying you alluded to some of the early customer use cases.
Is there any way to kind of frame revenue contribution or growth rate.
From that segment, where we sit today, either quantitatively or qualitatively I guess it will be the same question for security just trying to better understand kind of the growth rates in and magnitude of those key pieces of the business.
So I think security is probably the first one to talk about because it's been it's been out there had been a big contributor.
Since the acquisition of signal Sciences back in Q4 of 2020.
In Q3 signals sciences, forgetting about 11% of our revenues.
It's up from 8% in <unk>.
Q4 of last year, which was the first combined quarter and I think importantly, kind of look at the growth rates, we're seeing on a quarter to quarter basis, we're seeing growth at 12%. So we're seeing healthy growth and I think what we see is it's important to customers.
And there is as we cross sell and up sell that is an opportunity that's going to drive that growth.
Let's see it contributing a bigger piece.
Our revenues over time I think on the computer.
Still the nascent it's early days and is not not a material amount of revenue thus far but we believe it has great.
Great opportunity as we attract developers to add more applications to the edge compute network.
That's great. Thank you.
Thanks Bill.
Our next question is from James Fish with Piper Sandler Your line is open.
Hey, guys. Thanks for the questions here I guess, maybe starting on the signal Sciences side I guess, how is the integration of signal sciences and fastest growing you know the security at the edge now generally available or what's left to integrate still to make it more broadly available.
And I guess, why the confidence and going up to Pemex here are reaching about $400 million in four years, because really when you think about it very few companies have actually been able to have that growth rate in security and usually they are in the big end coin or network markets compare to where you're at today. So I'm trying to understand also how much of it.
That is going to come from inorganic opportunities as well as where these new products are being launched.
Sure Hey, Jim It's Joshua here I think you know, let me start on the <unk> integration side. So.
It's been three quarters as Ron talked about earlier, we had really strong success. We have launched the first phase of having fixed I'd be available.
And that and that has gone well and we're going to continue to invest there. We haven't fully completed that plan. We're looking at are targeted in the Q2 range to have that ready in and out.
In broader availability I think the important aspect when you actually look at signal Sciences, one of the things that attracted us uncertainty attracted our customers to that platform was the variability of implementation.
Option. So this can be implemented on premise it can be implemented in the cloud it can be implemented through a variety of ways.
The success that we've seen in that revenue growth and what we do.
You can tell from our from our ambitious goals speak to the continued broad adoption. We think that that's one of the assets. So it's not we're not stalled here, we're seeing that growth, we definitely want to get something at the.
The edge that is in general availability, but it also has to meet the requirements that we have which is massive scale and we need to make sure that it fits in with the portfolio. So I would tell you. There is some work to do we're making good progress.
I wish it would be faster, but we're seeing that progress I think in terms of the overall arching goal and if we step back here a little bit.
We see them, we see ourselves being at the start of this journey. So we don't talk about 400 odd enterprise customers. So can you just go and look at our largest direct competitor. They have eight to 10000, but if you cast your eye over the legacy software and appliance vendors you're talking about companies that have 2030 40 50.
Enterprise customers. So when we look at the position that we're in today and we look at the trends, which are the all of the security.
<unk> appliances legacy infrastructure is all disappearing and it's all coming to the edge clouds, we feel extremely confident we are in a the dawning of this new euro where every appliance. We believe over the next few years is going to be replaced we believe that this idea of having this proliferation of many appliances.
All with specialized workloads is something our customers don't want so we are looking at billions of dollars in revenue that we feel is up for grabs and when we look at the Tenex target. We certainly feel like that's a you know that's ambitious but it's something that we feel we're well situated for it. This is all coming to the cloud.
Alright, and if I can sneak a sneak another one in there doing.
Doing what they've been talking about computer that you know you brought up. The example, with Maccario pre processing the data via computer that but then it gets sent onto a central data warehouse you guys feel like you need to do more on the storage side at the edge like some of your competitors have done in the edge space or even kind of a centralized storage environment to really bring.
On the full developer suite.
Our perspective on storage hasn't hasn't changed which is that our customers are looking for us to provide that high value services.
Manipulation of data in them.
And ensuring and adding value to that data and they want us to offload their origins from as much work as possible you know we've got these amazing partnerships with them.
The large clouds and other companies that are really really good at storage and.
And we feel like those we see an ecosystem of partnerships here. So I think the answer is we are going to continue to invest in the <unk>.
And ensuring that we have the data that our customers need us to have but we also acknowledge and recognize that there's a place for the central clouds here and we have a different perspective in terms of.
Looking at it as an ecosystem, it's how we've looked at our entire business. If you think about all the partnerships that we have across logging across data across.
The broader portfolio that we're doing in compute we believe in an ecosystem. We do not believe in a walled garden and I think that approach you'll see also on data. So we have a job to do which is to make sure that we have the content that our customers want and the origins are getting a few requests as possible. We are best in the world that we intend to keep same best in the world at that.
Thanks, Josh appreciate the question Jim Thank you.
Our next question is from silver Rigby with RBC capital markets. Your line is open.
Hey, guys. Thanks for taking the question I wanted to start on this promotion you announced for compute at edge and at first I know we're in early days here, but can you give us a sense on what youre seeing in terms of adoption or interest or maybe your expectations there.
And then second any any idea you can give us on how we should be thinking about this in terms of revenue impact over the next 12 months.
Sure Hey, Phil It's Joshua here I think on the computer and motion.
We have a long our entire company's experiences based on this idea that developers at time of inspiration can use our products try our product and they can have this sort of self referential and self reinforcing process where they.
They don't have to go through an arduous enterprise sales cycle. They don't have to go through all these hoops. They just get to try it and that's been the case for our delivery product and the first generation of our compute product is now true for the second generation of our compute product and what we know is that that seed the future of innovation and so I would tell you that the motion that we announced recently.
<unk> be around come try it.
Which is.
A really big step for us.
The continued investment in the recipes and the additional sort of use cases. This is just the start you're going to see more and more as we build out these ecosystems in terms about seeding that developer mindset and showing the path for how compute is going to change the world and so I would tell you that.
You know that Moshe.
We've been doing this in our.
In our own little ecosystem, that's changed we believe that the next year is a very important year in terms of getting that enterprise traction enterprise developed traction you saw set some ambitious goals of 800000 enterprise developers by by 2023 and again the enterprise developers that are really important to the work that we do so I would tell you that.
We are unleashing that capability and it's something that our customers have been demanding it's something we're truly excited about and we're certainly going to be reporting back to you and others on how our on how we're progressing I'll hand, it off to run on the revenue side, yes.
From a downside perspective, there is no. These are new things that people are going to be trying that they wouldn't have necessarily launch into the network has quickly. So ultimately as they are more and more experimentation and we seem to get built out they will bring them into production and so we believe this will add traffic this will add applications to the edge.
Over the course of the year.
And it's not it's really going to be additive or incremental to revenue as these things.
Get deployed.
From a comp perspective, I think you have the cost of actually supporting this really nominal over that period of time.
Got it that's super helpful guys and then.
Just you talked about you know circling back on kind of progress product progress I guess on the on these three goals.
What should we expect in terms of future disclosures or milestones to kind of track how you're executing there.
Yes, I mean, we set out some pretty clear milestones. Obviously, you know a couple of them we already have been.
Reported revenue growth of course, and security I think we're looking to formalize that in terms of what we've already done with signal sciences formalize that into a into a cadence that we think is appropriate obviously with the new goal around new public school today around going from 1% to 50 trillion requests on the platform and getting to a 100.
Enterprise developers will be giving you a regular updated cadence on those as well and we didn't get to this position in our business by not setting audacious goals. We've always set our important goals for the business. We think we're at a stage where it'd be really helpful to give a little bit more visibility and be more public with them. That's a decision that we made and we will be updating.
You and others regularly on that progress.
Got it thanks, everyone.
I appreciate it thanks Bill.
Yeah.
Our next question is from <unk> with Bank of America. Your line is open.
Hi, guys.
I wanted to ask about gross margin you.
You said in the in the press release that margins are going to be flat.
And if I understand.
Your recent acquisition the margins are higher so does it mean that your core business, there is margin pressure or any pricing pressure.
Yes. So I think there are two drivers I think as.
As you know the acquisition the Sigma Sciences product does have a higher gross margin.
Some of that is mitigated a little bit by purchase price adjustments that tend to.
It's pretty de Minimis as you go into 2022, what's largely offset that has been.
Aren't desperate and get the edge cloud network, both the bandwidth.
And in infrastructure to support the growth that we've seen.
New customers and to be prepared for additional growth going forward.
And as I indicated, particularly as we're looking at a global expansion a lot of those costs in the international markets or cost that you incur before the traffic.
Yes, so that's been the bigger driver I think from a price perspective, while there are price declines we've actually seen a deceleration in the rate of price declines in 2021.
So I think from that perspective.
We feel that its not really pricing as much as investments you know there is this big year over year comparison, where because of the COVID-19 pandemic and the very quick spike in traffic we saw exceptionally.
Good increases in our gross margin in 2020.
And what we're seeing this year is kind of returning to where we were before as indefinite offset some of the benefits from the signal sciences are higher gross margins.
I think as you look at the medium to long term as we grow the security business as we spoke about earlier grow other products are computed edge applications that continue to add and accelerate enterprise customers. Those are things that will be accretive to gross margins over the long term, but to bring those customers on we need to have.
Mobile robust network.
Got it thank you.
Thanks, Tom.
Our next question is from Frank Louthan with Raymond James Your line is open.
Great. Thank you, what's the pace of new customer acquisitions, we can expect going forward.
And give us an idea of what sort of percentage of sales that you have that comes from existing customers and then I've got a follow up.
Sure.
From a customer acquisition perspective.
<unk> came into the role of Chief revenue officer about six months ago, and he's been making some profound and important changes in that organization.
Historically, you can see the trend I think over the medium and long term, we expect that trend to uptick now is it going to be linear it won't be right. If you look at how we count for example, enterprise customer growth. It's a backward looking metric over looking back in time, and adding up that revenue. So I would say over the short term.
I think we will continue to see progress, but it won't necessarily be linear, but our expectation is that in the medium and long term. We will continue to see that growth as threat transformed that organization. We're already seeing that obviously this quarter showed some real strength on the enterprise count number and that is not surprising you know it it it sort of times.
When he is kind of what you've done and how we'd come in and he said he's a real hard nosed sort of traditional.
Sales leader, who has brought a tremendous amount of discipline now with that discipline comes change and with change you have to look at that change play through you have to let those players get on the fielding slack can play the game. So I think we're going to really see in Q2 and beyond we will see that consistent steady growth. This is part of the transformation. We're in and you know those.
Speak to to real progress at this time.
In terms of what percentage of sales from existing customers I don't think that's something that we.
We haven't disclosed, but we haven't disclosed that.
We do focus on the new customers is kind of the metric of how we're adding to that base.
Okay.
Okay, Great and then quick follow up when Youre, winning computed edge customers, who are you competing with.
Me and seeing out there in the market and where does this traffic coming from.
There's a lot of the computed edge a lot of compute at edge use cases, new use cases, if you think about what we shared in the shareholder letter.
And these are these are use cases that traditionally were done in the central cloud or the central data Center. These are things that are optimized and certainly made much faster and more effective at the edge and so and because of the capabilities that we have in the enterprise so far exceed anyone else to the table to play at scale.
And the sophistication. This isn't this isn't a takeaway game I mean, all of our major competitors are.
Certainly competitor in the enterprise does not.
<unk> does not have a computed edge offerings that we feel is competitive and so most of these use cases are impossible to do other than on hours on our on our solution.
This is a lot of new use cases, and as Ron said I think that's really encouraging for us I think that's something that we.
We see as a strong differentiator do you see the progress that we've made in for example, the Forrester report that came out recently it really speaks to the core differentiation and the enterprise readiness of our product, particularly around the things that the enterprise tiers about like security. So novel use cases for the most part.
Alright, great. Thank you very much.
Thanks, Brian.
Our next question is from Rudy Kessinger with D. A Davidson your line is open.
Hey, guys. Thanks for taking my questions.
Well, let's start with the customers that had taken a traffic away and then I read in the letter that they've all come.
Come back I guess.
Any more details you can share on that just have all of them come back just to what extent has that brought their traffic back when do you expect them to kind of be back at the run rate that they were prior to when they turned it off et cetera that kind of stuff yes.
So I think as we.
We've set a top customer did return traffic return to traffic. They do continue to ramp I think given our larger customers.
When they come back typically ramp their traffic back over time.
Don.
Don't have a specific timeline, but they are back.
And that will increase over time.
Got it and then.
1 billion revenue target by 2025.
That kind of assumes a 30%.
Revenue CAGR.
You know the Q4 guide implies about 11% growth year over year at the midpoint. So I guess that 1 billion target against should we think of that as an organic target or should we assume that includes maybe some M&A and then just how quickly do you think you can get back up to kind of that 30% ish growth range.
One thing I would add I think as we look at kind of that net growth rate. As you know 2020 was sort of an outsized growth rate. So some of the comps.
Do tend to negatively impact our growth rates on a year over year basis versus 2020. If you do look at just kind of the existing growth rate going back to 2019.
That CAGR is closer to that 30% kind of in line with kind of that ramp to get there.
So I think that's one thing to keep in mind that you can do it.
And then really it's Joshua here on the inorganic versus organic side I think we're looking at this and looking at the market opportunity right. So we're stepping back over this long horizon. Thanks.
Does the market what are the what's the what's the size of this market opportunity and how quickly can we grow I don't think we rule in or out M&A in general what you saw is very opportunistic and very thoughtful at the same time when it came to augmenting our security and I think we will continue to do so if the opportunity presents itself, but this is really a.
How would that be.
Rentable transformation, that's occurring in spend there.
The number of dollars that are being thrown up.
From traditional vendors, who are not meeting the needs who are locking people into solutions that worked in the two thousands and certainly don't work today is unprecedented I would say where we're at this incredible inflection point so.
Regardless of sort of how exactly.
Exactly how it's achieved I think right now we firmly believe that growth is there organic or inorganic and we will certainly be pursuing what's in the best interest of customers, but I don't think.
I don't think today, we have significant plans.
On the inorganic side.
Got it great. Thanks for taking my questions.
I'm sorry.
Our next question is from Tim Horan with Oppenheimer. Your line is open.
Thanks, guys.
Maybe just talk about the overall product offering and go to market.
Are you thinking this is going to be like.
A bundled strategy where customers come in and they start using more compute at edge and the security is easy to add on and website acceleration and.
Developers almost become your go to market strategy or.
Just any thoughts about how you envision this playing out both on the product and the go to market.
Yes, Tim its a great question I think it's great to have 10 years of history here, where we can look back and just see what works and when you look at the 400 plus enterprise customers that we have most of them have gained the same way which is.
There is this dual motion, which we talked about at the IPO, which stays at central today to our thesis as ever which is.
Developers at the moment of inspiration are able to play build.
Dream with Fastly and that's with fast that compute that's what's asked me on the delivery side Thats exactly on the security side and they are solving problems, they're not they're not out looking for for Fastly and they're out there trying to solve problems and that's where we come in and we come in at moments of inspiration at two a M and we're.
Built for them, we work the way they want to work we give them control. So that's the first element to the motion and if you look at what's happening the enterprise motion, which has to come on top of that because we are so central where so core to these to these organizations, but we do need a senior executives often.
To come into this process that is a top down process that need to combine with the bottoms up process. So our go to market is really different than a lot of other companies, who either have one or the other there aren't a lot of companies that have both Andy and Matt talked down motion, what you see as important as people are out solving a problem and so what youre going to see from us and what you will.
Continued where you have seen from US we'll continue to see from us.
Putting this in the perspective of here's a problem and we solve it.
So you see that from some of the use cases that we talked about you need preprocessing at the edge great episode, because you want it to be passed do you want to send less data you want to make smarter decisions great. That's a problem Fastly salt and then we get into this really virtuous cycle this flywheel where customers come in.
One of the things that experiences are world class support of all of the work that we do to to work with that customer. They trust us they start coding on US and then the circle loops back and if you look at the circle with some of our largest customers. There are hundreds of developers who are now in that loop for an individual customer and that's the loop that really leads to the.
<unk> term success, and so I think no.
To market motion for us a slightly unique something that breadth and that.
Our entire team.
It's working and continuing to experiment and how we tightened that loop, how do we get it faster, but we're seeing some really encouraging numbers and so I would say the pillars are delivery compute security and it depends on what problem you're going to solve many of our customers have to solve them all at the same time.
And that's what makes our solution you need and to be clear I guess 10 services leverage one infrastructure fabric, primarily at this point or where are you with that and then secondly can developers kind of access all of these products off of one platform.
So.
Absolutely one one network every every server does everything and that's a huge asset to us and something that has differentiated us from the start and end.
Yeah is that it's a fully integrated experience in that and that is very important to our customers.
Thank you.
Thanks.
Our next question is from Jonathan Ho with William Blair. Your line is open.
Hi. Thank you. This is John watermark for Jonathan Thanks for taking my questions.
Just a question on your perspective on that.
COVID-19 roll off.
It won't affect us.
The COVID-19.
What can you talk about your expectations for the normalization of activities now versus where you think it might be.
Toby cause us to change the way, we do things can you talk a little bit about your some of your assumptions.
<unk>.
The end user.
Activity and such.
Sure Yeah.
We've said over.
Over the last couple of earnings calls that we are predicting the world's getting back to normal and that's what we're seeing you know I'm in a room with Ron today, which feels like it's back to normal at nice that it's nice to be in the same room and I think a lot of people are getting back to normal. However, the processes that kicked off during COVID-19 the digital transformation the drive to do things.
Differently, none of that has abated and I think we are at a new normal and we see that with our customers and we see that with the pace of their innovation. So I believe we are not predicting that consumer behaviors.
Which obviously have a large impact to us have any.
Barry Asian other than traditional seasonal seasonality going forward, we're not we're not predicting any more lockdowns, we're not predicting anything.
That would be outside the normal course of business or normal seasonality. So that none of that is baked into how we're looking at the future. It's generally back to normal.
And it's a new normal, but it's generally back to school.
Okay. Thank you and last question.
You mentioned.
In forthcoming quarters, you'll be talking about roadmap of new products.
The press release.
Are you at Liberty to tell us.
What areas might be more focused security delivery versus compute where do you think it'll be even hand it across the board.
Yes.
I think that for.
For US there is development going on in all areas I think the most.
I think the ones that will probably have to attract the most attention around the security and the compute side and Youre absolutely right. We are we have a we have a a nice pipeline. We have a lot of work that's come out of the brilliant engineers that we brought in from signal Sciences that will augment for example, the security platform. So.
There's a lot coming you know we're not we're not at liberty to disclose them until they come out, but it's something that our customers.
<unk> are asking us to not to take the leadership position that we're in and do even more one of our commitments to our customers, we're going to keep the modern and the security space the world changes all.
All the time, so I do think security and compute are the two areas, where you will continue to see.
To see innovation, because you actually saw.
A number of things over the last six months on that as well.
Alright. Thank you very much. Thank you so much.
I'm showing we have no further questions at this time, Mr. <unk> I'll turn the call back over to you.
Thank you.
Before we sign off I want to thank our employees, our customers our partners and our investors.
We remain as committed as ever to fueling and securing digital experiences.
And moving forward, we remain focused on execution, bringing.
Bringing lasting growth to our business and delivering the value to our shareholders that we outlined from the very beginning as we continue to execute against our long standing goal of being $1 billion business in 2025.
We look forward to connecting with many of you.
Hope to see many of you at the upcoming Needham RBC and Raymond James Raymond James conferences. Thank you.
Ladies and gentlemen. This concludes today's conference call you may now disconnect.
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