Fastly (FSLY) risk factors, 2025 10-K

Risks Related to Our Business, Industry and Technology

1. 01The costs incurred in correcting any material defects, errors, or other performance problems in our platform may be substantial and could harm our business
2. 02If we are unable to attract new customers, in particular, enterprise customers, and to have existing enterprise customers continue and increase their use of our platform, our business will likely be harmed
3. 03usage, it can be easy for certain customers to quickly reallocate usage or switch from our platform to an alternative platform altogether. In addition, they may reduce or cease their use of our products at any time without penalty or termination charges, even after they have expanded usage in prior periods
4. 04We receive a substantial portion of our revenues from a limited number of customers from a limited number of industries, and the loss of, or a significant reduction in usage by, one or more of our major customers would result in lower revenues and could harm our business
5. 05Component delays, shortages or price increases could interrupt our ability to complete the construction of our servers to meet the usage needs of our customers. Our operating results could be materially harmed if we are unable to adequately manage our server needs
6. 06Our history of operating losses makes it difficult to evaluate our current business and prospects and may increase the risks associated with your investment
7. 07Certain privacy and data security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and Sensitive Information
8. 08If we fail to efficiently develop and sell new products and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements, or preferences, our products may become less competitive
9. 09If we fail to forecast our revenue accurately, or if we fail to manage our expenditures, our operating results could be adversely affected
10. 10Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform
11. 11The markets in which we participate are competitive, and if we do not compete effectively, our business will be harmed
12. 12If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, results of operations and financial condition may suffer
13. 13Acquisitions, strategic investments, partnerships, or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, and dilute stockholder value
14. 14We are, and may in the future be, involved in class-action lawsuits and other litigation matters that are expensive and time-consuming. If resolved adversely, lawsuits and other litigation matters could seriously harm our business
15. 15We may not be able to scale our business quickly enough to meet our customers’ growing needs. If we are not able to grow efficiently, our business could be harmed
16. 16support our growing customer base, including increasing our number of POPs around the world and investments in systems, training, and customer support
17. 17We may have insufficient transmission bandwidth and colocation space, which could result in disruptions to our platform and loss of revenue
18. 18The nature of our business exposes us to inherent liability risks
19. 19Our dedication to our values may negatively influence our financial results
20. 20Our growth depends in large part on the success of our partner relationships
21. 21We operate in an emerging and evolving market, which may develop more slowly or differently than we expect. If our market does not grow as we expect, or if we cannot expand our services to meet the demands of this market, our revenue may decline, or fail to grow, and we may incur operating losses
22. 22Usage of our platform accounts for substantially all of our revenue, and as a result, our operating results could suffer from a reduction in usage
23. 23In addition, because substantially all of our revenue from usage is recognized during the term of the relevant contract upon usage, downturns or upturns in sales contracts are not immediately reflected in full in our operating results
24. 24We expect fluctuations in our financial results and key metrics, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors, our stock price and the value of your investment could decline significantly
25. 25Our pricing models subject us to various challenges that could make it difficult for us to derive sufficient value from our customers, and we do not have sufficient history with our pricing models to accurately predict the optimal pricing necessary to attract new customers and retain existing customers
26. 26Our sales and onboarding cycles with customers can be long and unpredictable, and our sales and onboarding efforts require considerable time and expense
27. 27Given these factors, it is difficult to predict whether and when a customer will switch to our platform
28. 28If our platform does not achieve sufficient market acceptance, our financial results and competitive position will suffer
29. 29If our platform and any future enhancements do not achieve adequate acceptance in the market, or if products and technologies developed by others achieve greater acceptance in the market, our business could be harmed
30. 30We rely on third-party hosting providers that may be difficult to replace
31. 31Our business is exposed to risks associated with credit card and other online payment processing methods
32. 32If we do not or cannot maintain the compatibility of our platform with third-party applications that our customers use in their businesses, our business will be harmed
33. 33We provide service level commitments under our customer agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service, or face contract termination with refunds of prepaid amounts, which could harm our business
34. 34If we fail to offer high quality support, our business may be harmed
35. 35Scrutiny relating to environmental, social and governance factors may impose additional costs and expose us to new risks

Risks Related to Employees and Managing Our Growth

1. 36The failure to attract and retain qualified personnel could prevent us from executing our business strategy
2. 37We rely on the performance of highly skilled personnel, including our senior management and other key employees, and the loss or transition of one or more of such personnel, or of a significant number of our team members, could harm our business
3. 38Our past growth may not be indicative of our future growth and we may not be able to manage our growth effectively
4. 39If we cannot maintain our company culture as we grow, our success and our business may be harmed

Risks Related to Our Financial Position and Need for Additional Capital

1. 40Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all, and debt or equity issued to raise additional capital may reduce the value of our common stock
2. 41Seasonality may cause fluctuations in our sales and operating results
3. 42Our current operations are international in scope and we plan on further geographic expansion, creating a variety of operational challenges
4. 43If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected
5. 44Current and future indebtedness could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions
6. 45We may not be able to successfully manage the growth of our business if we are unable to improve our internal systems, processes and controls
7. 46Our financial results may be adversely affected by changes in accounting principles applicable to us

Risks Related to Laws, Regulations, and the Global Economy

1. 47Failure to comply with United States and foreign governmental laws and regulations could harm our business
2. 48Similar laws have been proposed in several other states and at the federal and local levels, and we expect more states to pass similar laws in the future, which could increase our compliance costs and adversely affect our business
3. 49We may at times fail (or be perceived to have failed) in our efforts to comply with our privacy and data security obligations. Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations
4. 50Activities of our customers or the content of their websites and other Internet properties may violate applicable laws and/or our terms of service and could subject us to lawsuits, regulatory enforcement actions, and/or liability in various jurisdictions
5. 51Our sales to highly regulated organizations and government entities are subject to a number of challenges and risks
6. 52The success of our business depends on customers’ continued and unimpeded access to our platform on the Internet
7. 53We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business
8. 54Changes in our effective tax rate or tax liability may harm our business
9. 55We could be required to collect additional sales taxes or be subject to other tax liabilities that may increase the costs our clients would have to pay for our offering and harm our business
10. 56Adverse tax laws or regulations could be enacted or existing laws could be applied to us, which could adversely affect our business and financial condition
11. 57Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
12. 58Our international operations may subject us to potential adverse tax consequences
13. 59We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate such controls
14. 60We are exposed to fluctuations in currency exchange rates
15. 61Unfavorable conditions in our industry or the global economy, rising inflation or reductions in information technology spending could harm our business

Risks Related to Intellectual Property

1. 62We could incur substantial costs in protecting or defending our intellectual property and proprietary rights, and any failure to adequately protect our rights could impair our competitive position and we may lose valuable assets, experience reduced revenue, and incur costly litigation to protect our rights
2. 63Elements of our platform and our products use open source software, which may restrict the functionality of our platform and our products, or require that we release the source code of certain products subject to those licenses
3. 64Provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses

Risks Related to Ownership of Our Common Stock

1. 65Our stock price may be volatile, and the value of our common stock may decline
2. 66We may not have the ability to raise the funds necessary to repay or settle conversions of the Notes in whole or in part in cash or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes
3. 67Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock
4. 68Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt
5. 69Regulatory actions and other events may adversely affect the trading price and liquidity of the Notes
6. 70The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results
7. 71Future sales and issuances of our capital stock or rights to purchase capital stock could result in dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline
8. 72Future sales of our common stock in the public market could cause the market price of our common stock to decline
9. 73If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our common stock price and trading volume could decline
10. 74We do not intend to pay dividends for the foreseeable future
11. 75We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
12. 76Anti-takeover provisions in our charter documents, the indenture governing the Notes, and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors or management and limit the market price of our common stock
13. 77we repurchase the Notes, increase the conversion rate, or both, which could make it costlier for a potential acquirer to engage in such takeover. Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors