Fastly Announces Second Quarter 2024 Financial Results

August 7, 2024

Fastly, Inc. (NYSE: FSLY), a leader in global edge cloud platforms, today announced financial results for its second quarter ended June 30, 2024.

“We continued to drive customer acquisition in the second quarter, achieving 4% sequential growth in Enterprise customer count,” said Todd Nightingale, CEO of Fastly. “This, along with the acceleration of our go-to-market motions, contributed to revenue growth above the midpoint of our guidance.”

“However, we are experiencing demand challenges with some of our largest customers, and we are taking measures to align our cost structure accordingly,” continued Nightingale. “This change will enable focused investment in edge cloud innovation and continued go-to-market transformation.”

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

 

$

132,371

 

 

$

122,831

 

 

$

265,891

 

 

$

240,395

 

Gross margin

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

55.1

%

 

 

52.3

%

 

 

55.0

%

 

 

51.8

%

Non-GAAP gross margin

 

 

58.5

%

 

 

56.6

%

 

 

58.6

%

 

 

56.1

%

Operating loss

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(46,734

)

 

$

(49,827

)

 

$

(92,994

)

 

$

(97,102

)

Non-GAAP operating loss

 

$

(12,673

)

 

$

(7,785

)

 

$

(22,337

)

 

$

(21,859

)

Net loss per share

 

 

 

 

 

 

 

 

GAAP net loss per common share—basic and diluted

 

$

(0.32

)

 

$

(0.08

)

 

$

(0.64

)

 

$

(0.44

)

Non-GAAP net loss per common share—basic and diluted

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.12

)

 

$

(0.12

)

For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this press release.

Second Quarter 2024 Financial Summary

  • Total revenue of $132.4 million, representing 8% year-over-year growth. Network services revenue of $104.2 million, representing 6% year-over-year growth. Security revenue of $25.4 million, representing 13% year-over-year growth. Network Services include solutions designed to improve performance of websites, apps, APIs, and digital media. Security includes products designed to protect websites, apps, APIs, and users.
  • GAAP gross margin of 55.1%, compared to 52.3% in the second quarter of 2023. Non-GAAP gross margin of 58.5%, compared to 56.6% in the second quarter of 2023.
  • GAAP net loss of $43.7 million, compared to $10.7 million in the second quarter of 2023. Non-GAAP net loss of $9.3 million, compared to $4.6 million in the second quarter of 2023.
  • GAAP net loss per basic and diluted shares of $0.32, compared to $0.08 in the second quarter of 2023. Non-GAAP net loss per basic and diluted shares of $0.07, compared to $0.04 in the second quarter of 2023.

Key Metrics

  • Enterprise customer 1 count was 601 in the second quarter, up 24 from the first quarter of 2024. Total customer count 1 was 3,295 in the second quarter, up 5 from the first quarter of 2024.
  • Last 12-month net retention rate (LTM NRR) 2 decreased to 110% in the second quarter from 114% in the first quarter of 2024.
  • Remaining performance obligations (RPO) 3 were $223 million, down 2% from $227 million in the first quarter of 2024.

Second Quarter Business and Product Highlights

  • Scott R. Lovett joined Fastly as Chief Revenue Officer, bringing more than 30 years of experience in the network services and cybersecurity industries.
  • Fastly recognized as a 2024 Gartner® Peer Insights™ Customers’ Choice for Cloud Web Application and API Protection (WAAP) for the sixth consecutive year – and the only vendor to be recognized for six years running.
  • Fastly Security Research Team identified the active exploitation of unauthenticated stored XSS vulnerabilities in WordPress Plugins.
  • Fastly named to the U.S. News & World Report's 2024-2025 Best Companies to Work For.
  • Product package deals doubled compared to the first quarter of 2024, driven by the successful introduction of Observability packages in addition to Compute, Security, and Delivery.
  • New deal registrations grew 33% quarter-over-quarter in the second quarter, and year-to-date revenue contribution more than doubled year-over-year.
  • Released beta version of Fastly AI Accelerator, the company’s first AI solution to help developers speed up the performance of their ChatGPT-powered apps and reduce the costs of using OpenAI’s large language model API.
  • Redesigned our pricing page to provide clarification around our new self-serve checkout plan (Usage), mix-and-match packages, and our free tier offerings.
  • Launched free developer accounts alongside Simplified Compute Service Creation, which allows developers to set up, configure, and sync a new Compute service to their local machine using a single command.
  • Enhanced Fastly Managed Security Service offering with Fastly Bot Management, and an industry-leading 30-minute time-to-notify service level agreement (SLA).

Third Quarter and Full Year 2024 Guidance

 

 

Q3 2024

 

Full Year 2024

Total Revenue (millions)

 

$130.0 - $134.0

 

$530.0 - $540.0

Non-GAAP Operating Loss (millions)

 

($12.0) - ($8.0)

 

($33.0) - ($27.0)

Non-GAAP Net Loss per share (4)(5)

 

($0.08) - ($0.03)

 

($0.16) - ($0.11)

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Fastly’s future GAAP financial results.

Conference Call Information

Fastly will host an investor conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, August 7, 2024.

Date:

Wednesday, August 7, 2024

Time:

1:30 p.m. PT / 4:30 p.m. ET

Webcast:

https://investors.fastly.com

Dial-in:

888-330-2022 (US/CA) or 646-960-0690 (Intl.)

Conf. ID#:

7543239

Please dial in at least 10 minutes prior to the 1:30 p.m. PT start time. A live webcast of the call will be available at https://investors.fastly.com where listeners may log on to the event by selecting the webcast link under the “Quarterly Results” section.

A telephone replay of the conference call will be available at approximately 5:00 p.m. PT, August 7 through August 21, 2024 by dialing 800-770-2030 or 647-362-9199 and entering the passcode 7543239.

About Fastly, Inc.

Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Wendy’s, Neiman Marcus, Universal Music Group, and SeatGeek. Learn more about Fastly at https://www.fastly.com , and follow us @fastly.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, our operating performance, our ability to innovate, the success of our products and product enhancements, the capabilities of Fastly’s AI Accelerator, our customer acquisition and go-to-market efforts, our ability to monetize, and our ability to deliver on our long-term strategy. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including those more fully described in Fastly’s Annual Report on Form 10-K for the year ended December 31, 2023 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses the following non-GAAP measures of financial performance: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP basic and diluted net loss per common share, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, free cash flow and adjusted EBITDA. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings releases.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss and non-GAAP basic and diluted net loss per common share, non-GAAP research and development, non-GAAP sales and marketing, and non-GAAP general and administrative differ from GAAP in that they exclude stock-based compensation expense, amortization of acquired intangible assets, net gain on extinguishment of debt, impairment expense and amortization of debt discount and issuance costs.

Adjusted EBITDA: excludes stock-based compensation expense, depreciation and other amortization expenses, amortization of acquired intangible assets, executive transition costs, interest income, interest expense, including amortization of debt discount and issuance costs, net gain on extinguishment of debt, impairment expense, other income (expense), net, and income taxes.

Amortization of Acquired Intangible Assets: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases and acquisitions. Management considers its operating results without this activity when evaluating its ongoing non-GAAP performance and its adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and acquisitions and may not be reflective of our core business, ongoing operating results, or future outlook.

Amortization of Debt Discount and Issuance Costs: consists primarily of amortization expense related to our debt obligations. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook. These are included in our total interest expense.

Capital Expenditures: consists of cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.

Depreciation and Other Amortization Expense: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and may not be reflective of our core business, ongoing operating results, or future outlook.

Free Cash Flow: calculated as net cash used in operating activities less purchases of property and equipment, net of proceeds from sale of property and equipment, principal payments of finance lease liabilities, capitalized internal-use software costs and advance payments made related to capital expenditures. Management specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Management considers non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in Fastly's business and strengthening its balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

Impairment Expense: consists of non-recurring charges related to our long-lived assets. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Income Taxes: consists primarily of expenses recognized related to state and foreign income taxes. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Expense: consists primarily of interest expense related to our debt instruments, including amortization of debt discount and issuance costs. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Income: consists primarily of interest income related to our marketable securities. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Net Gain on Debt Extinguishment: relates to net gain on the partial repurchase of our outstanding convertible debt. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Other Income (Expense), Net: consists primarily of foreign currency transaction gains and losses. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Stock-Based Compensation Expense: consists of expenses for stock options, restricted stock units, performance awards, restricted stock awards and Employee Stock Purchase Plan ("ESPP") under our equity incentive plans. Although stock-based compensation is an expense for the Company and is viewed as a form of compensation, management considers its operating results without this activity when evaluating its ongoing non-GAAP net loss performance and its adjusted EBITDA performance, primarily because it is a non-cash expense not believed by management to be reflective of our core business, ongoing operating results, or future outlook. In addition, the value of some stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control.

Management believes these non-GAAP financial measures and adjusted EBITDA serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors' overall understanding of our current financial performance.

In the financial tables below, the Company provides a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this press release.

Key Metrics

1 Our number of customers is calculated based on the number of separate identifiable operating entities with which we have a billing relationship in good standing, from which we recognized revenue during the current quarter. Our enterprise customers are defined as those with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue for each customer within the quarter and multiplying it by four.

2 We calculate LTM Net Retention Rate by dividing the total customer revenue for the prior twelve-month period (“prior 12-month period”) ending at the beginning of the last twelve-month period (“LTM period”) minus revenue contraction due to billing decreases or customer churn, plus revenue expansion due to billing increases during the LTM period from the same customers by the total prior 12-month period revenue. We believe the LTM Net Retention Rate is supplemental as it removes some of the volatility that is inherent in a usage-based business model.

3 Remaining performance obligations include future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied.

4 Non-GAAP Net Loss per share is calculated as Non-GAAP Net Loss divided by weighted average basic shares for 2024.

5 Assumes weighted average basic shares outstanding of 139.3 million in Q3 2024 and 137.5 million for the full year 2024.

 

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts, unaudited)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

 

$

132,371

 

 

$

122,831

 

 

$

265,891

 

 

$

240,395

 

Cost of revenue (1)

 

 

59,470

 

 

 

58,617

 

 

 

119,756

 

 

 

115,927

 

Gross profit

 

 

72,901

 

 

 

64,214

 

 

 

146,135

 

 

 

124,468

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development (1)

 

 

35,106

 

 

 

37,421

 

 

 

73,354

 

 

 

74,852

 

Sales and marketing (1)

 

 

52,959

 

 

 

47,797

 

 

 

102,566

 

 

 

92,068

 

General and administrative (1)

 

 

28,433

 

 

 

28,823

 

 

 

60,072

 

 

 

54,650

 

Impairment expense

 

 

3,137

 

 

 

 

 

 

3,137

 

 

 

 

Total operating expenses

 

 

119,635

 

 

 

114,041

 

 

 

239,129

 

 

 

221,570

 

Loss from operations

 

 

(46,734

)

 

 

(49,827

)

 

 

(92,994

)

 

 

(97,102

)

Net gain on extinguishment of debt

 

 

 

 

 

36,760

 

 

 

 

 

 

36,760

 

Interest income

 

 

3,937

 

 

 

4,508

 

 

 

7,785

 

 

 

8,694

 

Interest expense

 

 

(464

)

 

 

(1,232

)

 

 

(1,043

)

 

 

(2,445

)

Other income (expense), net

 

 

193

 

 

 

(803

)

 

 

104

 

 

 

(1,053

)

Loss before income tax expense

 

 

(43,068

)

 

 

(10,594

)

 

 

(86,148

)

 

 

(55,146

)

Income tax expense

 

 

661

 

 

 

110

 

 

 

1,008

 

 

 

245

 

Net loss

 

$

(43,729

)

 

$

(10,704

)

 

$

(87,156

)

 

$

(55,391

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.32

)

 

$

(0.08

)

 

$

(0.64

)

 

$

(0.44

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

 

137,444

 

 

 

127,863

 

 

 

136,015

 

 

 

126,648

 

__________

(1)

Includes stock-based compensation expense as follows:

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2024

 

2023

 

2024

 

2023

Cost of revenue

 

$

2,044

 

$

2,837

 

$

4,823

 

$

5,518

Research and development

 

 

7,983

 

 

12,205

 

 

18,306

 

 

23,686

Sales and marketing

 

 

7,058

 

 

9,877

 

 

14,901

 

 

16,582

General and administrative

 

 

9,063

 

 

12,073

 

 

19,939

 

 

19,357

Total

 

$

26,148

 

$

36,992

 

$

57,969

 

$

65,143

 

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, unaudited)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Gross profit

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

72,901

 

 

$

64,214

 

 

$

146,135

 

 

$

124,468

 

Stock-based compensation

 

 

2,044

 

 

 

2,837

 

 

 

4,823

 

 

 

5,518

 

Amortization of acquired intangible assets

 

 

2,475

 

 

 

2,475

 

 

 

4,950

 

 

 

4,950

 

Non-GAAP gross profit

 

$

77,420

 

 

$

69,526

 

 

$

155,908

 

 

$

134,936

 

GAAP gross margin

 

 

55.1

%

 

 

52.3

%

 

 

55.0

%

 

 

51.8

%

Non-GAAP gross margin

 

 

58.5

%

 

 

56.6

%

 

 

58.6

%

 

 

56.1

%

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

 

 

 

 

GAAP research and development

 

$

35,106

 

 

$

37,421

 

 

$

73,354

 

 

$

74,852

 

Stock-based compensation

 

 

(7,983

)

 

 

(12,205

)

 

 

(18,306

)

 

 

(23,686

)

Non-GAAP research and development

 

$

27,123

 

 

$

25,216

 

 

$

55,048

 

 

$

51,166

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

$

52,959

 

 

$

47,797

 

 

$

102,566

 

 

$

92,068

 

Stock-based compensation

 

 

(7,058

)

 

 

(9,877

)

 

 

(14,901

)

 

 

(16,582

)

Amortization of acquired intangible assets

 

 

(2,301

)

 

 

(2,575

)

 

 

(4,601

)

 

 

(5,150

)

Non-GAAP sales and marketing

 

$

43,600

 

 

$

35,345

 

 

$

83,064

 

 

$

70,336

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

 

 

 

 

GAAP general and administrative

 

$

28,433

 

 

$

28,823

 

 

$

60,072

 

 

$

54,650

 

Stock-based compensation

 

 

(9,063

)

 

 

(12,073

)

 

 

(19,939

)

 

 

(19,357

)

Non-GAAP general and administrative

 

$

19,370

 

 

$

16,750

 

 

$

40,133

 

 

$

35,293

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(46,734

)

 

$

(49,827

)

 

$

(92,994

)

 

$

(97,102

)

Stock-based compensation

 

 

26,148

 

 

 

36,992

 

 

 

57,969

 

 

 

65,143

 

Amortization of acquired intangible assets

 

 

4,776

 

 

 

5,050

 

 

 

9,551

 

 

 

10,100

 

Impairment expense

 

 

3,137

 

 

 

 

 

 

3,137

 

 

 

 

Non-GAAP operating loss

 

$

(12,673

)

 

$

(7,785

)

 

$

(22,337

)

 

$

(21,859

)

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(43,729

)

 

$

(10,704

)

 

$

(87,156

)

 

$

(55,391

)

Stock-based compensation

 

 

26,148

 

 

 

36,992

 

 

 

57,969

 

 

 

65,143

 

Amortization of acquired intangible assets

 

 

4,776

 

 

 

5,050

 

 

 

9,551

 

 

 

10,100

 

Net gain on extinguishment of debt

 

 

 

 

 

(36,760

)

 

 

 

 

 

(36,760

)

Impairment expense

 

 

3,137

 

 

 

 

 

 

3,137

 

 

 

 

Amortization of debt discount and issuance costs

 

 

349

 

 

 

803

 

 

 

703

 

 

 

1,519

 

Non-GAAP net loss

 

$

(9,319

)

 

$

(4,619

)

 

$

(15,796

)

 

$

(15,389

)

 

 

 

 

 

 

 

 

 

Non-GAAP net loss per common share—basic and diluted

 

$

(0.07

)

 

$

(0.04

)

 

$

(0.12

)

 

$

(0.12

)

Weighted average basic and diluted common shares

 

 

137,444

 

 

 

127,863

 

 

 

136,015

 

 

 

126,648

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, unaudited) (continued)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(43,729

)

 

$

(10,704

)

 

$

(87,156

)

 

$

(55,391

)

Stock-based compensation

 

 

26,148

 

 

 

36,992

 

 

 

57,969

 

 

 

65,143

 

Net gain on extinguishment of debt

 

 

 

 

 

(36,760

)

 

 

 

 

 

(36,760

)

Impairment expense

 

 

3,137

 

 

 

 

 

 

3,137

 

 

 

 

Depreciation and other amortization

 

 

13,443

 

 

 

13,030

 

 

 

26,843

 

 

 

25,210

 

Amortization of acquired intangible assets

 

 

4,776

 

 

 

5,050

 

 

 

9,551

 

 

 

10,100

 

Amortization of debt discount and issuance costs

 

 

349

 

 

 

803

 

 

 

703

 

 

 

1,519

 

Interest income

 

 

(3,937

)

 

 

(4,508

)

 

 

(7,785

)

 

 

(8,694

)

Interest expense

 

 

115

 

 

 

429

 

 

 

340

 

 

 

926

 

Other income (expense), net

 

 

(193

)

 

 

803

 

 

 

(104

)

 

 

1,053

 

Income tax expense

 

 

661

 

 

 

110

 

 

 

1,008

 

 

 

245

 

Adjusted EBITDA

 

$

770

 

 

$

5,245

 

 

$

4,506

 

 

$

3,351

 

 

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

 

 

 

As of
June 30, 2024

 

As of
December 31, 2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

147,196

 

 

$

107,921

 

Marketable securities, current

 

 

164,569

 

 

 

214,799

 

Accounts receivable, net of allowance for credit losses

 

 

113,878

 

 

 

120,498

 

Prepaid expenses and other current assets

 

 

25,312

 

 

 

20,455

 

Total current assets

 

 

450,955

 

 

 

463,673

 

Property and equipment, net

 

 

177,058

 

 

 

176,608

 

Operating lease right-of-use assets, net

 

 

52,451

 

 

 

55,212

 

Goodwill

 

 

670,356

 

 

 

670,356

 

Intangible assets, net

 

 

52,676

 

 

 

62,475

 

Marketable securities, non-current

 

 

 

 

 

6,088

 

Other assets

 

 

79,176

 

 

 

90,779

 

Total assets

 

$

1,482,672

 

 

$

1,525,191

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

5,532

 

 

$

5,611

 

Accrued expenses

 

 

34,445

 

 

 

61,818

 

Finance lease liabilities, current

 

 

8,178

 

 

 

15,684

 

Operating lease liabilities, current

 

 

25,399

 

 

 

24,042

 

Other current liabilities

 

 

35,748

 

 

 

40,539

 

Total current liabilities

 

 

109,302

 

 

 

147,694

 

Long-term debt

 

 

344,167

 

 

 

343,507

 

Finance lease liabilities, non-current

 

 

 

 

 

1,602

 

Operating lease liabilities, non-current

 

 

44,634

 

 

 

48,484

 

Other long-term liabilities

 

 

3,382

 

 

 

4,416

 

Total liabilities

 

 

501,485

 

 

 

545,703

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

3

 

 

 

3

 

Additional paid-in capital

 

 

1,903,374

 

 

 

1,815,245

 

Accumulated other comprehensive loss

 

 

(282

)

 

 

(1,008

)

Accumulated deficit

 

 

(921,908

)

 

 

(834,752

)

Total stockholders’ equity

 

 

981,187

 

 

 

979,488

 

Total liabilities and stockholders’ equity

 

$

1,482,672

 

 

$

1,525,191

 

 

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

 

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(43,729

)

 

$

(10,704

)

 

$

(87,156

)

 

$

(55,391

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

13,318

 

 

 

12,920

 

 

 

26,595

 

 

 

24,960

 

Amortization of intangible assets

 

 

4,900

 

 

 

5,175

 

 

 

9,799

 

 

 

10,350

 

Non-cash lease expense

 

 

5,800

 

 

 

5,648

 

 

 

11,356

 

 

 

11,763

 

Amortization of debt discount and issuance costs

 

 

349

 

 

 

803

 

 

 

703

 

 

 

1,519

 

Amortization of deferred contract costs

 

 

4,531

 

 

 

3,746

 

 

 

9,104

 

 

 

7,171

 

Stock-based compensation

 

 

26,148

 

 

 

36,992

 

 

 

57,969

 

 

 

65,143

 

Deferred income taxes

 

 

333

 

 

 

 

 

 

561

 

 

 

 

Provision for credit losses

 

 

393

 

 

 

567

 

 

 

1,346

 

 

 

1,100

 

Loss on disposals of property and equipment

 

 

45

 

 

 

296

 

 

 

444

 

 

 

547

 

Amortization of premiums (discounts) on investments

 

 

(1,244

)

 

 

298

 

 

 

(2,402

)

 

 

747

 

Impairment of operating lease right-of-use assets

 

 

 

 

 

187

 

 

 

 

 

 

187

 

Impairment expense

 

 

3,137

 

 

 

 

 

 

3,137

 

 

 

 

Net gain on extinguishment of debt

 

 

 

 

 

(36,760

)

 

 

 

 

 

(36,760

)

Other adjustments

 

 

(178

)

 

 

(85

)

 

 

(437

)

 

 

(328

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(6,754

)

 

 

6,482

 

 

 

5,274

 

 

 

10,183

 

Prepaid expenses and other current assets

 

 

(2,131

)

 

 

217

 

 

 

(4,831

)

 

 

(417

)

Other assets

 

 

(3,210

)

 

 

(4,771

)

 

 

(5,024

)

 

 

(11,983

)

Accounts payable

 

 

(341

)

 

 

1,119

 

 

 

(240

)

 

 

944

 

Accrued expenses

 

 

1,911

 

 

 

234

 

 

 

(6,849

)

 

 

(6,593

)

Operating lease liabilities

 

 

(4,406

)

 

 

(6,682

)

 

 

(12,012

)

 

 

(12,432

)

Other liabilities