Go ahead and let me just go through some disclosures for important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If any questions, please reach out to your Morgan Stanley sales representative. With that, why don't we do just sort of a level set on terms of where we are in terms of the state of the business. You recently reported Q4, which was, you know, a, you know, better level of execution. You guided 2025 revenue ahead of consensus, also positive. That said, this year growth has fallen into the low single digits. Can you give us a sense of where you believe the team executed well this year, and where do you think you're looking for in terms of areas of improvement going into 2025? Yeah. I mean, I think there's a couple of areas where we saw execution really improve as we got into the second half, particularly around our go-to-market motion. We brought in a new Chief Revenue Officer mid-year, and, over the course of 2024, Scott built out his leadership team and made a number of changes just in terms of our go-to-market effort. We started to see some of the benefits of that with new enterprise customer adds in Q4, a strengthening pipeline, and increased bookings relative to, you know, the outlook for 2025. Additionally, we made a lot of progress on the product side. I'll let Kip talk a little bit about that, but I think that, you know, allows us to enter 2025 with a much stronger product portfolio and better platform integration. Yeah, absolutely. We focused a lot last year on the product side, on platform unification and really integrating our products and services into a coherent platform for our customers. That started to show up in terms of a growing corpus of customers who were taking multiple product lines from us. We also spent a lot of time last year improving our product development engine, if you will. I think we saw acceleration through the year, concluding with launching three new products in the fourth quarter. I think we've, you know, we'll be able to build on the improvements we made last year and have an accelerated pace of product delivery this year as well. Yeah. Accelerated pace of product innovation that drives hopefully a new product pipeline going in. Absolutely. Absolutely. I mean, if you think about last year, we started the year with one security product. Mm-hmm. The WAF. We're starting this year with three security products. Yeah. That gives our new CRO and his new leadership team a lot more to work with and to sell and a lot more engagements with our customers. Probably from a customer perspective, you are sort of hitting the checkbox of capabilities that you need to. That. To compete. That's exactly right. I mean, we had a number of RFP-type situations last year where we didn't fully qualify due to some of the missing products that we've actually subsequently shipped. We are pretty excited about that. Awesome. Were you gonna, so maybe in terms of, like, some of the challenges that we saw in 2024, that was mostly concentrated in the top 10 customers and in your media business. Can we just sort of dive into what were the factors, that these media customers were seeing that caused them to pull back on their spend on Fastly? To what extent was that weaker revenue a function of lower pricing and not just lower volumes? Yeah, that was a good question. You know, we did see, you know, it was really a bit of a surprise, I think, you know, in early 2024 when, you know, a subset, you know, maybe a handful of those top 10 customers who were very focused on profitability made a change in some of their strategy. They had had a trend of vendor consolidation. Mm-hmm. They reversed that and added in additional vendors, which resulted in, you know, a loss of traffic share. More importantly, they did that to drive, you know, pricing, price downs as well. We saw both the impact of price downs without increased traffic, which we typically see at renewals, as well as a dilution in terms of our traffic share in, again, a handful of these top customers, which really resulted in declines in revenue from our top 10. We saw, well, we want to reduce concentration. We saw that happen a lot quicker than we wanted with our top 10 customers. We exited 2023 with them making up 40% of our revenue. We ended 2024 at 32%. 32. What we did during the year, though, is we built out, improved our engagement with these largest customers, with the senior leadership team, as well as the sales team, to improve our ongoing engagement across the year, and really dramatically improved our visibility into not only what their expectations are around traffic, but what are their strategies, understanding, you know, how are they planning to manage their expenses. With that better visibility, we have much better confidence in terms of our revenue outlook. Additionally, we've had the ability in some instances to actually influence favorably our share of their traffic. Mm-hmm. through that engagement. Yeah. Just two quick follow-ups there. In terms of the mix, sort of in the low 30s, is that kind of like a sort of a near-term trough in terms of how we should think about that mix from that segment of the business? Yeah. From an operational perspective, you touched on it just a little bit, but sort of go into detail of what's driving that improved visibility with those specific customers. Yeah. I think in terms of the concentration, I think that's a healthy level. I think as we start to see stability in those customers and maybe even a little bit of return to growth in the second half, we're gonna see that stay kind of in the low to maybe mid-30s, in the near term. I think that visibility increase really has to do with the engagement that we have with those customers, you know, building relationships with their senior team, engaging regularly with them to understand what's their strategy, how can we help them achieve their goals. Mm-hmm. You know, if they are focused on, you know, profitability or if they're focused on new markets, being involved early in that process. You mentioned, you know, the sort of pendulum swing between consolidation and then back to, you know, multi-sourcing. Mm-hmm. If you will. If you look at what's happening in the, in the category, there are now fewer players in the delivery market, Edgio most recently exiting the market. How do you see this dynamic of a fewer number of players impacting Fastly going forward with respect to both pricing and the ability to grow further share in the category? Yeah. I think, from consolidation, I think first and foremost, I think it does drive pricing stability. I think the fewer players that you have, and there was also, Edgio had a lot of capacity. Mm-hmm. I think that drove some fairly significant discounting. I think as we enter 2025, we're gonna see a lot more pricing stability. I think our outlook is for pricing to be more in line with what we've seen over a longer period of time, you know, back to sort of normal trends. I think the other opportunity within leaving the market is an opportunity for us to gain, you know, some of their customers that are looking for a new customer. We've signed a few in the fourth quarter. We're engaged in negotiations with a number of those customers to bring on new logos that were Edgio. In the case of multi-vendor, you know, there's a really good opportunity to capture a portion of their share of traffic. Mm-hmm. That makes total sense. Things kinda jump up. Maybe I'll direct it at Kip since he picked up probably out of his perspective, and then Ron, add in, for your color. We think about package deals being up 150% in 2024, it's up 60% in Q4. Can you tell us what's included in these package deals? Who's the target customers for these package? How do you expect this pricing and packaging strategy to help the overall growth equation at Fastly? Sure. We have had two generations of packages at Fastly. The second generation that we had, I launched actually, one of the first things I did when I got to Fastly about a year ago. Mm-hmm. and it was really oriented towards simplifying the purchase of the products. In a lot of cases, it gives our customers more of a fixed price. Mm-hmm. Predictable pricing for them, which is also predictable for us, which is great. It's also helped drive adoption of our compute product line in particular as a lot of the packages cross the different product lines. We've seen great, I mean, you mentioned some of the numbers. I mean, we've seen good results from this initiative, and it's really strengthened our conviction that making it lower friction and easier to consume our offerings is key to our growth. In fact, with the three products I mentioned earlier that we launched last quarter, we started launching all of our products with a self-service capability where you can actually go to the website, sign up with a credit card, and start consuming the value more or less immediately. That's something that we've seen a good response to as well. I put those packages in kind of a broader umbrella of things we're doing to make it much easier and lower friction to do business with us. Mm-hmm. And we're gonna continue focusing on that 'cause it's been particularly fruitful for us and helps us grow the customers that are not the top 10 type of customers, but the customers where they're consuming multiple product lines and we have a stickier relationship. Yeah. It also seems to help unlock the new logo acquisition. Absolutely. Yeah. No, it's so much easier for a customer to just pick up a package and start running with that. Mm-hmm. and so, you know, you'll see more and more from us along those lines. And just sort of to tie the bow on the three new products, for those less familiar with the Fastly story, could you describe what those three products are? Yeah, sure. Last quarter, we launched Fastly Object Storage. Mm-hmm. which is an object storage capability. We've actually seen great uptake on that through the self-service channel in particular. We launched our DDoS offering, which takes some really world-class DDoS technology that we've developed over the last decade of running a CDN. You know, I like to say the same technology that, you know, protects our CDN clients like the New York Times at, like, on election night is you can now get as a Fastly customer for your own services. That's been huge. We also launched our Fastly AI Accelerator as well last quarter with support for OpenAI, Google, Gemini, as well as Microsoft large language models. As I said earlier, I think it's a reflection of the accelerated product delivery that we've established at Fastly. Ron, we were talking about how this packaging strategy kind of improves the sort of visibility. Mm-hmm. and sort of budgeting process for your end customers. What about for Fastly itself? Like, can you describe what you're doing on the pricing and contracting side to improve visibility into Fastly's business and, and in quarterly revenues? Yeah. Yeah. I mean, in addition to the packages, which give us a SaaS-like revenue stream, that makes it easy to predict, you know, we have with some of our customers, you know, had annual commitments, and we're putting a lot of focus in terms of, you know, aligning those commitments with what we think their revenue expectations are. There is tight alignment, adding multi-year commitments to those customers as well, because that additionally provides better predictability. It also helps, you know, drive, you know, customer engagement in terms of, you know, how many products they buy. We like to tie commitments if they're looking for discounts so that we can get that trade-off. As we continue to increase packages and drive more commitments, that's gonna substantially increase just the predictability and longer-term visibility that we have for revenue. Yeah. Makes, makes total sense. Let's, kinda dive, deep into, into the product strategy. First on from, like, an executive standpoint, there's been a number of executive changes the past two years. Kip, you came on board last year. Can you share what, what your top priorities have been since joining Fastly, about a year ago? No, absolutely. I joined in January of 2024. I spent a lot of time traveling to visit our customers and, you know, I certainly spent a lot of time with the internal teams, but I wanted to hear straight from our customers what their impressions and experiences with Fastly were. I will say some of the most remarkable meetings that I had with customers during that time were meetings where the customers were angry with us for not selling them more. Mm-hmm. which in my several decades of experience, I had not encountered. I've been in a number of difficult customer situations, but that was a unique difficulty. you know, where they literally are like, "Well, we have budget and we wanna do this. How, how, how can we do more with you? We love your, your, your technology." As I dug into things, really my impression from before I joined that Fastly was a company with an incredible technology platform and an amazing engineering team, that was, in my view, not earning the market share it deserved. Mm-hmm. was kinda validated. As I dug into my own organization, I lead the product function. I made a number of changes and, in fact, replaced all of the leaders. Mm-hmm. in the product organization, the middle of last year, and took advantage of the restructuring that we had as a company to. Mm-hmm. Really make some accelerated change, I'll say, in the product organization. We spent time focused on some of the fundamentals. Having a much stronger and more structured product development process. I saw incredible innovation and incredible energy, but not necessarily as focused on solving important customer problems where there's really a significant differentiated opportunity for us as a company. We have retooled the way that we manage the portfolio and the way that we manage our product delivery. Like I said earlier, that has resulted in opportunity now to deliver more products more quickly into the market. You know, we tripled our number of security products through the year, from, as I mentioned earlier, from one to three, which really gives us a much more complete security capability. And we've really, I think, established an accelerated cadence with the launches and with our go-to-market organization. You know, that's, I mean, that's my area, but I think, you know, the change with our new Chief Revenue Officer is a huge piece of the puzzle. I think Ron mentioned that earlier, but midway through last year, we had a new Chief Revenue Officer come in. He's fantastic. He's actually got his new leadership team in place now, and was able to put in a compensation plan that he wanted for this year, which emphasizes some of the cross-sell and new logo acquisition more. And he brings a much stronger security focus. I think that that's gonna be super helpful for us this year. Yeah. Let's talk a little bit more about Scott, your new Chief Revenue Officer. Sort of kinda pre and post, you spoke to, like, a philosophical change in the product organization being more focused on, on, on solving customer problems. What's the philosophical change that Scott's gonna bring to bear in the organization? Yeah. I mean, I think one of the areas, and Kip touched on it, really is that security focus. He has a lot of experience selling security. And I think, as you know, our space has really moved to more of a platform sale where security is a key part of it. I think that's part of the overall sales effort, and I think that's gonna have a big impact. I think bringing in a team that has that experience, and additionally, I think as we've sort of evolved, focusing on new customer acquisition and, you know, that bringing in new customers outside of kinda that, that top tier where we had a lot of early success is now building out, you know, a diverse customer base, and with discipline, a strong focus on aligning where we have resources with the opportunity in that region, which means, you know, redeploying salespeople in some areas to really focus on what that opportunity is in that region is gonna drive, I think, efficiency in that sales organization in return. As I indicated earlier, you know, we're starting to see some of that impact in terms of the stronger pipeline, stronger bookings as well as an acceleration in customer acquisition. Yeah. It makes total sense. Let's talk a little, let's spend some time on the security opportunity. In terms of just sort of level setting, how many customers are taking on the security projects today? And can Signal Sciences WAF be a material driver of customer expansion going forward? No, I mean, definitely. Although I will say Signal Sciences WAF is now just part of our security portfolio and, Part of the platform sale. You know, one of the nice things about the two additional security products, bot mitigation and DDoS protection that we launched last year is that those are built organically by Fastly. It demonstrates our ability, not just with the WAF that we acquired. It's a fantastic product that we acquired from Signal Sciences, but our own teams developing new security products, going forward. You know, I track a number of metrics related to our platform strategy, and because that's really the foundation of what we're trying to do. In many ways, even more important than our security strategy, our compute strategy, or delivery strategy is how does this all fit together. Mm-hmm. One of the things I track is what percentage of Fastly's customers are using more than one product line. That number, we do not share it externally. Maybe we will at some point in the future, but we do not share it externally at this point. That number moved materially up last year, very much in favor of security being picked up by more of our customers. I can tell you that number is well above 50% now. Mm-hmm. The majority of Fastly's customers now take multiple product lines, and that's so important to us because it shows the cross-sell and the value of the platform, but also because customers who take more than one product line have really materially lower churn and materially lower price compression or price pressure. It really enables us to build a much, much stronger foundation for our business. The other number I track with respect to security and really our platform strategy overall is our new logo acquisition. For each new logo, for each new customer that comes to Fastly, which product line or product lines are they taking in that very first order where they become a Fastly customer? Mm-hmm. You know, historically, I think if I went back a year ago, that was predominantly delivery. When I look at those numbers now, it's far more balanced. Mm-hmm. It was actually funny. I had someone on my team who focused on the delivery business disappointed that the% of new logos who took delivery as part of their initial purchase with Fastly had dropped. I point out to him that this just meant that he could now cross-sell some of the security customers. Right. Okay. Just as security's been cross-selling our delivery customers. You know, we're seeing that really play a bigger role. I don't think we break it out externally, but if you were to set aside those top 10 customers and those large streamers and downloaders and look at, you know, what I would call more the core of our business. Mm-hmm. The percentage of security revenue is substantially higher than the percentage of the overall company just because we have the majority of those customers taking multiple product lines. Yeah. That makes a ton of sense. If I kind of take you back to the 2023 investor day and where you sort of outlined where the product roadmap is headed, frankly, seen a lot of execution against that product roadmap there. Absolutely. Is there anything? More to come. Yeah. That is essentially the question is like, with respect to, like, API security or anything else, what other capabilities are you looking to bring to market to drive, you know, to that to those customers that want you to want you want to buy more products from you? What are sort of the focus areas on the product roadmap? Yeah. I absolutely. I mean, that investor day was, was before I was with Fastly, but it was prescient. Yeah. It's wonderful to be able to deliver on that. API resilience, I think, was mentioned there. You can certainly, we have customers using our platform today for that. You know, similar to the story on DDoS, I think there's an opportunity for us to package some world-class technology and deliver that to our customers. We have some of those security products. I hesitate to launch security products or launch products at an investor conference, but we, you know, we will have some. First time for everything. We will have some new, we'll be, yeah, we're experimenting in marketing, but I'm not sure that's the. Right. Experiment we wanna run. We'll be launching some new products very soon. In terms of focus areas, you know, one thing that's kinda popped in the last couple quarters for us that I think is an area that you'll see us doubling down on is a security technology called Deception. When you look at our DDoS capabilities that, as I mentioned earlier, grew up over our, you know, decade more plus of CDN experience, we take pains when we block a DDoS attack to make sure the attacker thinks that it's not blocked and that the attack is working. Yeah. That's really critical because then they waste their time and resources on that. They don't try something else or try something different. The research is now coming out showing that that's an incredibly compelling capability more broadly in security. We have some expertise in that area, and I think you'll see that as a theme across our security offerings just because it's incredibly effective. In fact, research has shown that attackers hesitate to attack targets if they even think there's deception deployed. Because they can end up attacking something that's a fake target. They can end up thinking their attack is working and spending their time and resources. Right. It just makes it so much more difficult for them that they will often simply pick a different target. We love that for our customers. Super interesting, super exciting. Maybe sticking on the theme of security, when I've, like, having been a tech analyst for a while, when you ever think security, the channel and partner seems to be, like, an important piece of the puzzle to solve. Maybe talk about some of the changes you made to the channel partner program to build your relationships with the important sort of elements of the security channel to help drive that cross-sell upsell motion. Yeah. I mean, we had a very strong channel presence that we sort of inherited from Signal Sciences around security and WAF. You know, over the last year or two, we've engaged in training that channel to sell more than just security, to also be able to deliver, or sell delivery. The channel remains an important piece of kind of the strategy, again, focused on training of that team and really focused on kind of the deal reg that's coming out of that to be able to actually convert those into customers. Mm-hmm. Awesome. We have talked about security. I guess, to Kip's points, ultimately, this is to drive, like, a broader unification across all of these opportunities. If we think about the edge compute service opportunity, how do you guys think about that opportunity today? We have been talking about it a lot, you know, in the ecosystem. When is it gonna be the year of edge compute has been kind of a famous question. Where do you see Fastly sort of differentiated and the sort of edge compute serverless opportunity? Yeah, absolutely. We have right now, I think, an incredible, serverless edge compute opportunity. We were pioneers in using the WebAssembly or WASM technology to provide a language-agnostic, high-performance, highly secure edge compute capability. We have a lot of customers using it, to great effect. I think New Relic is a great. Mm-hmm. public reference customer. I would note that we actually use that, same compute facility that we make available to our customers to build a lot of our products. Mm-hmm. The AI accelerator is actually built on top of that. Our WAF, for instance, is actually built on top of that technology as well. We're super proud of that. You know, it's not a big part of our business, but we've seen growth rates in excess of 50% for the last two years in our compute business. I think the addition of Fastly Object Storage last quarter will complement that. Right. Open up additional use cases for us there, and also provide even more connectivity between our delivery service and the edge compute. That said, you know, we've run into customers who have workloads that don't lend themselves to a serverless model, you know, longer-running process workloads and things like that, that they still really want to be able to run in our high-performance distributed infrastructure on our network, you know, close to users. We've been exploring models around that with those customers and, in fact, have been running a workload like that in production for one of our large customers now for some time. We're exploring how we could productize that and make that available, so that more customers could run more kinds of workloads in the Fastly network and on our platform. Kip, what I think in terms of trying to connect the dots, you know, you've just rolled out a object storage capability. You've had an edge compute that has been growing 50%. I mean, are we headed towards, like, an in, you know, edge inferencing opportunity that you can monetize in terms of as AI gets put, switched to the edge? How are you thinking about edge inference, for AI workloads? Yeah, absolutely. I mean, we have a lot of CPU resources. Mm-hmm. at the edge. I mean, we run a single platform. So the same server and network infrastructure that is delivering videos or downloads or e-commerce sites or running our security products also run our compute workloads. We have a lot of capacity, in terms of processing power there. We have a lot of customers looking at using it for various forms of AI workloads, whether it's our own AI accelerator product or things that they're developing themselves. You know, I think what we're finding is the edge is just very useful, just as it's been useful for security, just as it's been useful for content delivery. There are use cases in compute around personalizing content and so forth. There are use cases in AI as well. I think a really interesting example is something one of our customers is doing with Fastly Object Storage. They have a large, multi-tens of petabytes image library. Mm-hmm. They have a new business model with their image library, which is licensing it to people for model training. You know, you think about Fastly's network and our platform being close to end users and devices. It is also incredibly well connected with all of the clouds in the world because that is where applications and content often originate. They came to us and they are storing that image library with Fastly so that the people that they license it to, to do training in the cloud, can have high-performance access to that library at very good economics. I think we are seeing the edge will play a significant role in AI. We are working with, you know, kind of pioneer customers, if you will, on various use cases and how they apply our platform. We will be evolving our platform, whether it's the underlying capabilities or the software, to enable those workloads. Could I ask a follow-up question to Kip's answer? Like, when we see opportunities that look interesting over a long-time horizon, as CFO, how do you think about the capital allocation decision to fund those opportunities versus what kind of, like, I would say security, like, that needs to be really successful, right, to get where we want to go to in terms of growth and margins? The trade-off decisions in terms of the capital allocation decisions for these incubation opportunities versus the core, how do you think through that? Yeah. I mean, I think when it comes to, you know, from a roadmap in terms of development, you know, we have a really good process around looking kinda what the opportunity and use cases are. I think what we built is, you know, a platform that allows, you know, customers to kind of apply kinda their own use cases. I think, you know, when it comes to actually deploying it from, you know, a capability, you know, we have, over the last, you know, couple of years, really improved our ability to, to deploy that fairly quickly. Mm-hmm. We can actually do much better planning. As we see the opportunity, you know, we can deploy the capital, you know, to meet that need. I think if we have, you know, actual demand, that's one of the things I'm looking for is, do we have the, the contract? Do we have the deal? Then we can support it with the needs, once we have it, rather than having to invest well ahead of that, as I think we, you know, may have done in the past. We're looking to get better at being able to do that more real-time so that we're really, you know, investing in line with, you know, actual traffic, actual business that's there, and we can meet those needs. Yeah. Yeah. I Yeah. I mean, I'll say one thing that helps us is unified software-defined infrastructure. In other words, we launch AI accelerator. There wasn't a discussion about a capital investment. Yep. Because it's a new workload on our existing platform. Right. Now, as that grows, maybe it drives more needs for our platform. That capacity, if AI Accelerator's not being used, can be used to deliver videos or to process other things or to do security workloads. It is one of the advantages we get. You know, our unified software-defined platform gives us more agility in terms of pursuing new opportunities. Yeah. Awesome. That's a great point. We've been talking about kind of the strategic opportunities and the product-related opportunities already. Let's get back more towards the nearer term in terms of the outlook. Q4 revenues came in better. Fiscal year 2025 guidance also came in above expectations. Ron, can you talk to us about the growth drivers of the next 12 months that support that above-consensus guide that you reported a couple weeks ago? In particular, on the full-year outlook, why are you expecting to see a re, an acceleration in the second half? Yeah. Yeah. I think, you know, the drivers are, you know, we talked a little bit about that, is, you know, the improvements we've made in our go-to-market motion, the, you know, entering the year with, you know, a much broader complete security portfolio. Above and beyond that, I think we've got, you know, better visibility, the increase, you know, in enterprise customers. You know, as we look at those, those tend to add revenue over time. Those will start to, you know, add meaningful revenue as we get into the second and third and fourth quarters. Mm-hmm. That customer acquisitions are gonna drive some of that accelerated growth in the second half. Additionally, you know, with the bankruptcy of Edgio, I talked about the opportunity to gain share from those customers. Some of those customers, as they meet commitments with, you know, one of our competitors bought their contracts. As they meet those commitments, there's an opportunity for us to gain those traffic. Those will come on board across the full year. As we get into the second half, given the headwinds and challenges we saw since some of our larger customers, you start to get the easier comparisons. You can see within our guide, which. Mm-hmm. We feel that we, as we get to in the second half, you know, we can exit at, you know, close to a 10% growth rate is implicit in our outlook. Yeah. Makes total sense. Going back to that investor day in 2023, and maybe this is where we can wrap up, you laid out a three-year operating plan targeting revenue of $800 million-$900 million, gross margins of approximately 65%, margins, about 7% calendar year 2026. Given where you stand today, you know, entering into 2025, you know, what's the latest thinking on how achievable that model is today? And just, yeah, maybe sort of comment on where we are on that. Yeah. I think the model and the incremental model around our gross margins and the investment we're making in the business are still intact. Mm-hmm. I think given some of the headwinds that we saw from some of our largest customers, the timeline has changed. Mm-hmm. for that. You pushed it out, I think, a year or two. Mm-hmm. I think the model is still intact. Yeah. I think we do see incremental gross margins of, you know, north of 70%, you know, in the medium to long term, you know, driving margins, you know, north of 60%. You know, we're continuing to focus on improving our operating margins. We're gonna reduce that operating loss by more than half at our current outlook. And we're hoping to do better than that this year. Mm-hmm. that same trajectory, you know, would get us to profitability in 2026. We remain extremely disciplined on, you know, managing to bottom-line results, given the revenue visibility that we have. Awesome. With that, we're, you know, at the, at the end of time. Thank you so much, Ron. Thank you so much, Kip, for joining us, Thank you. On stage. Thank you. To talk to us about the product strategy. Thank you for giving us the update on Fastly. Really appreciate it. Thank you. Thank you.