What changed in this filing

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Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-22 · 60 added, 54 removed, 190 unchanged (38% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act) as of December 31, 2023.

Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that as of December 31, 2023, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, due to the material weakness described below, our disclosure controls and procedures were not effective as of December 31, 2024.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the results of its assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer and oversight of the board of directors, our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the results of its assessment, due to the material weakness described below, management concluded that our disclosure controls and procedures were not effective.

Material Weakness

We identified a material weakness in our internal control over financial reporting for the year ended December 31, 2024.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We identified deficiencies in the design and operating effectiveness of controls within the revenue process.

These deficiencies are related to certain business process controls primarily caused by a lack of sufficiently qualified personnel due to turnover, information technology general controls, including the failure to receive a service auditor’s report for our billing system hosted by a third-party, and insufficient monitoring controls over such third-party service provider.

In the aggregate, these deficiencies created a reasonable possibility that a material misstatement to the consolidated financial statements might not be prevented or detected on a timely basis, and represent a material weakness.

The material weakness did not result in a misstatement, but could result in misstatements to our financial statements in the future, if not remediated.

Management has concluded that the financial statements included elsewhere in this Annual Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with U.S.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in Part II, Item 8—Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Remediation Efforts with Respect to the Material Weakness

The process of implementing an effective system of internal control over financial reporting is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations.

We have taken and will continue to take action to remediate this material weakness, including:

• Hiring and training sufficiently qualified personnel with appropriate technical expertise within the revenue process;

• Enhancing the effectiveness of our change management and user access controls over systems within the revenue process by strengthening policies, procedures, review processes, and documentation;

• Enhancing our controls over the ongoing monitoring of third-party service providers to confirm their service auditor reports are timely provided to evidence design, implementation, and operating effectiveness of controls within the service organization’s framework of internal controls;

• Reassessing the design and effectiveness of controls over the timely input of complete and accurate customer contract information that is used for the processing and recording of billing and revenue transactions in our systems.

As we continue to evaluate and work to improve our internal control over financial reporting, we may decide to take additional measures to address control deficiencies or modify the remediation plans described above.

We believe that these actions will remediate the material weakness, however the weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Management believes the foregoing plans will effectively remediate the deficiencies constituting the material weakness.

Changes in Internal Control over Financial Reporting

There were no changes during the year ended December 31, 2023 in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than as described above, there have been no changes in our internal control over financial reporting in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

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and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 25, 2025, expressed an unqualified opinion on those financial statements.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management's assessment:

The Company identified deficiencies in the design and operating effectiveness of controls within the revenue process.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, 2024, of the Company, and this report does not affect our report on such financial statements.

/s/ Deloitte & Touche LLP

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Trading Arrangements

During the Company’s last fiscal quarter, the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of the Company’s securities set forth in the table below.

Type of Trading Arrangement

Name and Position

Adoption/ Termination

Rule 10b5-1**

Total Shares of Class A Common Stock to be Sold

Total Shares of Class A Common Stock to be Purchased

Expiration Date

Ronald Kisling , Chief Financial Officer (1)

Richard Daniels , Director (2)

Brett Shirk , former Chief Revenue Officer (3)

* Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

** “Non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K under the Exchange Act.

(1) Ronald Kisling , our Chief Financial Officer , adopted a Rule 10b5-1 Plan on November 20, 2023.

Kisling's plan provides for the potential sale of up to 163,938 shares of the Company’s Class A Common Stock, plus any shares that are granted to him in 2024 relating to the 2023 company-wide Bonus Program;

provided, however, because certain of Mr.

Kisling’s planned sale amounts are equal to a designated percentage of the net number of shares resulting from RSUs vesting, of which a portion will be surrendered to the Company or sold to cover withholding taxes, depending on how many shares are withheld in these instances, the maximum number of shares to be sold may be less.

The plan expires on December 31, 2024, or upon the earlier completion of all authorized transactions under the plan.

(2) Richard Daniels , a member of our board of directors, adopted a Rule 10b5-1 Plan on November 17, 2023.

Daniels' plan provides for the potential sale of up to 7,766 shares of the Company’s Class A Common Stock;

provided, however, because certain of Mr.

Daniels' planned sale amounts are equal to a designated percentage of the net number of shares resulting from RSUs vesting, of which a portion will be surrendered to the Company or sold to cover withholding taxes, depending on how many shares are withheld in these instances, the maximum number of shares to be sold may be less.

The plan expires on March 29, 2024, or upon the earlier completion of all authorized transactions under the plan.

(3) Brett Shirk , our former Chief Revenue Officer , on December 20th, 2023, terminated a Rule 10b5-1 Plan entered into on August 21, 2023 in connection with his departure.

Second Amendment to Senior Secured Credit Facilities Agreement

On February 16, 2024, we entered into the Second Amendment to Credit Agreement with the Lenders and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as a lender and as administrative agent and collateral agent for the Lenders, which, among other things, extended the maturity date of the loans under the Credit Agreement to June 14, 2024.

The foregoing summary of the Second Amendment to Credit Agreement does not purport to be complete and is subject to and is qualified in its entirety by the terms of the Second Amendment to Credit Agreement, which is attached to this Annual Report on Form 10-K as Exhibit 10.22, and incorporated herein by reference.

During the Company’s last fiscal quarter, none of the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated contracts, instructions or written plans for the purchase or sale of the Company’s securities.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Within the time period required by the SEC and the NYSE, we will post on our website at www.fastly.com/investors under the “Governance” tab any amendment to our Code of Business Conduct and Ethics or any waivers of such provisions granted to executive officers and directors.

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, officers and employees that are designed to promote compliance with insider trading laws, rules and regulations, and applicable NYSE listing standards, as well as procedures designed to further the foregoing purposes.

A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

Executive Compensation

14 unchanged sentences

Exhibit Filing Date Filed Herewith

2.1 Agreement and Plan of Reorganization, dated August 26, 2020.

8-K 001-38897 2.1 October 12, 2020

3.1 Amended and Restated Certificate of Incorporation .

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3.4 Amended and Restated Bylaws .

10-Q 001-38897 3.3 August 7, 2020

001-38897 3.1

August 15, 2024

4.1 Form of Class A common stock certificate of Fastly, Inc.

6 unchanged sentences

8-K 001-38897 4.2 March 5, 2021

Indenture, dated as of December 5, 2024, between Fastly, Inc.

Bank Trust Company, National Association, as trustee.

8-K 001-38897 4.1 December 5, 2024

Form of Certificate representing the 7.75% Convertible Senior Notes due 2028 (included as Exhibit A to the Indenture filed as Exhibit 4.1)

8-K 001-38897 4.2 December 5, 2024

Description of Securities.

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10-Q 001-38897 10.3 August 9, 2019

Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.6+ 2019 Employee Stock Purchase Plan.

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S-1/A 333-230953 10.8 May 6, 2019

Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

10.8+ Cash Incentive Bonus Plan.

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S-1/A 333-230953 10.31 May 6, 2019

2022 Change in Control and Severance Plan and form of participation agreement thereunder.

001-38897 10.2

August 7, 2024

Non-Employee Director Compensation Policy, as amended.

001-38897 10.14

February 21, 2024

Stock Ownership Guidelines.

S-1/A 333-230953 10.33 May 6, 2019

Employment Agreement, by and between Fastly International (Holdings) Ltd.

and Joshua Bixby dated February 19, 2020.

8-K 001-38897 10.1 February 20, 2020

Equity Offer Letter, by and between Fastly, Inc.

and Joshua Bixby dated February 19, 2020 .

8-K 001-38897 10.2 February 20, 2020

Employment Terms by and between Fastly, Inc.

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Second Amendment to the Senior Secured Credit Facilities Credit Agreement dated as of February 16, 2021, among Fastly, Inc., the several lenders from time to time party thereto, and Silicon Valley Bank, dated as of February 16, 2024.

Offer Letter Agreement, by and between Fastly, Inc.

and Brett Shirk, dated February 9, 2021 .

10-K 001-38897 10.23 March 1, 2022

001-38897 10.22 February 21, 2024

Third Amendment to the Senior Secured Credit Facilities Credit Agreement dated as of February 16, 2021, among Fastly, Inc., the several lenders from time to time party thereto, and Silicon Valley Bank, dated as of April 30, 2024.

001-38897 10.2 May 1, 2024

Offer Letter by and between Fastly, Inc.

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8-K 001-38897 10.1 August 3, 2022

Transition and Separation Agreement by and between Fastly, Inc.

and Joshua Bixby, dated September 6, 2022.

8-K 001-38897 10.1 September 6, 2022

Offer Letter by and between Fastly, Inc.

and Scott Lovett, dated May 16, 2024.

001-38897 10.1 August 7, 2024

Insider Trading Po li cy

21.1 Subsidiaries of the Registrant.

1 unchanged sentence

February 24, 2023

23.1 Consent of Independent Registered Public Accounting Firm.

24.1 Power of Attorney (contained on the signature page of this report).

Number Exhibit Description Form File No.

Exhibit Filing Date Filed Herewith

23.1 Consent of Independent Registered Public Accounting Firm.

24.1 Power of Attorney (contained on the signature page of this report).

31.1 Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

5 unchanged sentences

Incentive Compensation Recoupment Policy.

001-38897 97.1 February 21, 2024

INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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/s/ Artur Bergman

Chief Architect and Director

Chief Technology Officer and Director

February 25, 2025

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures