Fastly, Inc. 10-K

Item 8. Financial Statements and Supplementary Data FASTLY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS The following financial statements are filed as part of this Annual Report on form 10-K: Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Loss Consolidated Statements of Stockholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 89 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Fastly, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Fastly, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue—Refer to Notes 2 and 3 to the financial statements Critical Audit Matter Description Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. The processing and recording of certain revenue requires a manual process, and therefore the Company uses a complex set of procedures to generate complete and accurate data to record its revenue transactions. We identified manually processed revenue as a critical audit matter as the manually processed revenue requires a complex set of manual procedures to generate complete and accurate data to process and record revenue. This required an increased extent of effort to audit these manually processed revenue transactions. 90 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to manually processed revenue included the following, among others: • We tested the effectiveness of controls over the recognition of manually processed revenue. • We obtained an understanding of the nature of the manually processed revenue through inquiry with the Company personnel responsible for the invoice as well as review of the contract with the customer. • For a sample of manually processed revenue transactions, we recalculated the manually processed revenue by comparing key attributes utilized in our recalculation to source information and documents, including usage, bandwidth, and other services provided. We compared our recalculation of manually processed revenue transactions to the Company’s recorded revenue and evaluated any differences. /s/ Deloitte & Touche LLP San Francisco, California February 25, 2026 We have served as the Company’s auditor since 2015. 91 FASTLY, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) As of December 31, 2025 As of December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 180,563 $ 286,175 Marketable securities, current 181,196 9,707 Accounts receivable, net of allowance for credit losses of $ 6,262 and $ 8,254 as of December 31, 2025 and December 31, 2024, respectively 118,029 115,988 Prepaid expenses and other current assets 26,921 28,325 Total current assets 506,709 440,195 Property and equipment, net 186,785 179,097 Operating lease right-of-use assets, net 52,067 50,433 Goodwill 670,356 670,356 Intangible assets, net 25,771 42,876 Other assets 57,789 68,402 Total assets $ 1,499,477 $ 1,451,359 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 17,612 $ 6,044 Accrued expenses 70,669 41,622 Long-term debt, current 38,557 — Finance lease liabilities, current — 2,328 Operating lease liabilities, current 24,427 25,155 Deferred revenue 35,234 26,511 Other current liabilities 7,499 2,796 Total current liabilities 193,998 104,456 Long-term debt, net 323,282 337,614 Operating lease liabilities, non-current 43,921 39,561 Other long-term liabilities 8,698 4,478 Total liabilities 569,899 486,109 Commitments and contingencies (Note 9) Stockholders’ equity: Class A common stock, $ 0.00002 par value; 1,000,000,000 shares authorized as of both December 31, 2025 and 2024; 151,537,271 and 142,086,129 shares issued and outstanding at December 31, 2025 and 2024, respectively 3 3 Class B common stock, $ 0.00002 par value; 4,191,275 shares authorized as of both December 31, 2025 and 2024; no shares issued and outstanding as of both December 31, 2025 and 2024 — — Additional paid-in capital 2,044,103 1,958,157 Accumulated other comprehensive loss ( 41 ) ( 100 ) Accumulated deficit ( 1,114,487 ) ( 992,810 ) Total stockholders’ equity 929,578 965,250 Total liabilities and stockholders’ equity $ 1,499,477 $ 1,451,359 The accompanying notes are an integral part of the consolidated financial statements. 92 FASTLY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Year ended December 31, 2025 2024 2023 Revenue $ 624,018 $ 543,676 $ 505,988 Cost of revenue 267,815 247,738 239,660 Gross profit 356,203 295,938 266,328 Operating expenses: Research and development 162,662 137,980 152,190 Sales and marketing 201,434 198,610 191,773 General and administrative 110,692 113,399 116,077 Impairment expense 415 4,144 4,316 Restructuring charges — 9,720 — Total operating expenses 475,203 463,853 464,356 Loss from operations ( 119,000 ) ( 167,915 ) ( 198,028 ) Net gain on extinguishment of debt 941 1,365 52,416 Interest income 12,290 14,871 18,186 Interest expense ( 12,699 ) ( 2,747 ) ( 4,051 ) Other expense, net ( 721 ) ( 1,028 ) ( 1,832 ) Loss before income tax expense (benefit) ( 119,189 ) ( 155,454 ) ( 133,309 ) Income tax expense (benefit) 2,488 2,604 ( 221 ) Net loss $ ( 121,677 ) $ ( 158,058 ) $ ( 133,088 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.83 ) $ ( 1.14 ) $ ( 1.03 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 146,902 138,099 128,770 The accompanying notes are an integral part of the consolidated financial statements. 93 FASTLY, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Year ended December 31, 2025 2024 2023 Net loss $ ( 121,677 ) $ ( 158,058 ) $ ( 133,088 ) Other comprehensive income: Foreign currency translation adjustment — — 565 Unrealized gain on investments in available-for-sale-securities 59 908 7,713 Total other comprehensive income $ 59 $ 908 $ 8,278 Comprehensive loss $ ( 121,618 ) $ ( 157,150 ) $ ( 124,810 ) The accompanying notes are an integral part of the consolidated financial statements. 94 FASTLY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2022 124,336 $ 2 $ 1,666,106 $ ( 9,286 ) $ ( 701,664 ) $ 955,158 Exercise of vested stock options 291 — 2,169 — — 2,169 Vesting of restricted stock units 6,150 1 — — — 1 Shares issued under bonus program 1,193 — 16,599 — — 16,599 Shares issued under employee stock purchase program 1,022 — 8,692 — — 8,692 Stock-based compensation — — 121,679 — — 121,679 Net loss — — — — ( 133,088 ) ( 133,088 ) Other comprehensive income — — — 8,278 — 8,278 Balance as of December 31, 2023 132,992 $ 3 $ 1,815,245 $ ( 1,008 ) $ ( 834,752 ) $ 979,488 Exercise of vested stock options 292 — 1,115 — — 1,115 Vesting of restricted stock units 5,886 — — — — — Shares issued under bonus program 1,889 — 26,849 — — 26,849 Shares issued under employee stock purchase program 1,027 — 6,714 — — 6,714 Stock-based compensation — — 108,234 — — 108,234 Net loss — — — — ( 158,058 ) ( 158,058 ) Other comprehensive income — — — 908 — 908 Balance at December 31, 2024 142,086 $ 3 $ 1,958,157 $ ( 100 ) $ ( 992,810 ) $ 965,250 Exercise of vested stock options 388 — 1,044 — — 1,044 Vesting of restricted stock units 7,054 — — — — — Shares issued under bonus program 951 — 6,898 — — 6,898 Shares issued under employee stock purchase program 1,058 — 6,703 — — 6,703 Purchases of capped calls — — ( 18,162 ) — — ( 18,162 ) Stock-based compensation — — 89,463 — — 89,463 Net loss — — — — ( 121,677 ) ( 121,677 ) Other comprehensive income — — — 59 — 59 Balance as of December 31, 2025 151,537 $ 3 $ 2,044,103 $ ( 41 ) $ ( 1,114,487 ) $ 929,578 The accompanying notes are an integral part of the consolidated financial statements. 95 FASTLY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 121,677 ) $ ( 158,058 ) $ ( 133,088 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 61,031 54,037 51,602 Amortization of intangible assets 16,821 19,599 20,424 Non-cash lease expense 22,445 22,474 22,678 Amortization of debt discount and issuance costs 906 1,377 2,476 Amortization of deferred contract costs 19,369 18,623 15,548 Stock-based compensation 117,323 107,930 136,303 Deferred income taxes 1,433 1,793 ( 900 ) Provision for credit losses 4,181 3,834 2,025 Loss on disposals of property and equipment 186 540 505 Accretion of discounts on investments ( 4,703 ) ( 3,973 ) ( 646 ) Impairment of operating lease right-of-use assets — 371 744 Impairment expense 415 4,144 4,316 Net gain on extinguishment of debt ( 941 ) ( 1,365 ) ( 52,416 ) Other adjustments 549 ( 814 ) 648 Changes in operating assets and liabilities: Accounts receivable, net ( 6,222 ) 676 ( 32,945 ) Prepaid expenses and other current assets 1,579 ( 7,627 ) 8,709 Other assets ( 19,545 ) ( 11,869 ) ( 23,137 ) Accounts payable 4,489 611 382 Accrued expenses ( 447 ) ( 2,922 ) ( 7,856 ) Operating lease liabilities ( 20,707 ) ( 26,541 ) ( 22,074 ) Other liabilities 17,959 ( 6,434 ) 7,064 Net cash provided by operating activities 94,444 16,406 362 Cash flows from investing activities: Purchases of marketable securities ( 389,837 ) ( 155,099 ) ( 132,233 ) Sales of marketable securities 25,936 — 25,625 Maturities of marketable securities 197,176 371,189 433,767 Advance payment for purchase of property and equipment — ( 790 ) — Purchases of property and equipment ( 28,694 ) ( 10,330 ) ( 10,976 ) Proceeds from sale of property and equipment 44 24 49 Capitalized internal-use software ( 17,657 ) ( 26,094 ) ( 21,292 ) Net cash (used in) provided by investing activities ( 213,032 ) 178,900 294,940 Cash flows from financing activities: Proceeds from issuance of convertible notes 180,000 — — Payments of issuance costs for convertible notes ( 5,924 ) ( 5,729 ) — Cash paid for debt extinguishment ( 148,875 ) — ( 310,540 ) Payments for purchase of capped calls ( 18,162 ) — — Repayments of finance lease liabilities ( 2,328 ) ( 14,958 ) ( 27,175 ) Payment of deferred consideration for business acquisitions — ( 3,771 ) ( 4,393 ) Proceeds from exercise of vested stock options 1,044 1,115 2,169 Proceeds from employee stock purchase plan 7,006 6,244 8,559 Net cash (used in) provided by financing activities 12,761 ( 17,099 ) ( 331,380 ) Effects of exchange rate changes on cash, cash equivalents, and restricted cash 215 ( 103 ) 608 Net increase (decrease) in cash, cash equivalents, and restricted cash ( 105,612 ) 178,104 ( 35,470 ) Cash, cash equivalents, and restricted cash at beginning of period 286,175 108,071 143,541 Cash, cash equivalents, and restricted cash at end of period $ 180,563 $ 286,175 $ 108,071 96 FASTLY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS—Continued (in thousands) Year ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information: Cash paid for interest $ 11,571 $ 527 $ 1,574 Cash paid for income taxes, net of refunds received $ 1,337 $ 809 $ 331 Cash paid for finance lease interest $ 15 $ 378 $ 1,329 Noncash investing and financing activities: Property and equipment additions not yet paid in cash or financed $ 7,701 $ 983 $ 640 Capitalized stock-based compensation $ 7,270 $ 9,716 $ 9,975 Assets obtained in exchange for operating lease obligations $ 7,128 $ 8,543 $ 5,769 Net noncash change in operating lease assets and liabilities associated with modifications and terminations $ 16,245 $ 10,439 $ ( 4,425 ) Deployments of prepaid capital equipment $ 9,247 $ 14,598 $ 8,665 Debt issued in exchange for extinguishment of existing notes $ — $ 155,730 $ — Debt retired in exchange for issuance of new notes $ — $ ( 157,095 ) $ — Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows Cash and cash equivalents $ 180,563 $ 286,175 $ 107,921 Restricted cash — — 150 Total cash, cash equivalents, and restricted cash $ 180,563 $ 286,175 $ 108,071 The accompanying notes are an integral part of the consolidated financial statements. 97 FASTLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Business Fastly, Inc. is an edge cloud platform that can process, serve, and secure its customers' applications as close to their end users as possible. The Company was incorporated in Delaware in 2011 and is headquartered in San Francisco, California. As used herein, “Fastly,” “the Company,” “its” and similar terms include Fastly, Inc. and its subsidiaries, unless the context indicates otherwise. 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain changes to presentation have been made to conform the prior period presentation to the current period reporting. The Company has made certain presentation changes to separate out deferred revenue from other current liabilities on the consolidated balance sheets. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. Actual results and outcomes could differ significantly from the Company’s estimates, judgments, and assumptions. Significant estimates, judgments, and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, internal-use software development costs, the incremental borrowing rate related to the Company’s lease liabilities, fair value of assets acquired and liabilities assumed during business combinations, useful lives of acquired intangible assets and property and equipment, financial instruments, income tax reserves, and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements in the period of change and prospectively from the date of the change in estimate. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. The Company’s cash, cash equivalents, and marketable securities primarily consisted of money market funds, investment-grade commercial paper, corporate notes and bonds, U.S. treasury securities, certificates of deposit, and municipal bonds. The primary focus of its investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy limits the amount of credit exposure with any one financial institution or commercial issuer. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents to the extent recorded in the balance sheets. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically dispersed customers diversified across several industries . No single customer accounted for more than 10% of revenue for the years ended December 31, 2025, 2024 and 2023. No single customer accounted for more than 10% of the total accounts receivable balance as of December 31, 2025 or 2024. Affiliated customers that are business units of a single company generated an aggregate of 10 % of the Company’s revenue for the year ended December 31, 2025. No affiliated customers that are business units of a single company generated more than 10% of revenue for the year ended December 31, 2024. Affiliated customers that are business units of a single company generated an aggregate of 12 % of the Company’s revenue for the year ended December 31, 98 2023. No affiliated customers that are business units of a single company accounted for more than 10% of the Company's accounts receivable balance as of December 31, 2025. Affiliated customers that are business units of a single company accounted for an aggregate of 11 % of the Company’s accounts receivable balance as of December 31, 2024. Cash, Cash Equivalents, and Marketable Securities Cash and cash equivalents include cash held in banks, highly liquid money market funds, U.S. treasury securities, municipal securities, and commercial paper, all with original maturities of three months or less when acquired. The Company’s short-term and long-term marketable securities consists of fixed income U.S. and foreign government agency securities, corporate bonds, municipal securities, certificates of deposit, and commercial paper. Management determines the appropriate classification of the Company’s investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying remaining contractual maturity date. The Company classifies its marketable securities as available-for-sale as it has the ability to sell the marketable securities prior to its maturity. The Company’s marketable securities are reported at fair value with unrealized gains and losses reported, net of tax, as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash and cash equivalents are stated at cost, which approximate fair market value. Short-term and long-term marketable securities are classified as available-for-sale debt securities and are also carried at fair market value. When the available-for-sale debt securities are sold, cost is based on the specific identification method, and the realized gains and losses are included in other income (expense), net in the consolidated statements of operations. All of the Company’s investments are subject to a periodic impairment review. The Company recognizes an impairment charge when the fair value of its investments decline below their respective cost basis. Factors considered in determining whether a credit impairment has occurred include whether the decline in fair value is due to credit related factors, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security prior to the expected recovery of the investment’s amortized cost basis. No such impairment charges were recorded during the years ended December 31, 2025, 2024, and 2023. Accounts Receivable, net Accounts receivable are recorded and carried at the original invoiced amount, net of an allowance for any potential credit losses. The allowance for credit losses is determined based upon the assessment of various factors, such as historical experience, credit quality of its customers, age of the accounts receivable balances, geographic related risks, economic conditions, and other factors that may affect a customer’s ability to pay. The Company records these charges as a component of general and administrative expenses in the consolidated statements of operations in the period in which the change occurs. The Company does not have any off-balance sheet credit exposure related to its customers. Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission payments. The Company pays commissions based on contract value upon signing an arrangement with a new customer and upon upgrades of existing contracts with customers only if the upgrades result in an incremental increase in contract value. These costs are deferred on the consolidated balance sheets and amortized over the expected period of benefit on a straight-line basis. The Company also pays commissions on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Based on the nature of the Company’s technology and services, and the duration of its relationships with its customers, the expected period of benefit is determined to be five years . Management periodically reviews the carrying amount of deferred commission costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. Amortization is included in sales and marketing expense in the consolidated statements of operations. Deferred commission are included in other assets on the consolidated balance sheets. 99 Fair Value of Financial Instruments The Company’s available-for-sale securities are recorded at fair value. The Company’s cash and cash equivalents are recorded at cost, which approximates fair value. Additionally, accounts receivable, accounts payable, and accrued expenses approximate fair value due to their short-term nature. For disclosure purposes, the Company measures the fair value of its outstanding senior convertible notes using a market approach based on actual bids and offers in an over-the-counter market, or Level 2 inputs, on the last trading day of the period. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. The estimated useful life of each asset category is as follows: Computer and networking equipment 3 to 5 years Leasehold improvements Shorter of lease term or 5 years Furniture and fixtures 3 years Office equipment 3 years Internal-use software 3 to 5 years The Company periodically reviews the estimated useful lives of property and equipment and any changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the consolidated statements of operations. Repairs and maintenance costs are expensed as incurred. Internal-Use Software Development Costs Labor and related costs associated with internal-use software incurred during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization ceases at the point when the project is fully tested, is substantially completed and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets. The Company amortizes such costs on a straight-line basis over the estimated useful life of the software, which is generally between three to five years . Completed internal-use software that is related to the Company’s network is amortized to cost of revenue over its estimated useful life. Costs incurred during the planning, training, and post-implementation stages of the software development life-cycle are expensed as incurred. Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net tangible and identifiable intangible assets acquired. The carrying amount of goodwill is reviewed for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has a single operating segment and reporting unit structure for all of the periods presented. As part of the annual goodwill impairment test, the Company may first perform a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of the qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test will be required. If the Company has determined it necessary to perform a quantitative impairment assessment, the Company will compare the fair value of the reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill of the reporting unit. The Company did not recognize any goodwill impairment charges for any of the periods presented. 100 Goodwill has historically been tested for impairment annually on October 31 or more frequently upon the occurrence of certain events or substantive changes in circumstances that indicate impairment is more likely than not. During the year ended December 31, 2025, the Company changed the date of its annual impairment test from October 31 to October 1 of each year. This change is preferable because it aligns the Company’s impairment testing procedures with its annual business planning and budgeting process and allows the Company to maximize time and resources required to perform the impairment analysis. The Company does not consider this change in impairment testing date to be a material change in the application of an accounting principle as it does not result in the delay, acceleration or avoidance of an impairment charge. On October 1, 2025, the Company completed its annual goodwill impairment test associated with its single reporting unit and, based on the qualitative assessment, determined it was more likely than not that the fair value of the reporting unit exceeded its carrying value. The Company did not identify any events or changes in circumstances since the performance of its annual goodwill impairment test that would require the Company to perform another goodwill impairment test during the fiscal year. The Company’s definite lived intangible assets are carried at cost, net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company estimates the useful life by estimating the expected period of economic benefit. The useful lives of the intangible assets are as follows: Customer relationships 3 to 8 years Developed technology 4 to 5 years Trade names 3 to 4 years Internet protocol addresses 10 years Long-lived assets, including property and equipment, definite lived intangible assets, and operating lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in market capitalization, facility closures, or work-force reductions indicate that the carrying amount of the long-lived asset or asset group may not be recoverable. When such events occur, the Company compares the carrying amount of the asset or asset group to the undiscounted expected future cash flows related to the asset or asset group. If this comparison indicates that an impairment is present, the amount of impairment is calculate as the difference between the carrying amount and the fair value of the asset or asset group. In addition to the recoverability assessment, the Company periodically reviews the remaining estimated useful lives of long-lived assets. If the estimated useful life assumption for any asset is changed due to new information, the remaining unamortized balance would be depreciated or amortized over the revised estimated useful life, on a prospective basis. Refer to Note 5 — Balance Sheet Information and Note 6 — Leases for discussion of impairment of property and equipment and impairment of operating lease right-of-use asset, respectively. 101 Leases The Company leases office space and data centers (“colocation leases”) under non-cancelable operating leases with various expiration dates. The Company also leases server equipment under non-cancelable finance leases with various expiration dates. The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use assets and lease liabilities are recognized at the present value of the future lease payments at commencement date. The interest rate implicit in the Company’s operating leases is not readily determinable, and therefore an incremental borrowing rate is estimated to determine the present value of future payments. The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. Operating lease right-of-use assets also include any prepaid lease payments and exclude lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term commencing on the date the Company has the right to use the leased property. The lease terms may include options to extend or terminate the lease. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that the option will be exercised. The lease agreements may contain variable costs such as common area maintenance, operating expenses or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. The Company’s lease agreements generally do not contain any residual value guarantees or restrictive covenants. Certain of our operating leases contain both lease and non-lease components. Non-lease components for our office spaces include fixed payments for maintenance, utilities, real estate taxes, and management fees. Non-lease components for colocation leases include fixed payments for utilities and other operating costs. For both office spaces and colocation leases, the Company combines fixed lease and non-lease components and account for them as a single lease component. The Company leases networking equipment from a third party through equipment finance leases. These leases include a bargain purchase option, resulting in a full transfer of ownership at the completion of the lease term. Operating leases are reflected in operating lease right-of-use assets, operating lease liabilities, and operating lease liabilities, non-current on the consolidated balance sheets. Finance leases are included in property and equipment, net, finance lease liabilities, and finance lease liabilities, non-current on the consolidated balance sheets. Convertible Debt The Company evaluated the terms of its debt in line with ASC 470-20, as amended by Accounting Standards Update (“ASU”) 2020-06, and concluded that the instrument does not require separation and that there were no other derivatives that required separation. The Company has combined these features with the host contract and accounted for the convertible debt as a single liability in long-term debt on the consolidated balance sheets. The carrying amount of the liability is either based on fair value or the gross proceeds, net of the unamortized transaction costs incurred related to the issuance of the convertible debt instrument, and any partial repurchases made. The debt discount from the net unamortized transaction cost is amortized to interest expense over the term of the convertible debt instrument using the effective interest rate method. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts in which the standard contract term is one year, although terms may vary by contract. Most of the Company’s contracts are non-cancelable over the contractual term. The majority of the Company’s usage-based contracts commit the customer to a minimum monthly level of usage and specify the rate at which the customer must pay for actual usage above the monthly minimum. The Company also offers subscriptions to access security services at a fixed rate. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. In accordance with Revenue from Contracts with Customers (“ASC 606”), revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services. To achieve the core principle of this standard, the Company applies the following five steps: 102 (1) Identify the contract with a customer The Company considers the terms and conditions of contracts with customers and its customary business practices in identifying contracts under ASC 606. The Company determines it has a contract with a customer when the contract is approved, each party’s rights regarding the services to be transferred can be identified, payment terms for the services can be identified, it has been determined that the customer has the ability and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. (2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from the Company or from third parties, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The Company’s contracts with customers often include promises to transfer multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. Performance obligations generally represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. (3) Determine the transaction price The transaction price is determined based on the consideration to which the Company is expected to be entitled in exchange for transferring services to the customer. Variable consideration is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The transaction price in a contract for usage-based services is typically equal to the minimum commit price in the contract plus any variable amounts of usage above the minimum commitment, less any discounts provided. The transaction price in a contract that does not contain usage-based services is equal to the total contract value. (4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”). For contracts with multiple performance obligations that are delivered over different time periods, the Company allocates the contract transaction price to each performance obligation using the estimated SSP of each distinct good or service in the contract. Judgment is required to determine the SSP for each distinct performance obligation. The Company analyzes separate sales of its services or the discounted list price per management’s approved price list as a basis for estimating the SSP of these services. In instances where SSP is not directly observable, such as when the Company does not sell the service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those services by customers and circumstances. In these instances, the Company may use information, such as geographic region and distribution channel, in determining the SSP. Because the Company’s typical contracts represent distinct services delivered over time with the same pattern of transfer to the customer, usage-based consideration primarily related to actual consumption over the minimum commit levels is allocated to the period to which it relates. The amount of consideration recognized for usage above the minimum commit price is limited to the amount the Company expects to be entitled to receive in exchange for providing services. The Company has elected to apply the practical expedient for estimating and disclosing the variable consideration when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a performance obligation from its remaining performance obligations under these contracts. For contracts to which such practical expedient cannot be applied, consideration is estimated. (5) Recognize revenue when or as performance obligations are satisfied Revenue is recognized when control of the services is transferred to the customer, in an amount that reflects the consideration expected to be received in exchange for those services. The Company generates all its revenue from contracts with customers. The Company’s revenue is recognized over time, consistent with the pattern of benefit provided to the 103 customer over the term of the agreement. Revenue on the Company’s subscription services are recognized ratably over their respective contractual term. At times, customers may request changes that either amend, replace, or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts should be accounted for as a separate contract or as a prospective modification. In contracts where there are timing differences between when the Company transfers a promised good or service to the customer and when the customer pays for that good or service, the Company has determined its contracts do not include a significant financing component. The Company has also elected the practical expedient to not measure financing components for any contract where the timing difference is less than one year. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as colocation costs. Cost of revenue also includes employee costs for network operation, build-out and support and services delivery, network storage costs, cost of managed services and software-as-a-service, depreciation of network equipment used to deliver services, and amortization of network-related internal-use software. The Company enters into contracts for bandwidth with third-party network providers with terms of typically one year . These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. The Company enters into contracts for colocation services with third-party providers with terms typically ranging from one to six years . Research and Development Costs Research and development costs consist of primarily payroll and related personnel costs for the design, development, testing, and enhancement of the Company’s edge cloud platform. Research and development expenses also include cloud infrastructure fees for development and testing. Costs incurred in the development of the Company’s edge cloud platform are expensed as incurred, excluding those expenses which meet the criteria for the capitalization of internal-use software. Advertising Expense The Company recognizes advertising expense as incurred. The Company recognized total advertising expense of approximately $ 5.1 million, $ 5.8 million and $ 4.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. Accounting for Stock-Based Compensation The Company recognizes stock-based compensation expense based on the grant-date fair value of the awards. The fair values of the restricted stock units (“RSUs”) and performance stock awards (“PSUs”) are based on the fair value of the Company’s stock price on the grant date. The fair values of stock options and employee stock purchase program (“ESPP”) are based on the Black-Scholes option-pricing model. The fair value of the market-based performance stock awards (“MPSUs”) and Relative Total Shareholder Return Award PSUs (“rTSR PSUs”) are measured using a Monte Carlo simulation valuation model. The determination of the fair value of a stock-based award is affected by the deemed fair value of the underlying stock price on the grant date, as well as assumptions regarding a number of other complex and subjective variables, including expected term and stock price volatility of the awards. Stock-based compensation expense for awards with service-based vesting only is recognized on a straight-line basis over the requisite service period of the awards, which is generally three or four years . In addition to service-based conditions, stock-based compensation expense for awards that have performance-based or market-based conditions are recognized over the requisite service period for each separately-vesting tranche as though each tranche of the award is its own separate grant, which results in an accelerated recognition of compensation cost. The Company accounts for forfeitures as they occur. 104 Foreign Currency The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the consolidated statements of operations. The aggregate transaction gain or loss for the years ended December 31, 2025, 2024 and 2023 is included in the determination of net income for the period and was not material to the respective periods. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations and consolidated statement of comprehensive loss. Accrued interest and penalties are included in accrued expenses on the consolidated balance sheet. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options, restricted stock units, restricted stock awards, shares issuable under its employee stock purchase plans and performance stock awards. The Company also applies the if-converted method for calculation of diluted earnings per share for its convertible debt instruments. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Segment Information The Company has one reportable and operating segment. Financial information about the Company’s operating segment and geographic areas is presented in Note 13 to these financial statements. Recently Issued and Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The guidance is effective for the Company's annual 105 periods beginning in 2025. The Company adopted the standard on December 31, 2025. For further information, refer to Note 12—Income Taxes, in these financial statements. In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses,” which aims to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for the Company's annual periods beginning in 2027 and interim periods beginning in the first quarter of fiscal year 2028. The Company is currently evaluating the impact of the new guidance. In November 2024, the FASB issued ASU 2024-04 “Induced Conversions of Convertible Debt Instruments,” which amends ASC 470-202 to clarify the requirements related to accounting for the settlement of a debt instrument as an induced conversion. The guidance is effective for the Company's annual periods beginning in 2026 and interim periods within those annual reporting periods. The Company did not early adopt and is currently evaluating the impact of the new guidance. In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which aims to clarify and modernize the accounting for costs related to internal-use software. The guidance is effective for the Company's interim and annual periods beginning in 2028. The Company is currently evaluating the impact of the new guidance. 3. Revenue Disaggregation of Revenue Revenue by geography is based on the billing address of the customer. Aside from the United States, no other single country accounted for more than 10% of revenue for the years ended December 31, 2025, 2024 and 2023. The following table presents the Company’s net revenue by geographic region: Year ended December 31, 2025 2024 2023 (in thousands) United States $ 465,450 $ 407,324 $ 370,424 All other countries 158,568 136,352 135,564 Total revenue $ 624,018 $ 543,676 $ 505,988 The Company reports its revenue by three product lines: Network Services, Security, and Other. Network Services include solutions designed to improve performance of websites, apps, application programming interfaces (“APIs”), and digital media. Security includes products designed to protect websites, apps, APIs and users. Other includes Compute solutions that allow developers to build and deploy modern web applications on Fastly's edge cloud platform and Observability solutions that provide real-time logs, data, and metrics streamed from Fastly's edge platform for actionable insights. The following table presents the Company’s revenue by product line: Year ended December 31, 2025 2024 2023 (in thousands) Network Services $ 477,774 $ 427,690 $ 405,116 Security 125,061 103,037 92,864 Other 21,183 12,949 8,008 Total revenue $ 624,018 $ 543,676 $ 505,988 106 Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. The Company’s payment terms and conditions vary by contract type, and generally range from 30 to 90 days . Contract assets are recognized when a conditional right to consideration exists and transfer of control has occurred. The Company records a contract asset, or unbilled receivable, when revenue is recognized prior to invoicing. Contract assets are typically related to the Company's subscription services and cloud usage. Contract assets are included in accounts receivable, net on the Company's Consolidated Balance Sheets. The Company records a contract liability, or deferred revenue, when a contract is billed to customers in advance of revenue being recognized. Deferred revenue primarily consists of the unearned portions of billings for the Company’s security subscription services and the unearned portion of committed edge cloud platform usage. Contract liabilities are included in deferred revenue for the current portion and other long term liabilities for the long-term portion on the Consolidated Balance Sheets. The following table presents the Company’s contract assets and contract liabilities as of December 31, 2025 and 2024: As of December 31, 2025 As of December 31, 2024 (in thousands) Contract assets $ 1,668 $ 1,072 Contract liabilities $ 40,819 $ 29,585 The following table presents revenue recognized during the years ended December 31, 2025 and 2024 from amounts included in the contract liability at the beginning of the period: Year ended December 31, 2025 2024 (in thousands) Revenue recognized in the period from amounts included in contract liability at the beginning of the period $ 27,097 $ 33,719 Remaining Performance Obligations Revenue allocated to remaining performance obligations represents deferred revenue and amounts that were and will be invoiced and recognized as revenue in future periods for non-cancelable subscription arrangements and usage commitments. The Company’s RPO excludes performance obligations from on-demand arrangements when there are no minimum purchase commitments associated with these arrangements. As of December 31, 2025, the aggregate amount of the transaction price in our contracts allocated to remaining performance obligations that are unsatisfied or partially unsatisfied was $ 353.8 million. This amount includes 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. As of December 31, 2025, the Company expects to recognize approximately 70 % of its remaining performance obligations over the next 12 months. The Company’s typical contractual term with its customers is one year, although terms may vary by contract. Costs to Obtain a Contract As of December 31, 2025 and December 31, 2024, the Company’s costs to obtain contracts were as follows: As of December 31, 2025 As of December 31, 2024 (in thousands) Deferred contract costs, net $ 47,586 $ 52,583 107 During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 19.4 million, $ 18.6 million and $ 15.5 million of amortization related to deferred contract costs, respectively. These costs are recorded within sales and marketing expenses on the accompanying consolidated statements of operations. 4. Investments and Fair Value Measurements Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash held in banks, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to their short maturities, and are therefore excluded from the fair value tables below. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There is a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3—Unobservable inputs that are supported by little or no market activity, which require management judgment or estimation. The Company measures its cash equivalents and marketable securities at fair value. The Company classifies its cash equivalents and marketable securities within Level 1 or Level 2 because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company classifies its investments, which are comprised of corporate notes and bonds, commercial paper, U.S. treasury securities, securities of deposit, and municipal securities within Level 2 of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. Financial assets and liabilities are measured and recorded at fair value on a recurring basis. The following table summarizes the Company’s cash and marketable securities' amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents or marketable securities as of December 31, 2025 and 2024. 108 As of December 31, 2025 Reported as: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and cash equivalents Marketable securities: (in thousands) Cash $ 87,743 $ — $ — $ 87,743 $ 87,743 $ — Level 1: Money market funds 44,032 — — 44,032 44,032 — Level 2: U.S. Treasury securities 64,273 27 — 64,300 8,290 56,010 Corporate notes and bonds 50,942 19 — 50,961 4,570 46,391 Commercial paper 111,706 20 ( 2 ) 111,724 33,928 77,796 Municipal Securities 1,600 — — 1,600 1,600 — Certificates of deposit 1,399 — — 1,399 400 999 Total $ 361,695 $ 66 $ ( 2 ) $ 361,759 $ 180,563 $ 181,196 As of December 31, 2024 Reported as: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash and cash equivalents: Marketable securities: (in thousands) Cash $ 52,951 $ — $ — $ 52,951 $ 52,951 $ — Level 1: Money market funds 233,224 — — 233,224 233,224 — Level 2: Corporate notes and bonds 6,005 3 — 6,008 — 6,008 Commercial paper 3,699 — — 3,699 — 3,699 Total $ 295,879 $ 3 $ — $ 295,882 $ 286,175 $ 9,707 There were no transfers of assets and liabilities measured at fair value between Level 1 and Level 2, or between Level 2 and Level 3, during the years ended December 31, 2025 and 2024. There were no material realized gains or losses from sales of marketable securities that were reclassified out of accumulated other comprehensive loss into other expense, net as of December 31, 2025 and December 31, 2024. For the years ended December 31, 2025, 2024 and 2023, the Company did not record any impairment charges for its marketable debt securities in its consolidated statements of operations. No impairment loss has been recorded on the securities as the Company does not intend to sell any impaired securities, nor is it more likely than not that the Company would be required to sell impaired securities before recovery of amortized cost basis. 109 5. Balance Sheet Information Allowance for Credit Losses The activity in the accounts receivable reserves is as follows: As of December 31, 2025 2024 2023 (in thousands) Beginning balance $ 8,254 $ 7,054 $ 5,029 Additions to the reserves 4,181 3,834 2,025 Write-offs and adjustments ( 6,173 ) ( 2,634 ) — Ending balance $ 6,262 $ 8,254 $ 7,054 Revenue Reserve The activity in the revenue reserve is as follows: As of December 31, 2025 2024 2023 (in thousands) Beginning balance $ 5,130 $ 4,296 $ 2,449 Additions to the reserves 10,052 834 1,847 Write-offs and adjustments ( 7,420 ) — — Ending balance $ 7,762 $ 5,130 $ 4,296 Property and Equipment, Net Property and equipment, net consisted of the following: As of December 31, 2025 2024 (in thousands) Computer and networking equipment $ 278,181 $ 237,148 Leasehold improvements 8,181 8,139 Furniture and fixtures 2,430 2,153 Office equipment 1,232 1,218 Internal-use software 148,419 123,849 Property and equipment, gross 438,443 372,507 Accumulated depreciation and amortization ( 251,658 ) ( 193,410 ) Property and equipment, net $ 186,785 $ 179,097 The Company did not recognize any material impairment charge during the year ended December 31, 2025, During the year ended December 31, 2024, the Company recognized an impairment charge of $ 2.8 million related to equipment and an internal-use software project that the Company did not plan to continue with and therefore abandoned. During the year ended December 31, 2023, the Company recognized an impairment charge of $ 4.3 million, of which $ 3.0 million related to property and equipment, net and $ 1.3 million related to advance payments for the purchase of property and equipment. The write-off was primarily related to excess computer and networking equipment including software the 110 Company did not expect to use and therefore abandoned. Impairment charges are included within impairment expense in the consolidated statements of operations. Depreciation on property and equipment for the years ended December 31, 2025, 2024 and 2023 was $ 61.0 million, $ 54.0 million, and $ 51.6 million, respectively. Included in these amounts was amortization expense for capitalized internal-use software costs of $ 22.6 million, $ 17.0 million and $ 14.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, the unamortized balance of capitalized internal-use software costs on the Company’s consolidated balance sheets was approximately $ 81.4 million and $ 79.5 million, respectively. Other Assets Other assets consisted of the following: As of December 31, 2025 2024 (in thousands) Deferred contract costs, net $ 47,586 $ 52,583 Advance payment for purchase of property and equipment — 9,837 Other assets 10,203 5,982 Total other assets $ 57,789 $ 68,402 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: As of December 31, 2025 2024 (in thousands) Prepaid expenses $ 16,737 $ 22,455 Other current assets 10,184 5,870 Total $ 26,921 $ 28,325 Accrued Expenses Accrued expenses consisted of the following: As of December 31, 2025 2024 (in thousands) Accrued compensation and related benefits $ 46,611 $ 19,266 Accrued colocation and bandwidth costs 13,944 15,317 Other tax liabilities 4,800 4,266 Other accrued expenses 5,314 2,773 Total accrued expenses $ 70,669 $ 41,622 111 Other Current Liabilities Other current liabilities consisted of the following: As of December 31, 2025 2024 (in thousands) Accrued computer and networking equipment $ 413 $ 743 Customer deposits 6,115 1,213 Other current liabilities 971 840 Total other current liabilities $ 7,499 $ 2,796 6. Leases The Company has operating leases for corporate offices and data centers (“colocation” leases) and finance leases for networking equipment. The Company’s operating leases have remaining lease terms ranging from less than 1 year to 9 years, some of which include options to extend the leases. The Company also subleases a portion of its corporate office spaces. The Company’s subleases have remaining lease terms ranging from less than 1 year to 4 years. Sublease income was $ 0.8 million, $ 1.4 million, and $ 1.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. The components of lease cost were as follows: As of December 31, 2025 2024 2023 (in thousands) Operating lease cost: Operating lease cost $ 26,809 $ 26,581 $ 26,996 Variable lease cost 20,546 17,003 15,112 Total operating lease cost $ 47,355 $ 43,584 $ 42,108 Finance lease cost: Amortization of assets under finance lease $ 11,598 $ 13,521 $ 14,391 Interest 15 378 1,328 Total finance lease cost $ 11,613 $ 13,899 $ 15,719 The short-term lease costs were not material for the years ended December 31, 2025, 2024 and 2023. The Company did not recognize any material impairment charge on its operating lease right-of-use assets during the year ended December 31, 2025. During the year ended December 31, 2024, the Company recognized an impairment charge of $ 1.7 million related to right-of-use assets, of which $ 1.3 million was related to the Company exiting a certain office facility and is included within the impairment expense line in the Company's consolidated statements of operations. During the year ended December 31, 2023, the Company recognized impairment on its operating lease right-of-use assets of $ 0.7 million. As of December 31, 2025 2024 2023 (in thousands) Weighted Average Remaining Lease term (in years): Operating leases 4.39 2.84 3.48 Finance leases — 0.32 1.00 Weighted Average Discount Rate: Operating leases 7.16 % 6.36 % 6.03 % Finance leases — % 4.67 % 4.67 % 112 Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows: Operating Leases (in thousands) Year ending December 31, 2026 $ 30,344 2027 21,670 2028 12,133 2029 6,559 2030 5,028 Thereafter 15,245 Total future minimum lease payments $ 90,979 Less: imputed interest ( 13,526 ) Total liability $ 77,453 As of December 31, 2025, the Company has undiscounted commitments of $ 9.1 million for operating leases that have not yet commenced, and therefore are not included in the right-of-use asset or operating lease liability. These operating leases will commence in the first quarter of 2026 with lease terms ranging from 2 years to 5 years. 7. Goodwill and Intangible Assets Goodwill As of December 31, 2025 and 2024, the Company’s goodwill was $ 670.4 million. The Company did not record an impairment charge on goodwill for the fiscal years ended December 31, 2025, 2024 and 2023. Intangible Assets, net As of December 31, 2025 and December 31, 2024, the Company’s intangible assets consisted of the following: As of December 31, 2025 As of December 31, 2024 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in thousands) Intangible assets: Customer relationships $ 69,100 $ ( 45,347 ) $ 23,753 $ 69,860 $ ( 37,364 ) $ 32,496 Developed technology 49,500 ( 49,500 ) — 50,130 ( 42,482 ) 7,648 Trade names 3,300 ( 3,300 ) — 3,910 ( 3,694 ) 216 Internet protocol addresses 4,984 ( 2,966 ) 2,018 4,984 ( 2,468 ) 2,516 Total intangible assets $ 126,884 $ ( 101,113 ) $ 25,771 $ 128,884 $ ( 86,008 ) $ 42,876 The Company’s customer relationships, developed technology, trade names and Internet protocol addresses represent intangible assets subject to amortization. Amortization expense was $ 16.8 million, $ 19.6 million and $ 20.4 million, for the years ended December 31, 2025, 2024 and 2023, respectively. The Company did not purchase any intangible assets during the years ended December 31, 2025, 2024 and 2023. The Company recorded an impairment charge of $ 0.3 million for the year ended December 31, 2025 related to the write-off of intangible assets no longer in use. The Company did not record an impairment charge on its intangible assets for either of the years ended December 31, 2024 or 2023. 113 The expected amortization expense of intangible assets subject to amortization as of December 31, 2025 is as follows: As of December 31, 2025 (in thousands) Year ending December 31, 2026 $ 9,064 2027 9,051 2028 6,891 2029 378 2030 281 Thereafter 106 Total $ 25,771 8. Debt Instruments Senior Secured Credit Facilities Credit Agreement On February 16, 2021, the Company entered into a Senior Secured Credit Facilities Credit Agreement (as amended, restated, amended and restated, supplemented, restructured, or otherwise modified from time to time, the “Credit Agreement”) with the lenders from time to time party thereto (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. The Credit Agreement provides for a $ 60.0 million senior secured revolving facility, with a maturity date of the earlier of (i) April 30, 2027 and (ii) so long as any of our permitted convertible debt is outstanding after January 30, 2027 and if Net Liquidity is less than $ 200.0 million (or, if the amount of outstanding permitted convertible debt is less than $ 35.0 million, $ 120.0 million), such date. The Company recorded $ 0.6 million of debt issuance costs associated with the Credit Agreement in other assets on the Company’s consolidated balance sheet. The revolving loans bear interest, at the Company’s election, at an annual rate based on the ABR (as defined in the Credit Agreement) plus 1.00 % (such loans, the “ABR Loans”) or the Adjusted Term SOFR (as defined in the Credit Agreement) plus 2.00 % (such loans, the “SOFR Loans”). Interest payments on outstanding borrowings are due, with respect to SOFR Loans, on the last day of each interest period and with respect to ABR Loans, on the last calendar day of each month. The Credit Agreement has a commitment fee on the unused portion of the borrowing commitment, which is payable on the last day of each calendar quarter at a rate per annum of 0.20 % to 0.25 % depending on the average daily outstanding balance of all loans and letters of credit under the Credit Agreement. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain a consolidated adjusted quick ratio of at least 1.25 to 1:00 tested on a quarterly basis as well as a springing revenue growth covenant not to be less than 5 % on a quarterly basis for certain periods if the Company’s consolidated adjusted quick ratio falls below 1.75 to 1:00 on the last day of any fiscal quarter. The Credit Agreement requires the Company to comply with various affirmative and negative covenants, and contains customary events of default. As of December 31, 2025 and 2024, the Company and its subsidiaries were in compliance with all of the Credit Agreement’s covenants. During the years ended December 31, 2025 and 2024, no amounts were drawn down on the Company’s Credit Agreement. As of the years ended December 31, 2025 and 2024, no amounts were outstanding under the Credit Agreement. 114 Convertible Senior Notes On March 5, 2021, the Company issued approximately $ 948.8 million aggregate principal amount of 0 % convertible senior notes due 2026 (the “2026 Notes”), including the exercise in full by the initial purchasers of their option to purchase up to an additional approximately $ 123.8 million principal amount of the 2026 Notes. The 2026 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2026 Notes will mature on March 15, 2026, unless earlier converted, redeemed or repurchased. The net proceeds from the issuance of the 2026 Notes were approximately $ 930.0 million after deducting the initial purchasers’ discounts and transaction costs. On May 25, 2022, the Company entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase (the “Repurchases”) $ 235.0 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 176.4 million and aggregate transaction costs of $ 0.7 million. The Repurchases were accounted for as a debt extinguishment that resulted in a net gain of $ 54.4 million, which was recorded as non-operating income on the Company's consolidated statement of operations for the year ended December 31, 2022. During the year ended December 31, 2023, the Company entered into several separate privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 367.3 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 309.1 million and aggregate transaction costs of $ 2.0 million. The Repurchases were accounted for as a debt extinguishment that resulted in a net gain of $ 52.4 million, which was recorded as non-operating income on the Company’s consolidated statement of operations for the year ended December 31, 2023. During the year ended December 31, 2024, the Company entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to exchange $ 157.9 million aggregate principal amount of the 2026 Notes for $ 150.0 million aggregate principal amount of 7.75 % convertible senior notes due 2028 (the “2028 Notes”), which were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The exchange was accounted for as a debt extinguishment and an issuance of new debt that resulted in a net gain of $ 1.4 million, which was recorded as non-operating income on the Company’s consolidated statement of operations for the year ended December 31, 2024. During the year ended December 31, 2025, the Company issued $ 180.0 million aggregate principal amount of 0 % convertible senior unsecured notes due in 2030 (the “2030 Notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. Concurrently with issuance of the 2030 Notes, the Company also entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 150.0 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 148.9 million. The repurchase was accounted for as a debt extinguishment and resulted in a net gain of $ 0.9 million, which was recorded as non-operating income on the Company’s consolidated statement of operations for the year ended December 31, 2025. As of December 31, 2025, the Company's outstanding convertible senior notes (collectively, the "Notes") had a par value totaling $ 368.6 million. The following table summarizes further details of the Notes: Notes Issuance Date Maturity Date Principal amount (in thousands) Coupon Interest Rate Effective Interest Rate 2026 Notes March 5, 2021 March 15, 2026 $ 38,594 — % 0.38 % 2028 Notes June 1, 2025 June 1, 2028 $ 150,000 7.75 % 7.77 % 2030 Notes December 5, 2025 December 15, 2030 $ 180,000 — % 0.76 % 115 Redemption Rights of the Notes The Company may redeem for cash, all or any portion of the 2026 Notes, at the Company’s option, at a redemption price equal to 100 % of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. No sinking fund is provided for the 2026 Notes. The Company may not redeem the 2028 Notes prior to the maturity date. The 2030 Notes may not be redeemed by the Company prior to December 20, 2028. On or after December 20, 2028, if the common stock price is at least 130 % of the conversion price for the 2030 Notes in effect for at least 20 of any 30 consecutive trading day period, the Company may redeem all or part of the Notes at a redemption price equal to the principal amount and accrued and unpaid interest with at least 35 days’ notice to holders. If the Company undergoes a fundamental change at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. Conversion Rights of the Notes Prior to the close of business on the business day immediately preceding the conversion date, as noted in the table below, under the following circumstances a holder may exercise their conversion right: • During any calendar quarter commencing after the calendar quarter ended June 30, 2021 for the 2026 Notes, March 31, 2025 for the 2028 Notes and March 31, 2026 for the 2030 Notes (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; • During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the respective Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or • Upon the occurrence of specified corporate events. On or after the respective conversion date, as noted in the table below, holders may convert all or any portion of their respective Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. 116 The conversion rights of the Notes are as follows: Notes Conversion Date Conversion Rate (1) Conversion Price per share 2026 Notes December 15, 2025 9.7272 $ 102.80 2028 Notes March 1, 2028 50.6586 $ 19.74 2030 Notes September 16, 2030 65.5136 $ 15.26 (1) The conversion rate for the Notes is established as a number of shares of the Company's common stock per $1,000 principal amount of the Notes, that is equivalent to the conversion price per share, subject to adjustments in certain events. Upon the occurrence of certain corporate events the Company will increase the conversion rate for a holder that elects to convert its Notes. As of December 31, 2025, the conversion conditions had not been met by any of the Notes, and therefore were not yet convertible. Carrying Value of the Notes as of December 31, 2025 and 2024 as follows : 2030 Notes 2028 Notes 2026 Notes As of December 31, 2025 Principal amount $ 180,000 $ 150,000 $ 38,594 Less: unamortized debt issuance costs ( 6,620 ) ( 98 ) ( 37 ) Net carrying amount 173,380 149,902 38,557 As of December 31, 2024 Principal amount — 150,000 188,594 Less: unamortized debt issuance costs — ( 77 ) ( 903 ) Net carrying amount — 149,923 187,691 For the years ended December 31, 2025, 2024 and 2023, interest expense related to the Company’s debt obligations was $ 12.6 million, $ 2.3 million, and $ 2.7 million respectively. As of December 31, 2025 and 2024, the total estimated fair value of the Company's convertible senior notes were $ 379.5 million and $ 327.7 million, respectively. Capped Calls In connection with the pricing of the issuance of the 2030 Notes, the Company entered into the Capped Calls. The Capped Calls associated with the 2030 Notes each had an initial strike price of approximately $ 15.26 per share. These Capped Calls had initial cap prices of $ 23.04 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the 2030 Notes, with such offset subject to a cap based on the cap price. The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offers and the announcement of such events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, increased cost of hedging and hedging disruptions. For accounting purposes, the Capped Calls are separate transactions and not part of the terms of the 2030 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity resulting in a $ 18.2 million decrease in additional paid in capital. 9. Commitments and Contingencies Purchase Commitments As of December 31, 2025, the Company had long-term commitments for cost of revenue related agreements (i.e., bandwidth usage, peering and other managed services with various networks, fixed asset vendors, Internet service providers and other third-party vendors). The Company also has non-cost of revenue long-term commitments for various non-cancelable agreements. 117 Aside from the Company’s finance and operating lease commitments, including its colocation operating commitments, which have been disclosed in Note 6—Leases, the minimum future commitments related to the Company’s purchase commitments as of December 31, 2025 were as follows: Cost of Revenue Commitments Operating Expense Commitments Total Purchase Commitments (in thousands) Year ending December 31, 2026 $ 59,276 $ 21,668 $ 80,944 2027 17,556 13,994 31,550 2028 4,081 8,664 12,745 2029 18 — 18 2030 — — — Total $ 80,931 $ 44,326 $ 125,257 Sales and Use Tax The Company conducts its operations in many tax jurisdictions throughout the United States. In some of these jurisdictions the Company is subject to indirect taxes, such as sales and use taxes, and may be subject to certain other taxes. In accordance with GAAP, the Company has recorded a provision for its tax exposure in these jurisdictions when it is both probable that a liability has been incurred and the amount of the exposure can be reasonably estimated. The Company has accrued $ 4.8 million and $ 4.3 million as of December 31, 2025 and 2024, respectively, for sales and use tax. These estimates are based on several key assumptions, including the taxability of the Company’s operations and the jurisdictions in which the Company believes it has nexus. In the event these jurisdictions challenge the Company’s assumptions and analysis, its actual exposure could differ materially from its current estimates. Legal Matters From time to time, the Company has been and may be subject to legal proceedings and claims. Such matters are subject to many uncertainties and outcomes are not predictable. The Company accrues for contingencies when it believes that a loss is probable and that the Company can reasonably estimate the amount of any such loss. On May 24, 2024, a purported securities class action lawsuit was filed in the United States District Court for the Northern District of California, captioned Ken Kula v. Fastly, Inc., et al. (Case No. 4:24-cv-03170), naming the Company and certain of its officers as defendants. Motions for lead plaintiff were filed on July 23, 2024. On August 22, 2024, the court appointed lead plaintiff (“Lead Plaintiff ” ) and lead counsel. On November 1, 2024, Lead Plaintiff filed an amended complaint. The amended complaint alleges violations of Section 10(b) and 20(a) of the Exchange Act purportedly on behalf of all those who purchased or acquired Fastly securities between November 15, 2023 and August 7, 2024. The complaint seeks unspecified compensatory damages, and other relief. Defendants filed a motion to dismiss on January 15, 2025. Lead Plaintiff filed an opposition to the defendants’ motion to dismiss on March 17, 2025. Defendants filed a reply in support of the motion to dismiss on April 30, 2025. On September 24, 2025, the court issued an order granting in part and denying in part the motion to dismiss. On October 24, 2025, Lead Plaintiff filed a second amended complaint. On December 9, 2025, Defendants filed a motion to dismiss the second amended complaint. On January 26, 2026, Lead Plaintiff filed an opposition. Defendants filed a reply in support of the motion to dismiss the second amended complaint on February 19, 2026. A hearing is scheduled for April 30, 2026 on Defendants’ motion to dismiss the second amended complaint. It is possible that additional lawsuits will be filed, or allegations made by stockholders, regarding these same or other matters and also naming as defendants the Company and its officers and directors. On June 12, 2024, certain of the Company’s officers and directors were named as defendants in a stockholder derivative action filed in the United States District Court for the Northern District of California, captioned Roy v. Nightingale, et al. (Case No. 3:24-cv-03549-JCS). On July 1, 2024, a stockholder derivative complaint was also filed against certain of the Company's officers and directors in the same court, captioned Steffens v. Nightingale et al. (Case No. 4:24-cv-03984-DMR). The derivative complaints are based on substantially similar allegations as those in the securities class action. The derivative complaints assert that defendants breached their fiduciary duties as directors and/or officers of the Company, as well as claims of unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, aiding and abetting, violations of 118 Section 14(a) of the Exchange Act, and contribution under Sections 10(b) and 21D of the Exchange Act. The court consolidated and stayed the derivative actions until after resolution of the Company’s motion(s) to dismiss in the above-referenced securities class action. On August 23, 2024, a substantially similar stockholder derivative complaint was filed against certain of the Company’s officers and directors in the United States District Court for the District of Delaware, captioned Sweitzer v. Nightingale, et al. (Case No. 1:24-cv-00969-GBW) (the “Sweitzer Action”). On September 26, 2024, the court stayed the Sweitzer Action until after resolution of the Company's motion(s) to dismiss in the above-referenced securities class action. On December 20, 2024, a substantially similar stockholder derivative complaint was filed against certain of the Company’s officers and directors in the Court of Chancery for the State of Delaware, captioned Bushansky v. Nightingale, et al. (Case No. 2024-1322) (the “Bushansky Action”). On January 8, 2025, the court stayed the Bushansky Action until after resolution of the Company’s motion(s) to dismiss in the above-referenced securities class action. It is possible that additional lawsuits will be filed, or allegations made by stockholders, regarding these same or other matters and also naming as defendants the Company and its officers and directors. The Company is also party to various disputes that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material effect on the Company's business, results of operations, financial conditions, or cash flows. The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and it may not prevail. In addition, the Company may incur substantial legal fees and costs in connection with such lawsuits. The Company is not currently able to estimate the possible cost to it from these matters, as the pending lawsuits are currently at an early stage, and it cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages that it may be required to pay. Such amounts could be material to the Company's financial statements if the Company does not prevail in the defense against the pending lawsuits and any other related lawsuits, or even if it does prevail. As of December 31, 2025, the Company has not recorded any significant accruals for loss contingencies associated with the above mentioned lawsuits as it does not believe an outcome resulting in a loss is probable. It will accrue for loss contingencies if it becomes both probable that it will incur a loss and if the Company can reasonably estimate the amount or range of the loss. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright, or other intellectual property right, breach of the Company’s security or data protection obligations, or its negligence, willful misconduct, or violation of law. Subject to applicable statutes of limitation, the term of these indemnification agreements is generally for the duration of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to the Company’s services and could limit its exposure in that respect. The Company has agreed to indemnify each of its officers and directors during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is, was, or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable it to recover a portion of certain future amounts paid. To date, the Company has not encountered material costs as a result of such indemnification obligations and has not accrued any related liabilities in its financial statements. In assessing whether to establish an accrual, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. 119 10. Stockholders’ Equity Common Stock The Company’s Amended and Restated Certificate of Incorporation, as amended and restated in May 2019, authorizes the issuance of 1.0 billion shares of common stock, each at a par value per share of $ 0.00002 . Holders of common stock are entitled to one vote per share. Equity Incentive Plans The Company maintains five equity incentive plans: the 2019 Equity Incentive Plan (the “2019 Plan”), 2011 Equity Incentive Plan (“2011 Plan”), 2019 Employee Stock Purchase Plan (“ESPP Plan”), the Signal Sciences Corp. 2014 Stock Option and Grant Plan, as amended (the “Signal Plan”), and the 2025 Employment Inducement Incentive Plan (the "2025 Inducement Plan"). The 2019 Plan became effective in May 2019 and replaced the 2011 Plan. The Company’s 2019 Plan provides for the issuance of incentive stock options, non-statutory stock options, restricted stock units, performance-based stock awards, and other forms of equity compensation, which are collectively referred to as stock awards to its employees, directors, and consultants. The Signal Plan includes 251,754 registered shares which can be exercised to purchase shares of Fastly’s common stock. The 2025 Inducement Plan provides for the grant of non-statutory stock options, restricted stock units, performance based stock awards, and other forms of equity compensation. As of December 31, 2025 and 2024, there were 5.8 million and 6.9 million shares of common stock available for issuance under the 2019 Plan, respectively. As of December 31, 2025 a total of 0.5 million shares were available for grant under the 2025 Inducement Plan. As of December 31, 2025 and 2024, 151.5 million and 142.1 million shares of common stock were issued and outstanding, respectively. Stock Options Options granted under the 2011 Plan and 2019 Plan are exercisable for common stock and expire within 10 years from the date of grant and generally vest over four years , at the rate of 25 % on the first anniversary of the date of grant and ratably on a monthly basis over the remaining 36-month period thereafter based on continued service. Forfeitures are recognized as they occur. The following table summarizes stock option activity during the year ended December 31, 2025: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Outstanding at December 31, 2024 2,364 $ 8.60 4.3 $ 7,592 Granted — — Exercised ( 388 ) 2.64 Forfeited ( 234 ) 4.49 Outstanding at December 31, 2025 1,742 $ 10.47 4.4 $ 4,256 Vested and exercisable at December 31, 2025 1,479 $ 9.41 3.8 $ 4,256 The total pre-tax intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 2.1 million, $ 1.9 million, and $ 3.1 million, respectively. The total grant date fair value of employee options vested for the years ended December 31, 2025, 2024, 2023 was $ 1.7 million, $ 1.9 million, and $ 2.1 million, respectively. During the years ended December 31, 2025 and 2024, and 2023, the Company recognized stock-based compensation expense from stock options of approximately $ 1.7 million, $ 1.9 million, and $ 2.1 million, respectively. 120 As of December 31, 2025, total unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $ 2.7 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 1.6 years. Restricted Stock Units The Company began granting RSUs under the 2019 Plan during the fiscal year ended December 31, 2019 as well as under the 2025 Inducement Plan during the year ended December 31, 2025. The fair value of RSUs is based on the grant date fair value and is expensed on a straight-line basis over the applicable vesting period. RSUs granted to new hires typically vest over three or four years , at the annual rate of 33 % or 25 %, respectively, on the first anniversary of the vesting start date and ratably on a quarterly basis over the remaining 24-month or 36-month period thereafter, respectively. RSUs granted to existing employees typically vest in equal quarterly installments over a three or four-year service period. All vesting is contingent on continued service. Forfeitures are recognized as they occur. The following table summarizes RSU activity during the years ended December 31, 2025: Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Nonvested RSUs as of December 31, 2024 11,982 $ 13.06 Granted 12,840 6.52 Vested ( 7,833 ) 11.95 Cancelled/forfeited ( 2,988 ) 10.38 Nonvested RSUs as of December 31, 2025 14,001 $ 8.25 During the years ended December 31, 2025, 2024 and 2023, the weighted-average grant date fair value for RSUs granted was $ 6.52 , $ 11.62 and $ 15.80 per share, respectively. During the years ended December 31, 2025, 2024 and 2023, the total weighted-average grant date fair value of RSUs vested was $ 93.6 million, $ 126.5 million and $ 127.3 million respectively. During the years ended December 31, 2025, 2024 and 2023, the Company recognized stock-based compensation expense related to RSUs of $ 83.7 million, $ 96.7 million and $ 105.2 million, respectively. As of December 31, 2025, total unrecognized stock-based compensation cost related to non-vested RSUs was $ 103.2 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 2.2 years. Performance-Based Restricted Stock Units Performance Stock Awards for Executive Officers ("executive PSUs”) Pursuant to the Company’s 2019 Equity Incentive Plan, the Company grants certain employees shares of executive PSUs, which are to vest based on the level of achievement of certain Company-wide targets related to the Company’s operating plan for the relevant fiscal year. The Company has accounted for these awards as equity-based awards and will recognize stock-based compensation expense over the employees’ requisite service period based on the expected attainment of the Company-wide targets as of the end of each reporting period. Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Nonvested executive PSUs as of December 31, 2024 1,089 $ 13.21 Granted 1,901 6.89 Vested ( 172 ) 14.82 Cancelled/forfeited ( 1,373 ) 10.71 Nonvested executive PSUs as of December 31, 2025 1,445 $ 7.08 121 For the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 3.9 million, $ 3.5 million, and $ 4.3 million of stock-based compensation expense associated with these awards, respectively. Company-wide Bonus Program (“Bonus Program”) On an annual basis the Compensation Committee approves a bonus program for the fiscal year, including performance targets, to most of the Company’s employees on active payroll in the relevant fiscal year. Shares awarded under the program are paid out the following year in February in fully vested RSUs and based on the final attainment of Company-wide performance targets which are tied to its operating plan for the relevant fiscal year. The payout of the Bonus Program will vary linearly between 50 %, 100 %, and 150 % based on the achievement of these targets. Employees are required to be employed through the payout date to earn the awards. The Company has accounted for these awards as liability-based awards, since the monetary value of the obligation associated with the award is based predominantly on a fixed monetary amount known at inception, and it has an unconditional obligation that it must or may settle by issuing a variable number of its equity shares. The Company recognizes stock-based compensation expense over the employees requisite service period, based on the expected attainment of the Company-wide targets as of the end of each reporting period. In February 2024, the Company paid out the bonus liability associated with the 2023 Bonus Program in 1.9 million of restricted stock units, and correspondingly recorded a charge to additional paid-in-capital of $ 26.8 million. In February 2025, the Company paid out 1.0 million of restricted stock units associated with the 2024 Bonus Program, and correspondingly recorded a charge to additional paid-in-capital of $ 6.9 million. The Company has paid out the Bonus Program approved in February 2025 in February 2026. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 35.3 million, $ 10.0 million, and $ 24.7 million of stock-based compensation expense related to the company-wide Bonus Program, respectively. Market-Based Performance Stock Awards In September 2022 and January 2023, pursuant to the Company’s 2019 Equity Incentive Plan, the Company granted certain employees shares of MPSUs, which are to vest upon the satisfaction of the Company’s achievement of specified Fastly common stock price targets during the applicable performance period. In addition, the awards are subject to each recipient’s continuous service through each applicable vest dates. The Company measured the fair value of the MPSUs using a Monte Carlo simulation valuation model. The risk-free interest rates used were 3.37 % - 3.68 %, which were based on five-year US treasury yield, adjusted to a continuous time basis. The expected volatility was a blended volatility rate of 80 %, which incorporated both the Company’s observed equity volatility and the relevant guideline company volatility. Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Nonvested MPSUs as of December 31, 2024 1,313 $ 6.45 Granted — — Vested — — Cancelled/forfeited ( 978 ) 6.39 Nonvested MPSUs as of December 31, 2025 335 $ 6.63 Stock-based compensation expense relating to the MPSUs are recognized using the accelerated attribution method over the derived service period. For the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 3.0 million of stock-based compensation benefit and $ 2.8 million and $ 5.9 million of stock-based compensation expense associated with these awards, respectively. Total unrecognized stock-based compensation expense related to the unvested portion of the MPSUs was $ 0.1 million as of December 31, 2025. This expense is expected to be amortized over a weighted-average vesting period of 1.9 years. Relative Total Shareholder Return Award PSUs In 2025, pursuant to the 2019 Plan, the Company granted certain employees shares of rTSR PSUs, which are to vest based on the Company’s total shareholder return (TSR) relative to a designated peer group over the performance period. The 122 Company has accounted for these awards as equity-based awards and will recognize stock-based compensation expense on a straight-line basis over the vesting period. In addition, the awards are subject to each recipient’s continuous service through the vest date. Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Nonvested rTSR PSUs as of December 31, 2024 — $ — Granted 372 14.05 Vested — — Cancelled/forfeited ( 109 ) 13.47 Nonvested rTSR PSUs as of December 31, 2025 263 $ 14.30 During the year ended December 31, 2025, the Company recognized $ 1.0 million of stock-based compensation expense associated with these awards. Employee Stock Purchase Program The ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 15 % of their eligible compensation. The ESPP provides for six-month offering periods, commencing in May and November of each year. At the end of each offering period employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the date of purchase. The Company estimates the fair value of shares to be issued under the ESPP on the first day of the offering period using the Black-Scholes valuation model. The inputs to the Black-Scholes option pricing model are the Company’s stock price on the first date of the offering period, the risk-free interest rate, the estimated volatility of the Company’s stock price over the term of the offering period, the expected term of the offering period and the expected dividend rate. Stock-based compensation expense related to the ESPP is recognized on a straight-line basis over the offering period. Forfeitures are recognized as they occur. The Company estimated the fair value of shares granted under the ESPP on the first date of the offering period using the Black-Scholes option pricing model with the following assumptions: Year ended December 31, 2025 2024 2023 Fair value of common stock $ 2.81 – $ 3.80 $ 2.33 – $ 3.56 $ 3.33 – $ 6.09 Expected term (in years) 0.49 – 0.50 0.49 – 0.50 0.49 – 0.50 Risk-free interest rate 3.75 % – 4.33 % 4.45 % – 5.40 % 4.65 % – 5.43 % Expected volatility 70 % – 82 % 54 % – 93 % 70 % – 88 % Dividend yield — % — % — % During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 2.2 million, $ 3.4 million, and $ 4.1 million in stock-based compensation expense related to the ESPP, respectively. As of December 31, 2025, total unrecognized stock-based compensation cost related to ESPP was $ 1.6 million. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 0.4 years. During the years ended December 31, 2025, 2024 and 2023, an aggregate of 1.1 million, 1.0 million and 1.0 million shares of the Company’s common stock was purchased under the ESPP, respectively. Equity Awards Modification There were no material equity award modifications in the years ended December 31, 2025, 2024 and 2023. 123 Stock-based Compensation Expense The following table summarizes the components of total stock-based compensation expense included in the accompanying consolidated statements of operations: Year ended December 31, 2025 2024 2023 (in thousands) Cost of revenue $ 10,137 $ 8,644 $ 11,656 Research and development 44,453 33,606 47,827 Sales and marketing 32,971 29,061 33,703 General and administrative 29,762 36,619 43,117 Total $ 117,323 $ 107,930 $ 136,303 For the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 7.4 million, $ 10.3 million, and $ 10.1 million of stock-based compensation expense, respectively. 11. Net Loss Per Share Attributable to Common Stockholders Basic net loss per share is computed by dividing net loss by basic weighted-average shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by diluted weighted-average shares outstanding, including potentially dilutive securities. The following table presents the computation of basic and diluted net loss per share of common stock: Year ended December 31, 2025 2024 2023 (in thousands, except per share amounts) Net loss attributable to common stockholders $ ( 121,677 ) $ ( 158,058 ) $ ( 133,088 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 146,902 138,099 128,770 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.83 ) $ ( 1.14 ) $ ( 1.03 ) The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been antidilutive: Number of Shares Year ended December 31, 2025 2024 2023 (in thousands) Stock options 1,742 2,364 2,710 RSUs 14,001 11,982 11,244 PSUs 1,445 1,089 732 MPSUs 335 1,313 1,471 rTSR PSUs 263 — — Bonus PSUs 4,054 767 1,572 Shares issuable pursuant to the ESPP 571 70 410 Convertible senior notes (if-converted) 19,767 9,433 3,370 Total 42,178 27,018 21,509 124 12. Income Taxes Loss before income ta xes includes the following components: Year ended December 31, 2025 2024 2023 (in thousands) United States $ ( 126,278 ) $ ( 161,398 ) $ ( 137,240 ) Foreign 7,089 5,944 3,931 Loss before income taxes $ ( 119,189 ) $ ( 155,454 ) $ ( 133,309 ) The income tax expense (benefit) consists of the following: Year ended December 31, 2025 2024 2023 (in thousands) Current tax provision (benefit): Federal $ — $ — $ — State 35 200 57 Foreign 1,020 611 622 Deferred tax expense (benefit): Federal — — — State — — — Foreign 1,433 1,793 ( 900 ) Total tax expense (benefit) $ 2,488 $ 2,604 $ ( 221 ) The Company recorded tax expense of $ 2.5 million and $ 2.6 million for the years ended December 31, 2025 and 2024, respectively, and recorded tax benefit of $ 0.2 million for the year ended December 31, 2023. The Company’s income tax expense (benefit) is primarily due to income taxes from certain foreign jurisdictions where the Company conducts business and state minimum income taxes in the United States. 125 The Company adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a retrospective basis effective December 31, 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to the Company's actual global effective amount and rate for the years ended December 31, 2025, 2024, and 2023: Year ended December 31, 2025 2024 2023 Amount (in thousands) Percent Amount (in thousands) Percent Amount (in thousands) Percent US federal statutory tax rate $ ( 25,030 ) 21.0 % $ ( 32,645 ) 21.0 % $ ( 27,995 ) 21.0 % State and local income taxes, net of federal income tax effect* ( 543 ) 0.5 % ( 519 ) 0.3 % ( 985 ) 0.7 % Foreign tax effects: United Kingdom: Change in valuation allowance — — % — — % ( 2,080 ) 1.6 % Other 685 ( 0.6 ) % 1,160 ( 0.7 ) % 197 ( 0.1 ) % Other foreign jurisdictions 280 ( 0.2 ) % 125 ( 0.1 ) % 504 ( 0.4 ) % Effect of changes in tax laws or rates enacted in the current period Effect of cross-border tax laws 678 ( 0.6 ) % 52 ( 0.1 ) % — — % Tax credits: Research and development credits ( 4,985 ) 4.2 % ( 8,671 ) 5.6 % ( 18,444 ) 13.8 % Changes in valuation allowances 19,627 ( 16.5 ) % 26,675 ( 17.2 ) % 33,410 ( 25.1 ) % Nontaxable or nondeductible items: Stock-based compensation awards 7,582 ( 6.4 ) % 10,492 ( 6.7 ) % 4,824 ( 3.6 ) % Disallowed executive compensation 1,784 ( 1.5 ) % 2,483 ( 1.6 ) % 3,922 ( 2.9 ) % Other 586 ( 0.5 ) % 695 ( 0.4 ) % 517 ( 0.4 ) % Changes in unrecognized tax benefits 1,824 ( 1.5 ) % 2,757 ( 1.8 ) % 5,909 ( 4.4 ) % Total $ 2,488 ( 2.1 ) % $ 2,604 ( 1.7 ) % $ ( 221 ) 0.2 % *State taxes in California made up the majority (greater than 50%) of the tax effect in this category 126 The Company’s deferred tax assets and liabilities were as follows: Year ended December 31, 2025 2024 (in thousands) Deferred tax assets: Net operating losses $ 198,780 $ 183,824 Lease liability 18,255 17,329 Research and development credits 52,060 46,759 Capitalized research and development 50,707 62,615 Stock-based compensation 13,995 6,924 Deferred revenue 7,618 5,158 Reserves and accruals 5,325 4,885 Other 4,826 4,582 Deferred tax assets 351,566 332,076 Deferred tax liabilities: Intangible asset amortization ( 6,320 ) ( 10,995 ) Right-of-use asset ( 13,814 ) ( 13,377 ) State taxes ( 16,066 ) ( 14,844 ) Prepaid commissions ( 11,473 ) ( 13,306 ) Other ( 17 ) ( 1 ) Deferred tax liabilities ( 47,690 ) ( 52,523 ) Valuation allowance ( 303,285 ) ( 279,204 ) Net deferred tax (liabilities) assets $ 591 $ 349 As of December 31, 2025 and 2024 , t he Company had NOL carryforwards for U.S. federal income tax purposes of approximately $ 698.2 million and $ 635.9 million, respectively; and for state income tax purposes of approximately $ 647.1 million and $ 621.0 million, respectively. The federal NOL carryforwards, if not utilized, will begin to expire in 2034. The state NOL carryforward, if not utilized, will begin to expire on various dates starting in 2028. The Company also has federal and California research and development credit carryforwards totaling $ 55.7 million and $ 16.8 million as of December 31, 2025, respectively. The federal research and development credit carryforwards will begin to expire in 2027, unless previously utilized. The California research credits do not expire. As of December 31, 2025, the Company has NOL carryforwards for United Kingdom purposes of approximately $ 15.2 million. The UK NOL carryforwards do not expire. Based on all available evidence on a jurisdictional basis t he Company believes that it is more likely than not that the Company’s U.S. deferred tax assets will not be utilized and have recorded a full valuation allowance against its U.S. net deferred tax assets. The Company assesses on a periodic basis the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical losses. The Company determined that it is more likely than not that the U.S. net deferred tax assets will not be fully realizable for the years ended December 31, 2025 and 2024. 127 T he Company has a valuation allowance for U.S. deferred tax assets, including NOL carryforwards. The Company expects to maintain this valuation allowance for the foreseeable future. Changes in the valuation allowance were as follows: As of December 31, 2025 2024 2023 (in thousands) Beginning balance $ 279,204 $ 245,476 $ 208,215 Additions charged to expenses 24,081 33,728 37,261 Ending balance $ 303,285 $ 279,204 $ 245,476 Utilization of the NOL carryforwards may be subject to a substantial annual limitation due to the ownership change limitations under the Code and similar state provisions. Under Section 382 of the Code, a corporation that undergoes an “ownership change” may be subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. A detailed analysis was performed through December 31, 2021 for the Company to determine whether an ownership change under Section 382 of the Code has occurred, and ownership changes were identified in 2013 and 2020. A detailed analysis was completed through December 31, 2024 and no further ownership changes were identified. As a result of these analyses, the Company concluded that there is no longer any limitation on the utilization of such NOLs. A detailed analysis was performed for the period March 1, 2014 to October 1, 2020 for Signal Sciences to determine whether an ownership change under Section 382 of the Code has occurred and an ownership change was identified in 2020. As a result of this analysis, the Company concluded that there is no longer any limitation on its utilization of the NOLs of Signal Sciences. No provision for U.S. income and foreign withholding taxes has been made for these permanently reinvested foreign earnings because it is management’s intention to permanently reinvest such undistributed earnings outside the United States. A reconciliation of the Company’s unrecognized tax benefits is as follows (in thousands): Year ended December 31, 2025 2024 Balance at beginning of year $ 26,003 $ 23,245 Increases related to prior year tax positions 12 — Decreases related to prior year tax positions — ( 39 ) Increases related to current year tax positions 1,812 2,797 Balance at end of year $ 27,827 $ 26,003 The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary rollforward above. The unrecognized tax benefits, if recognized and in absence of full valuation allowance, would impact the income tax provision by $ 27.8 million and $ 26.0 million at December 31, 2025 and 2024, respectively. Generally, in the U.S. federal and state taxing jurisdictions, tax periods in which certain loss and credit carryovers are generated remain open for audit until such time as the limitation period ends for the year in which such losses or credits are utilized. 128 The Company adopted ASU 2023-09 on a retrospective basis effective December 31, 2025 and have included the following tables as a result of the Company's adoption, which presents income taxes paid (net of refunds received) for the years ended December 31, 2025, 2024 and 2023: Year ended December 31, 2025 2024 2023 (in thousands) State $ 55 $ 129 $ 41 Foreign 1,282 680 290 Total $ 1,337 $ 809 $ 331 Income taxes paid (net of refunds) exceed 5% of total income taxes paid (net of refunds) in the following jurisdictions: Year ended December 31, 2025 2024 2023 (in thousands) State Texas * $ 76 $ 41 Foreign Australia 303 87 132 Canada 143 156 107 Germany * 103 85 India 283 * * Japan 248 153 66 Netherlands * * 38 Spain 101 76 74 Sweden 71 67 46 UK * * ( 261 ) *Jurisdiction below the threshold for the period presented . 13. Segment and Geographic Information Segment The Company operates as one single operating and reportable segment. The Chief Operating Decision Maker (“CODM”) is the Company's Chief Executive Officer (“CEO”), who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about its revenue, for purposes of making operating decisions, assessing financial performance and allocating resources. Net loss is the Company's primary measure of profit or loss, and all costs and expenses categories on the Company's consolidated statements of operations, as well as share-based compensation, depreciation and amortization expenses, are significant. Refer to Note 10 for additional information about the Company's share-based compensation expense. Refer to Note 5 and 7 for additional information about the Company's depreciation and amortization expenses, respectively. The Company's other segment items include net gain on extinguishment of debt, interest income, interest expense, other expense, net and income tax expense (benefit) on the Company's consolidated statements of operations. Revenue Revenue by geography is based on the billing address of the customer. Refer to Note 3—Revenue for more information on net revenue by geographic area. 129 Long-Lived Assets The Company’s property and equipment and operating lease right-of-use assets, each net, by geographic area were as follows: As of December 31, 2025 2024 (in thousands) United States $ 168,887 $ 169,285 All other countries 69,965 60,245 Total long-lived assets $ 238,852 $ 229,530 14. Restructuring Charges During the year ended December 31, 2024, in an effort to streamline its organization, the Company initiated a restructuring plan to reduce expenses including a reduction of the Company’s workforce. In connection with this plan, the Company incurred charges of $ 9.7 million primarily consisting of employee-related severance and termination benefits. These charges are included within the restructuring charges line in the Company's consolidated statements of operations. The plan was completed by December 31, 2025 with no remaining unpaid balances, as the plan was materially paid out by December 31, 2024. 130 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.