Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fastly Third Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. And I’d now like to turn the conference over to Vernon Essi, Investor Relations at Fastly. Please go ahead.

Thank you, and welcome, everyone, to our third quarter 2023 earnings conference call. We have Fastly’s CEO, Todd Nightingale; and CFO, Ron Kisling, with us today. The webcast of this call can be accessed through our website, fastly.com and will be archived for one year. Also, a replay will be available by dialing 800-770-2030 and referencing conference ID number 754-3239, shortly after the conclusion of today’s call. A copy of today’s earnings press release, related financial tables and investor supplement, all of which are furnished in our 8-K filing today, can be found in the Investor Relations portion of Fastly’s website. During this call, we will make forward-looking statements, including statements related to the expected performance of our business, future financial results, product sales, strategy, long-term growth and overall future prospects. These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call. For further information regarding risk factors for our business, please refer to our most recent Form 10-K and Form 10-Q filed with the SEC and our third quarter 2023 earnings release and supplement for a discussion of factors that could cause our results to differ. Please refer in particular to the sections entitled Risk Factors. We encourage you to read these documents. Also note that the forward-looking statements on this call are based on information available to us as of today’s date. We undertake no obligation to update any forward-looking statements, except as required by law. Also during this call, we will discuss certain non-GAAP financial measures. Unless otherwise noted, all numbers we discuss today other than revenue will be on an adjusted non-GAAP basis. Reconciliations to the most directly comparable GAAP financial measures are provided in the earnings release and supplement on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Before we begin our prepared comments, please note that we will be attending three conferences in the fourth quarter. The RBC Capital Markets 2023 TIMT conference in New York City on November 15th. The D.A. Davidson Technology Summit in New York City on November 16th and the UBS Global Technology Conference in Scottsdale Arizona on November 29th. With that, I'll turn the call over to Todd. Todd?

Thanks Vern. Hi everyone and thanks so much for joining us today. First, I will give a quick summary of our financial results and third quarter highlights. And then I will provide an update on our product strategy, go to market and internal transformation before I hand or call off to Ron to discuss our third quarter financial results and guidance in detail. We reported record third quarter revenue of $127.8 million, which grew 18% year-over-year and 4$ quarter-over-quarter. This came in at the very high end of our guidance range driven by strong international traffic. This demonstrates continued momentum in our enterprise customer motion, as we continue to benefit from vendor consolidation and seasonal strengths in streaming activity. Our customer retention efforts, a hallmark of our customer satisfaction were favorable in the third quarter, Our LTM, and NRR was a 114%, down slightly from Q2. Our DBNER was a 120% in the third quarter down from 123% in Q2 and also slightly down from 122% in Q3 of last year. Our DBNER continues to demonstrate healthy wallet share gains in our customers as we continue to cross-sell more functionality and grow with our customers’ ongoing edge traffic requirements. We're starting to see some effects of budget tightening by our customers, but we continue to see strength in customer expansion, especially cross product expansion across the board. Our total customer count at third quarter was 3,102 which increased by 30 customers, compared to Q2 and 63 year-over-year. Enterprise customers totaled 547 in the quarter, a decrease of four from Q2 and an increase of 36 year-over-year. We have four new customers make the enterprise $25,000 threshold in the quarter, number dropped to reflect a sequential decline. As we discussed during our Q1 earnings, our newer enterprise customer count methodology will…

Thank you, Todd, and thanks everyone for joining us today. I'll discuss our business metric and financial results and then review our forward guidance. Note that unless otherwise stated, all financial results in my discussion are non-GAAP based. Total revenue for the third quarter increased 18% year-over-year to $127.8 million, coming in at the top end of our guidance of $125 million to $128 million. Revenue from Signal Sciences products was 14% of revenue, a 33% year-over-year increase or a 31% increase, excluding the impact of purchase price adjustments related to deferred revenue. Also, note that we calculate growth rate off of the actual results with the percentage of revenue rounded to the nearest whole percent. In the third quarter, we saw traffic expansion at our major customers, as well as strong upsell and cross-sell activity. Our trailing 12-month net retention rate was 114%, down from 116% in the prior quarter and 118% in the year ago quarter. We continue to experience very low turn and our customer retention dynamics remained strong. Turning to RPO, as I discussed last quarter, our consumption-based revenue model is now being augmented with predictable revenue packages. For the third quarter, our RPO was $248 million, up 7% from $231 million in the second quarter of 2023 and up 43% from $173 million in the third quarter of 2022. As Todd shared, we had 3,102 customers at the end of Q3, of which 547 were classified as enterprise, a net, decrease of 4 compared to an increase of 11 in the second quarter. As a reminder, we changed our calculation of enterprise customers this year to customers with an annualized revenue run rate of $100,000 or $25,000 in the current quarter, which results in more quarter-to-quarter volatility than the previous 12 months trailing $100,000 definition.…

[Operator Instructions] We will take our first question from Frank Louthan with Raymond James. Your line is open.

Great. Thank you. Just following up on the guidance, any change to the longer term metrics you gave at the Analyst Day, particularly the free cash flow guide from 2024? And then to follow up on the OpEx declines how much further can that - can we see that decline and what sort of good run rate for that going forward? Thanks.

Yeah. I think if you look at the sort of outlook, particularly with respect to cash flow, that we gave back on the Investor Day that exact - that is still intact if we look toward 2024, our cash flow basis, we would look to be break even-ish on a cash basis.

On the OpEx side, I'm pretty happy with the cost control across the company right now. But I'll tell you, we've got, we still have some significant benefits here. I mean, it takes a while to unravel long-term SaaS contracts and commitments. We're still seeing that. We're still reaping the benefits there and we've done I think a pretty good job of putting business model rubrics in place to control the headcount, that control the operating models for our teams. So that, going forward, we don't expect OpEx to grow nearly as fast as the top-line. And I think that's going to be the key for us.

All right, great. All right. Thank you.

And we'll take our next question From Jonathan Ho with William Blair. Your line is open.

Hi, good morning, good afternoon. Just wanted to get a little bit more color on what you're seeing in terms of the spending environment and some of the budget tightening? That’s the first question.

Yes, it's super interesting. We're seeing we see budget tightening in some of our accounts that leads to that can lead to vendor consolidation. They don't want to manage as many vendors. That tends to be good news for us, because, as the performance leader in almost all of those deals they tend to want Fastly to be part of their solution even if they stick with a multi-vendor play. There are some cases where we've seen deals taking a little longer to close as more approval of our needed. I think that might be the nature of the current economic environment that we're in and we haven't seen those deals dissolve. We've seen them take a slightly longer than usual. What we're tracking that very carefully. Kind of, I might have a little bit more interesting information next quarter on it. But we haven't we haven't really been too worried about it so far. But we're noticing something.

Got it. And just as a follow-up, how should we think about where you're growing in terms of the international markets? Is there a way for you to maybe help us understand what markets these are, these are specific vertical that you're seeing traction internationally? And how long is it sort of takes for some of these contracting negotiations to take? Thank you.

Sure. We see - we've been pushing on our international go to market for sure, and that drives local business with local traffic in those expanding regions for us. But what is interesting and what is causing some of our model to shift a tiny bit, is we’ve got large multinationals who are successfully penetrating new regions themselves, and they're using Fastly to partner to deliver that that content. We see it in media largely. And I think it's really good news. It's helping us grow into those markets and modernize our infrastructure and our or I should say, mature our infrastructure and that's what these to those contract negotiations. Because with more traffic, we're able to negotiate and peer more effectively in those regions and then improves the margin for all of our traffic in that region not just the multinationals, but the local traffic, as well. It can take us a little bit quarter, but more likely probably six months. It doesn't take a full year generally speaking because those contracts have a much tighter turning on renegotiations.

We will take our next question from James Fish with Piper Sandler. Your line is open.

Hey guys. Nice quarter here. Todd, maybe for you, channel partner deal registration of three times year-to-date. Can you just talk about what those channel partners are leading with between delivery that tends to be more self-serve versus security understanding? You gave some of those metrics there and really the crux is kind of what kind of economics you're seeing versus the traditional Fastly model? And then I've got a follow-up for Ron.

Yes, no worries. Our partner community has largely, historically been around the security business and we're starting to see that branch out from just security to them being able to operate across the portfolio, which is awesome. And that's been a big help, especially new partners that we’re bringing on board, they are capable of operating and in some cases have much broader expertise. And that's why for me, the jump of partners in the program up to 55 really matters. I think that is a broadening of the expertise of our partner community. And I think will also help customers to engage with those partners on board faster which is an important metric to our business. And the other thing is just on the geographic side. We've got our traditional partner program for the revamp was really heavily focused in the US. We are seeing it start to ramp up outside of the US and that's helping quite a bit. And I should say the partnership with the cloud providers helps that move a little faster. In some cases, it's easier for partners to onboard because they're all the operating to a cloud marketplace, and that is a nice synergy for them. And it’s valuable for us, as well as it lowers our operating costs it.

Got it. I am not surprised to see the top 10 up, just you guys own the relationships with those top 10 customers and it's a bit of double-edged sword especially as you think about the history of this space. So I guess how are you guys trying to mitigate some of that risk around those top 10 customers? Are you looking to sign those customers for longer contracts? And also Ron, any puts and takes on ‘24 to think about understanding, you're not going to guide Q4 for specifically, but especially as we start to think about how this packing can kind of impact growth rates moving forward? Thanks.

Yeah, I’d say, I'm proud with the growth in the top 10 accounts. And we take that very seriously as the largest, the most sophisticated users of this tech they trust Fastly and they're leaning into the platform more and more strategically, which is a good thing. The only way that I look to combat that is through enterprise customer acquisition, and especially large strategic customers. I have, we love engaging with those large customers. I've no interest in doing anything, but growing those accounts as fast as we can, and adding more and more technology to those partnerships. But it's a long-term litigation that has to come through customer acquisition especially differentiated vertical customer acquisition, and that's why we're so focused on that. That’s why we mentioned some of the expansion verticals especially e-commerce expansion verticals that we're focused on. I think, looking into ‘24 and we haven't really shared our ‘24 guidance. We talked a little bit about some of the cash flow expectations at our investor Day. We will share that as we’ve historically done on our Q4 call in February. I think what I would say is I think we're excited about the progress to-date. We continue to believe on our ability to outperform the market continuing into 2024.

All right guys.

Thanks.

We will take our next question from Rishi Jaluria with RBC Capital Markets. Your line is open.

Hey. This is Richard Poland on for Rishi Jaluria. Thanks for taking my question. So, I guess first one. Just any sense for how much of that top 10 account expansion was on the traffic side versus, cross-sell of the broader portfolio maybe getting more security products in there? Any color around kind of the breakdown of that?

It is a good question. We don't disclose this, although we do track it. The peak in international traffic that came from those large multinationals, that’s largely traffic expansion. But there are new use cases being added with those folks all the time. It's hard for us to disclose details on that. Maybe we'll look and see if there's something that that we can share in a longer term. Anything you'd add there?

I mean, the one I would add, I think as you look at that growth, I mean, vendor consolidation that we saw at one of our largest customers clearly was a contributor in that concentration. I think, as Todd said earlier, I think as we look forward to the benefits from some of the sales and marketing, the packaging in the channel of that accelerates new customer acquisition. That should be a counter motion to the expansion. We know we're going to continue to see, particularly our largest customers that you see in that top 10 number.

Thank you. That's very helpful. And then just a quick follow-up on the security portfolio. I think, if I recall correctly, the Bot management solution was still in beta as of last quarter. So any update there on just kind of how the progress of the expansion of security portfolio is going? Thanks.

Yeah that's great. Our bot product is, we have like a very large number of folks on the beta. It's going limited availability this quarter. I hope to actually to be able to close some deals on this quarter and then GA in the first half. We got amazing success. I've been really happy with how many customers have leaned in to the beta, and are helping us really co-develop that solution, and got one more feature to check off and it'll become available to customers and into our sales teams to start closing deals. So, I'm super excited about that. We're also looking at a couple of other important areas on the security side. A productization - the potential productization I should say, deeper DDOS analytics, visualization and services, as well as deeper feature set in API security. It's become really clear to us that the buyer in this space that's looking for strategic edge partner in CDN security, edge compute et cetera, they're looking for a suite of security suite that includes bot DDOS, next-gen and whack, and API security. And we plan on pushing hard on all of those components.

Got it. Very helpful, Todd. Thank you.

We will take our next question, from Will Power with Baird. Your line is open.

Okay. Great. Thanks. Yeah, I guess a couple, maybe just starting on competition. I mean, you kind of noted and I guess we've seen a couple of smaller players selling off contracts. And I guess, exiting the business I just wanted more broadly kind of what you're seeing from a pricing environment, recently in the US it sounds like you know international pricing is helping probably overall. But just think any kind of color as to kind of how the competitive environment is looking today?

Yeah, I think you're from a pricing perspective, as we said the international mix, we do have slightly favorable pricing relative to kind of the major markets in the US and EU. And that really provided if you some strengths, kind of in the quarter-to-quarter pricing. I see here in US, the trend has been generally in line with our long-term trend. We did have some deceleration in the first half from the vendor consolidation and I would say, outside of that international or if you look at it by market, it's generally been returned to more of those long-term trends. We haven't seen any acceleration. And we still see, a good pricing environment. I think this one across the industry.

Okay. And then, I guess, Ron, on just on the on the gross margin comments. It sounds like some headwinds just given the international traffic in Q4. But how would you kind of frame up how to think about gross margin progression next year? I mean, I know you generally been expecting it to rise, but how quickly do you get kind of international kind of behind you and back kind of maybe on the targets where you were?

Yeah, I think if you look at kind of that timeline, I think, the, the medium to long-term gross margin dynamics are still intact and I think the 80% gross margin that we had mentioned at the Investor Day in that medium to long-term are intact incremental gross margins are intact. I think, if you look at that gross - incremental gross margins that we've seen in the last four quarters have been above 60% compared to the teens kind of in early 2020. I think as we go through that contract negotiations, that's probably a couple of quarters work. I think we generally in 2024 address most of those headwinds and get back to that medium to long-term or the larger targets that we've laid out previously.

Okay. Thank you.

We will take our next question from Tim Horan with Oppenheimer. Your line is open.

Thanks guys. Can you talk a little bit about some products what customers are using it for? And why they are they using you? And any color when it kind of starts to move the revenue needle? Thanks.

Hey sorry. We missed the first part of that. Could you repeat the questions?

Yeah, I apologize. Can you talk about which compute products your customers are using? And what are they using it for? And why are they using it guys? And when you got moving the needle?

Yeah, great question. The customer that we track, our compute business on customer acquisition, people tend to come to Fastly, because we are really delivering freedom to developers especially with the technology called Labs, and that allows them to compile their own language and run it on the Fastly platform. You saw, there's a release I think it's in the supplement of our Go SDK and I think that that gives you a real sense of supporting languages that developers are - that are top of mind for developers and gives them the freedom to go and build serverless components at the edge. The second thing is, people come to Fastly to deliver use cases that are already proven out, and that's a big deal especially around personalization, shopping cart management, content recommendation, et cetera. That's been really a big push there. And from a vertical point of view, there's a very strong focus from high tech companies who are - they kind of be the most sophisticated. They tend to get be able to get a lot out of it very quickly, especially with pretty mature documentation and developer enablement from Fastly and part thanks to the acquisition. And I think that's what brings folks to the Fastly program. It's really an organic developer first motion. I plan on tracking this business largely in customer acquisition through next year, as it's still truly an incubation, but I think we're going to start to see it hit the - in some material way, hit the revenue line and I hope it tail end of ‘24 and ’25, but we'll see.

Great. And can we just give us some kind of revenue breakdown now if possible, like on media delivery, your application delivery or you know any other color would be would be great?

Yeah. We haven't provided that breakdown between media and other delivery across the verticals in our revenue breakdown. Sorry about that.

Thanks.

We will take our next question from Rudy Kessinger with D.A. Davidson. Your line is open.

Hey, great. Thanks for taking my questions, guys. I guess, just with those smaller CDM players exiting the business in the quarter, did you pick up any material business from this smaller players that exit?

We do pick up, we've seen a few already move over and we've got a quite a few additionally already in the pipeline. Those folks have contracts. And so what really, I think, I think the real pattern here is that as their contracts come due, they tend to stick their head up and, and make a new vendor selection. That's a really good news for us. We thought with Digital Turbine those guys pretty sophisticated group, they were able to move quickly. I'm hoping that we're going to see more of that really in Q4 and Q1 on the new customer acquisition front.

Got it. And then, just general traffic growth trends across the board. Anything to call any material changes as just how general traffic - traffic growth trending.

The traffic trend is pretty had been sort of interesting. There have been a lot of interesting events. We are starting to see the seasonal sporting event trends. We even saw some peaks from content drops, some of the streaming platforms. I think it's fairly close to what we were expecting with the addition of some of the international - some addition, some additional volume on the international front.

Yeah. And we're guiding to the normal potential update we start to see as we exit Q3. We are continuing to see this year.

Got it. Great. Thanks for taking my questions and congrats on the numbers.

Thanks.

Thank you.

We will take our next question from Fatima Boolani with Citi. Your line is open.

Hi, good afternoon. Thank you for taking my questions. Ron, maybe these are for you. First thing, over the course of this year, you all have been very intentional about managing your install base and start pruning the less economical or lower LTV type customers in your base. And that's been pretty obvious. I'm curious if you can comment on if you're sort of through the halfway point or towards the end of that process such that we can start seeing some more robust growth in that metric? And then just a quick follow-up on some of the contract negotiations, that you are foreshadowing for next year?

Sorry. Just to clarify, when you say, pruning customers in the LTV type of, what do you mean?

Just in terms of, managing the install base for higher quality customers, just wanted to get a sense of, how far down the path are you that your current install base is, high value high, penetration opportunity, versus, some of the customers that you might have particular ways with over the course of the year? I just wanted to get a sense of where you are in that process and is that mostly sort of done - are you done pruning?

Got it. But – I’d just clarify that. We haven't pruned any customers intentionally and largely the way that our business runs and the way our infrastructure is built and is able to organically serve customers, I think it's pretty hard. I mean it's very rare that we would find a customer that would be not a great fit. When we occasionally had a - I need to prune a customer. The only times I can think of that happening are on terms of use and community guidelines. The infrastructure at Fastly allows for us to have very efficient delivery, especially very efficient delivery of incremental traffic. And so we don't - we haven't done any pruning. I absolutely don't intend to. I do believe we have an opportunity to increase the margin by changing the traffic, a signature of our total customer base. But the only way that we're - the only thing we're pursuing to do that is, focusing on differentiating the verticals that we serve. So, that the traffic flow will be more balanced across type of day, as well as the type of traffic load and working hard to drive our customer acquisition motion into regions where we've got, where we have good infrastructure to be able to serve. And so, as far as improving the traffic mix on the platform, we certainly do that. We certainly have shifted our focus, but it's all of that focuses on the customer acquisition side. Not on the on the pruning side.

Understood, I appreciate that. And Ron, I appreciate you are in the planning phases of 2024 right now. But some of the contract negotiations that you're again foreshadowing for 2024 that you're going to be addressing. Can you give us a little bit of a flavor as to help bake these body of contracts is going to be, any high level thoughts on if these contracts may be concentrated with some of your largest customers? And any seasonality commentary at high level you can share with us, that would be really great as we think about the next year.

Yeah, I mean, I think you're starting with the seasonality. I think, what we're certainly seeing this year is fairly consistent seasonal patterns, as we work through Q3, we started see an increase in traffic. We expect us to continue to see that accelerate in Q4, I think it's reflected in our guidance. I think as you look to 2024 from seasonality, I think, again, we expect that the typical seasonal patterns to continue. Q1 typically is flat to down a few percentage points. We would expect that to continue into 2024. I think as you look to kind of your customer acquisition, I think again, there's really two motions that we have that are driving that. There's the expansion and the cross-selling opportunity in our largest customers. And we continue to be really successful at that, particularly when we see vendor consolidation and there is multiple vendors. We - because of our performance gained share and are able to cross-sell additional products into those customers. And then, our new customer acquisition engine with a lot of the work we're doing across packages as well as the channel, we really expect that to sort of drive acceleration and new customers in 2024. So I think you're going to see most of those motions driving the performance of 2024. Most expansion motion, which we've consistently done well, and the new activity is really driving acceleration of new customer.

We'll take our next question from Tom Blakey with KeyBanc Capital Markets. Your line is open.

Hey guys. Thanks for being here. I just - perfect setup there Ron, in terms of the channel you discussed some highlights in your press release this morning or this afternoon. Any color Todd, you want to provide for us to can talk, check the sustainability here? What are the biggest changes that you've implemented in terms of this dynamic growth here? You're seeing of late. I have a follow through.

Yeah, I think, look, it is still early. So I hope to have hundreds of partners driving business for Fastly and more importantly, delivering services that allow our customers to move more quickly to adopt Fastly technology more rapidly. I'd say from a trend point of view, I just think it's an underserved space. There's a lot of systems integrators with high software specialty. They're working very closely with teams that are building out digital experiences and they haven't had the ability to partner closely with a edge cloud provider, especially a performance leader in CDN. And so, we've had good receptions to this new partner program. We will be looking and reviewing it for next year to see ways to make it better. But so far, for me the trends are what I want to see. This is moving in the right direction, but I would say for sure, partner acquisition and dealer velocity are trending in the right direction. But for sure, we are planning to ramp them hard in 2024.

Does that include just quick follow-up before I ask for other questions? Does that include like enterprise caliber customers? And what are the - why is this kind of growth unique to Fastly? And what are the incentives. I am sorry. Just a lot of growth here and a big opportunity and typically CDN doesn't benefit from the channel.

Yeah. And I really think that our effect of just the way the first few entered into this product space have operated. I think, looking at the market now, there's so much software spend that's already going through the cloud market place. There is systems integration, know how to operate that and operationalize deals big and small through those systems and direct to vendors. And we offer both options. For me, there's one other twist, which is the ability that flexibility in that channel program matters. These - our channel partners can operate in the traditional channel sales motion, but also in an agency model. That flexibility matters. And the way that we've operationalize that I think is important. We're also engaging with partners who are really on the technology consulting side for the first time. And those engagements although it's early days, I think have a lot of potential upside, as well. And those are like technology consultants largely. But, I guess, my point of view, and I think this will play out in the next 12 months is that this is just an underserved part of the market. And by focusing here, we have an opportunity to gain the attention of the channel.

Very, very helpful. And then, Ron on that 50% channel revenue growth, is all the requisite questions there, over what period of time, what percentage of revenue here? Even if it's a range where you kind of expect that to head in the coming year or two? That’d be helpful. Thanks guys.

This is about the channel growth?

Well, you talk about revenue channel growth. Just what period of time is that and…

It’s program to-date year-over-year.

Okay, where are we in terms of a percentage of revenue where do you expect that to go? Todd kind of spoke positively there as that obviously going to increase just to give us something like level as – helps yet.

So I think what I said, we haven’t given the specific percentage of revenue, but we do expect it to continue to grow as a percentage of revenue. I think in terms of really gaining traction and being a contributor, we see that really gaining traction in 2024 a lot of the work, sign ups and deals happen this year. We expect to see that grow - as a contributor grow overall revenue in 2024.

Great. Thank you.

And we'll take our final questions from Madeline Brooks with Bank of America. Your line is open.

Thank you. Thanks so much for taking the question. Just a quick one for me here. It looks like from an edge compute standpoint, got a lot of positive signals with the packaging motion. So just want to marry that quickly to the budget comments and the landscape you guys are seeing with the slight weakness. And just want to know and apologies, if this has been asked I mean there's a few calls, but why do you think of paying Fastly now versus other companies earlier? And can you call out any specific areas of impacted more versus less? Thanks so much.

Sure. On the compute side, I feel like the momentum is really good for us right now. I feel like, you do me a critical amount of features and functionality before developers can really reach different outcomes that they care about, learning their services at higher cost, dramatically improving performance and user experience, being able to build sustainable solutions and pull the appropriate workloads from their core into an edge serverless environment that will have the kind of performance and kind of user experience improvement that they want. And I think we're getting – we are starting to hit our stride, which is great. I think we have opportunity here on the product side, as well. And not to - but I think we can simplify our offering and make it even easier for our customers to onboard and understand all the components there. So, I'm not trying to that, we've arrived. We're going to be on this journey for quite a while. Your second question was around the belt tightening comment in the opening, is that correct.

Yes, it’s correct.

Yeah, I guess, we may have briefly mentioned it already. I think, what we're seeing as our customers’ budgets feel a little pinch to them. That certainly drives vendor consolidation that tends to be good thing for us as the performance leader we tend to fair well in those engagements. We do, see a little bit of slowness in the deals as vendor changes when customers are leaving some of our competitors that come into Fastly changes in contracts are just getting more scrutiny, requiring more sign-ups and that can delay some deals. So we've seen a few deals that have taken a little longer to close than we'd like. But we'll see. I think I mentioned this earlier, like, I think we might have a more of a complete perspective of that next quarter. Yeah.

Got it. I am sorry Just to quickly clarify that, Todd, so, it fair to say a deal type you want to get it? But close rates have remained stable throughout the quarter.

Yeah. Well, we track a few - we track very carefully key deals in the quarter and we saw a few of them slip a few weeks, Nothing material. I mean, some of these are six months engagements. So we saw them slip a few weeks. And that, yeah, that's what is largely due to additional approvals that are needed. I’d say it's anecdotal, but we'll be tracking it closely. So I might have better day for you next year. Next quarter.

Got it. Thanks so much next quarter.

Great.

And that concludes our question and answer session. I will now turn the call back to Mr. Todd Nightingale for closing remarks.

Well, thank you so much. I do want to take a minute to thank our employees, our customers, partners and investors. And moving forward, we will continue to remain focused on executions, bringing lasting growth to our business, and delivering value to our shareholders. I’d like to close by saying how excited I am about the road ahead. Of course, there's plenty of work to do, but I believe digital experiences will drive the mission and to find the success of almost every organization everywhere in Fastly, while the significant impact on the way digital experiences are built and delivered around the world. Our customers have a real passion for Fastly’s solutions and employees have a real enthusiasm for our mission to make the Internet a better place where all experiences are fast, safe and engaging. Thank you so much for the time today.

Ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.