Company: FSLY
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001517413-25-000299
Chunk: 194

Company: Fastly, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part II, Item 1A
Chunk 194
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 satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

We have identified a material weakness in our internal control over financial reporting, and if we are unable to remediate and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock may be seriously harmed.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in those internal controls. For example, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act (“Section 404”). Our independent registered public accounting firm also needs to attest to the effectiveness of our internal control over financial reporting. We designed, 

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implemented, and tested internal control over financial reporting required to comply with this obligation. That process is time-consuming, costly, and complicated. 

As detailed in Part I, Item 4 in this Quarterly Report on Form 10-Q, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting for the year ended December 31, 2024. This material weakness relates to deficiencies in our design and operating effectiveness controls within our revenue process, primarily caused by a lack of sufficiently qualified personnel due to turnover. These deficiencies are related to certain business process controls, information technology general controls, including the absence of a service auditor's report for our billing system hosted by a third-party, and insufficient monitoring controls over third-party service providers. In the aggregate, these deficiencies created a reasonable possibility that a material misstatement to our consolidated financial statements might not be prevented or detected on a timely basis, and represent a material weakness. This material weakness did not result in a misstatement, but could result in misstatements to our financial statements in the future, if not remediated. While management has developed a remediation plan, we will not be able to conclude whether the steps management is taking will remediate the material weakness until a sustained period of time has passed to allow management to test the design and operational effectiveness of the new controls.

The process of implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant