Company: FSLY
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001517413-25-000299
Chunk: 369

Company: Fastly, Inc.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 369
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 of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. We identified a material weakness which has been included in "Item 9A. Controls and Procedures—Management’s Annual Report on Internal Control Over Financial Reporting" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. We identified deficiencies in the design and operating effectiveness of controls within the revenue process. These deficiencies are related to certain business process controls primarily caused by a lack of sufficiently qualified personnel due to turnover, information technology general controls, including the failure to receive a service auditor’s report for our billing system hosted by a third-party, and insufficient monitoring controls over such third-

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

Remediation Efforts with Respect to the Material Weakness

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

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

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

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

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

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

As we continue to evaluate and work to improve our internal control over financial reporting, we may decide to take additional measures to address control deficiencies or modify the remediation plans described above. We believe that these actions will remediate the material weakness, however the weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Management believes the foregoing plans will effectively remediate the deficiencies constituting the material weakness. 

Changes in Internal