INVESTOR ALERT: Morris Kandinov LLP Investigating Fastly, Inc. (FSLY); Shareholders Encouraged to Contact Firm

Morris Kandinov is investigating possible breaches of fiduciary duties and other violations of law, on behalf of shareholders of Fastly. On September 24, 2025, Judge Jon S. Tigar of the United States District Court for the Northern District of California issued an order denying in part the defendants' motion to dismiss in the pending securities class action against Fastly, paving the way for litigation to proceed.

Fastly operates an edge cloud platform – a system that extends cloud computing services to the "edge" of a network, processing data closer to where it's generated instead of sending it to a central data center - for processing, serving, and securing its customer's applications. An edge cloud enables developers to build, secure, and deliver digital experiences. Fastly's platform includes a Content Delivery Network, or a geographically distributed network of proxy servers and their data centers. Content owners, such as media companies and e-commerce vendors, pay Content Delivery Network operators to deliver their content to their end users. As such, Fastly's customers are delivering web experiences, whether in the form of applications, websites, or streaming services.

The bulk of Fastly's revenues are derived from use of its platform by its existing enterprise customers and its ten largest clients. Enterprise customers are those with annualized current quarter revenue in excess of $100,000 and include Fastly's ten largest clients – referred to by a confidential witness in the pending securities class action complaint as the "big whales" – among which are TikTok, Amazon (Amazon Aktie) Video, Apple (Apple Aktie), Twitter (X), Netflix, Paramount, and Disney. According to the complaint, for the fiscal year ended December 31, 2023, roughly 95% of Fastly's revenue was derived from its enterprise customers' use of its platform, with new customers contributing less than 10%.

Thus, a decline in revenue from the company's existing enterprise customers, especially the big whales, or a decline in retention of such customers, could create volatility in the company's revenue and materially impact Fastly's business.

According to the securities class action complaint, several confidential witnesses confirmed that, no later than 2023, customers had become increasingly price-conscious, were demanding aggressive price reductions in contract renewal negotiations, or were not renewing altogether. In addition, customers had begun allocating their business among several vendors instead of concentrating it all with Fastly. Sales personnel reported that they were regularly missing their sales quotas.

The securities class action alleges that, despite being aware of these negative trends, when questioned at an earnings call in November 2023, Fastly's former CEO, Todd Nightingale, falsely denied seeing any macro-effect-driven slowdown in revenue growth from customers, stating that, "My competitors are seeing these effects, some slowing in growth, and we're not seeing that."

A few months later, during a February 2024 earnings call about Q4 2023 results, which reported Q4 2023 revenues on the lower end of expected guidance, Nightingale blamed the shortfall on "weaker than anticipated international traffic," when in fact the securities class action alleges it resulted from the alleged general customer pullback. When pressed again on whether macro forces were negatively affecting Fastly, he again denied and downplayed any downturn.

To learn more about this investigation and your rights, visit: https://moka.law/case-contact-form/. All representation is on a contingency fee basis. Shareholders pay no fees or expenses. Concerned shareholders are encouraged to contact Leo Kandinov to learn more:

leo@moka.law
(619) 780-3993
moka.law

Morris Kandinov LLP is a national law firm that specializes in recovering investment losses and protecting stockholder rights. We work on contingency (i.e., you do not pay our fees out-of-pocket), and our attorneys have made substantial recoveries for investors in jurisdictions across the country. The firm would be happy to further discuss these matters, and any legal rights or remedies potentially available to you, at no charge.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/283799