title.Fastly Prices Upsized $160 Million Convertible Senior Notes Offering

SAN FRANCISCO (Business Wire) — Fastly, Inc. (NYSE: FSLY) announced today that it has priced a private placement of $160 million of 0% convertible senior notes due 2030. The offering, conducted under Rule 144A, was extended from the originally planned $125 million. Settlement is expected on December 9, 2025, subject to customary closing conditions. In addition, the initial investors received a 13‑day option to purchase up to $20 million of additional notes.

Deal structure and conversion mechanics

The notes are senior, unsecured obligations that carry no regular interest and do not accrue principal. They mature on December 15, 2030, but may be repurchased, redeemed, or converted before that date. Prior to September 16, 2030, conversion is permitted only upon the occurrence of specific trigger events. After that date, holders may elect to convert at any time up to the business day preceding maturity.

Fastly will settle conversions with cash, shares of its Class A common stock, or a combination thereof, at its discretion. The initial conversion rate is 65.5136 shares per $1,000 of principal, equating to a conversion price of roughly $15.26 per share—a 32.5% premium to the closing price of $11.52 on December 4, 2025. The conversion price is subject to adjustment for stock splits, dividends, or other corporate actions.

Redemption features and “fundamental change” protection

Fastly may redeem the notes, in whole or in part, for cash anytime after December 20, 2028 and before the 30th trading day prior to maturity, provided the market price of the Class A shares exceeds 130% of the conversion price for a defined period. The redemption price will equal the principal amount plus any accrued special interest.

If a “fundamental change” (as defined in the indenture) occurs—such as a change of control or a significant alteration to Fastly’s capital structure—noteholders (subject to limited exceptions) can require Fastly to repurchase the notes at principal plus accrued interest.

Use of proceeds and strategic intent

Fastly estimates net proceeds of approximately $153.8 million, or up to $173.2 million if the optional $20 million is exercised, after deducting discounts, commissions, and offering expenses. The company plans to allocate roughly $16.1 million of the net proceeds to fund capped‑call transactions (described below) and to use the remaining cash, together with existing reserves, to repurchase up to $150 million of its outstanding 0% convertible senior notes due 2026 (the “2026 Notes”) for an estimated $148.9 million.

The concurrent 2026‑Note repurchase is expected to be executed in privately negotiated transactions with the same initial purchasers or their affiliates. Holders of the 2026 Notes who are repurchased may unwind any hedge positions by buying Fastly shares on the open market, a dynamic that could influence the stock’s short‑term trading price and, indirectly, the effective conversion price of the new 2030 notes.

Capped‑call transactions: mitigating dilution

In tandem with the note issuance, Fastly entered into privately negotiated capped‑call agreements with a group of financial institutions (“option counterparties”). These contracts give Fastly the right to purchase a predetermined number of Class A shares at a capped price of $23.04 per share—a 100% premium to the $11.52 reference price on December 4, 2025. The capped‑call structure is designed to offset potential dilution that could arise if noteholders convert their securities into equity.

Should Fastly’s share price exceed the $23.04 cap, the capped‑call protection would be eroded, resulting in net dilution or insufficient cash offset for any excess conversion‑related cash payments. The counterparties are expected to hedge their exposure through a mix of derivatives and direct equity purchases, actions that could create short‑term price volatility around the pricing date and during any subsequent conversion observation periods.

Market context and strategic implications

Fastly’s decision to issue zero‑coupon convertible notes reflects a broader market trend where high‑growth tech firms seek low‑cost capital while preserving flexibility. By coupling the notes with capped‑call hedges, Fastly aims to minimize equity dilution—a critical consideration given its recent investments in edge‑cloud infrastructure and a competitive landscape that includes Amazon Web Services, Cloudflare, and Akamai.

From a technical standpoint, the 0% coupon structure places the entire cost of capital in the conversion premium and the potential redemption features, effectively linking Fastly’s financing cost to its share performance. If the market continues to reward the company’s growth trajectory, the conversion premium may narrow, delivering a lower effective cost of capital. Conversely, a sustained decline in share price could trigger early redemption or “fundamental change” clauses, providing investors with a safety net while preserving Fastly’s balance sheet.

Forward‑looking statements

This release contains forward‑looking statements regarding the offering, expected use of proceeds, and the impact of the capped‑call transactions. These statements are based on current expectations and are subject to risks, including market conditions, the satisfaction of closing conditions, and broader operational risks outlined in Fastly’s SEC filings. Actual results may differ materially from those expressed or implied herein. Fastly does not assume any obligation to update these statements, except as required by law.

Source: Fastly, Inc.