Fastly released third-quarter results after Wednesday's market close. Fastly shares subsequently dropped 17.5% to $17.30 in after-hours trading. Fastly's 52-week trading range was $7.87 to $34.82.
Fastly's third-quarter revenue increased 20% from a year earlier to $190,193,000. Benzinga Pro data put the consensus revenue forecast at $187,801,000. Network Services generated $138 million in revenue, a 16% year-over-year increase. Security revenue reached $44.7 million, up 32%. Other revenue totaled $7.4 million, up 37%. Fastly earned 17 cents per share, exceeding the consensus estimate of 12 cents.
Fastly matched record gross margins, with GAAP gross margin at 63.3% and non-GAAP gross margin at 65.8%. Fastly said the trailing 12-month net retention rate reached 119%, the highest level since 2022. Fastly CEO Kip Compton attributed the record third-quarter results to strong execution and customers adopting additional products and expanding platform usage. Fastly finished the quarter with $334 million in remaining performance obligations, up 24% from a year earlier.
Fastly forecast fourth-quarter sales of $198 million to $202 million, compared with a consensus estimate of $196.89 million. Fastly projected fourth-quarter earnings of 16 cents to 18 cents per share, above the consensus estimate of 13 cents. Fastly increased full-year sales guidance from $732 million to $746 million to a new range of $744 million to $748 million. Fastly raised full-year adjusted earnings guidance from 50 cents to 54 cents per share to a new range of 61 cents to 63 cents. Compton said record revenue and free cash flow demonstrated Fastly's value in helping customers achieve critical business outcomes and prepare for AI scale.
Fastly announced that Scott R. Lovett, president, Go To Market, plans to retire in 2027. Fastly is seeking a chief revenue officer. The management transition announcement, guidance falling short of expectations after another strong quarter, or both could explain Wednesday's share decline. Fastly had been identified as a potential beneficiary of growth in Meta's Muse AI platform. The quarterly results may not reflect that potential benefit.
Fastly Q3 Revenue Rises 20% to $190M, Guidance Raised, Shares Drop 17.5%
BenzingaShare
Summary
Fastly Q3 revenue rose 20% to $190.193M, beating forecasts of $187.801M. The company raised guidance for Q4 and full-year results. Shares fell 17.5% to $17.30 in after-hours trading. CEO cited strong execution and customer growth. Scott R. Lovett will retire in 2027. Market watchers suggest the drop may reflect shifts in the fear and greed index, with altcoins to watch potentially gaining attention amid investor uncertainty.
Source:Show original
Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information.
Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.