Business

Fastly Stock Plummets After Major Outage Dragged Down Q2 Revenue

Source: CNBC
  • Fastly's results missed on the top line and in guidance for the third quarter and the full year.
  • In addition to an outage, Fastly said, it's also dealing with delays of deployments on its global infrastructure to speed up the delivery of content.

Shares of Fastly fell as much as 19% in extended trading Wednesday after the content-delivery network provider reported lower revenue than expected following an outage and predicted deeper losses than expected for the coming quarters.

Here's how the company did, compared with expectations of analysts, according to Refinitiv:

  • Earnings: Loss of 15 cents per share, adjusted, vs. loss of 17 cents expected
  • Revenue: $85.1 million vs. $85.73 million expected

Revenue rose about 14% in the second quarter, but an outage June 8 that affected almost all of Fastly's customers caused a decrease in traffic volume and resulted in Fastly giving customers credits. The downtime caused technical issues for Amazon's Twitch livestreaming service, The New York Times and Reddit, among others.

"We expect to see a downstream impact on revenue from the outage in the near-to medium-term as we work with our customers to bring back their traffic to normal levels," Fastly CEO Joshua Bixby wrote in a letter to shareholders. One of Fastly's top 10 customers has not returned its traffic to the company's infrastructure, he wrote.

In addition, certain organizations have delayed deployments on Fastly.

"We believe that this traffic will come onto the network in 2021, but later than we had originally forecasted," Bixby wrote.

With respect to guidance, Fastly now sees a third-quarter adjusted loss of 21 cents to 18 cents per share on $82 million to $85 million in revenue. Analysts surveyed by Refinitiv had expected a loss of 9 cents per share on $98 million in revenue.

For the full year, Fastly called for an adjusted loss of 65 cents to 57 cents per share on revenue of $340 million to $350 million. Analysts polled by Refinitiv were looking for a loss of 43 cents per share on $382.8 million in revenue.

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