TikTok bandwidth provider Fastly’s shares sag as Q4 revenue, forecast mostly in line with Wall Street estimates
Shares of content distribution networker Fastly, which hosts traffic for the TikTok app, are lower in late trading after the company this afternoon reported Q4 revenue that slightly exceeded expectations, but a deeper-than-expected net loss, and forecast this quarter's, and the full year's, revenue in line.
CEO Joshua Bixby said the company had ended the year with "strong performance and execution," adding that "This quarter's results reflect the continued increase in reliance upon our platform to deliver fast and reliable digital experiences, and the greater importance of security, scale, and performance, as companies continue to accelerate their digital transformations to adapt to lasting trends."
Ιn a separate release, Fastly said it appointed a chief revenue officer, Brett Shirk, who comes to the company from privately held enterprise data management software startup Rubrik, where he held the same role. Prior to Rubrik, Shirk ran the Americas sales operation for software maker VMware, and prior to that held positions at Symantec and Veritas.
You'll recall, Fastly, whose biggest customer has traditionally been TikTok, at about 11% of revenue, back in October projected that this quarter's results would be below analysts' estimates at the time because of the removal of Tik Tok traffic from the U.S. by its Chinese owner, Bytedance, amidst a feud with the administration of then-U.S. president Donald J. Trump.
As it happens, revenue in the three months ended in December rose 40%, year over year, to $82.65 million, toward the upper end of the range that had been offered, $82 million $84 million, yielding a net loss of 9 cents, excluding some costs.
Analysts had been modeling $82 million and a loss of 11 cents.
Fastly touted its wins among enterprise customers in the quarter, noting that its dollar-based net expansion rate was 143%, down only slightly from 147% in Q3. The company's total customer count increased from 2,047 in Q3 to 2,084.
For the current quarter, the company sees revenue in a range of $83 million to $86 million, and net loss of 9 cents to 13 cents. That is roughly in line with the top-line consensus for $85 million, though worse than the consensus for a 9-cent loss per share.
For the full year, the company sees $375 million to $385 million, and negative 35 cents to 44 cents a share.
That is, again, roughly in line with consensus for $379 million on the top line, but worse than the consensus 25-cent loss estimate.