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Fastly plunges: Q1 results miss expectations, CFO stepping down

Fastly said it will search for a replacement will CFO Adriel Lares stays on for a transitionary period.
Written by Tiernan Ray, Senior Contributing Writer

Shares of content distribution networker Fastly, which hosts traffic for the TikTok app, plunged in late trading after the company reported Q1 revenue and profit that both missed Wall Street's expectations, and an outlook that missed as well. 

The company said CFO Adriel Lares is leaving the company, but will stay on for a period of time while a successor is sought.

"CFO Adriel Lares will be stepping down after five years of service," said CEO Joshua Bixby. 

He will continue in his role for a transition period during which we expect to appoint a successor and for a period of time after as an advisor to ensure a smooth transition. We thank Adriel for his many contributions to our company during formative milestones, including becoming a public company, and we wish him well in his future endeavors. 

The report sent Fastly shares down almost 18% in late trading

Bixby called the quarter "outstanding," adding, "we are observing that many of the trends that emerged last year appear to have become permanent, even as the world begins to reopen. 

"Fastly is uniquely positioned to serve companies as they adjust to this new reality, by seamlessly combining delivery, edge computing, and security. 

Also: TikTok bandwidth provider Fastly's shares sag as Q4 revenue, forecast mostly in line with Wall Street estimates

"We are more confident than ever in our ability to deliver on our edge cloud mission and will continue investing in it to position our company for future growth."

In a letter to shareholders, Bixby remarked that the company "Saw strong demand in the beginning of 2021 as we continued to bolster our edge cloud and security offerings."

Revenue in the three months ended in March rose 35%, year over year, $84.85 million, yielding a net loss of 12 cents a share.

Analysts had been modeling $85.08 million and negative 11 cents per share.

For the current quarter, the company sees revenue of $84 million to $87 million, and net loss in a range of 16 cents to 19 cents. That compares to consensus for $92 million and an 8-cent loss per share.

For the full year, the company sees revenue in a range of $380 million to $390 million, and a net loss of 35 cents to 44 cents per share. That compares to consensus of $382 million and a 37-cent loss per share.

Of the outlook, Bixy noted that it "Reflects our strong top-line growth momentum, our strategic investments in security and cloud computing, and the incremental expense from the Signal Sciences acquisition. 

"Given our usage-based business model, we base our revenue guidance on current and expected platform usage. Consistent with prior years, we expect to gain additional visibility as the year progresses."

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