Tag: FSLY (Page 2 of 2)

Fastly released their Q1 2020 earnings report on May 6. The results were a blow-out. Q1 actuals were comfortably above estimates for revenue and profitability. Q2 projections and full year raise were even more impressive. At the midpoint, Q2 annualized revenue growth was increased over 20%. Much of the outperformance was provided by the COVID-19 situation, but management anticipates the tailwinds from higher usage across their product set to continue through the year. On top of this, the new Compute@Edge beta release is progressing nicely and should drive incremental revenue streams in 2021. The stock surged almost 46% the day after earnings, as the market digested the stellar results. All analysts raised their price targets. In this post, I will parse out the earnings results, give an update on the CEO transition, check in with comparisons to Cloudflare and then draw conclusions for the investment thesis going forward.

Fastly announced earnings results for Q4 and full year 2019 on February 20, 2020. Results beat expectations on most measures, with strong revenue outperformance for Q4. Bundled with the earnings results was an announced CEO transition. The market reacted negatively the following day, pushing the stock down about 6%. This did coincide with a general market sell-off, which may have over-corrected the reaction. Projections for 2020 were inline and provide room for upside. Let’s take a look at the details and take-aways for investors.

Fastly (FSLY) is a leading edge cloud platform. While they support traditional CDN use cases, their focus and future growth opportunity lies in enabling edge computing. Edge computing represents a large addressable market and Fastly is rapidly rolling out new product offerings in this area. They are developer-centric with strong appeal to the developer community, due to their advantages in performance, security and programmability. Fastly has broad penetration among a set of forward-thinking enterprise customers and is experiencing high DBNER. They are founder led, with a strong leadership team. For these reasons, I think FSLY stock is worth consideration as part of a long term investment portfolio.