Fastly Inc Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 2024-08-08
Fastly, Inc. Reports Second Quarter 2024 Financial Results
Fastly, Inc. (NYSE:FSLY), a leader in global edge cloud platforms, today announced its financial results for the second quarter ended June 30, 2024.
Financial Metrics Overview
| Metric | Q2 2024 (Reported) | Q2 2023 (YoY) | Q1 2024 (QoQ) | Consensus Estimates (Current Quarter) |
|---|---|---|---|---|
| Total Revenue | $132.4 million | $122.6 million (+8%) | $127.5 million (+4%) | $131.57 million |
| EPS (GAAP) | -$0.32 | -$0.08 | -$0.28 | - |
| EPS (Non-GAAP) | -$0.07 | -$0.04 | -$0.06 | -$0.08 |
| GAAP Gross Margin | 55.1% | 52.3% | - | - |
| Non-GAAP Gross Margin | 58.5% | 56.6% | - | - |
| GAAP Net Loss | $43.7 million | $10.7 million | $40 million | - |
| Non-GAAP Net Loss | $9.3 million | $4.6 million | - | - |
Interpretation: Fastly reported total revenue of $132.4 million, surpassing the market consensus of $131.57 million and achieving an 8% year-over-year growth. EPS on a non-GAAP basis is -$0.07, better than the consensus estimate of -$0.08. The company displayed improved gross margins, both on a GAAP and non-GAAP basis. However, the GAAP net loss widened significantly.
Revenue Performance by Segment
| Segment | Revenue (Q2 2024) | YoY Comparison | Previous Guidance |
|---|---|---|---|
| Network Services | $104.2 million | +6% | Midpoint Exceeded |
| Security | $25.4 million | +13% | Midpoint Exceeded |
Interpretation: The network services segment, which includes solutions designed to improve the performance of websites, apps, APIs, and digital media, saw a 6% year-over-year increase, while security services grew by 13%. Both segments exceeded the previous guidance midpoint.
Key Operational Data
| Key Metrics | Q2 2024 (@) | Q1 2024 (QoQ) | Q2 2023 (YoY) |
|---|---|---|---|
| Enterprise Customers Count | 601 | +4% | - |
| Total Customer Count | 3,295 | +0.15% | - |
| LTM Net Retention Rate | 110% | -4% | - |
| Remaining Performance Obligations (RPO) | $223 million | -2% | - |
Interpretation: The enterprise customer count rose by 4% sequentially to 601. However, the company's last twelve-month net retention rate decreased to 110% from 114% in the first quarter. Remaining performance obligations also saw a minor decrease.
Comments from Company Officers
"We continued to drive customer acquisition in the second quarter, achieving 4% sequential growth in Enterprise customer count," said Todd Nightingale, CEO of Fastly. "This, along with the acceleration of our go-to-market motions, contributed to revenue growth above the midpoint of our guidance."
"However, we are experiencing demand challenges with some of our largest customers, and we are taking measures to align our cost structure accordingly," continued Nightingale. "This change will enable focused investment in edge cloud innovation and continued go-to-market transformation."
Dividends or Share Repurchase Program
No dividends or share repurchase programs were announced.
Forward Guidance
Fastly provided guidance for the third quarter and the full year 2024, though specific figures were not detailed. The company highlighted that providing a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not feasible due to the uncertainty of future expenses.
Stock Price Movement
Post-earnings release, Fastly's stock experienced a decrease of approximately 2.29%.
Summary
Fastly, Inc. reported solid revenue growth exceeding consensus estimates and demonstrating robust performance in both Network Services and Security segments. While the company's non-GAAP EPS slightly beat estimates, it faced challenges with a wider GAAP net loss and a decrease in the net retention rate. Forward-looking measures focused on aligning cost structures to better support innovation and market strategies, albeit challenges with some large customers remain.
For more detailed information, please refer to Fastly's official earnings press release .
