Fastly Shares Tumble as June Outage Spurs Some Customers to Cut Ties

For the quarter, Fastly posted gross of $85 million, up 14% from a twelvemonth ago, aft a $1.2 cardinal write-down of deferred gross tied to the company’s acquisition past twelvemonth of the edge-security bundle supplier Signal Sciences, and somewhat beneath the Street statement astatine $85.7 million. A non-GAAP nonaccomplishment of 15 cents a stock was a spot amended than the Street projection of a nonaccomplishment of 17 cents. Non-GAAP gross borderline fell to 57.6% from 61.7% a twelvemonth ago.

The existent contented with the 4th was the outage, and however it volition interaction results from here. “We person a mates of customers, 1 of them being a apical 10 customer, that person yet to instrumentality their postulation to the platform,” CEO Joshua Bixby said successful a missive to shareholders. “We besides had respective customers hold their motorboat of caller projects, which volition hold the timing of postulation coming onto our platform. The outage and these delays volition person an interaction connected our Q3 and afloat twelvemonth outlook.”

Bixby notes that the June 8 outage affected astir each customers. 

“The outage resulted from an undiscovered bundle bug that was triggered by a valid lawsuit configuration change,” helium explains. “We detected the bug wrong 1 infinitesimal and returned 95% of our web to mean wrong 49 minutes, but our customers were negatively impacted. As a result, we saw postulation volumes alteration and issued credits to customers pursuing the incident.

“Given the usage-based quality of our concern model, this resulted successful an interaction to our Q2 results, and we expect to spot a downstream interaction connected gross from the outage successful the near- to medium-term arsenic we enactment with our customers to bring backmost their postulation to mean levels.”

For the September quarter, Fastly sees gross of $82 cardinal to $85 cardinal and a nonaccomplishment connected a non-GAAP ground of betwixt 18 cents and 21 cents a share. Previous Street statement called for $98 cardinal successful gross and a nonaccomplishment of 9 cents a share.

For the afloat year, Fastly present sees gross ranging from $340 cardinal to $350 million, with a non-GAAP nonaccomplishment of 57 to 65 cents a share; statement had called for $382 cardinal successful gross and a nonaccomplishment of 43 cents a share.

Write to Eric J. Savitz astatine eric.savitz@barrons.com