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Fastly Falls After Missing Q3 Revenue, Profit Expectations

Fastly was expected to report a break-even quarter, but instead reported a loss in the period.
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Shares of Fastly  (FSLY)  dropped after hours Wednesday after the cloud services company reported third-quarter results that missed analyst estimates for the period. 

The San Francisco-based company reported revenue of $71 million in the quarter, a 42% year over year increase. The company also reported a net loss of 4 cents per share. 

Analysts were expecting Fastly to report a break-even quarter with revenue of $73.57 million. 

“Despite the customer-specific challenges we faced this quarter, we are pleased with the continued strength and resilience of our business, including a 42% year-over-year top-line growth in the third quarter,” said Joshua Bixby, CEO of Fastly.

Bixby touted the company's customer growth as its total customer count rose to 2,047 in the second quarter from 1,951 the previous quarter. 

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Fastly's enterprise customers accounted for 88% of its revenue for the period, holding steady from the previous quarter. 

Last week, analysts at Piper Sandler downgraded the stock to underweight from neutral based on the company's weak third quarter guidance. 

The firm cut Fastly's price target down to $65 from $84 per share. 

Fastly shares have jumped more than 300% year to date, but over the past four weeks, the stock has seen a more than 20% drop-off.

That decline occurred after the company said that its third-quarter results were impacted by "customer-specific factors that we had not foreseen when we reported our second-quarter results."

Shares closed Wednesday's session down 4% to $71.43 and fell another 3.25% after hours.