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Why Fastly Stock Is Plummeting Today
FastlyFastly(US:FSLY) The Motley Foolยท2025-02-13 17:17

Core Insights - Fastly's stock experienced a significant decline of 22.1% during trading, despite positive movements in major indices like the S&P 500 and Nasdaq [1] - The company reported fourth-quarter sales that exceeded market expectations but fell short on earnings, leading to bearish sentiment among investors [2] Financial Performance - Fastly recorded a non-GAAP loss per share of $0.03 on revenue of $140.57 million in Q4, compared to Wall Street's expectation of break-even results on sales of $138.63 million [3] - Revenue increased by 2% year-over-year in Q4, marking an all-time high for the period, with the top 10 customers accounting for 32% of revenue, down from 33% in Q3 and 40% in Q4 2023 [4] Customer Diversification and Margins - The company is making progress in customer diversification, closing the quarter with 596 enterprise customers, a 3% year-over-year increase [4] - Despite better-than-expected sales, margins missed expectations, raising concerns about competitive positioning and pricing power [5] Future Guidance - For Q1, Fastly is guiding for a loss per share of $0.09 to $0.05 on sales of $136 million to $140 million, while analysts expected a loss per share of $0.01 on sales of $137.14 million [6] - For the full year, Fastly projects sales between $575 million and $585 million, indicating an annual growth of approximately 6.7%, with an adjusted loss per share forecasted between $0.15 and $0.09 [7] Investor Sentiment - With projected sales growth in the mid-single-digit range and losses expected to be similar to last year, investor confidence in Fastly's growth narrative is waning [8]