Fastly Plummets 30% On Lowered Guidance, Poor TikTok Results

Shares of cloud platform provider Fastly are down significantly after-hours due to lower revenue expected from its top client TikTok.

What Happened: Fastly FSLY announced preliminary revenue results for its third quarter. The company had to file a resale registration statement due to its pending acquisition of Signal Sciences.

Fastly said it expects third-quarter revenue to come in a range of $70 million to $71 million. This is less than the company’s guided range of $73.5 million to $75.5 million.

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Why It’s Important: Fastly is placing blame on the “geopolitical environment” hurting the performance of its largest customer, TikTok. The revenue from TikTok did not meet the expectations Fastly had for the quarter. Fastly also reported lower usage for several other companies in the third quarter.

“All previously issued third quarter and full-year guidance that Fastly disclosed in its second quarter shareholder letter and related call on August 5 should not be relied upon,” the release states.

Other disclosed customers of Fastly are Vimeo, Pinterest, the New York Times and GitHub.

“We believe the fundamentals of Fastly’s business remain strong, as does demand for our platform,” said Fastly CEO Joshua Bixby.

Shares of Fastly have risen over 500% on the year as a play on the work-from-home and a play on the success of TikTok.

What’s Next: Fastly will report official third-quarter results on Oct. 28. The company will provide updated fourth quarter and full-year guidance.

Shares of Fastly are down 27.9% to $88.75 in after-hours trading. Shares closed 4% lower in the regular session.