Fastly, Inc. Achieves Record Revenue in Latest Earnings Call

Fastly, Inc ((FSLY)) has held its Q3 earnings call. Read on for the main highlights of the call.

Fastly, Inc. Reports Outstanding Quarter with Record Revenue and Strategic Wins

Fastly, Inc. recently held its earnings call, where the sentiment was overwhelmingly positive. The company reported a record-breaking quarter with impressive financial performance, including record revenue, operating income, and free cash flow. Security revenue showed significant growth, and successful cross-sell strategies were highlighted by a major win with a top 10 strategic account. Despite some concerns about seasonality affecting Q4 growth and a discovered error in RPO calculation, the overall sentiment remains optimistic due to the strong financial performance and strategic achievements.

Record-Breaking Revenue and Growth

Fastly’s third-quarter revenue reached $158.2 million, surpassing the high end of its guidance and marking a new record. The company experienced accelerated revenue growth of 15% year-over-year, compared to 12% in the second quarter, showcasing its robust market position.

Strong Financial Performance

The company posted a record operating income of $11.6 million, significantly above the $1 million guidance midpoint. Additionally, Fastly achieved a record quarterly free cash flow of $18 million, underscoring its strong financial health and operational efficiency.

Security Revenue Growth

Security revenue grew by 30% year-over-year, making up a record 21% of total revenue. This growth was driven by the expansion of Fastly’s security portfolio and successful cross-sell strategies, highlighting the company’s focus on enhancing its security offerings.

Cross-Sell and Platform Expansion Success

Fastly’s cross-sell efforts gained momentum, highlighted by a significant multiproduct win with a top 10 strategic account. This customer now utilizes products across all three of Fastly’s product lines, demonstrating the effectiveness of the company’s platform expansion strategy.

Innovation and Product Enhancements

The company introduced new security and AI enhancements, including API discovery and industry-first deception capabilities in their next-gen WAF. These innovations reflect Fastly’s commitment to staying at the forefront of technology and meeting evolving customer needs.

Seasonality Concerns

Despite the strong performance in Q3, Fastly anticipates only modest sequential revenue growth in Q4, indicating potential seasonality challenges. The company remains vigilant in addressing these concerns to maintain its growth trajectory.

Error in RPO Calculation

During the third quarter, Fastly discovered an error in the historical calculation of RPO, necessitating a recast of historical RPO data. The company is addressing this issue to ensure accurate financial reporting moving forward.

Forward-Looking Guidance

Fastly exceeded the high end of its guidance for both revenue and operating profit, achieving a record in free cash flow. The company reported Q3 revenue of $158.2 million, surpassing its guidance range and driven by a 15% year-over-year growth rate. Fastly raised its full-year guidance for revenue, profitability, and free cash flow, expecting an annual growth of 13% at the midpoint, with revenue anticipated between $610 million and $614 million.

In summary, Fastly, Inc.’s earnings call reflected a positive outlook, with record-breaking financial results and strategic achievements. The company demonstrated strong revenue growth, enhanced security offerings, and successful cross-sell strategies. While seasonality concerns and an RPO calculation error were noted, Fastly’s forward-looking guidance remains optimistic, setting the stage for continued success.