Top line 62% revenue growth, think this board will be happy with the gross margin movement!
Strong top-line growth with revenue of $75 million, up 62% year-over-year
Dollar-Based Net Expansion Rate (DBNER) of 137%, up from 133% in Q1 20201
Net Retention Rate (NRR) of 138%, up from 130% in Q1 20202>
Total customer count increased to 1,951 up from 1,837 in Q1 2020 — the largest
quarterly growth since IPO
Total enterprise customer count of 304, up from 297 in Q1 2020
Average enterprise customer spend of approximately $716,000, up from
$642,000 in Q1 20203
Enterprise customers generated 88% of our trailing twelve-month total
revenue, consistent with Q1 2020
GAAP gross margin of 60.2%, up from 55.0% in Q2 2019; non-GAAP gross
margin, which excludes stock-based compensation, of 61.7% up from 55.6% in
Q2 2019
GAAP operating loss of $14 million, compared to GAAP operating loss of $12
million for Q2 2019; non-GAAP operating income of $2 million, up from nonGAAP operating loss of $9 million in Q2 2019
GAAP basic and diluted net loss per share of $0.14, up from GAAP basic and
diluted net loss per share of $0.26 in Q2 2019; non-GAAP basic and diluted
income per share of $0.02, up from non-GAAP basic and diluted net loss per
share of $0.16 in Q2 20194
Adjusted EBITDA of $7 million, up from ($6) million for Q2 20194 — first
positive quarter
Capital expenditures of $3.1 million, or 4% of revenue5
Raised full-year 2020 guidance $290-300m up from $280-290m
In both cases I modeled in declining growth It just felt more correct then dropping a lot more this next quarter. Also, the past was a bit lumpy so Q4 needs less growth to be consistent on a YoY basis, which is why I included the QoQ numbers to help make sense of it. In reality, they could grow QoQ the same in Q4 as Q3 and it would really make the Q4 YoY % impressive.
The point is, as revenue is usage-based we can equate it roughly to network traffic and so guidance implies the growth in traffic coming through this quarter is more likely to remain consistent going forward as opposed to continued massive growth. I guess we could look at this as new customers in the future will add traffic but the explosion at existing customers is built in now. Perhaps Management doesn’t want to assume the success of their customers, combined with new customers, will continue at the same rate in their own projections so they modeled in less? Regardless I think it is safe to assume we will get a few more quarters of >50% growth from Fastly’s current business model while we wait to see what Compute@Edge brings.
Thanks for spotting that! I was just coming back to double check that because they just said on the conference call Q&A that the mid-point in guidance represented around 50% Q3 YoY growth as well as adding that Q4 is their strongest Q. Here are the corrected rows with adjusted numbers to try and bend these comments in:
Quarter Revenue QoQ Growth YoY Growth
Q4'18 40.8
Q1'19 45.6 11.8%
Q2'19 46.2 1.3%
Q3'19 49.8 7.8%
Q4'19 58.9 18.3% 44.4%
Q1'20 62.9 6.8% 37.9%
**Q2'20 75.0 19.2% 62.3% <-- this Q**
*Q3'20 75.0 0.0% 50.6% <-- 0% QoQ is ~50% growth?*
*Q4'20 87.1 16.1% 47.8% <-- I put the rest % here to get to 100*
**End FY20 300.0**
Quarter Revenue QoQ Growth YoY Growth
Q4'19 58.9 18.3% 44.4%
Q1'20 62.9 6.8% 37.9%
**Q2'20 75.0 19.2% 62.3% <-- this Q**
*Q3'20 80.9 7.8% 62.3% <-- typed any QoQ % to get to 62.3% YoY*
*Q4'20 95.6 18.3% 62.3% <-- typed any QoQ % to get to 62.3% YoY*
<i>_**End FY20 314.4**_</i>
I don’t know if anyone sees value in this exercise but if that first one is now correct then they really did guide to near 0% growth which is what Yahoo articles are already starting to call disappointing
“I put the rest % here to get to 100”
…should have been 300, as in the high end of the guidance, shown just below that. (my kingdom for an editing feature).
Thanks for the info. You’re right essentially flat QoQ guidance but still ahead of Streets Q3 estimates (which, as we all know, is just a game analysts play). Being usage vs. subscription based is going to make Fastly’s QoQ revenue numbers bounce around. YoY may provide a clearer picture without the noise of quarterly fluctuations in use, especially given Fastly’s retail base. On the QoQ line, a more true measure may be QoQ Total Customer Count which grew from 1837 to 1951. I believe that would be the largest customer count growth we’ve seen since it went public. That’s been overshadowed given the TicTok revelation but still relevant. That said, I see it as a solid, not spectacular, quarter and lifting full year to $290-300M range was also a positive. Again, thanks your insights are appreciated.
"If I add up the numbers for 2019, revenue is 200. Guided revenue for 2020 is 300. That’s a 50% YOY growth, unless I’m missing something…
YoY is generally quarterly: a quarter over the same quarter the year before. When you add all the FY quarters together and compare it you are doing the a yearly revenue comparison. As far as I know the quarterly YoY is what is commonly used. Correct me if wrong of couse.
“YoY may provide a clearer picture without the noise of quarterly fluctuations in use”
This would still be subject to quarterly swings but compare further in the past. If things are seasonal this may be just fine but this is not a normal year. Perhaps you were thinking about trailing twelve months (TTM)? Since this adds in the previous 4 quarters for each new quarter, it does have a smoothing effect. I dug deeper in to the data source I mentioned above and added all the data they have. They also have TTM growth % and they match my calculations here, FWIW (at least leading up to the March Q).