It appears that FSLY is warning investors early to expect slightly lower earnings than guidance called for originally. From the article it appears that the Tik-Tok debacle is to blame.
Fastly now expects third quarter 2020 total revenue of $70.0 to $71.0 million, compared to its previous guidance of $73.5 to $75.5 million. 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. These preliminary results and the withdrawal of the previously-issued third quarter and full-year guidance reflect the following customer-specific factors:
- Due to the impacts of the uncertain geopolitical environment, usage of Fastly’s platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer.
- During the latter part of the third quarter, a few customers had lower usage than Fastly had estimated..
My gut feeling is this is a total over-reaction by the market (-27% in AHT as I write this). And that ultimately, the acquisition of Signal Sciences will boost revenue, the Tik-Tok issue will become a blip in the rear-view mirror, and things will continue upwards after Q4.
I just picked some up in my wife’s Roth IRA, and I’m tempted to pick up more in my own, but might also wait to see what happens tomorrow.