Nothing we don’t already know, but always nice to see a face and hear a voice:
https://finance.yahoo.com/video/weve-never-seen-digital-tran…
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Not being native English i must ask.
Did he actually say they baked in the tiktok risk into guidance or i just wanted to read it into between the lines.
Cause that’s what i have seemed to hear
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Did he actually say they baked in the tiktok risk into guidance or i just wanted to read it into between the lines.
He alluded to it, even though it feels like he answered it fairly ambiguously:
“Yes we tried to provide the real look…we tried to disclose this, it was voluntary…we understood this was a risk we had to take into consideration…this is something we thought about and baked in”
So yes, it looks like it has been (and hopefully not simply disclosed as a risk).
Perhaps he answered this more concretely in the earnings call?
I have found the relevant excerpt from the earnings call, but again seems to be ambiguously worded to me. Perhaps we should err on the side of caution that it hasn’t been, however see GaryMF2020’s post re the impact of this (likely c.$8m to full year guidance https://discussion.fool.com/good-points-ethan-i39ll-add-a-few-id…)
Brad Reback – Stifel Financial Corp. – Analyst
Great. And then, Adriel, just following up on this line of thought. As you look at the back half guidance, have you assumed status quo with TikTok? Or have you made any changes in the assumptions?
Adriel Lares – Chief Financial Officer
Brad, yes, nothing at this time. I mean we’re sort of assuming a little bit of a sort of a status quo at this moment. And again, as Joshua sort of mentioned, as you get to sort of the latter half of the year, also it gives us a lot more time to react. So that’s sort of built into that.
https://www.fool.com/earnings/call-transcripts/2020/08/06/fa…
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Not being native English i must ask: Did he actually say they baked in the tiktok risk into guidance or i just wanted to read it into between the lines
It isn’t your English 
He did sidestep the question the first time, and gave a “half-answer” on the second ask.
The first time interviewer Zack Guzman asked about the potential loss of Tik-Tok, Joshua Bixby referred to all of their “innovative” customers choosing Fastly and gave us (speaking and with his slides) the names of some great companies who are using Fastly. He has an impressive list of customers. Then he mentioned how quickly “tech can change”. It drew our attention away from the original question.
Guzman asked again about Tik-Tok, being more specific. He reminded Bixby that Fastly raised guidance for the year and Fastly said then that losing Tik-Tok wasn’t necessarily “baked into the cake”. Then the interviewer asked Bixby when the potential Tik-Tok impact would be part of the “real look” into Fastly’s future. Bixby replied with three points:
1: We would comply with President Trump’s requirements if we are faced with it
2: We have a 62% YOY growth rate, a 138% net retention rate, and all these other fabulous customers
3: Impact was thought about and it was baked in.
So he sidestepped the intent of the question, “WHAT IS THE NUMERICAL IMPACT OF A LOSS OF TIK-TOK on your projections?”
I think the interviewer wanted Bixby to say something like, “Tik-Tok represents X% of our business, and if we lose them, our guidance becomes Y% growth”. Given that there may be some delicate negotiations in play, he might not want to be specific. Or he fears the worst, that they will lose the business entirely, and fears it will crash the stock price. I don’t know his motive for not wanting to directly answer.
We might be able to answer the question ourselves, if we know what percent of their business is Tik-Tok, and assume a complete loss and recompute the growth rate.
Their stock is down from 117 at peak to 76 today. That’s around a 36% drop. That is probably not all due to Tik-Tok problems. The market seems to be taking profits in the whole sector.
The interviewer led the conversation to the possible drop in overall online traffic due to falling COVID impact. Bixby acknowledged the point, then reminded us that the world is still changing toward online business, so COVID may go away, but the online world is still growing.
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“Impact was thought about and it was baked in.”
Many typically assume most of the companies we follow are sand-bagging a little on forecasts - we assume they will beat the forecast. IMO this answer from the CEO probably means that if Tic-Toc goes away, they will meet the “official” forecast, but they won’t get the upside “beat” assumption. That’s my best guess. If it happens, there will probably be more temporary weakness.
Long FSLY - added 30% in the last week. 5% position.
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Good Chimpanzee Almighty, but the answer ibuildthings gave above is such an obvious model for why this board is such a jungle paradise: instead of a quick toss-off answer, he built a deeper response that was methodical, accurate, and insightful.
Bless y’all!
Monkey (long NET and FSLY, with NET now winning by a small edge)
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