Fastly shares surge as cloud platform provider reports record quarterly revenue

Shares in Fastly Inc. surged by nearly 13% in late trading after the edge cloud platform provider reported earnings and revenue beats in its most recent quarter and a record quarterly level of revenue.

For its third quarter that ended Sept. 30, Fastly reported an adjusted earnings per share loss of six cents per share, an improvement over a loss of 14 cents per share in the same quarter of 2022. Revenue rose 18% from a year ago, to $127.8 million. Analysts surveyed by FactSet had expected a loss of eight cents per share on revenue of $126.6 million.

Fastly ended the quarter with 3,102 customers, up 30 from the previous quarter. Some 547 of those customers were enterprise customers, down four over the same period. Average enterprise customer spend in the quarter was $858,000, up 5% quarter-over-quarter.

Remaining performance obligations – a metric that represents the total amount of revenue that a company is contractually obligated to deliver to its customers in the future, rose 7% from the second quarter and 43% from a year ago, to $248 million.

Channel partner deal registration also saw healthy growth, more than tripling in 2023 year-to-date from all of 2022, with almost 90% growth in partner engagement and channel revenue growth of more than 50%. Transacted packing deals, a type of sales package that combines multiple products or services into a single, discounted offer, also saw twice as many customers quarter-over-quarter.

Other highlights in the quarter included Fastly acquiring domain status application programming interface provider Domainr for an undisclosed sum in August. The acquisition expanded Fastly’s domain API capabilities, advancing its edge cloud platform.

“Our focus on customer acquisition and industry vertical expansion positions us well for 2024, driving our mission to make every user experience fast, safe and engaging,” Chief Executive Todd Nightingale said in the company’s earnings release.

For its fiscal fourth quarter, Fastly expects an adjusted loss per share of between one and five cents on revenue of $137 million to $141 million. For the full year 2023, the company expects a loss of 19 to 23 cents per share on revenue of $505 million to $509 million.

Photo: Fastly