Fastly, Inc ((FSLY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Fastly, Inc. recently held its earnings call, showcasing a positive sentiment with significant achievements in revenue growth, record security revenue, and improved margins. The company highlighted strong cash flow and increased revenue guidance, overshadowing concerns about the CFO transition and reported net loss.
Revenue Growth and Record Security Revenue
Fastly reported a Q2 revenue of $148.7 million, marking a 12% year-over-year growth. Notably, security revenue reached a record high, accounting for 20% of total revenue with a 15% year-over-year increase. This growth underscores the company’s strength in expanding its security offerings.
Improved Gross Margin and Operating Leverage
The company’s gross margin improved by 170 basis points quarter-over-quarter to 59%. Additionally, Fastly reduced its operating loss to $4.6 million, outperforming the guidance midpoint, indicating enhanced operational efficiency.
Strong Cash Flow and Raised Revenue Guidance
Fastly generated $26 million in cash flow from operations, representing 17% of revenue. The company also raised its 2025 revenue guidance by $8 million and improved its operating loss guidance by $3 million at their respective midpoints, reflecting confidence in future performance.
Growth in Customer Base and Diversification
The total customer count reached 3,097, with enterprise customer count increasing by 27% from the last quarter. Revenue from customers outside the top 10 grew 17% year-over-year, marking the fifth consecutive quarter of accelerated growth beyond the top 10 customers.
Significant Increase in RPO
Fastly reported a record RPO of $315 million, growing 41% year-over-year. This increase reflects the company’s success in securing long-term revenue commitments.
CFO Transition
The earnings call also addressed the transition in financial leadership, as Chief Financial Officer Ron Kisling steps down after four years. This change marks a period of transition for Fastly’s financial team.
Net Loss and Operating Loss
Despite the positive developments, Fastly reported a net loss of $5 million, or a $0.03 loss per share for the quarter. However, the improvements in other areas suggest a positive trajectory.
Forward-Looking Guidance
Fastly’s forward-looking guidance is optimistic, with the company exceeding its revenue guidance range and achieving a 12% year-over-year growth. The gross margin improvements are expected to continue, driven by network efficiency and favorable pricing. The company also raised its full-year 2025 revenue guidance by $8 million and improved its operating loss guidance by $3 million, signaling confidence in sustained growth.
In summary, Fastly’s earnings call painted a positive picture with robust revenue growth, record security revenue, and improved margins. Despite the CFO transition and net loss, the company’s strong cash flow and raised guidance indicate a promising outlook for the future.