Fastly Stock Declines After Mixed Q4 Results and Disappointing Guidance

Fastly Inc., the internet infrastructure provider, experienced a sharp decline in its stock price following the release of its fourth-quarter results, which were a mixture of positive and negative news. Additionally, the guidance for both the first quarter and the entire year of 2024 was slightly below expectations.

Previous Performance and Current Stock Decline

Fastly shares had been performing exceptionally well, with a 32% increase over the course of the year and a remarkable 70% surge in the past 12 months as of Wednesday's regular trading session. However, the stock plummeted by 29% on Thursday morning.

Fourth Quarter Results

Fastly reported a revenue of $137.8 million for the fourth quarter, which fell slightly short of the consensus estimate of $139.5 million among analysts tracked by FactSet. Nonetheless, revenue increased by 15.5% compared to the same period last year and 8% sequentially. Moreover, the company achieved an adjusted profit of one cent per share, surpassing the Street's consensus forecast of a two-cent loss. The non-GAAP gross margin also demonstrated improvement, reaching 59.2% in the quarter compared to 57% a year earlier.

Full Year Results

Fastly's revenue for the entire year amounted to $506 million, marking a 17% increase from the previous year. The adjusted loss for the year was 17 cents per share.

First Quarter and Full-Year Guidance

For the first quarter, Fastly projects revenue in the range of $131 million to $135 million, with an anticipated non-GAAP loss between five and nine cents per share. This falls short of the Street consensus estimate of $135.5 million in revenue and a three-cent loss.

Fastly's full-year guidance anticipates revenue ranging from $580 million to $590 million, representing a midpoint increase of 15.6%. This is slightly below the previous Street consensus call of $586 million. The company also expects a net income ranging between break-even and a loss of six cents per share for the full year, while the Street had predicted a three-cent loss per share.

While the stock decline may have been triggered by the mixed fourth quarter results and slightly disappointing guidance, Fastly remains a prominent player in the internet infrastructure industry.