Fastly’s second quarter was met with a significant positive market reaction, reflecting stronger-than-expected revenue growth and improving operating margins. Management attributed the outperformance to new customer acquisitions, effective competitive takeout strategies, and disciplined pricing. CEO Charles Compton highlighted the impact of Fastly’s expanded security offerings, which now account for a higher share of total revenue, and cited improved network efficiency as another contributor. Fastly also reported progress in diversifying its customer base, with revenue outside its top 10 customers outpacing overall growth.
Is now the time to buy FSLY? Find out in our full research report (it’s free).
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Looking ahead, our analysts will be watching (1) how successfully Fastly expands its international footprint and leverages new leadership in key regions, (2) the pace of adoption for recently launched security and compute products among both existing and new customers, and (3) continued progress in cross-sell and upsell initiatives that drive higher customer retention and revenue diversification. Execution on operational efficiency and free cash flow generation will also serve as important indicators of Fastly’s ability to achieve sustainable profitability.
Fastly currently trades at $6.89, up from $6.51 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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