Fastly (NASDAQ: FSLY) is on a mission to hit $1 billion in revenue by 2025 — the point was highlighted by CEO Joshua Bixby in its most recent quarterly earnings. Trailing twelve-month (TTM) revenue is $323 million so it’s not absolutely ridiculous, and the company has more than doubled annual revenue in the last three years, so it could well double again, even if it doesn’t manage to hit its $1 billion target.
Fastly delivered $87 million in revenue for Q3 2021, up 23% on a year-on-year (YoY) basis, and beat the consensus estimate of $83.7 million. The company also came in ahead of expectations on earnings-per-share (EPS) at a loss of $0.11 v.s. a loss of $0.19 expected. Fastly added 167 new customers in Q3 2021, bringing the total to 2,748. This includes 22 new enterprise customers, which are defined as any customer with a spend of over $100,000 annually.
Fastly was founded in 2011 by Artur Bergman who, until 2020, was acting CEO at the company. He has stepped down as CEO since, but it still very involved with the company as Chief Architect and executive chairperson.
So what does Fastly do?
Cloud edge computing services. Basically, Fastly provide services for the digitization of businesses, content delivery, audio, image, and video optimization, buildings firewalls, and cybersecurity for businesses.
The Story So Far
Fastly is partnered with tech leaders like Amazon, Microsoft, and Google which is helping it scale, and manage some huge clients. Currently, enterprise customers make up 89% of Fastly’s revenue, and the average spend is approx. $700 million. Some of these key customers include Fox, Stripe, Pinterest (NASDAQ: PINS), BuzzFeed, the New York Times (NASDAQ: NYT), Yelp, Affirm (NASDAQ: AFRM), and Reddit. The ability to retain these customers will be essential as they scale and ultimately spend more with Fastly. The fact that some customers left and came back from Q2 to Q3 despite outages speaks volumes about the value add its services provide.
Is Fastly A Good Investment Then?
As a speculative investment, Fastly could very well pay off over the long term. Its ambition of $1 billion in revenue in the coming years is admirable, but whether it’s realistic is another story. The cloud computing market is currently worth $445 billion and is expected to grow to $947 billion by 2026, a compound annual growth rate of over 16%. Although Fastly isn’t growing as quickly as some competitors like Cloudflare(NASDAQ: NET), even if it picks up a little piece of the market, it’ll be doing quite well.
Are you looking for that right company to kickstart your portfolio? Look no further than MyWallSt, where our shortlist of market-beating stocks will take you to the next level. Don’t believe us? Why not start a free trial today?
Financial Writer at MyWallSt
David's favorite stock is Google. He's a daily user of its YouTube platform, where you can learn or find something brand new at the touch of a button. He believes the company will continue to grow for many years to come.