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Investing.com – Fastly stock (NYSE:FSLY) plunged 23% Thursday as the June worldwide outage of the websites it supports sank its second-quarter revenue, forcing it to miss expectations.
The company’s guidance of continuing impact from the outage and its decision to cut the forecast to even below the original estimate after having raised it in May didn’t help.
Fastly now expects 2021 revenue between $340 million and $350 million compared to the original forecast of $375 million to $385 million. The revised forecast had pegged the revenue in the range of $380 million to $390 million.
The San Francisco-headquartered company runs a content-delivery network to push data quickly around the internet. It hosts a service that large enterprises use to serve content to millions of users simultaneously.
Rather than hosting all website content on a single set of servers in one location, Fastly puts cloud infrastructure in dozens of locations to let people download from a server closest to them.
‘Error 503’ showed up on June 8 on home pages of several websites like New York Times (NYSE:NYT), Reddit and that of the U.K. government. Major websites like Twitch, The Verge, and Benzinga were also affected. All the affected websites used Fastly. It took the company almost an hour to identify the cause — a software bug.
Given the usage-based nature of Fastly’s business model, this resulted in an impact on its second-quarter results. The traffic on some of those websites remains affected. Not only this, several customers have also delayed the deployment of new traffic onto the Fastly platform.
Chief Executive Officer Joshua Bixby warned of a downstream hit to revenue from the outage in the near-to medium-term “as we work with our customers to bring back their traffic to normal levels”.
Notwithstanding its issues, Fastly’s customer count grew to 2,581 in the June quarter from 2,458 in January-March.
Total revenue rose 14% year-over-year to $85 million, when $85.73 million was expected. The net loss was $58 million.
