Fastly plunges more than 25% on lowered revenue guidance
- Shares of Fastly plunged more than 23% in after hour trading after the company lowered its third quarter guidance.
- The company said it now expects revenue of $70 million to $71 million, compared to its previous guidance of $73.5 million to $75.5 million.
- Fastly's technology helps consumers more rapidly view and retrieve digital content.
Shares of Fastly plunged as much as 28% in after-hours trading after the company lowered its third quarter guidance.
The company, whose core technology helps companies speed the delivery of digital content to consumers, said it now expects revenue of $70 million to $71 million, compared to its previous guidance of $73.5 million to $75.5 million.
"Due to the impacts of the uncertain geopolitical environment, usage of Fastly's platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer," the company said in the release.
Fastly did not identify the customer. However CEO Joshua Bixby said on the company's most recent earnings call that TikTok is its biggest customer, accounting for about 12% of revenue in the first six months of the year, sending the stock down almost 20% on that announcement.
TikTok has been caught up in a complicated geopolitical dance between China, where its parent company ByteDance is based, and the United States, with President Donald Trump threatening to ban the app completely unless a U.S. buyer was found. Last month, the president approved "in concept" a deal between TikTok, Oracle and WalMart that could allow the app to continue operating in the U.S., but the deal has not yet been finalized.
As of Wednesday's close, Fastly shares were up 514% this year, the second-biggest gain among cloud software companies, behind only Zoom, which has jumped 648%.