What happened
Shares of Fastly (NYSE: FSLY) jumped on Thursday, rising about 17% as of 10:10 a.m. ET. Optimism for the stock grew following the edge computing company's better-than-expected second-quarter results, which featured revenue ahead of both management's guidance range and the consensus analyst forecast for the key metric.
Additionally, the tech company's loss per share narrowed significantly compared to the year-ago quarter as its improved operational discipline continues paying off.
So what
Digging into the details, Fastly's top-line growth accelerated, rising 20% year over year -- up from 15% growth in Q1. Revenue for the period was approximately $123 million, beating analysts' average forecast for about $119 million. Meanwhile, Fastly's loss per share improved, narrowing from $0.14 in the year-ago quarter to $0.08. Similarly, Fastly's quarterly adjusted loss per share narrowed from $0.23 to $0.04 over the same period. The consensus forecast was for an adjusted loss per share of $0.10.
Fastly CEO Todd Nightingale, who took on the leadership position last fall, cited strategic initiatives to improve its go-to-market strategy, operational rigor, and cost control as key factors driving the performance.
Helping revenue growth in particular was the company's 3% sequential growth in average enterprise customer spend and the addition of 11 new enterprise customers. Its impressive 123% dollar-based net expansion rate (a measurement of growth in spend from existing customers) was up from 121% in the first quarter of 2023.
Now what
Likely serving as another reason for the stock's big gain on Thursday, Fastly raised its full-year revenue outlook. Management said it now expects 2023 revenue to be between $500 million and $510 million. Analysts on average were expecting full-year revenue of $501.8 million -- a figure that fell in the upper half of management's previous guidance range for revenue between $495 million and $505 million.
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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Fastly. The Motley Fool has a disclosure policy.
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