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Subject:  Re: Can we call it quits on FSLY v. NET? Date:  11/7/2020  11:44 AM
Author:  Texmex Number:  73285 of 78005

Fastly already warned after Q2 about the potential of losing Tiktok. Many here posted how a 6% or 12% revenue loss is a non issue - that was clearly not correct. Losing a 12% customer is always a big deal. Does not mean that company cannot make a come back like Twilio did with Uber.

We have always known about Fastly's slow enterprise growth. Nothing new there.

The only new info we got was that some of their customers did not increase their usage towards the end of the Q as expected.

Since then I have communicated with IR and received confirmation from the CFO that:
1. Most of the customers who did not increase usage have come back. Specifically he says "timing of events (sport schedules, flash sales, technical planning)" were delayed and are back in Q4.
2. Revenue-based churn has been less than 1%. They are not losing customers.
3. Usage based model is not under threat. Customers are not cutting use. They believe more usage aligns with customer success and more value. So, they are sharing in their customer success. 50% rev is usage-based.

These points give me some confidence. The usage based model can surprise us in a positive way too, like in Q2. So, as of now I am still keeping my 2.5% position (NET is 7.7%). If revenue grows 50% in Q4 watch out for a quick ramp up in the share price. It is too early to conclude that Fastly is done and NET has won. Now if we start seeing some big customers move away from Fastly that will be new info. But we don't know that yet.
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