Fastly's revenue surged 62% year over year to $75 million, fueled by new customer additions and higher sales to existing clients. That was above Wall Street's expectations for revenue of $71.4 million.
Better still, Fastly's profitability metrics are improving as it expands its business. It generated adjusted operating income of $2 million, compared to a loss of $9 million in the second quarter of 2019. Its adjusted earnings per share, meanwhile, came in at $0.02, compared to a loss of $0.16 in the prior-year period. That, too, was better than the $0.01 loss analysts had expected.
These strong results prompted Fastly to boost its 2020 full-year outlook. Management's new guidance includes revenue of $290 million to $300 million, up from $280 million to $290 million.
In summary, Fastly delivered revenue and adjusted profits that were higher than analysts forecasted and raised its guidance for the year ahead -- yet the stock still sold off by nearly 18%. After Fastly's incredible run in 2020, during which its share price soared 442% prior to today , it appears that many investors simply set the bar too high.
Fastly's long-term prospects remain strong. As a leading content delivery network, Fastly stands to benefit from the growth of some of the most popular websites in the world, including the rapidly expanding e-commerce platform Shopify. Referring to Fastly's impressive list of online retail customers, CEO Joshua Bixby told Barron's, "As they rise, we rise."
Should Fastly's shares continue to pull back in the coming days, long-term investors may wish to view the sell-off as an opportunity to buy the stock at a significant discount to its recent highs.