What happened
Shares of edge-computing specialist Fastly (FSLY 21.69%) tumbled once again today. As of 10:35 a.m. EDT on Friday, the stock was down about 7.5%.
This adds to a brutal sell-off for the growth stock that began earlier this month when the tech company said its third-quarter revenue would miss its initial guidance for the period. In addition, its third-quarter results reported earlier this week failed to excite investors. The stock's sharp drop on Friday is likely a continuation of its downward trend. In addition, a bearish day in the market for tech stocks is weighing on it.
Image source: Getty Images.
So what
Fastly recently announced third-quarter revenue of $70.6 million. Though this was up from $49.8 million in the year-ago quarter, management had initially guided for revenue during the period to be between $73.5 million and $75.5 million.
Fastly said the quarter's headwind was primarily a result of lower-than-expected usage from its largest customer, TikTok owner ByteDance.
"Based on publicly available information, we believe this global traffic reduction was in response to the potential of a prohibition of U.S. companies being able to work with this customer," Fastly said in its third-quarter shareholder letter.
Also hurting Fastly stock on Friday was a sharp sell-off in the overall market, particularly among tech stocks. The tech-heavy Nasdaq Composite index was down 2.6% as of this writing.
Now what
Though Fastly did say there's a possibility that some of the ByteDance usage that its platform lost could return, investors shouldn't count on it. Fortunately, Fastly saw accelerated growth in enterprise customers during the third quarter, helping it further diversify its customer base.
