Fastly Inc. (FSLY) shares dived nearly 30 percent in the pre-market trading Thursday following the news that the San Francisco, California-based company’s biggest customer did not use its product as per expectations.
The cloud computing services provider usually charge for its products according to usage. FSLY did not disclosed the name of its largest customer, which many believe is TikTok parent Bytedance Inc based in China, and the apparent reason behind low usage of its product is a potential ban on TikTok in the United States, beside uncertain geopolitical situation.
U.S. President Donald Trump has tried to impose a ban on TikTok in the United States. However, Bytedance challenged the move in a U.S. court, where the ban was put on hold by a Judge last month.
Fastly CEO Joshua Bixby said in a statement that the ongoing global environment has somehow helped Fastly to grow its business, but at the same time it created ambiguities in some areas. The company’s usage-based strategy has weighed on its preliminary Q3 results, but Fastly believes the fundamentals and demand for its services remain strong.
The company also revised its revenue guidance for the third quarter. It now expects sales between $70 million to $71 million for the quarter, below its previous outlook of $73.5 million to $75.5 million. Moreover, it also revoked its financial projection for full-year and said it will reissue the guidance when at the time of reporting quarterly results on October 28.
FSLY shares closed at $123.18 after declining 4.39 percent in the previous trading session. The shares continue to drop in the pre-market trading this morning by losing more than 30 points so far. If we look at the year-to-date performance of the stock, it did pretty well by climbing more than 500 percent. The 52-week range of the stock is $10.63-$136.50, while the company’s market cap stands at $13.743 billion.