Cloud Stocks: Analysis Of Fastly’s Signal Sciences Acquisition

According to a MarketsAndMarkets report, the global Content Delivery Network (CDN) market is expected to grow from $14.4 billion in 2020 to $27.9 billion in 2025 at a CAGR of 14%. Fastly (NYSE: FSLY), a leading player in the segment, recently reported its fourth-quarter results that surpassed the market’s expectations.

Fastly’s Financials

Fastly’s fourth-quarter revenues grew 40% to $82.65 million, far ahead of the market’s estimates of $82.03 billion. Adjusted EPS surpassed the expectations at a loss of $0.09 against the market’s forecast of a loss of $0.10.

For the fiscal year, Fastly announced revenues of $291 million, growing 45%, and a net loss of $0.18 per share.

Fastly forecast its first-quarter revenues to be $83-$86 million, against the market’s estimate of $82.62 million. It expects to end the year with revenues of $375-$385 million and a loss of $0.44-$0.35 per share, against the market’s estimates of revenues of $374.78 million and a loss of $0.19 per share.

Fastly’s Video Focus

Last year, Fastly also announced significant advancements to its collection of live-event and video-on-demand services. The features will allow developers to respond to the increase in live streaming events, which have increased on account of the continued pandemic conditions. The enhancements include a media shield with origin insights that will allow technologists to optimize multi-CDN deployments to reduce streaming costs and live event monitoring so that organizations can rely on a team of Fastly experts to monitor, alert, and troubleshoot issues. It will also offer capacity reservations to reserve additional bandwidth to prepare for high-traffic events and real-time observability capabilities that will let technologists gain real-time insights into how their users are consuming streaming content.

Fastly’s Signal Sciences Acquisition

Last year, Fastly announced the acquisition of California-based Signal Sciences for $775 million. Founded in 2014 by Andrew Peterson, Nick Galbreath, and Zane Lackey, Signal Sciences provides organizations with comprehensive and scalable threat protection capabilities. Prior to the acquisition, Signal Sciences had raised $61.7 million in 4 rounds of funding from investors including CRV, Harrison Metal, Index Ventures, Oreilly AlphaTech Ventures, and Lead Edge Capital.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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Roger Keats 2 weeks ago Member's comment

So what's the outlook