| COMPANY |
Fastly, Inc. |
| COURT |
United States District Court for the Northern District of California |
| CASE NUMBER |
24-cv-03170 |
| JUDGE |
The Hon. Jon S. Tigar |
| CLASS PERIOD |
February 15, 2024 through May 1, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS JULY 23, 2024.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
A class action lawsuit has been filed on behalf of those who purchased or acquired Fastly, Inc. (“Fastly”) (NYSE: FSLY) securities between February 15, 2024 and May 1, 2024, both dates inclusive (the “Class Period”).
On February 14, 2024, Fastly issued a press release providing full year ("FY") 2024 revenue guidance in a range of $580 million to $590 million. In that same press release, Fastly's CEO was quoted stating, "[t]his quarter demonstrated the progress we've made in operational and financial rigor resulting in strong gross margins and non-GAAP net income," and "[o]ur go-to-market, packaging and channel efforts through 2023 delivered an inflection in our customer acquisition as we closed out the year. This positions us well for 2024, driving our mission to make every user experience fast, safe, and engaging."
On May 1, 2024, Fastly announced its Q1 2024 results. Despite Fastly’s positive statements just weeks before about its performance and near-term business prospects, Fastly reported revenue of only $133.52 million, missing consensus estimates. Fastly also lowered its fiscal year 2024 revenue guidance to a range of $555 million to $565 million, significantly below its previously issued FY 2024 revenue guidance of $580 million to $590 million, and likewise below consensus estimates of $584.62 million for the same period.
On a conference call held that same day discussing the Q1 2024 results, Fastly’s CEO attributed the company’s disappointing results to “a reduction of revenue from a small number of [Fastly’s] largest customers,” and further reported that Fastly saw “significant volatility” in the Content Delivery Network (CDN) strategy run by many of Fastly’s top 10 accounts. Further, Fastly’s CFO stated that Fastly is “facing a challenging environment of revenue declines in our largest customers, overshadowing the impact of new customer acquisition and product pipeline[,]” and that Fastly would not benefit in 2024 from the favorable impact of the early 2023 CDN consolidation that drove favorable sequential growth in the prior year same period.
Then, on May 2, 2024, Bank of America downgraded Fastly stock from a “Buy” rating to an “Underperform” rating and cut its price target on the stock from $18 per share to a mere $8 per share. On this news, the price of Fastly shares declined by $4.14 per share, or approximately 32.02%, from $12.93 per share on May 1, 2024 to close at $8.79 on May 2, 2024.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) contrary to its representations to investors, Fastly was in fact experiencing a significant deceleration in growth among its largest customers and was losing the increased market share it had gained as a result of the 2023 CDN consolidation trend; (2) the foregoing issues were likely to have a material negative impact on the company's revenue growth; (3) accordingly, Fastly was unlikely to meet its own previously issued revenue guidance for FY 2024; (4) as a result, the company's financial position and/or prospects were overstated; and (5) as a result, the company's public statements were materially false and misleading at all relevant times.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.