The software company said on Wednesday that its largest customer, TikTok parent BuyDance Inc., traded more than 25% of its product.
A news release revealed that it now expects third-quarter revenue of $ 70 million to $ 71 million, following earlier guidance for sales of $ 73 million to $ 75.5 million. The company also said its full-year guidance should no longer be relied upon, and a new forecast will be released when the company reports its full earnings on October 28.
The company said its largest customer did not use its products, charging on the basis of usage, as much “due to the effects of uncertain geopolitical environments”. While Fast did not disclose the client’s name in the release, Fastley admitted in filings at the Securities and Exchange Commission and elsewhere that its largest customer was BuyDance.
“The current global environment has affected our business to some extent, but also created areas of uncertainty,” Chief Executive Officer Joshua Bixby said in a statement. “While our preliminary third quarter results reflect the challenges of a usage-based model, we believe Fastley’s business fundamentals remain strong, as is the demand for our platform.”
President Donald Trump has attempted to ban Tiktok from operating in the US until China-based Bydance transfers ownership to a US entity. While an agreement was reached to establish a new unit in the US with the help of Oracle Corp ORCL.
And Walmart Inc. WMT,
The move fights the ban through the US court system, where a judge imposed a moratorium at the end of last month, as the move was halted.
For more: TikTok geopolitical soap opera is a confusing mess
In its latest quarterly filing with the SEC, Fastly stated that Bytedance was its largest customer and contributed 12% of its revenue in the first six months of the calendar year. In Wednesday’s announcement, the company also said that other customers used its product less than anticipated at the end of the third quarter.
The stock closed sharply lower at $ 123.19 on Wednesday, down 4.4%, then trading below $ 90 in after-hours trading. The San Francisco software company went public in May 2019 for $ 16 per share.