The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how content delivery stocks fared in Q3, starting with Fastly (NYSE:FSLY).
The amount of content on the internet is exploding, whether it is music, movies and or e-commerce stores. Consumer demand for this content creates network congestion, much like a digital traffic jam which drives demand for specialized content delivery networks (CDN) services that alleviate potential network bottlenecks.
The 4 content delivery stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 3% below.
Luckily, content delivery stocks have performed well with share prices up 15.1% on average since the latest earnings results.
Fastly (NYSE:FSLY)
Founded in 2011, Fastly (NYSE:FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.
Fastly reported revenues of $137.2 million, up 7.3% year on year. This print fell short of analysts’ expectations by 0.6%. Overall, it was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations.
“Fastly delivered significant upside on our revenue guidance in Q3 along with record non-GAAP net income and adjusted EBITDA,” said Todd Nightingale, CEO of Fastly.
Fastly delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Interestingly, the stock is up 20.2% since reporting and currently trades at $9.80.
Read our full report on Fastly here, it’s free.
Best Q3: F5 (NASDAQ:FFIV)
Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ:FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.
F5 reported revenues of $746.7 million, up 5.6% year on year, outperforming analysts’ expectations by 2.2%. The business had a strong quarter with a solid beat of analysts’ billings estimates and revenue guidance for next quarter slightly topping analysts’ expectations.
F5 delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 23.2% since reporting. It currently trades at $269.12.
Is now the time to buy F5? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Akamai (NASDAQ:AKAM)
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ:AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $1.00 billion, up 4.1% year on year, exceeding analysts’ expectations by 0.5%. Still, it was a slower quarter as it posted underwhelming revenue guidance for the next quarter.
Akamai delivered the slowest revenue growth in the group. As expected, the stock is down 9.3% since the results and currently trades at $94.72.
Read our full analysis of Akamai’s results here.
Cloudflare (NYSE:NET)
Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.
Cloudflare reported revenues of $430.1 million, up 28.2% year on year. This number beat analysts’ expectations by 1.4%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Cloudflare delivered the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 26.1% since reporting and currently trades at $120.70.
Read our full, actionable report on Cloudflare here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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