Based on Fastly’s earnings report for Q3 2020, the edge IaaS provider had a non-GAAP loss of 4 cents per share. It, therefore, missed Zacks Consensus Estimate by 300%. The loss was attributed to low traffic from TikTok, its largest customer.
TikTok parent company ByteDance is on track to generate $27.2 billion in ad revenue from China in 2020. Its overall revenue goal for the year is $30 billion.
ByteDance’s Douyin Projected to Generate $22.78 Billion GMV in 2020
Fastly posted $70.6 million in revenue during Q3 2020, a 41.9% increase year-over-year (YoY), matching consensus estimates.
According to data the nine-month period which ended on September 30, 2020, TikTok accounted for 10.8% of the company’s revenue. Similarly, for the three- and six-month period ended on June 30, TikTok’s share of total revenue was 13% and 12%, respectively.
The gradual reduction in TikTok traffic came as a result of the threatened ban in the US. For Q4 2020, Fastly projected $80 to $84 million in revenue and adjusted loss between 8 cents and 12 cents per share.
Even though ByteDance is most popular globally for TikTok, the app contributes a negligible amount to its total revenue. Rather, the company relies on Douyin, the Chinese version of the app for about 60% of ad revenue.
In China, ByteDance is second only to Alibaba in the digital ad market. In 2019, it accounted for 23% of total digital ad spend in China, compared to Alibaba’s 33%. According to Sensor Tower, Douyin and TikTok were the highest grossing mobile apps in April 2020, raking in over $78 million. 86.6% of this came from Douyin. Douyin is one of ByteDance’s fastest growing segments, on track to generate $22.78 billion in gross merchandise value (GMV) in 2020.