Gross Margin % is calculated as gross profit divided by its revenue. Fastly's Gross Profit for the
three
months ended in Dec. 2023 was $75.8 Mil. Fastly's Revenue for the
three
months ended in Dec. 2023 was $137.8 Mil. Therefore, Fastly's Gross Margin % for the quarter that ended in Dec. 2023 was 55.00%.
Warning Sign:
Fastly Inc gross margin has been in long-term decline. The average rate of decline per year is -2.1%.
The historical rank and industry rank for Fastly's Gross Margin % or its related term are showing as below:
FSLY'
s Gross Margin % Range Over the Past 10 Years
Min: 48.48 Med: 53.6 Max: 58.74
Current: 52.64
During the past 7 years, the highestGross Margin % of Fastly was 58.74%. The lowest was 48.48%. And the median was 53.60%.
FSLY's Gross Margin % is ranked better than 61.93% of 2627
companies
in the Software industry
Industry Median: 41.72
vs FSLY: 52.64
Fastly had a gross margin of 55.00% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Fastly was -2.10% per year.
Fastly Gross Margin % Historical Data
The historical data trend for Fastly's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Fastly's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Fastly's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Fastly's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Fastly's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Fastly (NYSE:FSLY) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Fastly had a gross margin of 55.00% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Fastly Gross Margin % Related Terms
Thank you for viewing the detailed overview of Fastly's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Fastly operates a content delivery network, which is necessary for entities to provide faster and more reliable online content. Fastly's strategy differs from traditional CDNs, which focus on locating servers in as many locations as possible to store copies of files that consumers most use. Fastly is in far fewer sites than traditional CDNs, but it houses servers in the most network-dense data centers. Instead of simply storing static content, it allows its customers to program on its platform, enabling edge computing and better service of the more dynamic content that was traditionally not well served by CDNs. Fastly gears its service to the largest, most sophisticated enterprises rather than small companies and generated nearly three fourths of its revenue in the United States in 2022.
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