Fastly Inc. (FSLY) delivered a second-quarter earnings report that most companies would love, yet the stock took a hit anyway. Shares fell 7.41% to $24.10 in Wednesday's extended trading, despite the company beating expectations and raising its outlook. Let's dig into the numbers.

Fastly Q2 Details

The edge cloud platform reported quarterly earnings of 15 cents per share, comfortably beating the analyst consensus estimate of 7 cents. Revenue came in at $183.32 million, also topping the Street's expectation of $173.95 million and marking a solid jump from $148.7 million in the same period last year.

Fastly also highlighted record non-GAAP gross margin of 65.8% and a last-twelve-month net revenue retention rate of 117%, the highest level in over three years. These are the kind of metrics that usually get investors excited.

CEO Kip Compton struck a confident tone: "Record second quarter results reflect strong execution and the deep trust customers place in our technology and our teams." He added, "Our platform strategy is driving business momentum, giving us the confidence to raise our full-year outlook."

Looking Ahead

That confidence translated into a raised fiscal year adjusted EPS guidance of 50 to 54 cents, versus the 33-cent analyst estimate. Revenue guidance was also lifted to a range of $732 million to $746 million, compared to the $718.59 million estimate.

So why the sell-off? Sometimes good news isn't enough if the market was hoping for even more, or if profit-taking kicks in after a run-up. Either way, the fundamentals here look strong, and the raised guidance suggests management sees more upside ahead.