TLDR
- Fastly (FSLY) stock jumped 40% Thursday after beating Q4 earnings expectations with EPS of $0.12 versus $0.06 consensus and revenue of $172.61 million versus $161.36 million expected.
- Total revenue grew 23% year-over-year, with security revenue climbing 32% to $35.4 million and network services revenue rising 19% to $130.8 million.
- The company’s last 12-month net retention rate improved to 110% from 106% in Q3 2025, while enterprise customer count reached 628.
- Fastly issued strong fiscal 2026 guidance with revenue expected between $700-720 million versus analyst estimates of $667.83 million and adjusted EPS of $0.23-0.29 versus $0.14 consensus.
- RBC Capital raised its price target to $12 from $10 while Piper Sandler increased its target to $14, both citing continued revenue acceleration and margin execution.
Fastly stock exploded higher Thursday morning, climbing as much as 40% after the edge cloud platform company delivered a blowout fourth quarter and issued guidance that crushed Wall Street expectations.
The rally came after Fastly reported adjusted earnings of $0.12 per share on Wednesday evening, double the $0.06 consensus estimate. Revenue hit $172.61 million, beating expectations of $161.36 million by nearly 7%.
Total revenue jumped 23% compared to the same quarter last year. The growth came from across the business, with network services revenue climbing 19% to $130.8 million.
Security revenue showed even stronger momentum, surging 32% to $35.4 million. Other revenue jumped 78% to $6.4 million, though it remains a smaller piece of the overall mix.
The company’s remaining performance obligations reached $354 million, up 55% year-over-year. This metric represents contracted revenue that hasn’t been recognized yet, giving visibility into future growth.
Customer Metrics Show Strength
Fastly’s enterprise customer base grew to 628 in the quarter, adding 32 new customers from the previous quarter. But the real story was in customer retention and expansion.
The company’s last 12-month net retention rate improved to 110% from 106% in the third quarter. This means existing customers are spending more over time, a key indicator of product satisfaction and pricing power.
Top-ten customer revenue accelerated 28% year-over-year according to analyst notes. RBC Capital pointed to this as evidence of “durable acceleration” in the business.
Fastly also generated positive free cash flow for the fourth consecutive quarter. The company has now strung together a full year of cash generation after previous quarters of burning cash.
Outlook Drives the Rally
The guidance Fastly issued sent shares soaring in after-hours trading and continued the momentum Thursday morning. For fiscal 2026, the company expects adjusted EPS between $0.23 and $0.29.
That range sits well above the analyst consensus of $0.14. Full-year revenue is projected at $700-720 million versus Wall Street estimates of $667.83 million.
First-quarter guidance also beat expectations handily. Fastly sees Q1 adjusted EPS of $0.07-0.10 compared to the $0.01 consensus. Revenue is expected between $168-174 million against estimates of $159.62 million.
Analysts responded quickly to the results. RBC Capital lifted its price target to $12 from $10 while maintaining a Sector Perform rating.
Piper Sandler raised its target to $14 from $11, keeping a Neutral rating. William Blair upgraded the stock from Market Perform to Outperform, highlighting Fastly’s positioning in AI traffic growth.
The stock was trading around $12.98 Thursday morning, up nearly 40% from Wednesday’s close. Shares remain down about 7.5% over the past 12 months but are recovering from recent lows.
Fastly generated $172.61 million in Q4 revenue, a 23% increase year-over-year, with security revenue climbing 32% to $35.4 million.
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