Abstract

Fastly, Inc. will report fiscal first-quarter 2026 results on May 6, 2026, Post Market; consensus points to sharply higher year-over-year revenue and EPS, while guidance implies performance near the midpoint of the company’s previously outlined range.

Market Forecast

The market’s baseline for Fastly, Inc. this quarter centers on revenue of 170.26 million US dollars, implying 23.36% year-over-year growth, with estimated EPS of 0.08, implying 223.98% year-over-year growth and estimated EBIT of 15.35 million US dollars, implying 275.21% year-over-year growth; no widely published consensus for gross margin or net margin has emerged ahead of the print. Based on the company’s prior update, Fastly, Inc. expects fiscal first-quarter 2026 revenue between 168.00 million and 174.00 million US dollars and non‑GAAP operating income of 14.00 million to 18.00 million US dollars, placing current consensus close to the midpoint of the revenue range.

The core business continues to emphasize scale and cross‑sell, with the prior quarter’s 353.80 million US dollars in remaining performance obligations, up 55% year over year, and a last‑12‑month net retention rate of 110% underscoring healthy expansion within the customer base heading into fiscal 2026. Within the portfolio, security stands out as the most likely incremental growth lever this year, supported by recent product expansions and high‑profile collaborations; in the last quarter, security revenue was 125.06 million US dollars, and overall company revenue grew 22.79% year over year as a backdrop to segment traction.

Last Quarter Review

In fiscal fourth-quarter 2025, Fastly, Inc. delivered revenue of 172.61 million US dollars, up 22.79% year over year, with a gross profit margin of 61.39%; GAAP net loss attributable to shareholders was 15.51 million US dollars for a net profit margin of −8.98%, and adjusted EPS was 0.12, up 500.00% year over year.

Commercial momentum strengthened into fiscal 2026 with remaining performance obligations at 353.80 million US dollars, up 55% year over year, alongside a last‑12‑month net retention rate of 110%, reflecting broad‑based customer expansion. By business line in the last quarter, network services generated 477.77 million US dollars (76.56% mix), security contributed 125.06 million US dollars (20.04% mix), and other contributed 21.18 million US dollars (3.39% mix); at the company level, total revenue rose 22.79% year over year, while segment‑level year‑over‑year changes were not disclosed.

Current Quarter Outlook (with major analytical insights)

Core delivery and network services near‑term trajectory

Investors are looking for revenue to land near the midpoint of the 168.00–174.00 million US dollars range the company previously outlined, which is in line with the 170.26 million US dollars consensus. The fourth quarter established a strong baseline on both volume and unit economics, with gross margin of 61.39% reflecting operational discipline and mix. Seasonal normalization from a strong fourth quarter to the first quarter is common in usage‑driven models, yet the latest backlog and retention metrics suggest demand visibility into early fiscal 2026 is solid, anchoring confidence in the guide’s midpoint.

Gross margin is a central lever for sentiment this quarter. Even though the company has not provided a margin target in its quarterly outlook, investors will parse commentary on network efficiency, transit and peering costs, and traffic mix for signs that the level achieved in the prior quarter can be sustained through the first half of fiscal 2026. A stable gross margin profile would position operating profitability to track the company’s non‑GAAP operating income framework of 14.00–18.00 million US dollars, particularly if revenue lands at or near the high end of the range. The consensus EPS estimate of 0.08 embeds that margin discipline; any deviation—positive or negative—could drive post‑print volatility.

Usage patterns tied to media, e‑commerce, and emerging workloads are likely to shape revenue dispersion within the quarter. Management’s recent disclosure that the top ten customers represented 34% of revenue in the fourth quarter, up from 32% in the prior year’s period, highlights the importance of performance with large accounts; investors will watch for updates on engagement levels and expansion trajectories among these customers. With remaining performance obligations at 353.80 million US dollars, up 55% year over year, commentary on conversion of backlog to in‑period revenue will be a focal point in assessing the durability of current growth rates.

Security platform and application protection as the incremental growth engine

Security continues to be the franchise’s most promising growth vector in fiscal 2026. Recent product upgrades such as expanded API security capabilities (including API inventory) and recognition within third‑party peer‑review programs reflect an emphasis on breadth and efficacy. In parallel, collaborative initiatives that address critical customer pain points—such as combating illegal streaming—showcase the ability to translate threat intelligence and mitigation into real‑world outcomes, with potential to expand adoption and deepen customer relationships.

From a financial lens, security’s contribution can serve as both a growth catalyst and potential margin enhancer. While the company has not broken out segment‑level year‑over‑year growth, the 125.06 million US dollars contribution in the last quarter and the broader 22.79% company‑level revenue growth provide context for robust demand. If security‑driven bookings continue to scale in step with the 353.80 million US dollars RPO, the mix shift toward higher‑value services could support blended gross margin resilience even as network volumes fluctuate. Investors will also monitor attach rates within existing accounts, given the last‑12‑month net retention rate of 110%, for clues on whether security is accelerating cross‑sell within the installed base.

This quarter’s proof points are likely to come from several fronts: net new customer adds among enterprises, expansions within the top customer cohort, and references that demonstrate differentiated outcomes in areas such as bot management, API protection, and content protection. The company’s collaboration against illegal live streaming exemplifies outcome‑based value and may foster incremental opportunities in adjacent use cases. Clear line‑of‑sight between those initiatives and in‑period revenue recognition, combined with qualitative color on the pipeline, would reinforce the view that security is positioned to deliver a disproportionate share of incremental growth through fiscal 2026.

Key stock‑price swing factors into the print and guide

The first and most sensitive swing factor is whether revenue and non‑GAAP profitability land at or above the high end of guidance. With consensus positioned at 170.26 million US dollars and the company’s outlook framed at 168.00–174.00 million US dollars in revenue and 14.00–18.00 million US dollars in non‑GAAP operating income, a modest beat on both would validate the step‑up in demand implied by backlog and retention metrics. Conversely, delivery toward the low end would likely raise questions about seasonality versus a reset in consumption trends, especially given the strength seen in the fourth quarter.

The second swing factor centers on EPS and margin quality. The consensus EPS estimate of 0.08 implies 223.98% year‑over‑year improvement; sustaining gross margin near the prior quarter’s 61.39% while keeping expense growth contained is the most straightforward path to achieving that outcome. Investors will scrutinize the reconciliation between non‑GAAP and GAAP to understand the trajectory of stock‑based compensation and amortization expenses, as the prior quarter’s GAAP net loss of 15.51 million US dollars and net margin of −8.98% showed that profitability on a GAAP basis remains a work in progress even as adjusted metrics improve.

The third swing factor relates to forward‑looking commentary. The company previously indicated a fiscal 2026 revenue framework of 700.00–720.00 million US dollars; any update to the full‑year revenue and non‑GAAP operating income outlook on May 6, 2026 will shape the durability narrative. Additional metrics—such as movement in remaining performance obligations versus the 353.80 million US dollars fourth‑quarter level, trends in the last‑12‑month net retention rate versus 110%, and the proportion of revenue from the top ten customers versus 34%—will be important signals for the slope of growth into the second half. Balance sheet updates following the issuance of 0% convertible notes due 2030 and repurchase of 2026 notes can also factor into sentiment by clarifying liquidity and potential share‑count dynamics.

Analyst Opinions

The majority stance among recent institutional voices is neutral: two “Hold/Sector Perform” views versus one “Buy,” indicating that 67% of tracked opinions are neutral and 33% are bullish over the past six months. Notably, RBC Capital’s Rishi Jaluria reaffirmed a Hold rating on April 6, 2026 with a 20.00 US dollars price target, reflecting a wait‑and‑see approach around the sustainability of higher revenue growth and margin expansion over the coming quarters. Mizuho Securities also maintained a Hold view during the period, reinforcing the neutral tilt across the majority of tracked institutions.

The neutral cohort’s framework for this quarter centers on execution against the company’s own revenue range and the quality of margin delivery implied by the 0.08 EPS consensus. On the top line, analysts expect performance around the midpoint of the 168.00–174.00 million US dollars revenue range previously communicated, and they are focused on how back‑half demand is de‑risked by a 353.80 million US dollars backlog and a 110% last‑12‑month net retention rate. On profitability, the path to sustained adjusted profitability is seen as increasingly credible, but recent GAAP results—a 15.51 million US dollars net loss and −8.98% net margin in the fourth quarter—underscore the importance of expense management and mix as catalysts for further upside.

Neutral opinions also highlight the significance of revenue mix and customer concentration. The company’s disclosure that the top ten customers represented 34% of revenue in the fourth quarter suggests that incremental progress in diversifying the revenue base could shift sentiment positively if supported by data on new enterprise additions and cross‑sell success. Similarly, analysts are attentive to the contribution of security to blended growth and margins. The prior quarter’s segment contribution of 125.06 million US dollars in security, combined with evidence of product expansions and high‑visibility collaborations, supports the view that security can be a key incremental growth driver; confirmation of that momentum in bookings and in‑period revenue would represent an upside risk to neutral stances.

Finally, neutral‑leaning institutions are tracking capital structure and cash‑flow dynamics as part of the multi‑quarter story. The issuance of 0% convertible notes due 2030 and the repurchase of 2026 notes improved liquidity and staggered maturities, but analysts want clarity on the cadence of cash generation relative to non‑GAAP operating income targets. Commentary on the conversion of remaining performance obligations to billings and collections, together with updated non‑GAAP operating income guidance, will inform whether the earnings power implied by the 0.08 EPS estimate can translate into consistent adjusted profitability through fiscal 2026. Should the company deliver revenue near the high end of the range and demonstrate sustained margin discipline, the neutral majority could reassess the risk‑reward positively in subsequent quarters.