Fastly (FSLY) Surges 37.5% After Record Security Revenue and Raised 2025 Guidance – What’s Changed

• Fastly reported third-quarter 2025 earnings, posting higher-than-expected revenue of US$158.22 million and reducing its net loss compared to a year earlier, while also raising revenue guidance for both the fourth quarter and full year 2025.
• Security solutions now make up a record 21% of total revenue, reflecting strong cross-sell momentum and highlighting security as a core growth driver for the company.
• To understand how Fastly’s record security revenue growth and raised forecasts impact its outlook, we’ll assess the implications for its investment narrative.

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Fastly Investment Narrative Recap

To be a Fastly shareholder, you need to believe the company's edge computing and security-focused platform can capture meaningful market share despite competitive pressure from hyperscale providers. The latest earnings beat and improved revenue guidance materially support ongoing product momentum and strengthen the short-term catalyst of accelerating security revenue growth, though core risks like customer concentration and negative margins remain present.

The most relevant announcement is Fastly’s raised guidance for both the upcoming quarter and full year, reflecting management’s confidence in continued growth after a strong quarter for security products. This update directly supports the view that security momentum is shifting higher, amplifying the prospect for improved revenue diversification and partially offsetting near-term concerns about demand volatility.

However, investors should also be aware that, despite these positive signals, there remains a risk around Fastly’s reliance on a concentrated group of large customers...

Read the full narrative on Fastly (it's free!)

Fastly's narrative projects $694.5 million revenue and $44.3 million earnings by 2028. This requires 6.7% yearly revenue growth and a $192 million earnings increase from -$147.6 million today.

Uncover how Fastly's forecasts yield a $9.42 fair value, a 14% downside to its current price.

Exploring Other Perspectives

Six community members at Simply Wall St estimate Fastly's fair value from as low as US$0.32 to US$15.89 per share. With accelerating security revenue as a key catalyst, your views on growth sustainability could shape how you interpret these diverse valuations, explore how others are weighing these factors.

Explore 6 other fair value estimates on Fastly - why the stock might be worth as much as 45% more than the current price!

Build Your Own Fastly Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Fastly research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free Fastly research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fastly's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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