Fastly, Inc. FSLY delivered a strong first-quarter 2026 performance in its security business, with security revenues increasing 47% year over year to $38.8 million. Security accounted for 22% of total revenues in the quarter, reaching record levels for the company. The segment also grew 9% sequentially, marking the fourth straight quarter of accelerating security revenue growth.
Fastly’s security momentum is becoming stronger. Its Next-Gen WAF remained a core driver, but newer products also gained traction. These include DDoS Protection, Bot Management, and API Discovery and Inventory. Among instances of security products sold to new customers in the quarter, almost half came from these newer offerings. This indicates that Fastly’s security portfolio is expanding beyond one flagship product and gaining relevance across a wider set of customer needs.
Customer activity also supported the security growth story. Fastly closed multiple seven-figure deals that included security, while smaller wins also contributed. This suggests the quarter’s growth was not associated with just one isolated transaction.
AI-related traffic and security risks are also adding to the relevance of Fastly’s tools. ContentGuard was added by a long-standing media customer facing daily malicious AI bot traffic, while API security tools were positioned to help address shadow API risks as AI speeds up code delivery.
Fastly’s security business is becoming a more meaningful part of the company’s revenue mix. With stronger adoption across both established and newer security products, the segment’s momentum reflects improving product depth, broader customer engagement and a clearer role for security within Fastly’s platform strategy.
NET and AKAM Benefit From Rising Security and AI Demand
Cloudflare, Inc. NET reported fourth-quarter 2025 revenues of $614.5 million, up nearly 34% year over year, while full-year revenues increased about 30% to $2.17 billion. Management highlighted strong demand related to AI, enterprise security and connectivity workloads. Cloudflare also noted that large customer revenues grew 42% year over year and accounted for 73% of total revenues. NET continues to see traction across its Zero Trust, application security and Cloudflare Workers offerings.
Akamai Technologies, Inc. AKAM also reported steady security momentum in its latest quarter. Akamai Technologies’ fourth-quarter 2025 revenues increased 7% year over year to $1,095 million. Akamai Technologies’ security revenues rose 11% year over year to $592 million, while Guardicore Segmentation and API Security revenues jumped 36% to $90 million. These figures show that AKAM continues to see demand for cybersecurity, API protection and segmentation offerings.
FSLY Stock Price Performance, Valuation & Estimates
Shares of Fastly have surged a whopping 314.3% over the past year against the industry’s decline of 8%.
FSLY Price Performance Versus Industry
Image Source: Zacks Investment Research
From a valuation standpoint, FSLY trades at a forward price-to-sales ratio of 6.69, higher than the industry’s average of 3.8.
FSLY Valuation Compared to Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FSLY’s 2026 and 2027 earnings implies year-over-year growth of 115.4% and 32.1%, respectively.
Fastly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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