Fastly FSLY is set to report its first-quarter 2026 results on May 6.
For the first quarter of 2026, the company expects revenues between $168 million and $174 million, representing 18% annual growth at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $171.72 million, indicating an 18.86% increase from the year-ago quarter’s reported figure.
FSLY expects non-GAAP earnings between 7 cents and 10 cents. The consensus mark for earnings is pegged at 8 cents per share, unchanged over the past 30 days. This indicates 260% year-over-year increase.
Let us see how things have shaped up for the upcoming announcement.
Fastly, Inc. Price and EPS Surprise
Fastly, Inc. price-eps-surprise | Fastly, Inc. Quote
Key Factors to Note Ahead of FSLY’s Q1 Results
Fastly's first-quarter performance is expected to have benefited from expanding demand in network services and security, with accelerating security revenue, rising large-customer engagement and increasing AI-related activity.
The company's expanding product portfolio is a significant driver of future performance. The company has seen accelerated growth in its security portfolio, with security revenue up 32% year over year in the fourth quarter of 2025. New product launches, such as API Inventory and AI Assistant (in Beta), are expanding the platform's capabilities and appeal. The security-led sales motion and cross-sell momentum, particularly with large enterprise customers, are expected to have fueled growth in the to-be-reported quarter.
FSLY is expected to benefit from the improvement in customer commitments, as evidenced by record remaining performance obligations of $353.8 million at the end of the fourth quarter of 2025, up 55% year over year. This growth is broad-based across the customer base, reflecting deliberate go-to-market strategies that encourage larger upfront commitments and mitigate revenue volatility. The trailing 12-month net retention rate also improved to 110%, indicating strong customer loyalty and expansion. These factors are expected to have benefited FSLY's top line in the to-be-reported quarter.
However, the company is expected to have suffered from macroeconomic and geopolitical uncertainty, along with variability in customer usage and traffic. Stiff competition as well as pricing pressure are expected to hurt FSLY’s to-be-reported quarter’s performance.
FSLY Shares Outperform Sector, Industry
Fastly’s shares have risen 148.1% in the year-to-date period, outperforming the broader Zacks Computer and Technology sector’s return of 10.9% and the Zacks Internet Software industry’s decline of 12.7%.
The company's shares have also outperformed its closest peers, which include Akamai AKAM, Amazon AMZN, and Alphabet GOOGL, which are also expanding their footprints in the content delivery network sector. Akamai and large cloud platforms like Alphabet via Google Cloud and Amazon through Amazon Web Services set a high bar for differentiation on performance, resiliency and security outcomes. Year to date, Fastly has outperformed Akamai, Amazon and Alphabet shares, which have returned 18.1%, 14.9% and 23%, respectively.
FSLY Stock's Performance
Image Source: Zacks Investment Research
Fastly's stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales, FSLY is trading at 5.96X, higher than the Internet Software industry’s 3.84X.
FSLY's Valuation
Image Source: Zacks Investment Research
Fastly Benefits From Strong Enterprise Growth
Fastly is benefiting from strong enterprise growth, which has been a key growth driver. In the fourth quarter of 2025, it reported record revenues of $172.6 million, representing 23% year-over-year growth, the highest in more than three years.
Growth was largely fueled by the company's enterprise customer base, which accounted for more than 90% of its revenues. Fastly’s enterprise customer count reached 628, showcasing its ability to attract and retain high-value clients. This trend is expected to have continued in the to-be-reported quarter.
An expanding portfolio is expected to drive platform growth. Fastly is extending its edge capabilities with Next-Gen WAF (Web Application Firewall), Bot Management, API Security (Discovery+Inventory) and Managed Security Services. These tools are designed to support secure, high-speed delivery for performance-sensitive workloads. Partnerships and deeper adoption across accounts like Alphabet, VMware, Shopify, Azure and AWS may help support longer-term engagement.
Further expanding its portfolio, in the fourth quarter of 2025, FSLY introduced its Enhanced Adaptive Threat Engine to strengthen DDoS protection, improving detection accuracy and rapidly mitigating short-lived, bursty attacks.
Conclusion
Fastly’s expanding security portfolio and strong AI-driven growth are expected to improve its top-line growth over the long term. However, Fastly’s near-term prospects are limited given stiff competition, traffic variability and upfront capex spending is expected to depress gross margin.
Fastly currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point to accumulate the stock. 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).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
