FSLY — Fastly, Inc. · XVARY Snapshot

XVARY Composite Score

46

/ 100

Below Average

Combines growth, value, risk, and momentum factors into a single institutional-grade score.

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What it is

Fastly runs an edge cloud platform that helps websites deliver, secure, and process traffic closer to users.

How it gets paid

Last year Fastly made $624M in revenue.

Why it's growing
Revenue grew 14.8% last year. Revenue hit a record $172.6M, and gross margin rose to 61.4%.

What just happened

Fastly beat on EPS with $0.12 versus a $0.06 estimate, and revenue reached $172.6M.

At a Glance

B balance sheet — gets the job done, barely

35/100 earnings predictability — expect surprises

214.2x trailing p/e — you're paying up for this one

5.0% return on capital — nothing to write home about

XVARY composite: 46/100 — below average

What They Do

Fastly runs an edge cloud platform that helps websites deliver, secure, and process traffic closer to users.

Edge cloud platform → servers near the user → your site loads and filters traffic faster. Fastly's top ten customers were 34% of Q4 revenue, so the platform is already wired into real traffic. Leaving is painful when your delivery and security stack lives in one place.

software small-cap edge-cloud security cdn

How They Make Money

$624M annual revenue · their business grew +14.8% last year

total revenue

$624M

+14.8%

The Products That Matter

Content delivery and edge compute

Edge Cloud Platform

$624M revenue · 100% of sales

this is the entire business. when one platform drives all $624M of revenue, every customer win matters and every stumble matters more.

100% of revenue

Security and bot management

Security Offerings

$158.2M quarter · 62.8% gross margin

the strong quarter ran through here: $158.2M in revenue and a 62.8% gross margin. this is the part of the story that can lift company-wide profitability if demand holds.

margin engine

Cross-sell and new product adoption

Platform Expansion

14.8% company growth

management tied recent momentum to new offerings and cross-selling, but the snapshot gives no segment breakout. you have 14.8% company growth, not clean disclosure on which newer products deserve the credit.

still proving it

Key Numbers

$0.15

fy2026 eps est

$850M

fy2028 rev est

214.2x

trailing p/e

55.4%

gross margin

Gross profit kept about 55.4% of each revenue dollar.

Financial Health

B

Strength

balance sheet grade B — adequate — nothing special
risk rank 4 — safer than 20% of stocks
price stability 5 / 100
long-term debt $150M (9% of capital)
net profit margin 8.2% — keeps 8 cents of every dollar in revenue
return on equity 5% — $0.05 profit for every $1 investors have put in

B — functional but not a standout on the balance sheet.

Total Return vs. Market

You invested $10000 in FSLY 3 years ago → it's now worth $13220.

The index would have given you $13920.

same period. same starting point. FSLY trailed the market by $700.

source: institutional data · total return

What Just Happened

beat estimates

Fastly beat on EPS with $0.12 versus a $0.06 estimate, and revenue reached $172.6M.

Revenue hit a record $172.6M, and gross margin rose to 61.4%. That says the business is selling more without giving away as much.

$172.6M

revenue

$0.12

eps

61.4%

gross margin

the number that mattered

Revenue at $172.6M was the cleanest proof point, because it showed growth and margin improvement in the same quarter.

Fastly, inc. may finish 2025 with a full-year share profit.
This outlook comes after the standout performance in the september period.
The company announced several new product offerings and delivered record revenue of $158.2 million, which was above our $150 million estimate, due to strong demand for security offerings.
Moreover, the gross margin expanded 420 basis points from the prior-year period, to 62.8%, aided by operational efficiencies and network optimization.

as such, the edge-cloud platform operator generated share earnings of $0.07 in the third quarter, which exceeded our breakeven target. leadership highlighted accelerating growth momentum, cross-selling success, and reduced reliance on its largest customers, while indicating early wins in international expansion to regions like asia pacific and europe. importantly, management stated that it intends to report another profitable quarter in the final stanza.
The edge computing market is projected to grow rapidly, fueled by ai, iot, and low-latency needs.

fastly will likely prioritize higher-margin security offerings and bundled sales for more predictable revenue streams.

source: company earnings report, 2026

What Could Go Wrong

The #1 risk is turnaround execution on a 3.0% net margin.

∘

Med

The margin story stalls

Fastly showed a 62.8% gross margin in the strong September quarter, but the full company still reports only a 3.0% net margin. That gap is the whole debate.

With only 3 cents kept per $1 of revenue, even modest cost pressure can erase profit.

∘

Med

Single-platform concentration

The Edge Cloud Platform is 100% of Fastly's $624M revenue base. There is no second engine if usage slows, pricing gets tighter, or customers consolidate vendors.

This risk touches the entire business, not a side segment.

∘

Med

The market stops paying for the comeback

The stock trades at 214.2x trailing earnings while institutions posted 105 buyers versus 117 sellers last quarter. That is not a huge exodus, but it is not broad conviction either.

If earnings stay uneven, multiple compression can hurt even with revenue still growing.

100% of $624M revenue sits in one platform, and the company keeps only 3.0% of sales as profit. That's a thin cushion for a stock already priced on improvement.

Source: institutional data · regulatory filings · risk analysis

Pay Attention To

Earnings

The next profitability check-in

after Q4 EPS of -$0.20, the next report needs to show that the September-quarter improvement was not a one-off.

Metric

Gross margin holding above the recent 62.8%

this is the cleanest operating proof point in the snapshot. If it slips, the valuation support gets thinner fast.

Risk

Whether 14.8% growth decelerates toward the $675M outlook

the current estimate implies about 8.2% growth next year. Slower growth plus premium valuation is not a forgiving combination.

Trend

Institutional flow turning from 105 vs. 117 to net buying

this is a sentiment stock as much as an earnings stock right now. Better fundamentals usually need better sponsorship to matter.

Analyst Rankings

short-term outlook

average

momentum score 3 — in human-speak, analysts are not seeing a clear short-term edge either way.

risk profile

below average

stability score 4 means more volatility than most stocks. You should expect bigger swings, not smoother compounding.

chart momentum

top 20%

technical score 2 says analysts expect above-average price performance in the year ahead. The chart looks better than the earnings history.

earnings predictability

35 / 100

earnings are hard to model here. That is another way of saying the story can improve quickly or disappoint quickly.

Source: institutional data

Institutional Activity

105 buyers vs. 117 sellers in 3q2025. total institutional holdings: 0.1B shares.

source: institutional data · 1q2025-3q2025

Source: institutional data

Price Targets

3-5 year target range

$4 $16

$11 Current price

$10 Target midpoint · 7% from current · 3-5yr high: $16 (+50% · 10% ann'l return)

source: institutional data · analyst targets

The Deep Dive

FSLY

XVARY Deep Dive

fsly

The full analysis is in the works.

What you'll get

DCF valuation model

Bull / base / bear scenarios

Competitive moat breakdown

Quarterly earnings tracker

Operating model projections

Risk matrix with kill criteria

Original price target + conviction

Updated with every earnings

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