Fastly, Inc. (FSLY) ripped higher today after posting record third‑quarter results and lifting guidance. By mid‑afternoon (UTC), the stock traded around $10.20, up roughly 26% intraday from Wednesday’s close, as investors digested stronger‑than‑expected revenue, expanding margins, and brisk growth in Fastly’s security portfolio. 1
Key takeaways
- Record Q3 revenue: $158.2M (+15% YoY); non‑GAAP gross margin climbed to 62.8% and free cash flow swung positive to $18.1M. 2
- Security revenue grew 30% YoY to $34.0M, now 21% of total sales, as cross‑sell momentum accelerated. 2
- Outlook raised: Q4 revenue guided to $159M–$163M; FY2025 revenue to $610M–$614M; FY non‑GAAP EPS $0.03–$0.07. 2
- Stock pops on print and guidance: multiple outlets tracked a premarket surge; intraday gains topped 20% as trading picked up. 1
- Fresh analyst moves today: RBC raised its price target to $9, and Piper Sandler lifted to $10, citing improving fundamentals and security strength. 3
What happened today
Fastly shares extended gains after the company’s Q3 results showed broad‑based improvement and a meaningfully higher outlook. Pre‑market coverage pointed to a double‑digit jump after the release, and shares remained sharply higher through the session, buoyed by analyst target hikes and a risk‑on tape for software. 1
“We delivered record revenue, operating profit and free cash flow this quarter,” CEO Kip Compton said, highlighting the role of faster product rollouts and cross‑sell wins. 2
By the numbers
Q3 FY2025 highlights (ended Sept. 30, 2025):
- Revenue:$158.2M (+15% YoY)
- Network services:$118.8M (+11% YoY)
- Security:$34.0M (+30% YoY)
- Other (Compute & Observability):$5.4M (+51% YoY)
- Margins & cash: GAAP gross margin 58.4%; non‑GAAP gross margin 62.8%; operating cash flow $28.9M; free cash flow $18.1M.
- Profitability: non‑GAAP EPS $0.07 (GAAP net loss $29.5M, or $0.20 per share).
- Customer metrics:627 enterprise customers (+51 YoY); LTM NRR 106% (up from 104% in Q2); RPO $268M (+16% YoY); top‑10 customers 32% of revenue. 2
Outlook:
- Q4 2025: revenue $159M–$163M; non‑GAAP EPS $0.04–$0.08.
- FY2025: revenue $610M–$614M; non‑GAAP EPS $0.03–$0.07. 4
Why it matters
Two themes stood out this quarter:
- Security as a growth engine. With 30% YoY growth and 21% of company revenue, Fastly’s security suite (Next‑Gen WAF, API security, DDoS) is scaling faster than core delivery, supporting mix shift and margin expansion. 2
- Operating discipline and cash turn. Positive free cash flow and higher non‑GAAP margins provide flexibility to keep investing in edge compute and security while progressing toward durable profitability. 2
Street reaction on Nov. 6
- RBC Capital raised its FSLY target to $9 (Sector Perform), citing improved trajectory and updated guidance. 3
- Piper Sandler lifted its target to $10, pointing to stronger security momentum and an improving setup. 5
- Market coverage flagged pre‑market gains approaching 20% following the print; intraday trackers showed the move holding above that threshold as volume climbed. 1
Product & platform pace
Q3 saw a brisk cadence of launches tied to security and developer productivity, including API Discovery, deception capabilities in Next‑Gen WAF, DDoS Precise Defense, an open‑source Model Context Protocol (MCP) Server to help AI assistants manage Fastly services, and a Sustainability Dashboard. Management also published a threat insights report focused on AI bot traffic—timely for customers tuning defenses around LLM crawlers and automated scraping. 4
What to watch next
Fastly management is scheduled to appear at upcoming investor conferences this month, offering another window into demand, pricing, and cross‑sell trends post‑earnings. 6
Bottom line
Record results, security‑led growth, and a raised outlook reset investor expectations—and the stock price—today. If Fastly sustains its product velocity and cross‑sell execution into Q4, the company looks positioned to keep narrowing the gap between topline growth and cash generation. 2
Sources: Fastly Q3 FY2025 press release and investor supplement; premarket/market action coverage; analyst updates from RBC and Piper Sandler; real‑time price data. 2
Note: This article is for informational purposes only and is not investment advice.
