Fastly's best quarter ever came with a 27% crash, and its top 10 customers grew 46% while the rest grew 8%
Ten customers supplied 39% of revenue and grew 46%, while every other account grew 8%. The two lines carrying the AI story missed Street estimates, and the sales chief behind that concentration retires in 2027 with no successor named.
Vincent Jiang · 3 min read
Fastly+3.12% — Fastly, up 3.12 percent today, the edge cloud company that sells delivery, security and compute to large websites, closed November 4 with record revenue, non-GAAP operating income and free cash flow: $190.2 million of revenue, up 20% year over year and above its own guidance ceiling, 65.8% non-GAAP gross margin, and a fifth consecutive quarter of non-GAAP operating profit 1. Full-year guidance rose to $744–748 million in revenue and $0.61–0.63 in earnings per share, from $0.50–0.54 2.
The stock had closed at $21.04 3. It fell 17.5% after hours and ended November 5 at $15.38, down 26.9% 13. Options traders had paid about $3.98 for the $21 straddle, a pre-report bet on a big move in either direction, priced to break even between $17.02 and $24.98; the close fell through that floor 3. It was the third straight earnings beat met with a selloff 4.
Growth bottomed at 2% in late 2024, then rebuilt to four straight quarters near 20%
The 20% streak is real; the market repriced what it is made of
Data
| Revenue growth, YoY | |
|---|---|
| Q4 '23 | 15.5% |
| Q1 '24 | 13.6% |
| Q2 '24 | 7.8% |
| Q3 '24 | 7.3% |
| Q4 '24 | 2% |
| Q1 '25 | 8.2% |
| Q2 '25 | 12.3% |
| Q3 '25 | 15.3% |
| Q4 '25 | 22.8% |
| Q1 '26 | 19.8% |
| Q2 '26 | 23.3% |
| Q3 '26 | 20.2% |
Ten customers did the growing
The shape of the numbers explains the verdict. The top 10 customers supplied 39% of revenue, up from 32% a year earlier, and grew 46%; every customer outside that group grew 8% 14. One group of entities under common control was 12% of quarterly revenue 1.
BofA+0.33% — BofA, up 0.33 percent today analyst Tal Liani, keeping an Underperform rating and cutting his target to $18 from $22, flagged Security growth of 31.5% against a 32.5% consensus and the Other line, home of the newest products, up 37.0% against 57.1% expected 5. RBC, the investment bank, cut its target to $19 from $25 6.
Ten customers grew 46%; everyone else grew 8%
The 20% quarter was carried by ten accounts
Data
| Value | |
|---|---|
| Top 10 customers | 46% |
| Whole company | 20% |
| All other customers | 8% |
One number where three used to be
From 2027, Fastly retires its three revenue lines, Network Services, Security and Other, into a single consolidated figure, and will report the three one final time with fourth-quarter results 1.
In their place comes a new metric, multi-product adoption, a count of product suites rather than dollars: 74% of large customers use two or more, 34% use four or more 1. The count carries no dollar amount, and AI product revenue has never been broken out; the AI Firewall covered here in October sits inside the Other line today and moves inside the blended number from 2027 1.
On the same call, Fastly said Scott Lovett, president of go-to-market and the architect of the large-account push, retires in 2027 with no successor named; management says the guidance already reflects the transition 1. From 2027, Fastly will tell investors how many products its customers buy and stop telling them what each one earns 1.
What the bulls are holding
The bull case has receipts: net retention of 119%, meaning existing customers spent 19% more over the trailing year, the highest since 2022; a seventh straight quarter of positive free cash flow; and an average analyst target of $28.55 against a $15.38 close 16. Retail bought the dip: "Crushed earnings. Good Guidance... Thanks for the discount" 7.
The catch: revenue is usage-based, and the fourth-quarter guide, implying 16% growth at the midpoint, leans on launch downloads of GTA 6, the long-awaited Grand Theft Auto game, traffic the CFO said "could be highly variable" 1. Remaining performance obligations, contracted revenue not yet booked, slipped to $333.5 million from $340.9 million in Q2 4.
February decides it
Fastly appears at RBC's technology conference in New York on November 17 1. The fourth-quarter report, due in February, is the last with the old segment lines and the first clean read on whether ten customers can keep carrying 20% growth 1. Until then, buyers at $15.38 own a company that still posts a GAAP net loss, of $0.07 a share 3, and is about to stop itemizing its revenue.
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