WillItSurvive
Cloud and infrastructure providers · United States

Fastly

fastly.com ↗

Fastly runs an edge cloud network for CDN, security, and serverless compute.

Losing its protection
Assessed 21 July 2026 · Evidence as of 21 July 2026
The structural protection is eroding.
On the recordSince 21 July 2026 · Checkable from mid-July 2026 · Every call on the record Checkpoint: Q2 2026 earnings report, testing $170-176M revenue guide and margin trend
The call

Fastly is growing and improving margins, but it sits between a faster, bigger Cloudflare and a deeply entrenched Akamai while still losing money.

Fastly runs a network that speeds up websites and apps for large customers, earning $624 million a year. The company has real technical advantages (its programming language lets customers customize how content flows through the network) and customers stick around (they renew and spend more each year), but Cloudflare is growing twice as fast at a much larger scale, and Akamai has deeper roots with big enterprises. Fastly is unprofitable and carrying heavy debt, which limits its ability to invest. The big question is whether Fastly's newer businesses (computing and security services) can grow fast enough to become the company's main profit engine before price competition crushes the older core business that today funds everything.

Why
01
AI pressure: None apparent. AI coding agents and inference traffic could add edge compute demand rather than replace Fastly's core delivery business. Could AI do the core job? Unlikely.
02
Bigger players: Cloudflare and Akamai. Cloudflare hits $2.17B at 30% growth with overlapping CDN, WAF, and Workers products, while Akamai leans on deeper enterprise ties and more PoPs. Could a giant copy it? Yes, easily.
03
What protects it. 600+ large customers spend about $1.03M each with 113% net retention, and switching CDN and security configs is costly and slow.
What would change this call
Whether Compute + Security exceed 50% of Fastly revenue within the next 1-2 fiscal years. Shows if Fastly is shifting away from its slower, commoditized CDN core.
Whether Fastly reports a full year of GAAP profitability. Shows if the business can fund competition with Cloudflare/Akamai without more debt.
Whether NRR stays above 110-113% and top-10 customer concentration stays near 34%. Shows whether large-customer dependence and retention are stable or eroding.
Key numbers
  • FY2025 revenue $624.0M, up 15% (FY2025)
  • Net loss $121.7M, margin -19.5% (FY2025)
  • Cash $180.6M vs long-term debt $323.3M (FY2025)
Named risks
  • Continued GAAP net losses ($121.7M FY2025) with $323.3M long-term debt against only $180.6M cash. Severity: high
  • Largest segment Network Services (77% of revenue) growing slowest at 11-12% YoY amid Cloudflare/Akamai price competition. Severity: high
  • Customer concentration: top-10 customers are ~34% of revenue. Severity: medium
  • Stock fell ~42% after a Q1 2026 earnings beat, signaling market skepticism on margins and competitive intensity. Severity: medium
  • Rising infrastructure capex flagged by management as a margin headwind for 2026. Severity: medium
Rivals, as read in July 2026
RivalDirectionEvidence
Cloudflarelosing toCloudflare FY2025 revenue $2.17B (+30%) vs Fastly's $624.0M (+15%), as of Feb 2026
Akamailosing toAkamai has ~4,100+ PoPs and deeper enterprise security incumbency, per May 6, 2026 comparison
Amazon CloudFront/AWScontestingAWS-aligned CDN competes directly in commoditizing Network Services segment, as of 2026
Bunny.netlosing toPositioned as lower-cost CDN alternative pressuring price-sensitive segment, per March 2026 analysis
Questions people ask
Is Fastly profitable in 2026?
No. Fastly posted a FY2025 net loss of $121.7 million (net margin -19.5%), per its Feb 11, 2026 earnings release. Despite record Q1 2026 revenue of $173.0 million (+20% YoY) and gross margins hitting 62.5%, the company remains unprofitable on a GAAP basis as of mid-2026.
Who is Fastly's biggest competitor?
Cloudflare is Fastly's largest rival, posting FY2025 revenue of $2.17 billion (+30% YoY) versus Fastly's $624.0 million (+15%). Akamai is the other major threat, with roughly 4,100+ points of presence and deeper enterprise security incumbency, as of mid-2026 competitive analysis.
Could AI replace Fastly's business?
Unlikely to replace it outright; AI is described by CEO Kip Compton as an 'increasing tailwind' as of FY2025 results. Fastly's Compute segment saw its 'largest-ever sequential increase' in Q1 2026 driven by agentic workloads, and it shipped an Agent Toolkit, AI Gateway, and MCP Server in 2026 to monetize AI infrastructure demand.
Did Fastly's stock crash in 2026?
Yes. Despite beating guidance with Q1 2026 revenue of $173.0 million (+20% YoY), Fastly's stock fell approximately 42% in the weeks following the May 6, 2026 report, driven by concerns over rising capex and competitive intensity, according to a May 14, 2026 Yahoo Finance report.
What is Fastly's net retention rate?
Fastly's net retention rate stood at 113% as of Q1 2026, per company slides reported May 12, 2026. The company serves over 600 large customers with average annual spend of $1.03 million, though top-10 customers make up about 34% of revenue, a concentration risk.
Who owns Fastly and where does it trade?
Fastly is a publicly traded company (ticker FSLY) with no controlling parent, founded in 2011 by Artur Bergman. It IPO'd on the NYSE in May 2019 and voluntarily moved its listing to the Nasdaq Global Select Market effective December 9, 2025, per a November 26, 2025 Nasdaq press release.
Timeline
  • 2026-07Fastly joins Agentic AI Foundation and launches MCP Server for sub-ms agentic execution
  • 2026-05-14FSLY stock plunges ~42% in weeks after Q1 2026 earnings beat
  • 2026-05-06Q1 2026 revenue hits $173.0M, up ~20% YoY, record 62.5% GAAP gross margin
  • 2026-03-31Fastly appoints Joan Jenkins as CMO to accelerate growth and AI positioning
  • 2026-02-11FY2025 results: $624.0M revenue (+15%), $121.7M net loss reported
  • 2025-12-09Fastly's stock listing transfers from NYSE to Nasdaq
  • 2025-11-26Fastly announces planned NYSE to Nasdaq listing transfer
  • 2025-06-16Kip Compton named CEO, succeeding Todd Nightingale
  • 2024-12Fastly issues $150M in convertible senior notes at 7.75% yield
  • 2024-08-08Fastly cuts about 11% of global workforce, $9.5-10M in charges
Revision history
21 July 2026
First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.
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