8-K: Fastly Achieves Record Q4, Full Year 2025 Financial Results

Fastly, Inc. announced record fourth quarter and full year 2025 financial results, driven by strong revenue growth and improved profitability, with AI anticipated as a future tailwind.

Summary

• Fastly reported record fourth quarter 2025 revenue of $172.6 million, representing 23% year-over-year growth.
• Full year 2025 total revenue reached a record $624.0 million, an increase of 15% compared to 2024.
• Non-GAAP gross margin for Q4 2025 was a record 64.0%, up from 57.5% in Q4 2024, and full year non-GAAP gross margin was 60.9%.
• Remaining Performance Obligations (RPO) hit a record $353.8 million as of December 31, 2025, growing 55% year-over-year.
• The company generated $8.6 million of positive free cash flow in Q4 2025, a significant improvement from negative $7.9 million in Q4 2024.
• Fastly achieved non-GAAP net income of $20.1 million in Q4 2025 and $19.7 million for the full year 2025, reversing non-GAAP net losses from the prior year.
• Raised $180 million in gross proceeds from 0% convertible notes due 2030 and used $149 million to repurchase notes due 2026, enhancing liquidity.
• Provided Q1 2026 revenue guidance of $168.0 $174.0 million and full year 2026 revenue guidance of $700.0 $720.0 million.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive report, demonstrating significant financial improvement, strategic product development, and a clear path to profitability, with AI identified as a key growth driver.

Positives

• Record Q4 2025 total revenue of $172.6 million, a 23% year-over-year increase.
• Record full year 2025 total revenue of $624.0 million, a 15% year-over-year increase.
• Record Q4 2025 non-GAAP gross margin of 64.0%, up from 57.5% in Q4 2024.
• Record full year 2025 non-GAAP gross margin of 60.9%, up from 58.8% in fiscal 2024.
• Record Remaining Performance Obligations (RPO) of $353.8 million, a 55% year-over-year increase.
• Generated $22.4 million of positive operating cash flow in Q4 2025, compared to $5.2 million in Q4 2024.
• Generated $8.6 million of positive free cash flow in Q4 2025, compared to negative $7.9 million in Q4 2024.
• Achieved non-GAAP operating income of $21.2 million in Q4 2025, a significant improvement from a non-GAAP operating loss of $2.8 million in Q4 2024.
• Reported non-GAAP net income of $20.1 million in Q4 2025, compared to a non-GAAP net loss of $2.4 million in Q4 2024.
• Full year 2025 non-GAAP net income of $19.7 million, compared to a non-GAAP net loss of $12.1 million in fiscal 2024.
• Security revenue grew 32% year-over-year in Q4 2025 to $35.4 million, representing 20% of total revenue.
• Enterprise customer count increased to 628 in Q4 2025, up 32 from Q4 2024.
• Last 12-month net retention rate (LTM NRR) increased to 110% in Q4 2025 from 106% in Q3 2025.
• Successfully raised $180 million in 0% convertible notes due 2030 and repurchased $149 million of notes due 2026, significantly improving liquidity.
• Named a 2025 Gartner Peer Insights Customers Choice for Cloud Web Application and API Protection (WAAP) for the seventh consecutive year.
• Released new product features including API Inventory, AI Assistant (beta), extended Custom Dashboards and Alerts, enhanced Adaptive Threat Engine, and Compute performance enhancements (Early Hints, beta C++ SDK).

Negatives

• GAAP net loss for Q4 2025 was $15.5 million, despite being an improvement from $32.9 million in Q4 2024.
• GAAP net loss for full year 2025 was $121.7 million, an improvement from $158.1 million in fiscal 2024, but still represents a loss.
• Current RPO % decreased from 79% in Q4 2024 to 70% in Q4 2025, indicating a lower proportion of Remaining Performance Obligations expected to be recognized in the next 12 months.

Risks

• Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those expressed or implied.
• Important factors that could cause actual results to differ materially are detailed in Fastly's reports filed with the SEC, including the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025, and the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Future Outlook

Fastly anticipates continued momentum into 2026, with AI expected to be an increasing tailwind for the business. The company provided Q1 2026 revenue guidance of $168.0 $174.0 million and full year 2026 revenue guidance of $700.0 $720.0 million, along with positive non-GAAP operating income and net income per share guidance for both periods.

Management Comments

• "Our fourth quarter results mark an inflection in Fastly's growth as we achieved record revenue, gross margin, and operating profit."
• "In 2025 we made significant progress on Fastly's transformation and delivered great results."
• "As we look toward 2026, we anticipate continued momentum, with AI as an increasing tailwind for our business."

Industry Context

StockSavvy.ai notes that Fastly's strong performance, particularly in security revenue and the explicit mention of AI as a tailwind, aligns with broader industry trends emphasizing robust cybersecurity solutions and the increasing demand for AI-driven infrastructure at the edge. The company's focus on product innovation like API Security and AI Assistant positions Fastly to capitalize on these market shifts, potentially strengthening its competitive standing against other edge cloud and CDN providers.

Comparison to Industry Standards

• Fastly was named a 2025 Gartner Peer Insights Customers Choice for Cloud Web Application and API Protection (WAAP) for the seventh consecutive year, indicating consistent strong customer satisfaction and product performance in a competitive market.
• An AppSec study with IDC, analyzing nearly 1,000 global security and technology leaders, revealed a more than 3x improvement in business outcomes from modern application security programs, suggesting Fastly's offerings are delivering tangible value in line with industry best practices.
• The 110% LTM Net Retention Rate indicates strong customer loyalty and expansion, a key metric for SaaS and cloud companies, comparing favorably to industry averages which often target 100-120% for healthy growth.

Stakeholder Impact

• Shareholders: Positive impact due to record financial results, improved profitability, strong RPO growth, positive free cash flow, and optimistic 2026 guidance. The convertible note transaction also improved liquidity.
• Customers: Enhanced product offerings (API Security, AI Assistant, Custom Dashboards, Adaptive Threat Engine, Compute performance) are expected to improve service, performance, and security.
• Employees: Not directly mentioned, but strong company performance and growth typically indicate a stable or expanding workforce.

Next Steps

• Fastly will host an investor conference call on February 11, 2026, to discuss these results.
• The company anticipates continued momentum in 2026, with AI as an increasing tailwind for the business.
• Additional information will be set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Key Dates

Recommendation

The filing indicates a significant inflection point for Fastly, moving from losses to profitability on a non-GAAP basis, achieving record revenue and gross margins, and demonstrating strong growth in key metrics like RPO and NRR. The strategic focus on security and AI, coupled with improved liquidity from the convertible notes, positions the company for continued growth and market share expansion. The positive guidance for 2026 further reinforces a strong outlook, making it an attractive investment.

Keywords

Edge cloud, CDN, content delivery network, WAF, API security, DDoS protection, Compute@Edge, observability, AI, cloud platform, financial results, FSLY