Nasdaq:FSLY
Fastly, Inc.
A high-growth edge computing platform delivering secure, low-latency content delivery and cloud services to enterprises worldwide.
Key Metrics
Investment Thesis
Bull Case
Investors may buy FSLY if they believe the company will achieve sustainable profitability as its revenue base expands and operating leverage improves over time. The unique edge computing architecture offers a defensible moat in an industry with high growth potential driven by video streaming and real-time application demands. A successful path to breakeven could unlock significant valuation upside given the current cash-rich balance sheet relative to peers.
Bear Case
Investors should avoid FSLY if they cannot accept the risk of prolonged net losses which have accumulated into a $-1.11B retained earnings deficit. The heavy capital expenditures and investment outflows suggest aggressive growth strategies that may not yet be generating sufficient returns on invested capital. Dependence on a volatile tech sector where customer budgets are tightening could exacerbate the company's inability to turn profitable quickly.
About Fastly, Inc.
Fastly, Inc. (FSLY) is a leading cloud-based edge computing platform that delivers high-performance content delivery and security services to enterprise customers globally. The company leverages its distributed network of Points of Presence to optimize application performance, reduce latency, and enhance security for websites and applications served across the internet. Its key products include the Fastly CDN, Cloudflare WAF integration, and various API-based solutions for developers and businesses seeking scalable infrastructure.
Analysis
Management Discussion
While revenue grew steadily to $624.0M in 2025, the company continues to report a net loss of $-121.7M, narrowing the deficit from previous years but highlighting ongoing profitability challenges. Cash flow from operations of $94.4M helped partially offset significant investing outflows of $-213.0M, largely driven by strategic acquisitions reflected in the change in cash and other investing activities. The company maintained a healthy current asset position of $506.7M against $194.0M in current liabilities, preserving liquidity despite the operating loss.
Industry Overview
The cloud edge computing market is experiencing rapid expansion as enterprises shift from traditional data centers to distributed architectures for lower latency and better security. Major technology giants are increasingly launching their own edge services, intensifying competition and potentially commoditizing standard CDN offerings. Regulatory scrutiny on data privacy and cross-border data flows remains a constant factor influencing growth strategies in this global industry.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $432.7M | $506.0M | $543.7M | $624.0M |
| Cost of Revenue | $222.9M | $239.7M | $247.7M | $267.8M |
| Gross Profit | $209.8M | $266.3M | $295.9M | $356.2M |
| Operating Expenses | $456.0M | $464.4M | $463.9M | $475.2M |
| Operating Income | $-246.2M | $-198.0M | $-167.9M | $-119.0M |
| R&D | $155.3M | $152.2M | $138.0M | $162.7M |
| G&A | $120.8M | $116.1M | $113.4M | $110.7M |
| Marketing | $179.9M | $191.8M | $198.6M | $201.4M |
| Stock-Based Comp | $145.8M | $136.3M | $107.9M | $117.3M |
| Depreciation | $42.6M | $51.6M | $54.0M | $61.0M |
| Amortization | $21.7M | $20.4M | $19.6M | $16.8M |
| Other OpEx | $0 | $4.3M | $13.9M | $415.0K |
| Non-Operating Income | $55.5M | $64.7M | $12.5M | $-189.0K |
| Interest Expense | $5.9M | $4.1M | — | — |
| Interest Income | $7.0M | $18.2M | $14.9M | $12.3M |
| Pre-Tax Income | $-190.7M | $-133.3M | $-155.5M | $-119.2M |
| Income Tax | $94.0K | $-221.0K | $2.6M | $2.5M |
| Continuing Ops | $-190.8M | $-133.1M | $-158.1M | $-121.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $-190.8M | $-133.1M | $-158.1M | $-121.7M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $-190.8M | $-133.1M | $-158.1M | $-121.7M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $636.5M | $463.7M | $440.2M | $506.7M |
| Cash & Equivalents | $143.4M | $107.9M | $286.2M | $180.6M |
| Marketable Securities | — | $214.8M | $9.7M | $181.2M |
| Accounts Receivable | $89.6M | $120.5M | $116.0M | $118.0M |
| Prepaid Expenses | $28.9M | $20.5M | $28.3M | $26.9M |
| Other Current Assets | $374.6M | $0 | $0 | $0 |
| Long-Term Assets | $1.26B | $1.06B | $1.01B | $992.8M |
| Intangibles | $82.9M | $62.5M | $42.9M | $25.8M |
| Goodwill | $670.2M | $670.4M | $670.4M | $670.4M |
| Operating Leases | $68.4M | $55.2M | $50.4M | $52.1M |
| LT Securities | — | $6.1M | $0 | — |
| Other LT Assets | $438.1M | $267.4M | $247.5M | $244.6M |
| Total Assets | $1.90B | $1.53B | $1.45B | $1.50B |
| Current Liabilities | $152.3M | $147.7M | $104.5M | $194.0M |
| Accounts Payable | $4.8M | $5.6M | $6.0M | $17.6M |
| Current Debt | — | — | — | $38.6M |
| Current Leases | $23.0M | $24.0M | $25.2M | $24.4M |
| Deferred Revenue | $28.0M | $33.8M | $26.5M | $6.1M |
| Other Current Liab | $35.3M | $22.4M | $5.1M | $36.6M |
| Long-Term Liabilities | $788.6M | $398.0M | $381.7M | $375.9M |
| Long-Term Debt | $704.7M | $343.5M | $337.6M | $323.3M |
| LT Operating Leases | $61.3M | $48.5M | $39.6M | $43.9M |
| Other LT Liab | $22.6M | $6.0M | $4.5M | $8.7M |
| Total Liabilities | $941.0M | $545.7M | $486.1M | $569.9M |
| Shareholders' Equity | $955.2M | $979.5M | $965.2M | $929.6M |
| Paid-In Capital | $1.67B | $1.82B | $1.96B | $2.04B |
| Retained Earnings | $-701.7M | $-834.8M | $-992.8M | $-1.11B |
| AOCI | $-9.3M | $-1.0M | $-100.0K | $-41.0K |
| Total L&E | $1.90B | $1.53B | $1.45B | $1.50B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $-190.8M | $-133.1M | $-158.1M | $-121.7M |
| Non-Cash Adjustments | $41.2M | $86.5M | $164.4M | $169.9M |
| Working Capital Changes | $79.9M | $47.0M | $10.1M | $46.2M |
| Cash from Operations | $-69.6M | $362.0K | $16.4M | $94.4M |
| Capital Expenditures | $20.0M | $11.0M | $10.3M | $28.7M |
| Cash from Investing | $235.8M | $294.9M | $178.9M | $-213.0M |
| Cash from Financing | $-189.1M | $-331.4M | $-17.1M | $12.8M |
| FX Effect | $-390.0K | $608.0K | $-103.0K | $215.0K |
| Net Change in Cash | $-23.4M | $-35.5M | $178.1M | $-105.6M |
| Beginning Cash | $167.0M | $143.5M | $108.1M | $286.2M |
| Ending Cash | $143.5M | $108.1M | $286.2M | $180.6M |
Frequently Asked Questions
How does Fastly, Inc. make money?
Revenue is primarily derived from Content Delivery Network (CDN) services, which handle traffic caching and acceleration, followed by Compute@Edge offerings that allow running code close to users for low latency. Additional revenue streams include Security services utilizing web application firewall capabilities, as well as API monetization and specialized cloud infrastructure solutions for enterprise clients.
What are the main risks for FSLY?
Persistent net losses and a growing retained earnings deficit indicate significant cash burn that could pressure liquidity if profitability timelines slip. Intense competition from larger hyperscalers like AWS CloudFront and Azure CDN could lead to pricing pressure and market share erosion. Cybersecurity threats targeting edge infrastructure pose reputational and financial risks, requiring constant high investment in R&D ($162.7M). Heavy reliance on large enterprise contracts creates concentration risk if a major client reduces spend or switches providers.
What is FSLY's competitive advantage?
Fastly's proprietary distributed network of Points of Presence provides superior performance and lower latency compared to competitors with fewer nodes. The company maintains a highly agile software-defined architecture that allows rapid feature deployment and customization without hardware dependency. Strong developer advocacy and open-source contributions foster deep loyalty within the engineering community, creating high switching costs for enterprise clients.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.