Fastly, Inc. FSLY entered 2026 with strong momentum, as first-quarter revenues increased 20% year over year to a record $173 million. Rising demand across edge cloud, security and compute services helped the company sustain one of its strongest growth phases in recent years.
The performance followed 23% revenue growth in the fourth quarter of 2025, showing that Fastly has largely held on to the acceleration seen over the past several quarters. Quarterly growth had earlier remained in single digits through much of 2024 before rebounding sharply in late 2025, making the latest 20% increase notable.
The composition of growth remains important. Network Services revenues, still the company’s largest business, increased 11% year over year to $126.2 million. Security revenues climbed 47% to $38.8 million and represented 22% of total revenues, while Other revenues, primarily driven by compute products, surged 67% to $8 million. This mix shows that Fastly’s growth is being supported by both its core delivery business and faster-growing newer categories.
Fastly also benefited from expansion within its customer base. LTM net retention rate improved to 113% from 100% a year ago, reflecting higher spending across a broader mix of customers. The company also reported record remaining performance obligations of $369 million, up 63% year over year, indicating stronger contracted revenue visibility.
Even so, the pace may gradually normalize from recent highs. Second-quarter 2026 revenue guidance of $170-$176 million implies 16% year-over-year growth at the midpoint, while full-year 2026 guidance of $710-$725 million points to a 15% increase. This indicates that while growth is expected to cool from the recent peak, Fastly still sees a mid-teens revenue trajectory for 2026.
NET & AKAM Benefit From AI-Driven Revenue Momentum
Cloudflare, Inc. NET posted first-quarter 2026 revenues of $639.8 million, up 34% year over year, driven by strong adoption of its AI, developer and security offerings. NET also highlighted accelerating enterprise traction, with large customer revenues rising 38% year over year. Cloudflare further noted that AI-driven and agentic workloads are becoming a major growth catalyst, with management calling AI the “biggest tailwind” in the company’s history.
Akamai Technologies, Inc. AKAM generated first-quarter 2026 revenues of $1,074 million, reflecting 6% year-over-year growth. AKAM continued benefiting from strong momentum in cloud infrastructure and security services, with cloud infrastructure services revenues jumping 40% year over year. Akamai Technologies also emphasized growing AI-related demand and signed a landmark $1.8 billion cloud infrastructure deal during the quarter.
FSLY Stock Price Performance, Valuation & Estimates
Shares of Fastly have surged 139.7% over the past year against the industry’s decline of 14.6%.
FSLY Price Performance Versus Industry
Image Source: Zacks Investment Research
From a valuation standpoint, FSLY trades at a forward price-to-sales ratio of 4.11, higher than the industry’s average of 3.75.
FSLY Valuation Compared to Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for FSLY’s 2026 and 2027 earnings implies year-over-year growth of 123.1% and 28.7%, respectively.
Fastly currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).