Fastly (FSLY) reported Q1 2026 earnings after Wednesday’s closing bell, beating headline numbers — but the market wasn’t buying it.
The stock had surged over 210% year-to-date heading into the print. That kind of run-up sets a high bar, and Fastly didn’t clear it.
Q1 earnings came in at $0.13 per share, up from a $0.05 loss a year ago and ahead of the $0.09 Wall Street estimate. Revenue rose 20% year-over-year to $173.02 million, topping the $171.8 million consensus.
Fastly $FSLY stock is down by almost 30% in after hours following its earnings
https://t.co/u3Lso9HUEY pic.twitter.com/AlZUKIQRiV
— Evan (@StockMKTNewz) May 6, 2026
By most measures, a solid quarter. But investors were focused on something else.
The key number they wanted to see was security revenue — the segment where AI-driven traffic shows up on Fastly’s books. That came in at $38.8 million, up 47% year-over-year, but only marginally above the $34.9 million analyst estimate.
For a stock priced for AI-fueled growth, “marginally above” wasn’t enough.
FSLY fell 37% to $19.94 on Thursday.
Evercore ISI analyst Peter Levine said the sell-off was “exacerbated” by softer-than-expected network services revenue and lighter compute sales, on top of the already elevated investor expectations going into the report.
Fastly’s large customer count hit 634 in Q1, up 39% from a year ago. The company is also securing larger minimum commitments from customers, which points to improving contract quality.
For Q2, Fastly guided revenue of $170 million to $176 million, with EPS of $0.05 to $0.08 — both above Wall Street’s prior forecasts of $169.8 million in sales and $0.04 EPS.
Full-year 2026 guidance was also raised. Fastly now sees revenue of $710 million to $725 million, up from its earlier $700 million to $720 million view. EPS guidance moved to $0.27–$0.33, from $0.23–$0.29.
The analyst consensus sits at $0.28 EPS on $712 million in revenue for the full year — Fastly’s new range brackets that on both ends.
Piper Sandler lowered its price target on FSLY to $27 from $30, keeping a Neutral rating. The firm flagged that Fastly’s core delivery business saw lower quarter-over-quarter volumes than expected, and that tougher pricing comparisons lie ahead for the rest of the year.
Piper Sandler also raised a broader concern: that growth may have peaked, particularly given that FSLY trades at a premium on an EV/revenue-to-growth basis versus peers.
Management pointed to its Compute@Edge platform seeing increased AI-related activity, and noted strong cross-selling traction for its Security product.
Fastly has scheduled an analyst day for September 23, 2026.
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