Fastly (NASDAQ: FSLY) ignited a sharp rally after posting fourth-quarter results that beat Wall Street expectations and forecasting an optimistic 2026.
The combination boosted investor confidence, sending shares to a new 52-week high and signaling a meaningful shift in sentiment.
Strong Fourth-Quarter Performance Lifts Shares
Investor enthusiasm stemmed from a solid finish to 2025. Specifically, for the fourth quarter, Fastly reported adjusted earnings of $0.12 per share — double the $0.06 analysts had projected.
Moreover, revenue also surpassed expectations. The company generated $172.61 million, representing 23% year-over-year growth and beating the consensus estimate of $161.36 million.
In addition, Fastly reported remaining performance obligations of approximately $354 million. That figure climbed 55% compared with the prior year, indicating expanding contracted future revenue.
Customer metrics further reinforced the positive trend. Enterprise customers reached 628 during the quarter. Meanwhile, the net retention rate over the past 12 months rose to 110%, compared with 106% in the prior quarter. This suggests existing clients are increasing their spending on the platform.
Chief Executive Officer Kip Compton described the quarter as a pivotal milestone, citing record revenue, operating profit, and gross margin. He added that transformation initiatives completed in 2025 have positioned the company for sustained progress, with artificial intelligence expected to serve as an incremental growth catalyst in 2026.
Unsurprisingly, the market reacted swiftly. Shares surged over 90% to $17.86 — a new 52-week high — before settling at $16.47 at the time of writing. The stock has climbed 121.23% over the past week and is up 73% year to date, thereby bringing Fastly’s market capitalization to roughly $2.49 billion.
Upbeat Q1 and Full-Year 2026 Outlook
Building on its quarterly performance, Fastly (NASDAQ: FSLY) issued guidance that also exceeded expectations. For the March quarter, the company forecasts adjusted earnings between $0.07 and $0.10 per share, compared with the analyst consensus of $0.06 per share.
Revenue for the same period is expected to range between $168 million and $174 million, ahead of the market’s estimate of roughly $166.6 million. This forward guidance reinforced confidence that growth is continuing into the new fiscal year.
Looking further ahead, Fastly expects full-year 2026 revenue of $700 million to $720 million, well above the $667.8 million consensus forecast. Adjusted earnings are projected at $0.23 to $0.29 per share, compared with analyst expectations of $0.13 per share. Importantly, the sizable gap between company guidance and market expectations added to the bullish reaction.
Analyst Reactions
Following the announcement, multiple research firms updated their views. William Blair upgraded the stock from “Market Perform” to “Outperform.”
Specifically, the analysts described Fastly as an underrecognized beneficiary of the accelerating adoption of large language models and agentic AI. Additionally, the firm highlighted growing AI-driven traffic that relies on Fastly’s infrastructure to gather and process online information.
Moreover, William Blair emphasized Fastly’s capabilities in distinguishing legitimate automated traffic from malicious bot activity, including scraping and distributed denial-of-service attacks. The firm also noted performance and reliability advantages that could help drive additional market share growth.
Other analysts raised price targets while maintaining neutral ratings. Piper Sandler increased its target to $14 from $11, citing Fastly’s strongest earnings surprise since 2019 and renewed acceleration among larger customers.
RBC Capital lifted its target to $12 from $10 after revenue beat consensus by 6.9% and noting 9.45% revenue growth over the past twelve months. Similarly, DA Davidson raised its target to $13 from $9 while keeping a “Neutral” rating.
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