TLDR
- Fastly stock dropped 37% to $19.94 after Q1 results disappointed investors despite beating headline earnings and revenue estimates.
- Q1 EPS came in at $0.13, beating the $0.09 forecast; revenue rose 20% to $173.02 million, above the $171.8 million consensus.
- Security revenue, which captures AI traffic, hit $38.8 million — up 47% year-over-year but only slightly above the $34.9 million estimate.
- Fastly raised its full-year 2026 revenue outlook to $710M–$725M and profit guidance to $0.27–$0.33 per share.
- Piper Sandler cut its price target to $27 from $30, maintaining a Neutral rating, citing concerns that growth may have peaked.
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.
What the Numbers Actually Said
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.
Analyst Reaction
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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