GET DAILY SIGNALSFastly (FSLY) Delivers Solid Q3 Beats but Shares Drop 13%
Key Takeaways
- Third-quarter revenue rose 20.2% year over year to $190.2 million, narrowly topping consensus estimates of about $187.9 million.
- Non-GAAP earnings per share reached $0.17, comfortably above the $0.12 Wall Street expected.
- Adjusted EBITDA came in at $43.54 million, beating the roughly $35.05 million consensus with a 22.9% margin.
- Net revenue retention climbed to 119% from 117% in the prior quarter, a sign existing customers are spending more on the platform.
- Management guided fourth-quarter revenue to $198 million–$202 million and raised full-year adjusted EPS guidance to roughly $0.62 at the midpoint.
- Despite the beats, the stock dropped about 13% in immediate after-hours trading.
- For more detail on the FSLY Major News, Today's Price Move, Price Targets, and Forecasts, explore these dedicated pages.
- Discover actionable trade ideas and market opportunities with Trending AI Robots.
Why This Quarter Matters
Fastly's third-quarter report arrives at an important juncture for the edge cloud provider. The company has been rebuilding its growth path over recent quarters, and this update shows whether that progress can hold as customers broaden their use of delivery, security, and compute offerings. Profitability gains have been central to the turnaround narrative, with AI workloads emerging as a notable driver of demand. Gross margins, free cash flow, and customer retention have all moved higher lately, so this quarter serves as a useful checkpoint on whether Fastly can continue turning revenue growth into better operating leverage while keeping infrastructure costs in check.
Breaking Down the Reported Results
Fastly posted third-quarter revenue of $190.2 million, up 20.2% from a year earlier and just ahead of the $187.9 million consensus. Non-GAAP earnings per share came in at $0.17, well above the $0.12 analysts expected. Adjusted EBITDA reached $43.54 million, topping the roughly $35.05 million consensus and equating to a 22.9% margin. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Customer metrics improved as well. Net revenue retention rose to 119% from 117% the prior quarter, showing that existing customers are using more of the platform. Operating margin narrowed to negative 5.9% from negative 18.2% a year ago, while free cash flow margin advanced to 13.2%.
For the fourth quarter, management guided revenue between $198 million and $202 million, above the $197 million consensus at the midpoint, and non-GAAP EPS of $0.16 to $0.18. The company also lifted its full-year adjusted EPS outlook to about $0.62 at the midpoint, signaling greater confidence in profitability.
Market Reaction and Investor Sentiment
Even with results that topped estimates on revenue, non-GAAP EPS, and adjusted EBITDA, FSLY shares fell roughly 13% in after-hours trading to around $18.53. This kind of reaction is not uncommon in software earnings when strong numbers still fall short of elevated expectations or when guidance, valuation, or other factors prompt new questions. Leadership changes announced alongside the results may have added some uncertainty. The gap between solid fundamentals and the share-price decline suggests investors are balancing longer-term growth prospects and margin trends against a stock that had already advanced meaningfully over the past year.
Forward Outlook and Key Factors to Monitor
Looking ahead, the focus will be on whether Fastly can maintain accelerating revenue growth while continuing to expand margins and free cash flow. Fourth-quarter guidance points to mid-teens year-over-year revenue growth, a moderation from the third quarter’s 20% pace, so the market will track whether results can again beat the midpoint. Customer retention stays important. The rise in net revenue retention to 119% indicates deeper engagement from existing users, though sustaining that level will depend on further adoption of security and compute products tied to AI workloads. Cost discipline and infrastructure spending will also matter, as investors watch whether recent free cash flow margin gains hold. Any further leadership or strategy shifts could affect sentiment, given execution’s role in the recent turnaround.
Using Tickeron AI Tools for Deeper Analysis
In my own research process, I often turn to Tickeron’s tools to cross-check earnings trends and compare setups across the sector. The AI Screener helps surface relevant patterns and signals quickly, allowing me to refine watchlists without spending hours on manual screens. It has become a regular part of how I evaluate names like this one after major reports.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
FSLY in downward trend: price dove below 50-day moving average on October 30, 2026
FSLY moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend. In 35 of 40 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are 88%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on FSLY as a result. In 78 of 90 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 87%.
The Moving Average Convergence Divergence Histogram (MACD) for FSLY turned negative on October 30, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In 36 of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at 80%.
The 10-day moving average for FSLY crossed bearishly below the 50-day moving average on October 22, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 14 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 88%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FSLY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 85%.
The Aroon Indicator for FSLY entered a downward trend on October 28, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +12.13% 3-day Advance, the price is estimated to grow further. Considering data from situations where FSLY advanced for three days, in 225 of 275 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
FSLY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 9 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.382) is normal, around the industry mean (-1.902). P/E Ratio (-39.689) is within average values for comparable stocks, (15.583). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.824). Dividend Yield (0.000) settles around the average of (0.072) among similar stocks. P/S Ratio (5.222) is also within normal values, averaging (70.854).
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 51 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 56 (best 1 - 100 worst), indicating steady price growth. FSLY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 93 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FSLY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
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a providesr of real-time content delivery network services
Industry PackagedSoftware
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