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Fastly (FSLY) is launching higher by 60%, reaching multi-year highs following a powerhouse Q4 earnings report that suggests the edge cloud provider has reached a definitive turning point. After a year of disciplined execution, the company delivered a beat-and-raise performance, pairing record revenue with its first-ever profitable fiscal year. With AI shifting from a buzzword to a fundamental traffic driver, FSLY is signaling that its transformation from a niche content delivery network to a comprehensive security and compute powerhouse is officially reaching an inflection point.

• FSLY crushed Q4 expectations, posting record revenue of $172.6 mln (up 23% yr/yr), marking its strongest growth in over three years and its fourth consecutive quarter of acceleration.
• Profitability reached new heights as record gross margins of 64.0% (up 650 bps yr/yr) and record operating income demonstrated significant operating leverage.
• CEO Kip Compton characterized the results as an "inflection" in growth and anticipates momentum into 2026, driven by AI as a tailwind.
• Security revenue jumped 32% to $35.4 mln, fueled by an expanded product suite including Next-Gen WAF, API security, and bot management.
• Other revenue (primarily Compute) skyrocketed 78% to $6.4 mln, while Network Services grew a solid 19% to $130.8 mln.
• Remaining Performance Obligations (RPO) exploded 55% to $353.8 mln, reflecting a shift toward larger, upfront enterprise commitments.
• Enterprise customer count increased by 32 yr/yr to 628, a vital cohort that generates over 90% of company revenue.
• Bullish 2026 guidance of $700-$720 mln in revenue and doubled operating margins (8% at midpoint) sits comfortably ahead of expectations.

Briefing.com Analyst Insight

FSLY is evolving from a CDN into a high-margin security and AI-enablement platform. The 55% RPO explosion proves enterprise clients are shifting from "testing the waters" to locking in mission-critical, multi-product commitments. Agentic AI is a fundamental tailwind for FSLY. As machines traverse the web more aggressively than humans, FSLY is capturing a surge in machine-to-machine traffic and AI bot mitigation demand. By serving as the intelligence layer for AI workloads, FSLY is outgrowing traditional markets. Despite macro risks, a rapidly expanding gross margin and a doubling of 2026 profit targets suggest FSLY has reached a profitable inflection point. Execution on its 10-12% infrastructure CapEx plan will be vital to sustaining this momentum.