Fastly(US:FSLY)2026-02-11 21:06Financial Performance - Total revenue for Q4 2025 was $172.6 million, representing a 23% year-over-year growth, with security revenue growing 32% year-over-year and accounting for 20% of total revenue[8] - Last 12-month net retention rate (LTM NRR) rose to 110% in Q4 2025 from 106% in Q3 2025[8] - Guidance for Q1 2026 projects total revenue between $168.0 million and $174.0 million, and for the full year 2026, total revenue is expected to be between $700.0 million and $720.0 million[5] - Non-GAAP net income per share for Q1 2026 is projected to be between $0.07 and $0.10, and for the full year 2026, it is expected to be between $0.23 and $0.29[5] - Q1 2024 revenue was $133,520,000, with a projected increase to $172,612,000 by Q4 2025, representing a growth of approximately 29.3%[34] - GAAP gross profit for Q4 2025 reached $105,960, an increase from $75,063 in Q4 2024, reflecting a growth of 41.2% year-over-year[35] - Non-GAAP gross profit for Q4 2025 was $110,386, up from $80,819 in Q4 2024, indicating a year-over-year increase of 36.5%[35] - The company reported a net gain on extinguishment of debt of $1,365,000 in Q4 2024 and $941,000 in Q4 2025, contributing positively to net income[34] - The company reported a net loss of $5.32 million in Q1 2024, which improved to a net income of $20.13 million by Q4 2025[38] - Non-GAAP diluted net income per share increased from $(0.04) in Q1 2024 to $0.12 in Q4 2025, showing a positive trend in profitability[38] Expenses and Cost Management - Total operating expenses in Q1 2024 were $119,494,000, with a slight decrease to $121,050,000 projected by Q4 2025[34] - Research and development expenses in Q1 2024 were $38,248,000, projected to increase to $41,591,000 by Q4 2025, reflecting a growth of about 8.9%[34] - Sales and marketing expenses for Q1 2024 were $49,607,000, expected to remain relatively stable at $51,023,000 by Q4 2025[34] - General and administrative expenses in Q1 2024 were $31,639,000, projected to decrease to $28,436,000 by Q4 2025, indicating a reduction of approximately 10.4%[34] - Total operating expenses decreased from $88.15 million in Q1 2024 to $89.16 million in Q4 2025, indicating effective cost management[38] Cash Flow and Liquidity - The company raised $180 million in gross proceeds from 0% convertible notes due 2030, using $149 million to repurchase notes due 2026, significantly improving liquidity[8] - Cash flows from operating activities showed a net cash provided of $11,132 thousand in Q2 2024, increasing to $28,924 thousand by Q4 2025[42] - Free Cash Flow improved from a negative $18,541 thousand in Q2 2024 to a positive $8,598 thousand in Q4 2025, reflecting a significant turnaround[43] - The company experienced a significant increase in cash, cash equivalents, and restricted cash from $108,071 thousand at the beginning of Q1 2024 to $180,563 thousand by the end of Q4 2025[42] Assets and Liabilities - Total current assets increased from $460,210 in Q1 2024 to $506,709 in Q4 2025, reflecting a growth of approximately 10.1%[41] - Total liabilities rose from $514,117 in Q1 2024 to $569,899 in Q4 2025, indicating an increase of approximately 10.8%[41] - Total stockholders' equity decreased from $991,806 in Q1 2024 to $929,578 in Q4 2025, representing a decline of about 6.3%[41] - Accounts receivable, net showed a slight increase from $107,517 in Q1 2024 to $118,029 in Q4 2025, which is an increase of approximately 9.8%[41] Operational Developments - The company expanded its API Security offering with API Inventory, allowing customers to manage intended APIs for security[7] - A Fortune 500 restaurant chain migrated to the company's platform for improved performance and streamlined online checkout[7] - The company enhanced its Adaptive Threat Engine for better accuracy and mitigation in DDoS Protection[7] - The company published an AppSec study with IDC, showing a more than 3× improvement in business outcomes from modern application security programs[8] Future Outlook - Future guidance indicates continued revenue growth, with expectations to exceed $172 million in Q4 2025, driven by market expansion and new product launches[38] - The company plans to exclude amortization of capitalized stock-based compensation from non-GAAP financial measures starting Q1 2025, enhancing the clarity of financial performance[36]