Fastly's Q1 2025: Unpacking Key Contradictions in Security Growth and Operating Profitability

Security product penetration and growth expectations, operating loss expectations, media business performance and strategy, security growth expectations, and sales cycles and operational efficiency are the key contradictions discussed in Fastly's latest 2025Q1 earnings call.



Revenue and Customer Growth:
- Fastly, Inc. reported revenue of $144.5 million for Q1 2025, above the high-end of their guidance range of $136 million to $140 million, with a growth rate of 8% year-over-year.
- Growth was driven by increased customer acquisition in strategic verticals and improved cross-selling efforts, with 19 new enterprise customers acquired in the first quarter.

Operating Performance and Cost Management:
- The company achieved an operating loss of $6 million, beating their guidance range of $11 million to $7 million.
- This was due to better-than-expected gross profit from revenue upside and cost control on the operating expense line.

Security Revenue and Product Enhancements:
- Fastly's security revenue increased by 7% year-over-year, with new offerings like AI bot detection and enhanced DDoS protection.
- Growth was supported by the expansion of the security portfolio and strategic go-to-market incentives, positioning Fastly to outpace the market in the second half of 2025.

Network Services and Market Share:
- Network services revenue grew by 7% year-over-year, with network services representing 87% of total revenue.
- The growth was driven by strong customer acquisition in strategic verticals and successful market share gains, including transitions from competitors like Edgio.