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What were the key takeaways from Fastly's earnings call?

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Did Fastly beat or miss consensus estimates last quarter?

- **Revenue Growth & Margin Expansion**: Q3 revenue up 15% YoY to $158.2M, with gross margin improving 410bps to 62.8%. Full-year guidance raised to $610-614M.
- **Strategic Win & Security Momentum**: A top 10 customer adopted all three product lines, driving security revenue growth of 30% YoY.
- **Innovation Leadership**: Launch of advanced security features (API Discovery, next-gen WAF) and AI integration, enhancing platform value.
- **Free Cash Flow Turnaround**: Q3 free cash flow of $18.1M vs. negative $36M in 2024, with full-year target of $25-35M.
- **APJ Expansion**: Early success in Asia-Pacific with dedicated sales leadership, positioning for future growth.

**【CEO Summary Section】**
- **Record Q3 Performance**: Revenue of $158.2M (+15% YoY), exceeding guidance, with gross margin of 62.8% (up 410bps YoY). Operating income of $11.6M and free cash flow of $18.1M.
- **Strategic Cross-Sell Win**: A top 10 customer adopted all three product lines, driving security revenue growth of 30% YoY.
- **Innovation Highlights**: Launch of API Discovery, next-gen WAF with deception tech, and AI integration with MCP Server.
- **Guidance Raise**: Full-year revenue updated to $610-614M (+13% YoY), with free cash flow of $25-35M.
- **Platform Momentum**: 106% trailing 12-month net retention rate, RPO of $268M (+16% YoY).

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Network services ($118.8M, +11% YoY), security ($34M, +30% YoY), other products ($5.4M, +51% YoY).
- **Gross Margin Leverage**: 62.8% driven by scale and engineering efficiency, with $1.6M non-recurring cost tailwind.
- **Operating Expenses**: $87.7M (+10% YoY), disciplined spend leading to 15% OPEX growth vs. 15% revenue growth.
- **Q4 Guidance**: Revenue $159-163M, gross margin 61.5%±50bps, operating profit $8-12M.
- **Liquidity**: $343M cash, with $188M convertible notes maturing in March 2026.

**【Q&A Highlights】**
- **Security Growth Sustainability**: 30% YoY expansion driven by cross-sell and new products; no one-time revenue recognition.
- **APJ Expansion**: Early wins from dedicated sales leadership, with focus on sales coverage and opportunity capture.
- **Seasonality**: Network services traffic trends normal, Q4 sequential growth cautious due to Q3 upside.
- **Gross Margin Outlook**: 60-61% for 2025, sustained by scale and engineering investments.
- **TikTok Impact**: U.S. traffic <2% of revenue; minimal expected impact from regulatory changes.

Fastly, Inc. (FSLY) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FSLY

FSLY fundamentals

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