Fastly's Revenue Climbs, But Cash Dips Amidst Marketable Securities Buys

TL;DR

**Fastly's revenue growth is solid, but the massive cash burn and debt restructuring make it a risky bet for short-term gains.**

AI Summary

Fastly, Inc. reported revenue of $158.2 million for the three months ended September 30, 2025, an increase from $137.2 million in the same period of 2024. For the nine months ended September 30, 2025, revenue reached $451.4 million, up from $403.1 million in 2024. Despite revenue growth, the company continues to report net losses, with a net loss of $29.5 million for the three months ended September 30, 2025, compared to $38.0 million in 2024. The nine-month net loss was $106.2 million, an improvement from $125.2 million in the prior year. Operating expenses for the nine months ended September 30, 2025, remained relatively stable at $354.2 million, compared to $354.5 million in 2024, despite increased research and development expenses of $121.1 million (up from $105.2 million). Cash and cash equivalents significantly decreased to $113.1 million as of September 30, 2025, from $286.2 million at December 31, 2024, primarily due to substantial purchases of marketable securities totaling $352.1 million. The company also saw a significant increase in current debt to $188.2 million from zero at December 31, 2024, while long-term debt decreased to $149.9 million from $337.6 million.

Why It Matters

Fastly's continued revenue growth, up 15.3% year-over-year for the quarter, signals strong demand for its edge cloud platform, which is crucial for investor confidence in its market position against competitors like Akamai and Cloudflare. However, the persistent net losses and a significant reduction in cash and cash equivalents, down 60.5% since year-end 2024, raise concerns about profitability and liquidity, potentially impacting future investment in innovation and employee retention. The shift from long-term to current debt also indicates a near-term financial obligation that could pressure cash flow, affecting the company's ability to expand its network and services for customers and maintain its competitive edge in the rapidly evolving content delivery network (CDN) and edge computing market.

Risk Assessment

Risk Level: high — Fastly's cash and cash equivalents plummeted by $173.0 million, from $286.2 million to $113.1 million, in the nine months ended September 30, 2025. This significant decrease, coupled with a net loss of $106.2 million for the same period and a substantial increase in current debt to $188.2 million, indicates considerable liquidity and solvency risks.

Analyst Insight

Investors should exercise caution and thoroughly evaluate Fastly's cash management strategy and path to profitability. Monitor upcoming earnings reports closely for improvements in net income and cash flow from operations, and assess how the company plans to address its increased current debt obligations.

Financial Highlights

debt To Equity

0.57

revenue

$158.2M

operating Margin

-18.2%

total Assets

$1.47B

total Debt

$338.1M

net Income

$(29.5)M

eps

$(0.20)

gross Margin

58.3%

cash Position

$113.1M

revenue Growth

+15.3%

Revenue Breakdown

Key Numbers

• $158.2M — Revenue (Up from $137.2M in Q3 2024, showing 15.3% growth.)
• $(29.5)M — Net Loss (Improved from $(38.0)M in Q3 2024, but still a loss.)
• $113.1M — Cash and Cash Equivalents (Significant decrease from $286.2M at Dec 31, 2024, a 60.5% drop.)
• $188.2M — Current Debt (Increased from zero at Dec 31, 2024, indicating near-term obligations.)
• $72.0M — Net Cash Provided by Operating Activities (Increased from $11.2M in the prior nine-month period, a positive trend.)
• $(249.2)M — Net Cash Used in Investing Activities (Primarily due to $352.1M in marketable securities purchases.)
• $0.20 — Net Loss Per Share (Diluted) (Improved from $0.27 in Q3 2024.)
• 149.2M — Shares Outstanding (As of Sep 30, 2025, indicating dilution from 142.1M at Dec 31, 2024.)

Key Players & Entities

• Fastly, Inc. (company) — Registrant
• SEC (regulator) — Securities and Exchange Commission
• $158.2 million (dollar_amount) — Revenue for Q3 2025
• $137.2 million (dollar_amount) — Revenue for Q3 2024
• $29.5 million (dollar_amount) — Net loss for Q3 2025
• $106.2 million (dollar_amount) — Net loss for nine months ended Sep 30, 2025
• $113.1 million (dollar_amount) — Cash and cash equivalents as of Sep 30, 2025
• $286.2 million (dollar_amount) — Cash and cash equivalents as of Dec 31, 2024
• $188.2 million (dollar_amount) — Current debt as of Sep 30, 2025
• New York Stock Exchange (regulator) — Exchange where Class A Common Stock is registered

FAQ

Risk Factors

• Liquidity and Cash Burn [high — financial]: The company's cash and cash equivalents decreased by 60.5% from $286.2M to $113.1M. This significant reduction, coupled with increased current debt of $188.2M, raises concerns about short-term liquidity and the ability to fund ongoing operations and investments without additional financing.
• Increased Debt Load [medium — financial]: Fastly has taken on $188.2M in current debt, up from zero at the end of 2024. While long-term debt has decreased, the substantial increase in short-term obligations could strain cash flow and increase financial risk if not managed effectively.
• Rising R&D Expenses [medium — operational]: Research and development expenses increased by 15% to $121.1M for the nine months ended September 30, 2025, compared to $105.2M in the prior year. While necessary for innovation, this continued investment without a corresponding increase in profitability could pressure margins.
• Intense Competition [medium — market]: The edge computing and CDN market is highly competitive, with established players and emerging technologies. Fastly faces pressure to continuously innovate and maintain its competitive edge to retain and attract customers.
• Continued Net Losses [high — financial]: Despite revenue growth, Fastly continues to report net losses, with a loss of $29.5M in Q3 2025 and $106.2M year-to-date. Sustained unprofitability may impact investor confidence and the ability to secure future funding.
• Dependence on Key Customers [medium — operational]: While not explicitly detailed in this excerpt, a common risk for CDN providers is reliance on a few large customers. Loss of a major client could significantly impact revenue.

Industry Context

Fastly operates in the highly competitive edge computing and content delivery network (CDN) market. Key trends include the increasing demand for low-latency content delivery, edge computing services for real-time data processing, and security solutions. Major competitors include Akamai, Cloudflare, and Amazon Web Services (AWS), all vying for market share through innovation and service expansion.

Regulatory Implications

As a technology company handling significant data traffic, Fastly is subject to data privacy regulations (e.g., GDPR, CCPA) and cybersecurity standards. Compliance with these evolving regulations is crucial to avoid penalties and maintain customer trust. Potential changes in net neutrality policies could also impact the industry landscape.

What Investors Should Do

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Key Dates

• 2025-09-30: Quarterly Report (10-Q) filed — Provides updated financial performance and operational insights for Q3 2025.
• 2024-12-31: Previous Fiscal Year End — Baseline for comparison of current assets, liabilities, and cash position.

Glossary

Marketable securities

Investments that are readily salable in the public markets. These can include stocks, bonds, and other financial instruments. (A significant portion of Fastly's cash was converted into marketable securities, impacting its reported cash position and indicating an investment strategy.)

Accumulated deficit

The total net losses of a company since its inception, minus any net profits. It represents a negative retained earnings balance. (Fastly has a substantial accumulated deficit of $1.1B, highlighting its history of unprofitability.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an asset for the lease term. (Indicates the company's long-term commitments for leased assets, such as office space or equipment.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its identifiable net assets. (Fastly has significant goodwill ($670.4M), likely from past acquisitions, which is not amortized but tested annually for impairment.)

Diluted Net Loss Per Share

The net loss per share after accounting for all potential dilutive common shares (like stock options and convertible securities). (Shows the per-share impact of the company's net loss, with a reported loss of $0.20 for Q3 2025.)

Year-Over-Year Comparison

Fastly's Q3 2025 results show continued revenue growth, with a 15.3% increase year-over-year. However, this growth is accompanied by a reduction in net loss, indicating some operational efficiency improvements. The most striking changes are in the balance sheet: cash reserves have significantly dwindled by 60.5%, while current debt has surged from zero to $188.2M, signaling a shift in the company's short-term financial strategy and increased leverage. Risk factors remain focused on financial stability and market competition, with the current liquidity situation becoming a more prominent concern.

Key Financial Figures

• $0.00002 — which registered Class A Common Stock, $0.00002 par value FSLY The New York Stock Excha

Filing Documents

• fsly-20250930.htm (10-Q) — 1841KB
• fsly-93025x10qexhibit311.htm (EX-31.1) — 11KB
• fsly-93025x10qexhibit312.htm (EX-31.2) — 11KB
• fsly-93025x10qexhibit321.htm (EX-32.1) — 5KB
• fsly-93025x10qexhibit322.htm (EX-32.2) — 5KB
• 0001517413-25-000299.txt ( ) — 9007KB
• fsly-20250930.xsd (EX-101.SCH) — 56KB
• fsly-20250930_cal.xml (EX-101.CAL) — 86KB
• fsly-20250930_def.xml (EX-101.DEF) — 260KB
• fsly-20250930_lab.xml (EX-101.LAB) — 694KB
• fsly-20250930_pre.xml (EX-101.PRE) — 516KB
• fsly-20250930_htm.xml (XML) — 1370KB

- Financial Information

Part I - Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 5 Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 5 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 6 Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 7 Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 8 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 10 Notes to Condensed Consolidated Financial Statements 12 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 51 Item 4.

Controls and Procedures

Controls and Procedures 51

- Other Information

Part II - Other Information 53 Item 1.

Legal Proceedings

Legal Proceedings 53 Item 1A.

Risk Factors

Risk Factors 53 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 92 Item 3. Defaults Upon Senior Securities 92 Item 4. Mine Safety Disclosures 93 Item 5. Other Information 93 Item 6. Exhibits 94

Signatures

Signatures 95 2 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "anticipate," "believe," "continue," "could," "design," "estimate," "expect," "intend," "may," "plan," "potentially," "predict," "project," "should," "will," "would," "target," or the negative of these terms or other similar expressions. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q, regarding, amongst other things: defects, interruptions, outages, delays in performance, or similar problems with our platform; our ability to attract new enterprise customers and to have existing enterprise customers continue and increase their use of our platform; the potential loss or significant reduction in usage by one or more of our major customers; component delays, shortages, and price increases; our history of operating losses; the potential that security measures, or those of third parties upon which we rely, are compromised, or the security, confidentiality, integrity or availability of o

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FASTLY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) As of September 30, 2025 As of December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 113,131 $ 286,175 Marketable securities, current 229,780 9,707 Accounts receivable, net of allowance for credit losses of $ 6,189 and $ 8,254 as of September 30, 2025 and December 31, 2024, respectively 109,184 115,988 Prepaid expenses and other current assets 27,689 28,325 Total current assets 479,784 440,195 Property and equipment, net 182,896 179,097 Operating lease right-of-use assets, net 53,050 50,433 Goodwill 670,356 670,356 Intangible assets, net 28,055 42,876 Other assets 56,461 68,402 Total assets $ 1,470,602 $ 1,451,359 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,829 $ 6,044 Accrued expenses 60,421 41,622 Current debt 188,232 — Finance lease liabilities, current — 2,328 Operating lease liabilities, current 23,676 25,155 Other current liabilities 45,757 29,307 Total current liabilities 328,915 104,456 Long-term debt 149,893 337,614 Operating lease liabilities, non-current 47,106 39,561 Other long-term liabilities 7,723 4,478 Total liabilities 533,637 486,109 Commitments and contingencies (Note 9) Stockholders' equity: Common stock 3 3 Additional paid-in capital 2,035,956 1,958,157 Accumulated other comprehensive loss ( 12 ) ( 100 ) Accumulated deficit ( 1,098,982 ) ( 992,810 ) Total stockholders' equity 936,965 965,250 Total liabilities and stockholders' equity $ 1,470,602 $ 1,451,359 The accompanying notes are an integral part of the condensed consolidated financial statements. 5 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue $ 158,223 $ 137,206 $ 451,406 $ 403,097 Cost of revenue 65,894 62,466 201,163 182,