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Fastly: How Is Its One-Stop Platform Strategy Turning Security Into a Powerful Moat?

Fastly, an edge cloud platform company, reported strong financial results for the third quarter of 2025, marking a continuation of its upward trajectory in both revenue and profitability. The company reported a record revenue of $158.2 million, a 15% year-over-year increase, which surpassed the high end of its guidance and reflected an acceleration in growth compared to the previous quarter. The company’s gross margins improved significantly, reaching 62.8%, exceeding guidance by 330 basis points, largely driven by revenue upside and a moderation in pricing declines. This figure also included a one-time benefit from cost accrual reversals. Operating income was reported at $11.6 million, surpassing expectations, with record free cash flow of $18 million. This was supported by a disciplined approach to operating expenses, which rose by only 10% year-over-year against a 15% increase in revenue, indicating strong operating leverage.