Summary
Fastly reported first quarter revenue of $144.5 million, up 8.2% from $133.5 million in the prior-year quarter. Growth was broad across the product lines. Network services and security revenue each grew 7% year over year, while other revenue, which covers Compute and Observability, grew 64%. Management credited the Compute pickup to wider adoption of those products. Usage on the platform drove roughly 95% of revenue in both periods, and revenue from new customers contributed less than 10% of the total.
Gross margin moved the wrong way. GAAP gross margin was 53.2%, down from 54.8% a year earlier, as bandwidth costs, depreciation and amortization, and software costs all rose. Gross profit still grew 4.9% to $76.8 million. Non-GAAP gross margin was 57.3%, down from 59.6%. Below the gross profit line, the picture improved. The operating loss narrowed to $38.2 million from $46.3 million, and the net loss narrowed to $39.1 million from $43.4 million. Diluted loss per share was $0.27, better than $0.32. Operating margin was negative 26.4%, an improvement from negative 34.6%. Total operating expenses fell 4% year over year, helped by an 11% drop in general and administrative costs. Interest expense rose 448%.
Non-GAAP results tell a similar story on operating loss but not on the bottom line. The non-GAAP operating loss was $5.8 million, narrower than $8.5 million a year ago, and adjusted EBITDA was $7.8 million versus $4.9 million. Non-GAAP net loss per share was $0.05, worse than $0.04 in the prior-year quarter.
Cash generation was the standout. Operating cash flow was $17.3 million, up 55.3% from $11.1 million. Free cash flow turned positive at $8.2 million, compared with negative $2.2 million in the first quarter of 2024. Capital expenditures were $2.6 million, up 62.5% from $1.6 million. The company ended the quarter with $307.3 million in cash, cash equivalents, marketable securities, and restricted cash. Deferred revenue fell 16.4% to $34.4 million from $41.1 million. Remaining performance obligations rose 33.5% to $303.0 million from $227.0 million, and were up 24% from $244 million at the end of the fourth quarter.
Customer metrics were mixed. Enterprise customer count was 595, up 18 from 577 a year earlier, but total customer count fell by 255 to 3,035. The top ten customers accounted for 33% of revenue, down from 38%, and revenue from that group declined 6% year over year while revenue from customers outside the top ten grew 17%. Last-twelve-month net retention rate slipped to 100% from 102% in the fourth quarter of 2024. Concentration remains a live risk. Fastly disclosed that TikTok was one of its largest customers in the quarter and that US legislation targeting ByteDance's ownership could eventually reduce TikTok's US traffic. The company also flagged that a sustained decline in its stock price could force a goodwill impairment, after it identified triggering events at March 31, 2025 and concluded no impairment was required.
Guidance points to a modest sequential step down in the second quarter. Management guided second quarter total revenue of $143.0 million to $147.0 million, with a non-GAAP operating loss between $4.0 million and $8.0 million and a non-GAAP net loss per share between $0.04 and $0.08. For the full year 2025, management guided total revenue of $585.0 million to $595.0 million, with a non-GAAP operating loss between $6.0 million and $12.0 million and a non-GAAP net loss per share between $0.07 and $0.13. The company said it is raising its full-year guidance and expects recent security and compute releases to improve the revenue mix.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $144.5M | $140.6M | +2.8% | $133.5M | +8.2% |
| Gross profit | $76.8M | $75.1M | +2.3% | $73.2M | +4.9% |
| Gross margin | 53.2% | 53.4% | -0.2 pp | 54.9% | -1.7 pp |
| Research & development | $37.4M | $32.7M | +14.3% | $38.2M | -2.1% |
| Sales & marketing | $49.3M | $50.0M | -1.5% | $49.6M | -0.6% |
| General & administrative | $28.2M | $26.2M | +8.0% | $31.6M | -10.8% |
| Total operating expenses | $115.0M | $109.4M | +5.1% | $119.5M | -3.8% |
| Operating income (loss) | -$38.2M | -$34.3M | -11.2% | -$46.3M | +17.5% |
| Operating margin | -26.4% | -24.4% | -2.0 pp | -34.6% | +8.2 pp |
| Net income (loss) | -$39.1M | -$32.9M | -19.0% | -$43.4M | +9.9% |
| Net margin | -27.1% | -23.4% | -3.7 pp | -32.5% | +5.4 pp |
| Diluted EPS | -$0.27 | -$0.24 | -$0.03 | -$0.32 | +$0.05 |
| Customers | 3,035 | — | — | 3,100 | -2.1% |
Risks
The 10 largest customers generated 32% of revenue in the trailing 12 months ended March 31, 2025, down from 38% in the prior-year period, but TikTok was one of the largest customers for the quarter and remains a customer. U.S. legislation and executive orders concerning TikTok could reduce TikTok U.S. traffic and negatively affect revenue.
Last-twelve Months Net Retention Rate decreased to 100.0% for the trailing 12 months ended March 31, 2025 from 114.0% in the prior-year period, indicating no net expansion. Total customer count decreased to 3,035 as of March 31, 2025 from 3,290 as of March 31, 2024.
Component delays, shortages or price increases could interrupt server construction and capacity expansion. The company recognized $4.1 million of equipment, internal-use software and right-of-use asset write-off charges in the year ended December 31, 2024, and MD&A cites tariffs and trade disputes as ongoing supply chain risks.
MD&A added a goodwill impairment critical accounting estimate. As of March 31, 2025, the company identified triggering events including a decrease in stock price and market capitalization, and subsequent stock price declines could require impairment of all or some portion of goodwill in future periods.
A putative securities class action and consolidated stockholder derivative lawsuits are pending. Defendants filed a motion to dismiss on January 15, 2025, the lead plaintiff filed an opposition on March 17, 2025, and defendants filed a reply on April 30, 2025. Defense costs and potential unfavorable outcomes could harm the business.
Gross margin decreased to 53.2% in FY2025 Q1 from 54.8% in FY2024 Q1. Cost of revenue increased 12% year over year, driven by higher bandwidth costs, depreciation and amortization, and software costs, which may continue to pressure gross margins.
The remaining $188.6 million principal of the 2026 Notes matures on March 15, 2026, unless earlier converted, redeemed or repurchased. Interest expense increased 448% to $3.2 million in FY2025 Q1 from $0.6 million in FY2024 Q1 due to the 2028 Notes coupon, and cash repayment may be required if the stock price is below the conversion price.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Total Customer Count
Non-GAAP Operating Loss
Remaining Performance Obligations (RPO)
Enterprise Customer Revenue %
Adjusted EBITDA
Enterprise Customer Count
LTM Net Retention Rate
Top Ten Customer Revenue %
Summary, forecast, risks and KPIs are extracted from Fastly, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.