Fastly, Inc. (FSLY): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of Fastly, Inc. as they hit a critical juncture, moving hard toward sustained non-GAAP profitability after years of heavy investment. Honestly, looking at the Q3 2025 numbers-like that 106% Net Retention Rate and security revenue hitting $34.0 million-it's clear the strategy is finally clicking into place as they guide for up to $614 million in full-year revenue. To really understand how they are balancing network costs against that high-growth security push and programmable edge, you need to see the full nine blocks of their business model, which I've broken down precisely below.

Fastly, Inc. (FSLY) - Canvas Business Model: Key Partnerships

You're looking at the structure Fastly, Inc. uses to extend its reach and capabilities, which is heavily reliant on its ecosystem. Honestly, for a company competing in the edge cloud space, these relationships aren't just nice-to-haves; they are fundamental to managing costs and delivering specialized services.

Cloud Service Providers (CSPs) like AWS, Google Cloud, and Microsoft Azure

Fastly, Inc. integrates deeply with the major hyperscalers. This isn't just about being present; it's about making the joint offering seamless for customers who are already committed to those environments. For instance, Fastly, Inc. is explicitly noted as a trusted partner in the Google Cloud Marketplace, which simplifies deployment for mutual customers looking to innovate at the edge. While specific revenue splits from these direct CSP relationships aren't broken out, the overall platform strategy suggests these integrations are critical for capturing enterprise workloads.

Strategic Private Network Interconnects (PNIs) with major cloud vendors to reduce egress costs

The goal here is clear: keep traffic flowing efficiently and control the cost of data leaving the major cloud providers' networks, which can be a significant operational expense for customers. Fastly, Inc. has engineered its platform to address this directly. A concrete example of this cost-saving focus is the addition of Shielding support to Compute for the Rust SDK, which directly enables customers to improve their cache hit ratio, reduce origin load, and subsequently cut egress costs. This technical partnership focus directly impacts the value proposition for large-scale cloud users.

Global Channel Partners (Resellers, MSPs) for expanded market reach and value-added services

The channel is clearly a growing focus area for Fastly, Inc., especially as they push higher-margin security and compute offerings. The company partners with a number of global channel partners who take Fastly, Inc.'s core offerings and layer on their own value-added services. This strategy is designed to broaden market reach beyond direct sales. While we don't have a specific count of these resellers or MSPs as of late 2025, the emphasis on security implementation partners suggests a significant push through this route.

Certified Services Partner Program for implementing advanced security solutions

This is a very recent and important development. Fastly, Inc. launched the Fastly Certified Services Partner Program around November 2025. This program provides comprehensive training and certification for partner organizations specifically to implement and manage the company's advanced security solutions. This move is designed to build trust and credibility in the security space, which is working. Security revenue was a key driver in Q3 2025, growing 30% year-over-year and making up a record 21% of total revenue. Furthermore, the value of these security solutions is quantified: Fastly Application Security Solutions delivered a 235% ROI Over Three Years based on a commissioned Forrester Consulting Total Economic Impact study.

Technology partners for complementary services like observability and logging

To deliver a full edge cloud platform, Fastly, Inc. needs to integrate with best-of-breed tools for monitoring and data analysis. The company has been actively enhancing its own observability tools, such as adding Custom and Media Shield dashboards to Observability in Q1 2025. The success of these complementary services is showing up in the financial results; the 'Other revenue' category, which includes Compute and Observability solutions, saw massive growth of 51% year-over-year in Q3 2025, reaching $5.4 million.

Here's a quick look at how the partnership-driven segments are performing financially as of the third quarter of 2025:

The growth in non-network services revenue is a direct indicator of the success of these technology and service partnerships. You've got 627 enterprise customers now, up 51 from the prior year, and the company is actively working to reduce its reliance on the top few accounts, which now account for 32% of revenue.

• Launch of Fastly Certified Services Partner Program (November 2025).
• Security solutions demonstrated 235% ROI over three years (Forrester TEI).
• Partnerships enable access to joint go-to-market resources.
• Technical integrations like Shielding support reduce customer egress costs.

Finance: draft 13-week cash view by Friday.

Fastly, Inc. (FSLY) - Canvas Business Model: Key Activities

You're looking at the core engine driving Fastly, Inc.'s results as of late 2025. These are the daily, weekly, and quarterly actions that translate strategy into revenue and platform growth. Honestly, the numbers show a clear pivot toward operational discipline alongside product expansion.

Developing and enhancing the programmable edge cloud platform (Compute@Edge)

This activity centers on pushing computation closer to the user, which is where the real-time performance advantage comes from. The platform's WebAssembly-based Compute@Edge is a key differentiator, enabling sub-50ms latency for certain workloads.

The financial contribution from this area, grouped under Other revenue which includes Compute and Observability solutions, shows strong acceleration:

Operating and maintaining a high-performance, global network infrastructure

This is the foundation-the physical and logical network that delivers the service. Fastly, Inc. maintains a massive footprint to ensure low latency and high reliability. For context, their network capacity was cited at 375 Tbps in a 2024 assessment.

The core network services revenue reflects the utilization of this infrastructure:

• Network Services Revenue (Q3 2025): $118.8 million.
• Network Services Revenue Year-over-Year Growth (Q3 2025): 11%.
• Network Services Revenue Year-over-Year Growth (Q2 2025): 10%.

Sales and marketing execution, particularly the security cross-sell motion

The sales team's focus is clearly on expanding the footprint within the existing customer base, moving beyond just Content Delivery Network (CDN) services. The success of this strategy is visible in the multi-product adoption rates.

Here's the quick math on customer expansion:

• Last 12-Month Net Retention Rate (LTM NRR) (Q3 2025): Increased to 106% from 104% in Q2 2025.
• Customers using two or more product lines accounted for 75% of revenue in Q1 2025.
• Product package deals in Q2 2025 grew over 50% year-over-year.
• Renewals involving package deals grew over 130% year-over-year in Q2 2025.
• Enterprise customer count (at $100K+ annual revenue threshold) in Q3 2025 was 627.

Continuous innovation in security products (WAF, DDoS, Bot Mitigation)

Security is a major growth vector, with the company actively launching new features like AI Bot Management to GA. The security portfolio now includes WAF, bot mitigation, and DDoS protection, helping secure over 130,000 apps and APIs collectively.

The financial results for this segment show significant momentum:

The cross-sell strategy directly fueled this, as platform expansion and cross-sell strategies drove security revenue growth to 30% year-over-year in Q3 2025.

Go-to-market (GTM) transformation and operational rigor

This activity involves streamlining how Fastly, Inc. sells and operates to achieve profitability. The GTM transformation is explicitly credited with increasing customer acquisition and expanding cross-sell opportunities.

Operational rigor is evidenced by the shift in cash flow and profitability guidance:

• Free Cash Flow (Q2 2025): Generated $10.9 million (positive, compared to negative $18.5 million in Q2 2024).
• GAAP Gross Margin (Q3 2025): Reached 58.4%.
• Non-GAAP Gross Margin (Q3 2025): Reached 62.8%.
• Operating Income (Q3 2025): $11.6 million.
• Full Year 2025 Revenue Guidance Raised to a range of $610 million to $614 million.
• Full Year 2025 Non-GAAP Operating Loss guided to be between $9 million and $3 million.

The new CFO is implementing a rigorous budgeting process across the company, focusing on the ROI of spend for growth and scale.

Fastly, Inc. (FSLY) - Canvas Business Model: Key Resources

You're looking at the core assets Fastly, Inc. (FSLY) relies on to deliver its edge cloud services. These aren't just abstract concepts; they are tangible infrastructure and human capital backed by recent financial performance.

The foundation is the Proprietary, modern, and highly programmable Edge Cloud Platform. This asset is defined by its technical capabilities and scale, which is reflected in its network throughput.

The Global network of strategically-located, high-density Points of Presence (PoPs) is central to the platform's performance. Fastly, Inc. (FSLY) focuses on fewer, more powerful POPs located near Internet Exchange Points, which is a deliberate architectural choice to maximize cache efficiency.

• Network map last updated: September 30, 2025.
• The network supports IPv4 and IPv6 connectivity on Autonomous System (AS) 54113.
• Expansion into Mexico included the first installed Point of Presence in Q2 2025.

For developer engagement, the Developer-centric tools and APIs, including the Glitch web coding platform, are key. While specific user counts for Glitch aren't immediately available, the platform's integration supports the programmable edge, which is a major differentiator.

The Highly skilled engineering talent focused on low-latency and security underpins the platform's evolution. This talent is driving growth in high-margin areas.

• Security revenue for Q3 2025 reached $34.0 million.
• Security revenue represented a record 21% of total Q3 2025 revenue.
• Security revenue grew 30% year-over-year in Q3 2025.

Finally, the balance sheet provides the financial runway. The Cash, cash equivalents, and marketable securities position Fastly, Inc. (FSLY) to continue investing in these resources.

As of Q3 2025, the total was approximately $343 million, which was a sequential increase of $22 million over Q2 2025. This liquidity supports operations while the company achieved positive cash flow metrics.

Fastly, Inc. (FSLY) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Fastly, Inc. over the competition, grounded in the numbers from their late 2025 performance. It's about speed, programmability, and protection, all designed to lower your total cost of ownership.

Ultra-low latency and high-performance content delivery.

The primary draw is raw speed, which directly impacts user experience and conversion. Fastly, Inc. maintains a global network with 375 Tbps capacity to ensure content reaches users quickly, regardless of where they are. This is supported by an edge cloud infrastructure spanning 60+ global Points of Presence (POPs). For performance-critical applications, the value is clear; for instance, one major streaming platform leveraged Fastly's edge computing and intelligent caching to improve content delivery speed by 40% for international users.

Programmable edge computing (Compute@Edge) for custom logic deployment.

This is where Fastly, Inc. lets you run custom code right where the traffic is, avoiding round-trips to a distant origin. The Compute@Edge platform is engineered for speed, offering an astonishing 100x improvement in code execution startup times when compared to other serverless options. This capability is part of the 'Other' revenue segment, which saw significant growth, increasing 60% year-over-year in the second quarter of 2025, reaching $4.5 million for that quarter.

Comprehensive, integrated security portfolio (WAF, DDoS, Bot Mitigation).

Security is no longer an afterthought; it's a core growth engine. In the third quarter of 2025, Fastly, Inc.'s Security revenue hit $34.0 million, marking a 30% year-over-year increase. This segment now accounts for 21% of total revenue as of Q3 2025. The Next-Gen Web Application Firewall (WAF) has been recognized as a "Strong Performer" by Forrester, underscoring the quality of their integrated protection suite.

Significant cost savings for customers by minimizing cloud egress fees.

You can lower your overall cloud bill by keeping traffic off your origin servers. Fastly, Inc. helps achieve this through high cache hit ratios and request collapsing. Specific customer examples show tangible savings: one media platform reported a 60% reduction in the cost of access to origin using Media Shield. Another customer, Flywheel, saw a 50% reduction in egress costs by leveraging Fastly and Google Cloud. Furthermore, Fastly Object Storage offers zero-egress access from both their Compute and Content Delivery services, which is a direct financial incentive for adopting more of the platform.

Real-time data and observability for immediate performance insights.

You need to see what's happening instantly to make quick adjustments. While specific observability revenue figures aren't broken out, this capability is bundled into the 'Other' revenue segment, which grew 60% year-over-year in Q2 2025. The platform's architecture is designed to provide immediate performance insights, which is crucial for maintaining the low latency promised to customers.

Here's a quick look at how the key revenue drivers performed in the third quarter of 2025:

The overall financial trajectory supports these value propositions; Fastly, Inc. raised its full-year 2025 revenue guidance to a range of $610 million to $614 million.

Finance: draft 13-week cash view by Friday.

Fastly, Inc. (FSLY) - Canvas Business Model: Customer Relationships

You're looking at how Fastly, Inc. manages its paying audience, and the data shows a clear focus on high-value enterprise relationships alongside product expansion.

For your largest clients, the approach is definitely high-touch. Fastly, Inc. defines an enterprise customer as one with annualized revenue exceeding $100,000. By the end of Q3 2025, the company reported having 627 enterprise customers, which was an increase of 51 year-over-year from Q3 2024. Still, revenue concentration remains a factor, though it is showing signs of broadening. Here's a quick look at the top-tier customer dynamics as of the third quarter of 2025:

The fact that revenue from customers outside that top ten cohort grew at 17% year-over-year, outpacing the 12% growth from the top ten, signals a healthy expansion across a wider base of large accounts. For these enterprise clients, Fastly, Inc. emphasizes operational culture and stability, with customers crediting engineers for performance gains and high-touch support for service stability.

The strategic cross-sell motion is clearly working, particularly as the security portfolio matures. Security revenue has become a significant component of the overall business. In Q3 2025, security revenue hit $34.0 million, marking a substantial 30% year-over-year acceleration, and now represents 21% of total revenue. Management explicitly attributed this acceleration to cross-sell activity. This momentum is also seen in broader product adoption; for instance, product package deals in Q2 2025 grew over 50% year-over-year.

Customer expansion, which measures how much more existing customers spend over time, is strong. This is the clearest signal of successful relationship management and product adoption. The 12-month Net Retention Rate (NRR) is a key indicator here. You should note the following progression:

• LTM NRR in Q3 2025 was 106%.
• LTM NRR in Q2 2025 was 104%.
• LTM NRR in the year-ago quarter (Q3 2024) was 105%.

An NRR of 106% means that, even without adding any new customers, Fastly, Inc.'s existing customer base spent 6% more than they did in the prior 12-month period. This expansion was primarily driven by revenue increases from existing customers.

While the enterprise segment is the financial backbone-accounting for roughly 88.18% of total revenue in Q2 2025-the platform is also built for developers. This is evident in the technical capabilities offered, such as a composable stack integrated through single sets of Terraform modules and APIs, which helps developers trial configurations safely at the edge using a production-equivalent staging environment.

Fastly, Inc. (FSLY) - Canvas Business Model: Channels

The go-to-market strategy for Fastly, Inc. relies on a multi-pronged approach to reach its customer base, with a clear emphasis on high-value enterprise accounts and expanding its ecosystem through partners.

Direct sales team focused on large, sophisticated Enterprise accounts.

The direct sales motion is centered on securing and expanding relationships with large organizations, evidenced by the focus on enterprise customers and cross-sell execution. As of the third quarter of 2025, Fastly, Inc. reported having 627 Enterprise customers, an increase of 51 from the third quarter of 2024. The company noted successful cross-sell motion, including a multi-product win with one of its top strategic customers. In Q3 2025, Fastly's top ten customers accounted for 32% of total revenue, though revenue from customers outside this top cohort grew by 17% year-over-year, indicating success in broadening the base. The Last 12-Month Net Retention Rate (LTM NRR) stood at 106% in Q3 2025. Security revenue, a key cross-sell product, reached $34.0 million in Q3 2025, representing 21% of total revenue for that quarter. The company raised its full-year 2025 revenue guidance to a range of $610 million to $614 million.

Here's a quick look at the enterprise customer base metrics as of Q3 2025:

Global Partner Network (Channel Partners, Resellers, MSPs).

Fastly, Inc. is actively building out its indirect sales motion. In November 2025, the company launched the Fastly Certified Services Partner Program, which provides comprehensive training and certification, specifically for implementing advanced security solutions. This program is designed around three primary channel partner types:

• Referral: Receive a referral fee for customer introductions.
• Reseller: Resell Fastly technology and receive discounts for registered deals.
• Managed Service Provider (MSP): Use Fastly to deliver solutions for unique client challenges.

The program benefits include partner-specific pricing & packaging, added discounts for increased profit margins, and protected opportunities via deal registration. This move is intended to broaden Fastly's reach and support expanded security solution delivery.

Cloud Marketplaces (e.g., AWS Marketplace, Google Marketplace) for simplified procurement.

Fastly, Inc. uses Cloud Marketplaces to facilitate simplified procurement for customers already operating within those hyperscaler environments. While this is a defined channel, specific revenue contribution figures for Q3 2025 were not detailed in the latest public filings.

Fastly's developer documentation and API access for self-onboarding.

The platform architecture is designed to empower developers, supporting self-onboarding through robust documentation and API access for rapid time-to-market. This self-service route feeds the developer community, although specific metrics on developer sign-ups or revenue derived purely from self-onboarding were not quantified in the Q3 2025 results.

Fastly, Inc. (FSLY) - Canvas Business Model: Customer Segments

Fastly, Inc. (FSLY) targets large, sophisticated enterprises that demand high-performance, dynamic content delivery at the edge. These customers are typically found in sectors like digital media, e-commerce, and technology, where latency and reliability are critical to user experience and business operations.

The customer base shows a degree of concentration, which is typical for high-value enterprise software and service providers. Specifically, the top ten customers accounted for 32% of Q3 2025 revenue. This concentration is balanced by a growing overall customer base, with the enterprise customer count reaching 627 in the third quarter of 2025.

A key driver of growth within this segment is the need for advanced protection. Customers with high traffic and complex security needs are actively adopting Fastly, Inc. (FSLY)'s security portfolio. This focus is directly reflected in the financial performance, driving security revenue growth of 30% year-over-year in Q3 2025.

The customer base is served across Fastly, Inc. (FSLY)'s product lines, which saw the following revenue contributions in the third quarter of 2025:

The company also serves developers and platform engineering teams who prioritize programmability and extensibility in their edge infrastructure. This segment is implicitly served by the high growth in the Other revenue category, which includes Compute solutions.

The overall financial health tied to this customer base resulted in Fastly, Inc. (FSLY) raising its full-year 2025 revenue guidance to a range of $610 million to $614 million.

The composition of the customer base can be further understood by looking at the revenue mix:

• Customers requiring core content delivery and performance optimization form the largest part of the business.
• Customers driving security adoption are accelerating growth at a 30% rate.
• Customers utilizing newer platform capabilities like Compute are contributing to the fastest-growing segment, with Other revenue up 51% year-over-year in Q3 2025.

Fastly, Inc. (FSLY) - Canvas Business Model: Cost Structure

The Cost Structure for Fastly, Inc. is heavily weighted toward the delivery of its core service, which means network infrastructure and bandwidth costs are the primary component of its Cost of Revenue. For the third quarter ended September 30, 2025, based on a reported revenue of $158.223 million and a GAAP gross margin of 58.4%, the Cost of Revenue was approximately $65.8 million.

To be fair, the non-GAAP gross margin for that same quarter was 62.8%, which management attributed to scale and traffic engineering efficiencies, though a $1.6 million non-recurring cost of revenue tailwind was also noted.

Significant investment continues in Research & Development (R&D) to fuel the edge compute and security offerings. Looking at the first quarter of 2025, the R&D expense for that three-month period was $137.1 million.

The Go-To-Market (GTM) transformation requires substantial Sales and Marketing (S&M) investment. For the first quarter of 2025, Selling, General & Administrative (SG&A) expenses totaled $308.3 million.

You are required to note that operating expenses are estimated at roughly $350 million for the full year 2025. This figure contrasts with the Q1 2025 operating expenses of $459.3 million for that single quarter, so you should treat the $350 million as a specific required input for the full-year model.

Personnel costs, including stock-based compensation, are a major driver within the operating expenses. While direct personnel cost figures aren't explicitly broken out for the full year 2025, the focus on operational rigor and discipline, as noted by the new CFO, suggests a focus on the return on investment (ROI) of this spend moving into 2026.

Here's a quick look at some of the key financial metrics from the recent reporting period:

• Q3 2025 Non-GAAP Operating Income: $11.608 million.
• FY 2025 Free Cash Flow Guidance: Range of $25 million to $35 million.
• Q3 2025 Cash Capital Expenditures: Approximately 9% of revenue.
• FY 2025 Cash CapEx Guidance: Range of 10% to 11% of revenue.
• Q3 2025 Security Revenue Contribution: A record 21% of total revenue.

The following table summarizes some of the most concrete, recent financial figures available for the cost-related line items:

The shift in product mix, with Security revenue growing 30% year-over-year in Q3 2025, is intended to improve the overall margin profile, which directly impacts the Cost of Revenue structure over time. Finance: draft 13-week cash view by Friday.

Fastly, Inc. (FSLY) - Canvas Business Model: Revenue Streams

You're looking at how Fastly, Inc. actually brings in the cash to fund its edge cloud platform, and honestly, it's broken down into three clear buckets as of late 2025. The core business, the Content Delivery Network (CDN) and delivery services, still drives the lion's share of the top line, but the security offerings are showing serious acceleration, which is what management is really focused on right now. It's all about usage and adoption across the platform, so let's look at the numbers from the third quarter of 2025 to get a clear picture.

Here's the quick math on the revenue segmentation for the third quarter of 2025:

The way Fastly, Inc. charges for these services is fundamentally a consumption-based pricing model tied to data traffic volume and feature usage. This means revenue scales directly with how much customers use the network for delivery, how many security events they mitigate, or how much they run their serverless code on Compute. This usage-based structure is why you see revenue growth tied so closely to traffic levels and the adoption of those higher-value security features. Defintely, the security segment's growth rate shows that cross-selling those add-ons is working well.

The shift in revenue mix is a key strategic indicator you should watch:

• Security revenue now accounts for a record 21% of total revenue in Q3 2025.
• Other revenue, which includes Compute and Observability, surged 51% year-over-year.
• The top ten customers accounted for 32% of Q3 2025 revenue.
• Last 12-month net retention rate increased to 106% in the third quarter.

Looking ahead, Fastly, Inc. has raised its expectations for the full year, signaling confidence in the momentum seen in the third quarter. The full-year 2025 revenue guidance is a strong $610 million to $614 million. Finance: draft 13-week cash view by Friday.