By Kit Norton
Shares of Fastly sank as the IT infrastructure provider's first-quarter revenue from artificial intelligence agentic traffic didn't impress investors.
The company posted first-quarter earnings of 13 cents a share, compared with a 5 cent a share loss a year ago and above Wall Street's call for earnings of 9 cents a share. Revenue rose 20% to $173.02 million, above the analyst consensus view of $171.8 million, according to FactSet.
The company's cloud platform speeds up websites and applications by storing digital content on servers located close to users. So when large-language models like ChatGPT scour the internet for answers to users' prompts, that boosts Fastly's traffic.
Fastly reported that its "large customer" count was 634 in the first quarter, up 39% from last year. However, the company's "security" revenue, which is where the bulk of AI-related traffic is captured, came in at $34.9 million, rising 47% from a year ago but missing Wall Street's expectations for $36.9 million, according to FactSet.
Fastly stock sank 29% in after-hours trading, extending a 2.4% drop during regular trading on Wednesday. In contrast, the shares have been on a torrid run, gaining 210% so far this year.
For the second quarter, Fastly guided for revenue between $170 million and $176 million with profit ranging from 5 cents a share to 8 cents a share. That's above Wall Street's profit forecast of 4 cents a share and sales totaling $169.8 million.
Meanwhile, the company also hiked its full-year profit expectation range to 27 cents a share to 33 cents a share versus the 23 cents a share to 29 cents a share it projected in February. Fastly sees 2026 revenue coming in between $710 million and $725 million, an increase from its initial $700 million to $720 million view. The analyst consensus calls for 2026 earnings of 28 cents a share on $712 million in sales.
Fastly is probably best-known for a software bug in June 2021 that briefly made popular websites including Amazon.com, Reddit, and the New York Times inaccessible.
Write to Kit Norton at kit.norton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 06, 2026 17:29 ET (21:29 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments