Fastly Stock Drops 13% Despite a Record Quarter: EPS Beat by 43%

Fastly beat Wall Street on almost every line in the third quarter of 2026 — and its stock still plunged about 13% immediately after the results. The edge cloud company reported record revenue of $190.2 million, up 20.2% from a year earlier, and adjusted earnings of $0.17 per share, 43% above what analysts expected. Yet within minutes of the release on Wednesday, November 4, shares fell to $18.53, and an after-hours movers snapshot at 5:03 p.m. ET showed the stock down 17.8% — the third-biggest decliner of the session.

What happened

Fastly reported third-quarter results after the close on Wednesday, November 4, 2026. Revenue came in at $190.2 million, above the consensus estimate of about $187.8 million to $187.9 million and above the top end of the company's own guidance range of $184 million to $190 million. Adjusted earnings per share jumped 143% from a year earlier, from $0.07 to $0.17, beating the $0.12 estimate by five cents and topping the high end of guidance of $0.11 to $0.13.

The supporting numbers were strong too. Adjusted EBITDA was $43.54 million, well above the $35.05 million analysts expected, for a 22.9% margin. The operating margin improved to negative 5.9%, from negative 18.2% a year earlier. Free cash flow margin rose to 13.2%, up from 1.9% in the previous quarter. Net revenue retention — how much existing customers expand their spending — climbed to 119%, from 117% in the prior quarter.

Chief executive Kip Compton called it a record quarter. "Our record third quarter results reflect strong execution as customers continued to adopt more of our products and deepen their use of our platform," he said, adding that delivering record revenue and free cash flow shows the company's value as customers "build for AI scale."

Guidance was raised, not cut

The outlook did not explain the selloff either. Fastly guided fourth-quarter revenue to about $200 million at the midpoint, above the $197 million consensus, implying growth of about 15.9% from a year earlier. Management also raised its full-year adjusted earnings guidance to $0.62 per share at the midpoint, an increase of about 19.2%. Its earlier full-year revenue outlook, set in August, called for $732 million to $746 million in 2026 revenue.

Why it's blowing up

The reaction is a textbook case of a high bar meeting a stock that had already run hard. Fastly shares were up about 107% in 2026 before this report and about 164% over the past year, so a 1.2% revenue beat — solid, but small — left little room for disappointment of any kind. The growth guide also points to a slower pace ahead: about 15.9% revenue growth expected next quarter, down from 20.2% this quarter, and analysts on average expect about 14.9% growth over the next 12 months. When a stock has doubled in a year, investors tend to sell first and ask questions later, even when the quarter itself is clean. StockStory also noted that Fastly announced some leadership changes alongside the results, adding another moving part for traders to digest after hours.

The pattern is familiar this earnings season: Datadog, Skyworks and Arm all fell despite beating estimates, as guidance and valuation mattered more than headline numbers. Fastly is the latest name on that list.

Key facts

• Revenue: $190.2 million, up 20.2% year over year, vs. about $187.9 million expected.
• Adjusted EPS: $0.17, up 143% year over year, vs. $0.12 expected — a beat of about 43%.
• Adjusted EBITDA: $43.54 million vs. $35.05 million expected.
• Q4 guidance: about $200 million revenue at the midpoint, vs. $197 million expected.
• Full-year EPS guidance: raised to $0.62 at the midpoint, up about 19.2%.
• Stock reaction: down about 13% to $18.53 immediately after the release; down 17.8% in a 5:03 p.m. ET after-hours snapshot.

Sources: StockStory, MarketCatalyst, Stocks Setups after-hours movers.

What's next

The question for Thursday is whether the slide holds once full liquidity returns. The next test is execution against that $200 million fourth-quarter guide, and whether growth stays closer to 20% than the mid-teens pace the guide implies. This report describes what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

Why did Fastly stock fall after earnings?

Shares fell about 13% immediately after the report despite beats on revenue and earnings, as investors reacted to a small 1.2% revenue surprise, a slower growth guide of about 15.9% for the next quarter, and a stock that had already risen about 107% in 2026.

What were Fastly's Q3 2026 results?

Fastly reported revenue of $190.2 million, up 20.2% year over year, and adjusted EPS of $0.17, up 143% and 43% above the $0.12 estimate. Adjusted EBITDA was $43.54 million and net revenue retention was 119%.

What guidance did Fastly give?

The company guided fourth-quarter revenue to about $200 million at the midpoint, above the $197 million consensus, and raised full-year adjusted EPS guidance to $0.62 at the midpoint.

Who leads Fastly and what did management say?

Chief executive Kip Compton called the results a record quarter, citing record revenue and free cash flow as customers adopt more of the platform and build for AI scale.