Fastly Targets Up to $1.3B Revenue by 2029 as AI Traffic Surges

Key Points

• Fastly is targeting $1.1 billion to $1.3 billion in revenue by 2029, alongside 67%–71% gross margins, 20%–22% operating margins and 12%–15% free-cash-flow margins.
• The company is shifting toward a unified edge-cloud platform, with 72% of customers using at least two product suites and security emerging as a major entry point; its security business grew 43% year over year in the latest quarter.
• AI traffic is accelerating the edge opportunity: Fastly says AI traffic is growing 6.5 times faster than human traffic, while model distribution, Model Context Protocol traffic and code-generation activity have surged on its platform.

Fastly NASDAQ: FSLY outlined a strategy centered on expanding its unified edge cloud platform, increasing multi-product adoption, broadening its geographic reach and targeting revenue of $1.1 billion to $1.3 billion by 2029 at its Investor Day.

Chief Executive Officer Kip Compton said the company sees a $22 billion total addressable market for products it already offers and described the edge as a complementary layer to hyperscale cloud infrastructure. Fastly’s distributed network is designed for applications requiring lower latency, high throughput, security and resiliency, he said.

Compton said Fastly processes more than 5 trillion requests on an average day and reported a 97% average customer satisfaction score. He also highlighted recent operating momentum, including three consecutive quarters of at least 20% year-over-year growth, five straight quarters of improving net revenue retention and six consecutive quarters of positive free cash flow.

Platform Strategy and Multi-Product Adoption

The company emphasized that it is shifting from selling discrete products toward selling platform-based solutions across delivery, security, compute and observability. Fastly operates a single global network with 166 points of presence, a design Compton said allows resources to be shared across different workloads and product suites.

Fastly said 72% of customers now use at least two product suites, while 30% use four or more. The four-or-more metric has increased from 7% two years ago and 14% one year ago, according to management.

Chief Product Officer Kelly Shortridge said security has become an important entry point to the broader platform. Half of Fastly’s new business deals over the past four quarters included security products, she said. The company’s security business grew 43% year over year in the latest reported quarter, while Bot Management and DDoS Protection each posted triple-digit growth, according to Shortridge.

Fastly recently introduced AI Runtime Control, AI Firewall and API Enforcement as part of its Fastly for AI offerings. Shortridge said the products are intended to help enterprises govern AI-related activity across cloud, private infrastructure and multiple AI models. She described Fastly’s architecture as cloud-neutral and model-neutral, allowing customers to use the platform without being tied to a single infrastructure or AI vendor.

Management also discussed opportunities for edge compute. Compton said Fastly is not seeking to replicate centralized cloud-computing services offered by hyperscalers, but instead aims to support workloads that benefit specifically from being deployed close to end users. The company expects to broaden its compute portfolio over time, similar to its earlier expansion of security products.

AI Traffic and Edge Opportunity

Founder and Chief Technology Officer Artur Bergman said AI and agentic software are creating new types of traffic and increasing the complexity of internet infrastructure. He cited public Python Package Index data showing a sharp increase in software package downloads following the release of AI coding tools, saying such activity reflects automated agent behavior rather than solely human usage.

Compton said Fastly is seeing AI traffic grow 6.5 times faster than human traffic. The company also reported a sevenfold increase in AI model distribution across its platform in the past month, 11 times growth in Model Context Protocol traffic and services so far this year, and 34 times growth in code-generation activity in recent months.

Management said AI could benefit Fastly through increased traffic volumes, security and control products for AI-driven applications, and potentially edge inference for smaller models. Bergman said large language models may remain more suited to centralized infrastructure in the near term, while smaller models could run closer to users at the edge.

Go-to-Market Expansion

President of Go-to-Market Scott Lovett said Fastly is focusing its sales resources on customers and industries where performance is mission-critical, including streaming, e-commerce, financial services, gaming and other always-on businesses. He said customers increasingly prioritize uptime, cache-clearing speed, security and operational response over the lowest-cost delivery option.

Lovett said Fastly is adding technical field resources to work directly with customers and expanding internationally. The company plans additional points of presence in India, the Middle East, Thailand, Southeast Asia and Latin America. Fastly also plans to work with service-provider partners that can extend its software and network capabilities in local markets.

Chief Financial Officer Rich Wong said Fastly will change its revenue reporting beginning in 2027, moving from separate Network Services, security and other revenue lines to a single revenue figure accompanied by multi-product adoption metrics. The company plans to report both the current and revised formats for the next two earnings releases to assist investors with the transition.

2029 Financial Targets

Fastly’s 2029 targets include:

• Revenue of $1.1 billion to $1.3 billion, representing a 14% to 21% compound annual growth rate from 2026.
• Gross margin of 67% to 71%.
• Operating margin of 20% to 22%.
• Free cash flow margin of 12% to 15%.
• Capital expenditures of roughly 10% to 12% of revenue, subject to adjustment based on growth.

Wong said the company expects its single-network architecture, product expansion, customer cross-selling, international growth and operating discipline to support the targets. Fastly maintained its 2026 free cash flow guidance of $40 million to $50 million.

About Fastly (NASDAQ:FSLY)

Fastly, Inc is a cloud computing company that provides an edge cloud platform for delivering, securing and accelerating digital experiences. Its platform processes and serves applications, websites, APIs, streaming media and other internet content closer to end users, helping organizations improve performance, reliability and control.

Fastly's product portfolio includes content delivery and application performance services, application programming interface (API) security, web application and bot protection, distributed denial-of-service (DDoS) mitigation, and edge compute capabilities.

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