FSLY

Fastly is a genuine turnaround-in-progress, not a broken story. Revenue reaccelerated to $624M (+14.8% YoY) in FY2025 — a notable step-up from the +7.5% it printed in FY2024 ($544M) — and the loss ladder has narrowed every year since FY2021 (-$223M → -$191M → -$133M → -$158M → -$122M). The standout is cash generation: operating cash flow swung to +$94.4M (up 476% YoY) against just $28.7M of capex, so the business is now meaningfully free-cash-flow positive even while GAAP net income is still -$122M. Gross margin of 57.1% is respectable for an edge-cloud/CDN model, and the balance sheet is not stressed: liabilities/equity of 0.61x, a 2.6x current ratio ($507M current assets vs $194M current liabilities) and $930M of equity give it room. The MD&A's pitch — positioning the edge platform for 'agentic AI' traffic and bundling Security/Compute/Observability on top of Network Services — is a plausible expansion vector that fits the reaccelerating top line.

The offsetting reality keeps this a hold, not a buy. The company is still unprofitable on a GAAP basis (operating margin -19.1%, ROE -13.1%) with a -$1.11B accumulated deficit, and cash fell 37% to $181M against ~$362M of total debt ($323M long-term + $38.6M current) — so the FCF turn matters precisely because the cash cushion is thinning. Current liabilities jumped 85.7%, which bears watching. Crucially, the MD&A flags the structural fragility of the model: revenue is overwhelmingly usage-based and 'changes in usage by our largest customers can create volatility,' so a single large-customer pullback can dent results quarter-to-quarter — the same dynamic that historically whipsawed Fastly's stock.