Fastly security revenue jumps 47% as edge compute strategies drive profitability

Fastly’s results validate a shift from commoditized CDN services toward higher-margin programmable edge logic and security. By integrating DDoS protection and bot management directly into the delivery stack, Fastly is capturing spend that previously leaked to standalone security vendors. For the streaming ecosystem, this convergence reduces architectural complexity and latency for dynamic, AI-driven workloads. The 47% jump in security suggests that "agentic" traffic—automated AI bots fetching web content—is becoming a primary growth engine rather than a network burden. Watch for whether the security and compute segments exceed their projected $200 million annual run rate by late 2026 to see if this margin expansion is sustainable.

The transition of the CDN market into a security-first edge model is intensifying as competitors like Cloudflare and Akamai report similar shifts. Per Bloomberg, May 2026, Cloudflare’s integrated security and developer services have sustained its position as a common enterprise choice, while Akamai has increasingly bundled Linode-backed cloud compute into its delivery agreements. This consolidation effectively collapses the silos between networking, DevOps, and security, forcing legacy providers to evolve or face pricing erosion in the core delivery business.

AI-driven traffic is a critical catalyst for this transformation. According to Reuters, June 2026, the rise of 'agentic AI'—autonomous bots that interact with web content—is significantly increasing demand for sophisticated bot management and traffic engineering at the network edge. This volume is not only driving delivery revenue but specifically boosting security attachment rates as platforms scramble to distinguish between legitimate AI scrapers and malicious automated attacks.

Industry benchmarks are also tightening. Per WSC, February 2026, updated Core Web Vitals from Google now require a Largest Contentful Paint (LCP) of under 2.0 seconds, down from the previous 2.5-second standard. This shift places a premium on edge compute providers that can execute code closer to the user to meet performance requirements. Analysts from KeyBanc, May 2026, noted that while the network services market is maturing, the 'attach rate' for higher-value security features remains the primary differentiator in 2026 valuation multiples.