Will Fastly's security revenue reach 25% or more of total quarterly revenue by Q4 2026?

Security revenue at $35.4M (21% of Q4 2025 total $172.6M) growing 32% YoY would reach ~$46.7M by Q4 2026. At guided total revenue growth of ~14%, Q4 2026 total would be ~$196.8M, yielding security mix of ~23.7% -- short of 25%. Reaching 25% requires security growth acceleration to ~39%, which would demand a step-change from API Security completion or bot management breakout. The 'any quarter' clause gives 4 shots but earlier quarters have lower security bases. The committee's ~2pp/year pace assessment is mathematically sound. A tail scenario where Network Services slows (reducing denominator) while security accelerates could get there, but this requires multiple favorable breaks.

The Revenue Revealer's ~2pp/year pace assessment is well-grounded: from 21% to 23% by end of 2026, well short of 25%. Even an acceleration to 3pp/year (which would be exceptional given no historical precedent) yields only 24%. The denominator problem is particularly acute for Fastly: FY 2025 actual revenue of $624M beat $575-585M guidance by ~7%. If similar outperformance occurs in FY 2026, total revenue grows faster than guided 14%, pushing the denominator higher and making 25% security mix even harder. API Security is 'about halfway through the journey' per management, suggesting material revenue contribution is an FY 2027+ story. The committee found 2/2 agreement that REVENUE_DURABILITY remains CONDITIONAL precisely because mix shift pace is too slow.

Exploring upside scenarios: (1) Security has multiple growth vectors -- WAF, DDoS, Bot Management, API Security -- if one has a breakout quarter, security could spike; (2) If Network Services has a weak quarter (client churn, usage-based volatility), the denominator shrinks and security mix rises; (3) Multi-product adoption at 50% of customers generating 75% of revenue suggests cross-sell into security is active. However, the base case math is firmly against YES. Even under optimistic assumptions (security grows 35%, total grows 10%), security reaches ~24.4% -- still marginally short. The only path to YES requires either a security growth acceleration well above 32% or a meaningful slowdown in total revenue growth, and both scenarios have low base rates. The question resolving YES would genuinely surprise the committee.

The math is straightforward: 32% security growth + 14% total growth = ~23.7% security mix by Q4 2026, short of the 25% threshold. To reach 25%, security growth needs to accelerate to ~39% while total growth stays at guidance -- a 7pp acceleration with no identified catalyst. The committee's ~2pp/year mix shift pace assessment directly addresses this question and concluded it would take approximately 2 years to reach 25%. This market is essentially asking whether the committee's timeline is wrong by a factor of 2x. While possible, there is no evidence suggesting such acceleration.

The denominator effect is the underappreciated factor here. Fastly has consistently beaten revenue guidance -- FY 2025 actual $624M vs $575-585M guidance (7% beat). If FY 2026 beats $710M midpoint by a similar margin, total revenue could reach ~$760M, meaning Q4 2026 total could be ~$205M. Even with 35% security growth ($47.8M), the mix would be only 23.3%. The paradox: Fastly executing well on total revenue actually makes this market harder to resolve YES. Security would need to dramatically outpace a company that is already executing above expectations. The Revenue Revealer's characterization of the pace as 'too slow to materially change revenue structure within 2-3 years' appears well-calibrated.

While the base case math points to NO, I assign slightly higher probability than pure math suggests because of multiple option-value catalysts. Security has four product lines (WAF, DDoS, Bot Management, API Security), and AI-driven traffic growth could disproportionately benefit bot management and API security. The 50% multi-product adoption rate at 75% of revenue suggests active cross-sell motion into security. Also, the question allows ANY quarter -- so even a single quarter where Network Services has usage-based volatility (reducing the denominator) while security has a strong product launch could spike the ratio. However, lower confidence because this upside scenario requires multiple favorable breaks with no specific supporting evidence.

Currently at 21% security mix with ~2pp/year pace. Need 4pp gain in one year to reach 25%. That is double the historical pace with no identified acceleration catalyst. Math clearly favors NO. Security at 32% growth with 14% total growth yields ~23.7% by Q4 2026.

Security needs to grow ~39% while total grows ~14% to reach 25% mix. Current security growth is 32% -- a 7pp acceleration is needed. Security growth may actually decelerate as the base grows ($125M FY2025 base). Revenue outperformance in FY2025 (beat by 7%) suggests total growth could exceed guidance, raising the bar. Strongly favors NO.

Multiple security products (WAF, DDoS, Bot, API) provide growth vectors. Multi-product adoption at 50% of customers supports cross-sell. However, base case arithmetic is clear: even at 35% security growth and 10% total growth, mix reaches only 24.4%. Small upside from quarterly volatility in usage-based Network Services, but insufficient for base case YES.