There is no simple answer to your question.
Basically, the tool is telling you that it has identified the longest path between any two registers in your design as having a total path delay of 25.4 ns, including register propagation delay and setup times. Note that 1/25.4 ns = 39.37 MHz.
There are any number of reasons that the design might actually run faster than this. First of all, this is a worst-case estimate over process, voltage and temperature extremes. Secondly, the path that the tool has identified may in fact be a "multi-cycle path" — one that doesn't need to propagate in a single clock cycle.
Yes, you can optimize your design. The first thing you need to do is read up on applying timing constraints to your design. Doing this will allow the synthesis tool to pick options that are more likely to meet your constraints. This is a broad topic with many subtleties, but one basic thing you can do is tell the toolchain what you need the clock period to be, rather than letting it tell you what it thinks it is. The synthesis tool will do its best to meet your requirement, and if it can't, it will tell you exactly where the problem is.