Fastly, Inc. (FSLY): Results of Operations and Financial Condition
Fastly, Inc. (FSLY) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Fastly Announces Second Quarter 2026 Financial Results Record second quarter revenue of $183.3 million grew 23% year-over-year Record second quarter gross margin of 63.3% and record non-GAAP gross margin of 65.8% LTM NRR of 117% reaches highest level in over three ye
How this was made
The 30-second read
Why it matters
Fastly discloses a full set of quarterly performance metrics (revenue by product, operating cash flow, free cash flow), contract visibility (RPO), retention (LTM NRR), and forward guidance ranges for revenue and non-GAAP profitability, which are direct inputs to valuation and near-term positioning.
Market read
Traders can update models immediately using the disclosed Q3 2026 and full-year 2026 guidance ranges plus improving cash flow, RPO, and retention metrics.
What to watch
Non-GAAP guidance is provided without GAAP reconciliation on a forward basis, leaving uncertainty around GAAP profitability and potential expense volatility.
Fastly reported Q2 2026 total revenue of $183.3 million, up 23% year over year, led by 43% Security revenue growth, while guiding Q3 2026 revenue to $184.0 - $190.0 million.
Revenue grew 23% year over year, Security revenue grew 43% year over year, LTM NRR reached 117%, and operating cash flow was $39.3 million. The filing also reports positive free cash flow and revenue and non-GAAP operating-income guidance for Q3 2026 and full-year 2026.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenueGAAP | $183.3 million | – | 23% |
| Network Services RevenueGAAP | $133.9 million | – | – |
| Security RevenueGAAP | $41.7 million | – | 43% |
| Other RevenueGAAP | $7.7 million | – | – |
| Security Revenue as a Percentage of Total Revenueother | 23% | – | – |
| Large Customer Countother | 624 | – | – |
| Large Customer Revenue %other | 94% | – | – |
| Top Ten Customer Revenue %other | 37% | – | – |
| LTM Net Retention Rate (NRR)other | 117% | – | – |
| Remaining Performance Obligations (RPO)other | $340.9 million | – | 38% |
| Current RPO %other | 79.0% | – | – |
| Operating Cash FlowGAAP | $39.3 million | – | – |
| Free Cash Flownon-GAAP | $3.6 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Network ServicesNetwork Services Revenue was reported in the quarterly revenue-by-product table. | $133.9 million | – | – |
| SecuritySecurity revenue represented 23% of total revenue. Customer activity cited in the filing included Bot Management, DDoS Protection, and Next-Gen WAF selections and expansion. | $41.7 million | – | 43% |
| OtherOther Revenue was reported in the quarterly revenue-by-product table. | $7.7 million | – | – |
Q3 2026 and Full Year 2026 outlook
- RevenueQ3 2026: $184.0 - $190.0 million; Full Year 2026: $732.0 - $746.0 million
- NoteNon-GAAP Operating Income: Q3 2026: $20.0 - $24.0 million; Full Year 2026: $88.0 - $96.0 million
- NoteNon-GAAP Net Income per share: Q3 2026: $0.11 - $0.13; Full Year 2026: $0.50 - $0.54
- NoteAssumes weighted average diluted shares outstanding of 181.4 million in Q3 2026 and 180.3 million for the full year 2026.
What drove it
- Total revenue of $183.3 million represented 23% year-over-year growth.
- Security revenue grew 43% year over year and represented 23% of total revenue.
- LTM NRR increased to 117% in the second quarter from 113% in the first quarter of 2026.
- The filing cites a multi-year, multi-million dollar commitment from a UK health and beauty retailer that expanded use of Fastly’s platform.
- The filing cites customer selections of Bot Management, DDoS Protection, and Next-Gen WAF.
- Fastly released a C++ SDK for Fastly Compute and announced a Skyfire partnership for trusted commerce at the edge.
Concerns
- Free cash flow was $3.6 million compared to $10.9 million in the second quarter of 2025.
- Large Customer Count was 624, compared to 634 in Q1 2026.
- RPO was $340.9 million, compared to $368.7 million in Q1 2026.
- Top Ten Customer Revenue % was 37%, compared to 34% in Q1 2026.
What to watch
- Execution against Q3 2026 total revenue guidance of $184.0 - $190.0 million.
- Execution against Q3 2026 non-GAAP operating income guidance of $20.0 - $24.0 million.
- Whether LTM NRR remains above the reported 117%.
- Security revenue growth and Security revenue as a percentage of total revenue.
- RPO, Current RPO %, Large Customer Count, and Top Ten Customer Revenue %.
Balance sheet and cash flow
- Generated $39.3 million of operating cash flow compared to $25.8 million of operating cash flow in the second quarter of 2025.
- Generated $3.6 million of positive free cash flow compared to $10.9 million in the second quarter of 2025.
Analysis
Fastly reported Q2 2026 total revenue of $183.3 million, representing 23% year-over-year growth. Security revenue was $41.7 million, grew 43% year over year, and represented 23% of total revenue. Network Services Revenue was $133.9 million and Other Revenue was $7.7 million. The filing positions security offerings, including Bot Management, DDoS Protection, and Next-Gen WAF, as important customer-use cases.
Customer metrics showed LTM NRR of 117%, up from 113% in Q1 2026. Large Customer Revenue % was 94%, while Top Ten Customer Revenue % was 37%. Large Customer Count was 624. The filing also describes a multi-year, multi-million dollar platform commitment by a UK health and beauty retailer and multiple security-related customer deployments.
RPO was $340.9 million, while the filing's financial highlights describe RPO as $341 million and up 38% from $247 million in the second quarter of 2025. Current RPO % was 79.0%. The supplement states that RPO for all prior periods presented was recast after the company identified an error during the third quarter of 2025 involving certain contracts with a termination-for-convenience clause.
Cash generation included $39.3 million of operating cash flow, compared with $25.8 million in the second quarter of 2025. Free cash flow was positive $3.6 million, compared with $10.9 million in the second quarter of 2025. The supplied filing text does not provide cash, debt, capital expenditures, repurchases, or dividends.
For Q3 2026, Fastly guided total revenue to $184.0 - $190.0 million, non-GAAP operating income to $20.0 - $24.0 million, and non-GAAP net income per share to $0.11 - $0.13. Full-year 2026 guidance calls for total revenue of $732.0 - $746.0 million, non-GAAP operating income of $88.0 - $96.0 million, and non-GAAP net income per share of $0.50 - $0.54. No prior outlook was supplied, so a comparison with prior guidance is not available.
Not in the filing
stated, not guessed- GAAP gross profit and GAAP gross margin for Q2 2026
- Non-GAAP gross profit and non-GAAP gross margin for Q2 2026
- GAAP operating income or loss for Q2 2026
- Non-GAAP operating income or loss for Q2 2026
- GAAP net income or loss for Q2 2026
- Non-GAAP net income or loss for Q2 2026
- GAAP basic and diluted EPS for Q2 2026
- Non-GAAP basic and diluted EPS for Q2 2026
- Operating expenses for Q2 2026, including research and development, sales and marketing, and general and administrative expense
- Adjusted EBITDA for Q2 2026
- Cash and cash equivalents
- Debt balance
- Capital expenditures
- Share repurchases
- Dividends
- Q3 2026 and full-year 2026 gross-margin guidance
- Q3 2026 and full-year 2026 operating-expense guidance
- Q3 2026 and full-year 2026 tax-rate guidance
- Previous-release outlook or prior guidance for comparison
- Named executive commentary or executive quotes
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The filing is Fastly’s SEC Form 8-K Item 2.02 with an investor supplement covering Q2 2026 operating metrics, product updates, customer wins, and formal Q3 and full-year 2026 guidance.
Ticker impact
Fastly filed an 8-K with Q2 2026 results, including $183.3M revenue, $39.3M operating cash flow, and Q3 and FY 2026 guidance ranges.
Likely positive bias for the next session as traders reprice forward revenue and margin expectations around the issued Q3 and FY 2026 ranges.
The filing provides multiple forward-looking inputs (Q3 and full-year revenue and non-GAAP operating income and EPS ranges) alongside improving retention (LTM NRR to 117%) and higher RPO ($341M).
Market effects
Edge security and CDN vendors may see read-across demand signals from Fastly’s security revenue growth and WAF/Bot Management traction.
Primarily US-listed tech/infra sentiment; customer highlights span UK and global brands.
AI traffic management and edge security partnerships (e.g., Skyfire) reinforce global enterprise focus on machine-traffic controls.
Counterpoint
RPO includes a recast due to an error in certain contracts, so traders may discount some of the magnitude until they assess contract quality and sustainability.
Key entities
- public_companyFastly, Inc.
Edge cloud and security provider issuing Q2 2026 results and Q3 and full-year 2026 guidance in an SEC 8-K.
- customer_partnerLALIGA
Announced collaboration with Fastly on anti-piracy solutions for live sports streaming.
- partnerSkyfire
Partnership enabling trusted commerce at the edge for AI agents.
