Fastly Announces Third Quarter 2026 Financial Results
Fastly, Inc. (FSLY) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Fastly Announces Third Quarter 2026 Financial Results Record third quarter revenue of $190.2 million grew 20% year-over-year Third quarter gross margin of 63.3% and non-GAAP gross margin of 65.8% match record levels LTM NRR of 119% reaches highest level since 2022 SA
How this was made
The 30-second read
Why it matters
The earnings beat and guidance range are likely to attract buying, though the guidance is presented without a direct raise compared to prior outlook.
Market read
Fastly's strong performance may lift sentiment in the edge computing niche and influence related stocks.
What to watch
Higher operating cash flow may mask rising costs; watch for margin pressure in future quarters.
Record third quarter revenue of $190.2 million grew 20% year-over-year; third quarter gross margin of 63.3% and non-GAAP gross margin of 65.8% matched record levels; LTM NRR reached 119%.
Third-quarter revenue grew 20% year-over-year, gross margins expanded, operating cash flow and free cash flow increased, and both GAAP and non-GAAP operating losses or income improved substantially. Guidance calls for $198.0 - $202.0 million of fourth-quarter revenue and $744.0 - $748.0 million for full year 2026.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenueGAAP | $190.2M | – | 20% |
| Nine months 2026 total revenueGAAP | $546.5M | – | – |
| Q3 2026 gross profitGAAP | $120.4M | – | – |
| Nine months 2026 gross profitGAAP | $344.5M | – | – |
| Q3 2026 GAAP gross marginGAAP | 63.3% | – | – |
| Nine months 2026 GAAP gross marginGAAP | 63.0% | – | – |
| Q3 2026 non-GAAP gross profitnon-GAAP | $125.2M | – | – |
| Nine months 2026 non-GAAP gross profitnon-GAAP | $358.5M | – | – |
| Q3 2026 non-GAAP gross marginnon-GAAP | 65.8% | – | – |
| Nine months 2026 non-GAAP gross marginnon-GAAP | 65.6% | – | – |
| Q3 2026 research and development expenseGAAP | $42.77M | – | – |
| Q3 2026 sales and marketing expenseGAAP | $56.63M | – | – |
| Q3 2026 general and administrative expenseGAAP | $31.27M | – | – |
| Q3 2026 impairment expenseGAAP | $1.01M | – | – |
| Q3 2026 total operating expensesGAAP | $131.7M | – | – |
| Nine months 2026 total operating expensesGAAP | $394.1M | – | – |
| Q3 2026 loss from operationsGAAP | −$11.27M | – | – |
| Nine months 2026 loss from operationsGAAP | −$49.6M | – | – |
| Q3 2026 non-GAAP income from operationsnon-GAAP | $31.19M | – | – |
| Nine months 2026 non-GAAP income from operationsnon-GAAP | $77.33M | – | – |
| Q3 2026 net lossGAAP | −$11.26M | – | – |
| Nine months 2026 net lossGAAP | −$47.37M | – | – |
| Q3 2026 non-GAAP net incomenon-GAAP | $31.58M | – | – |
| Nine months 2026 non-GAAP net income (loss)non-GAAP | $80.70M | – | – |
| Q3 2026 GAAP net loss per common share, basic and dilutedGAAP | $(0.07) | – | – |
| Nine months 2026 GAAP net loss per common share, basic and dilutedGAAP | $(0.30) | – | – |
| Q3 2026 non-GAAP net income per common share, basicnon-GAAP | $0.20 | – | – |
| Q3 2026 non-GAAP net income per common share, dilutednon-GAAP | $0.17 | – | – |
| Nine months 2026 non-GAAP net income per common share, basicnon-GAAP | $0.51 | – | – |
| Nine months 2026 non-GAAP net income per common share, dilutednon-GAAP | $0.45 | – | – |
| Q3 2026 adjusted EBITDAnon-GAAP | $43.54M | – | – |
| Nine months 2026 adjusted EBITDAnon-GAAP | $111.1M | – | – |
| Q3 2026 operating cash flowGAAP | $39.98M | – | – |
| Nine months 2026 operating cash flowGAAP | $108.2M | – | – |
| Q3 2026 capital expendituresother | −$14.81M | – | – |
| Nine months 2026 capital expendituresother | −$75.33M | – | – |
| Q3 2026 free cash flownon-GAAP | $25.17M | – | – |
| Nine months 2026 free cash flownon-GAAP | $32.85M | – | – |
| Remaining Performance Obligationsother | $334M | – | up 24% |
| Last 12-month net retention rateother | 119% | increased to 119% in the third quarter from 117% in the second quarter of 2026 | – |
| Large-customer adoption of two or more product suitesother | 74% | – | up 7 percentage points year-over-year |
| Large-customer adoption of four or more product suitesother | 34% | – | up 15 percentage points year-over-year |
| Top ten customers as a percentage of revenueother | 39% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Network ServicesSolutions designed to improve performance of websites, apps, APIs, and digital media. | $138M | – | 16% year-over-year growth |
| SecurityProducts designed to protect websites, apps, APIs, and users. | $44.7M | – | 32% year-over-year growth |
| OtherCompute and Observability solutions. | $7.4M | – | 37% year-over-year growth |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Q4 2026 and Full Year 2026 outlook
- RevenueQ4 2026: $198.0 - $202.0; Full Year 2026: $744.0 - $748.0
- NoteNon-GAAP Income from Operations: Q4 2026: $30.0 - $34.0; Full Year 2026: $107.0 - $111.0
- NoteNon-GAAP Net Income per share: Q4 2026: $0.16 - $0.18; Full Year 2026: $0.61 - $0.63
- NoteAssumes weighted average diluted shares outstanding of 184.1 million in Q4 2026 and 180.7 million for the full year 2026.
What drove it
- Total revenue was $190.2 million, representing 20% year-over-year growth.
- Security revenue was $44.7 million, representing 32% year-over-year growth, while Other revenue was $7.4 million, representing 37% year-over-year growth.
- Multiproduct adoption among large customers reached 74% for two or more product suites and 34% for four or more product suites.
- LTM NRR increased to 119% in the third quarter from 117% in the second quarter of 2026.
- Fastly launched AI Runtime Control, AI Firewall, and new API Security capabilities.
- Fastly partnered with Comcast to integrate Fastly's software into Comcast's nationwide network.
Concerns
- GAAP loss from operations was $(11,272) in Q3 2026 and GAAP net loss was $(11,255).
- Top ten customers accounted for 39% of third-quarter revenue, compared to 32% in the third quarter of 2025.
- Nine months 2026 free cash flow was $32,854, compared to $37,211 in the nine months ended September 30, 2025.
- Q3 2026 impairment expense was $1,013.
- Non-GAAP measures exclude stock-based compensation expense and related employer payroll taxes, amortization items, impairment expense, and other specified items.
What to watch
- Q4 2026 total revenue guidance of $198.0 - $202.0.
- Q4 2026 non-GAAP income from operations guidance of $30.0 - $34.0.
- Q4 2026 non-GAAP net income per share guidance of $0.16 - $0.18.
- The progression of LTM NRR from 119% and large-customer product-suite adoption from 74% and 34%.
- The revenue contribution of Security, Compute, and Observability solutions.
- Customer concentration, with the top ten customers accounting for 39% of Q3 2026 revenue.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $113,506; as of December 31, 2025: $180,563.
- Marketable securities as of September 30, 2026: $251,712; as of December 31, 2025: $181,196.
- Total current assets as of September 30, 2026: $507,781; as of December 31, 2025: $506,709.
- Property and equipment, net as of September 30, 2026: $223,358; as of December 31, 2025: $186,785.
- Total assets as of September 30, 2026: $1,543,988; as of December 31, 2025: $1,499,477.
- Long-term debt, current as of September 30, 2026: —; as of December 31, 2025: $38,557.
- Long-term debt, net as of September 30, 2026: $324,297; as of December 31, 2025: $323,282.
- Total liabilities as of September 30, 2026: $540,415; as of December 31, 2025: $569,899.
- Total stockholders' equity as of September 30, 2026: $1,003,573; as of December 31, 2025: $929,578.
- Nine months 2026 repayment of convertible senior notes: $(38,593).
- Q3 2026 net cash used in investing activities: $(18,806); nine months 2026 net cash used in investing activities: $(144,454).
- Q3 2026 net cash provided by financing activities: $2,515; nine months 2026 net cash used in financing activities: $(30,769).
Analysis
Fastly reported third-quarter revenue of $190,193, compared with $158,223 in the third quarter of 2025, and characterized the result as 20% year-over-year growth. Network Services contributed $138.0 million, while Security contributed $44.7 million and Other revenue contributed $7.4 million. Security and Other grew 32% and 37% year-over-year, respectively, faster than Network Services at 16%, pointing to a stronger contribution from the company’s security, Compute, and Observability offerings.
Profitability improved materially from the prior-year quarter. GAAP gross margin was 63.3%, compared with 58.4%, and non-GAAP gross margin was 65.8%, compared with 62.8%. GAAP loss from operations narrowed to $(11,272) from $(28,788), while non-GAAP income from operations increased to $31,193 from $11,608. GAAP net loss was $(11,255), compared with $(29,483), and non-GAAP net income was $31,582, compared with $11,129.
Cash generation was positive in the quarter. Operating cash flow was $39,981 versus $28,924, and free cash flow was $25,172 versus $18,091. For the nine months ended September 30, 2026, operating cash flow was $108,181, while free cash flow was $32,854 compared with $37,211 in the prior-year nine-month period. The balance sheet showed $113,506 of cash and cash equivalents, $251,712 of marketable securities, and $324,297 of long-term debt, net, as of September 30, 2026.
Customer metrics support the revenue result. Remaining Performance Obligations were $334 million, up 24% from $268 million in the third quarter of 2025, and LTM NRR rose to 119% from 117% in the second quarter of 2026. Multiproduct adoption reached 74% for two or more suites and 34% for four or more suites. The principal concentration item is that the top ten customers represented 39% of revenue, compared with 32% in the prior-year quarter.
The fourth-quarter outlook calls for total revenue of $198.0 - $202.0 million, non-GAAP income from operations of $30.0 - $34.0 million, and non-GAAP net income per share of $0.16 - $0.18. Full-year guidance calls for $744.0 - $748.0 million of revenue, $107.0 - $111.0 million of non-GAAP income from operations, and $0.61 - $0.63 of non-GAAP net income per share. The release does not provide a forward GAAP reconciliation because future expenses including stock-based compensation and related employer payroll taxes cannot be reasonably determined or predicted.
Management, verbatim
Our record third quarter results reflect strong execution as customers continued to adopt more of our products and deepen their use of our platform.
Kip Compton, CEO of Fastly
Delivering record revenue and free cash flow demonstrates our value proposition as we help customers achieve critical business outcomes and build for AI scale.
Kip Compton, CEO of Fastly
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so prior-guidance comparisons are unavailable.
- No capital return activity, including share repurchases or dividends, was reported.
- No forward gross-margin guidance was reported.
- No forward operating-expense guidance was reported.
- No forward tax-rate guidance was reported.
- No CFO commentary or quote from a named CFO was provided.
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Fastly filed an SEC Form 8‑K announcing its Q3 2026 results and providing forward‑looking revenue guidance.
Ticker impact
Fastly reported record Q3 2026 revenue of $190.2M, 20% YoY growth and issued guidance for Q4 and full-year revenue up to $202M.
likely upward pressure as the market prices in the record revenue and issued guidance range
First‑report earnings release with material revenue growth and a issued revenue outlook typically drives buying interest.
Market effects
Edge cloud and CDN providers may see increased investor interest on the back of Fastly's growth.
U.S. tech sector could receive a modest boost from the positive earnings surprise.
Limited to investors tracking cloud infrastructure and AI‑related services.
Counterpoint
If the guidance range is seen as modest relative to peers, the stock could face profit‑taking.
Key entities
- companyFastly, Inc.
Edge cloud platform provider reporting Q3 2026 results.
