Fastly, Inc.

Q2 revenue was $183.3 million, up 23% year over year and above guidance of $170 million to $176 million. Gross margin was 65.8%, up 680 basis points from 59% in Q2 2025, and operating income was $27 million versus a Q2 2025 operating loss of $5 million; adjusted EPS was $0.05 per diluted share versus a loss of $0.03 a year ago. Adjusted EBITDA was $38.1 million, or 21% of revenue, and free cash flow was $3.6 million, marking a sixth consecutive positive quarter. For Q3 2026, Fastly guided to revenue of $184 million to $190 million, gross margin of 65% plus or minus 50 basis points, operating profit of $20 million to $24 million, and EPS of $0.11 to $0.13. For full-year 2026, guidance was raised to revenue of $732 million to $746 million, gross margin of 65% plus or minus 50 basis points, operating profit of $88 million to $96 million, EPS of $0.50 to $0.54, infrastructure capex of 10% to 12% of revenue, and free cash flow of $40 million to $50 million.

Charles Compton framed the quarter as evidence that Fastly’s platform strategy is working: customers are adopting more products, retention is improving, and growth is coming with higher profitability. He emphasized that Fastly’s unified platform helps customers solve performance, security, and AI-driven traffic problems on one stack, which deepens relationships and expands wallet share. His tone was confident and optimistic, pointing to record margins, strong customer wins, and plans to discuss additional products and disclosures at Investor Day.

Richard Wong focused on the financial inflection: 23% revenue growth to $183.3 million, gross margin of 65.8% versus 59% last year, and operating income of $27 million, well above the guided $12 million to $16 million range. He said operating expenses were $93.7 million and below expectations due to disciplined spend and hiring timing, and he highlighted $337 million in cash, equivalents, marketable securities, and investments, plus a positive net cash balance of $14 million. He also noted $39.3 million in operating cash flow, $3.6 million in free cash flow, capex at about 17% of revenue in Q2, and full-year capex expected at 10% to 12% of revenue as supply-chain issues are managed.

Analysts pressed on why network services outperformed seasonality, whether AI or agentic traffic helped, and if Fastly was gaining share. Management said AI-related traffic is a tailwind across the platform, especially in security and compute, but also in network services, and said Fastly believes it is gaining share where performance matters. Questions also focused on NRR, security penetration, and pricing; management said NRR strength is driven by cross-sell and upsell into WAF, DDoS, and bot management, that pricing remains rational with mid-single-digit price erosion, and that they do not plan surcharge pricing but instead negotiate case by case around customer value and product mix.