Fastly (FSLY) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $183.3 million, up 23% year-over-year, with strong growth in Security and Compute solutions and increased usage from existing customers.

• Gross margin reached a record 65.8% non-GAAP and 63.3% GAAP, both significantly higher than last year.

• Non-GAAP net income was $26.2 million, reversing a non-GAAP net loss of $5.0 million in Q2 2025; GAAP net loss narrowed to $15.6 million from $37.5 million.

• LTM revenue reached $687 million, with a net retention rate of 117% and 624 large customers as of June 30, 2026.

• Platform strategy and AI-driven traffic are driving deeper customer relationships and durable revenue growth.

Financial highlights

• Network Services revenue grew 17% year-over-year to $133.9 million; Security revenue surged 43% to $41.7 million; Other (Compute/Observability) revenue rose 69% to $7.7 million.

• Gross profit for Q2 2026 was $116.0 million (+43% YoY); non-GAAP gross margin: 65.8%, GAAP gross margin: 63.3%.

• RPO ended at $341 million, up 38% year-over-year, with 79% current portion.

• Operating cash flow for H1 2026 was $68.2 million, up from $43.1 million in H1 2025.

• Free cash flow was $3.6 million in Q2 2026, sixth consecutive positive quarter.

Outlook and guidance

• Q3 2026 revenue guidance: $184 million–$190 million, 18% annual growth at midpoint; non-GAAP net income per share: $0.11–$0.13.

• Full-year 2026 revenue guidance: $732 million–$746 million, 18% growth at midpoint; non-GAAP net income per share: $0.50–$0.54.

• 2026 gross margin expected at 65% ±50 bps; operating profit $88–$96 million, operating margin 12% at midpoint.

• Free cash flow guidance for 2026 maintained at $40–$50 million.

• Management expects continued investment in platform, network, and international expansion to drive long-term growth.