Fastly (FSLY) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $173 million, up 20% year-over-year, near the high end of guidance, driven by strong security and compute growth, and supported by increased usage from existing customers.

• Security revenue grew 47% year-over-year, now representing 22% of total revenue, with broad-based adoption and innovation across new and existing customers.

• Compute and other product revenue surged 67% year-over-year, marking the largest sequential increase ever for this category.

• Large customer count increased to 634, with top ten customers accounting for 34% of revenue and their revenue rising 25% year-over-year.

• Recognized as a leader in edge development and delivery by major industry analysts, with new product launches and a new Chief Marketing Officer appointed.

Financial highlights

• Gross margin reached a record 65.1% (non-GAAP), up from 57.3% year-over-year, aided by operational efficiencies and a one-time accounting policy change.

• Operating income was $19.1 million (non-GAAP), with operating margin expanding from -4% to +11% year-over-year.

• Net profit was $22.9 million (non-GAAP), compared to a net loss of $6.6 million in Q1 2025; GAAP net loss narrowed to $20.5 million.

• Adjusted EBITDA was $29.5 million, up from $7.8 million a year ago.

• Free cash flow was $4.1 million, down from $8.2 million due to higher infrastructure spend; LTM free cash flow was $42 million.

• Ended Q1 with $330 million in cash, after retiring $39 million in long-term debt.

Outlook and guidance

• Q2 2026 revenue expected between $170 million and $176 million, with gross margin guidance at 64% ±50 bps.

• Full-year 2026 revenue guidance raised to $710–$725 million (15% growth at midpoint), with gross margin at 64% ±50 bps.

• Non-GAAP operating profit for 2026 guided to $58–$68 million (9% margin midpoint), and EPS of $0.27–$0.33.

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

• Infrastructure CapEx expected at 10–12% of revenue, front-loaded due to supply chain constraints.