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 net retention rate reached 117%, highest in over three years, and large customer count reached 624, generating 94% of annualized current quarter revenue.

• Platform strategy, innovation, and operational discipline drove growth, profitability, and market leadership.

Financial highlights

• Q2 2026 revenue: $183.3M (+23% YoY), exceeding guidance; LTM revenue: $687M (+23% YoY).

• Gross margin: 65.8% non-GAAP (record), up from 59.0% YoY; GAAP gross margin: 63.3% vs. 54.5% last year.

• Operating income: $27M, operating margin 14.7%; adjusted EBITDA: $38.1M (21% of revenue), up from $8.9M YoY.

• Net profit: $26.2M non-GAAP ($0.15/diluted share); GAAP net loss: $15.6M ($0.10/share), improved from $37.5M loss.

• Free cash flow: $3.6M in Q2; LTM free cash flow: $34M; cash and equivalents: $337M.

Outlook and guidance

• Q3 2026 revenue guidance: $184M–$190M (18% YoY growth at midpoint); non-GAAP net income per share: $0.11–$0.13.

• FY2026 revenue guidance: $732M–$746M (18% YoY growth at midpoint); non-GAAP net income per share: $0.50–$0.54.

• FY2026 gross margin expected at 65% ±50 bps; operating profit $88M–$96M (12% margin midpoint).

• FY2026 free cash flow guidance: $40M–$50M.

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