Highlights

  • Fastly increased second-quarter revenue as Security expanded faster than Network Services and remaining performance obligations grew substantially year-over-year.
  • The company narrowed its GAAP net loss and moved into non-GAAP profit compared with the prior-year quarter.
  • Operating cash flow remained positive, but free cash flow declined despite the improvement in reported adjusted earnings.
  • Fastly’s ten largest customers contributed a greater revenue share, increasing concentration alongside higher last-twelve-month net retention during the quarter.

Security growth helped Fastly, Inc. (NYSE:FSLY) lift second-quarter revenue by 23%, but the earnings improvement was accompanied by lower free cash flow and greater customer concentration. Results released on 5 August 2026 showed expanding contracted business and a narrower GAAP loss. The edge cloud and content delivery provider also supplied third-quarter and full-year forecasts, which remain distinct from reported results.

Security Grows Faster Than Network Services

Quarterly revenue totalled USD 183.3 million. Network Services generated USD 133.9 million, up 17%, while Security revenue rose 43% to USD 41.7 million. Other revenue increased 69% to USD 7.7 million.

The figures show Security expanding faster than the largest revenue category. However, the supplied material does not disclose product-level margins or pricing, so the different growth rates cannot establish how each category contributed to profit.

Last-twelve-month net retention increased to 117% from 113% in the first quarter. Remaining performance obligations reached USD 341 million, up 38%. That measure provides information about contracted business but is not the same as sales already recognised or a forecast of the next quarter’s revenue.

Loss Narrows as Adjusted Earnings Improve

The GAAP net loss narrowed to USD 15.6 million, or USD 0.10 per share, from USD 37.5 million a year earlier. Non-GAAP net income was USD 26.2 million, or USD 0.15 per diluted share, compared with a USD 5.0 million non-GAAP loss.

GAAP gross margin was 63.3%, while non-GAAP gross margin was 65.8%. The use of separate accounting measures means the adjusted profit should not be described as a GAAP profit.

Chief executive Kip Compton credited execution and customer trust for the quarter’s performance. His commentary accompanied the reported results without removing the difference between the company’s statutory loss and adjusted earnings.

Free Cash Flow and Concentration Diverge

Operating cash flow was USD 39.3 million, while free cash flow was USD 3.6 million. The latter declined from USD 10.9 million in the second quarter of 2025, creating a different comparison from the improvement in non-GAAP profit.

The ten largest customers accounted for 37% of revenue, up from 31% a year earlier. The increase leaves more revenue concentrated among a small group of customers, an exposure identified in the supplied document alongside higher retention.

Guidance Sets Separate Operating Targets

For the third quarter, Fastly guided to revenue of USD 184.0–190.0 million, non-GAAP operating income of USD 20–24 million and non-GAAP earnings per share of USD 0.11–0.13.

Full-year 2026 guidance called for revenue of USD 732–746 million, non-GAAP operating income of USD 88–96 million and non-GAAP earnings per share of USD 0.50–0.54. These are management forecasts, not achieved outcomes.

The supplied document does not confirm the next results date. Subsequent disclosures would be needed to compare actual performance with those ranges and establish whether stronger Security sales and retention are accompanied by improved free cash flow.