Fastly, Inc.

What they do

Fastly operates a global edge cloud platform that converges CDN functionality with capabilities traditionally delivered by hardware appliances such as application delivery controllers, web application firewalls, API management, bot detection, DDoS protection and WAAP. The platform is API-driven and programmable, positioned as an intelligent edge layer in front of customers' single- or multi-cloud environments, serving industries including ecommerce, streaming media, gaming, digital publishing, high tech and financial services. Processing at the edge is aimed at dynamic, time-sensitive data, including AI traffic management and agentic AI workloads.

Revenue drivers

• Network Services — Solutions that improve performance of websites, apps, APIs and digital media; $133.9M in Q2 2026, up 17% year-over-year, and the largest revenue line.
• Security — Products protecting websites, apps, APIs and users; $41.7M in Q2 2026, up 43% year-over-year.
• Other (Compute and Observability) — Compute and Observability solutions; $7.7M in Q2 2026, up 69% year-over-year, the smallest but fastest-growing line.
• Large customer concentration — Top ten customers accounted for 37% of Q2 2026 revenue, up from 31% in Q2 2025, reflecting reliance on enterprise accounts.

Recent performance

Q2 2026 revenue was a record $183.3M, up 23% year-over-year, with GAAP gross margin of 63.3% versus 54.5% a year earlier and non-GAAP gross margin of 65.8%. GAAP operating loss narrowed to $14.4M from $36.9M, and GAAP net loss was $15.6M, or $0.10 per diluted share, versus $37.5M and $0.26 a year ago. Non-GAAP operating income was $27.0M versus a $4.6M loss, and non-GAAP net income was $26.2M versus a $5.0M loss. Operating cash flow was $39.3M and free cash flow was $3.6M. RPO was $341M, up 38% from $247M, and LTM NRR rose to 117% from 113% in Q1 2026.

Strategy

Fastly's stated focus is its unified edge cloud platform, spanning developer creation through end-user experience, with security integrated as a core component. Direct selling targets expansion of existing enterprise customers through field sales, account managers and technical account managers, supported by developer outreach as a customer acquisition channel. The company is positioning itself around AI-driven traffic, citing AI traffic growing 6.5x faster than human traffic, and product moves such as the Skyfire partnership for transacting with AI agents and a C++ SDK for Fastly Compute. Management also cites simplifying customer onboarding, pricing and packaging as priorities, and expects total operating expenses to increase as it expands.

Risks

• Platform outage or defects — Fastly states its platform is inherently complex and may contain material defects or errors, and it has found defects and errors from time to time that could cause data unavailability or loss.
• Customer concentration — Fastly warns of potential loss or significant reduction in usage by one or more major customers; the top ten customers were 37% of Q2 2026 revenue.
• History of operating losses — The company has a history of operating losses, reporting GAAP net losses each year from 2021 through 2025 and a $15.6M GAAP net loss in Q2 2026.
• Competition and technology change — Fastly cites the risk that it may not compete effectively with existing competitors and new market entrants, or respond to rapidly changing technology and customer needs.

Outlook

Management raised its full-year outlook on the Q2 2026 results, according to CEO Kip Compton in the August 5, 2026 earnings release; the specific revised figures are not included in the excerpt provided. The company expects total operating expenses to increase as it continues to expand, and it plans to keep investing in a single unified platform, onboarding simplification, and pricing and packaging.