Fastly (2Y7) Q2 2026 Earnings Report

The call conveyed strong positive momentum: record revenue, record gross margins, meaningful operating profitability improvements, sustained free cash flow, and accelerating platform adoption—especially in security and compute. Management acknowledged near-term variability from episodic events, some customer concentration, higher front-loaded CapEx due to supply-chain mitigation, and mid-single-digit price erosion in network services. Overall the company presented improving unit economics, stronger RPO, and raised full-year guidance while flagging execution items and normalization of OpEx in the back half.

Fastly guided Q3 revenue of $184M–$190M (midpoint +18% YoY), with gross margin ~65% ±50 bps, non‑GAAP operating profit of $20M–$24M (≈12% operating margin at the midpoint) and non‑GAAP net EPS of $0.11–$0.13; for full‑year 2026 it raised revenue guidance to $732M–$746M (≈+18% at midpoint), expects full‑year gross margin ~65% ±50 bps, non‑GAAP operating profit $88M–$96M (≈12% operating margin at midpoint), non‑GAAP net EPS $0.50–$0.54, infrastructure CapEx of 10%–12% of revenue (front‑loaded vs. 5% in 2025), and free cash flow of $40M–$50M, while noting OpEx will normalize higher in H2 due to headcount additions and discretionary spend.