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Fastly : Second Quarter 2026 Investor Presentation
Fastly : Second Quarter 2026 Investor
About this update from Fastly, Inc.
Investor Presentation ©2026 Fastly, Inc. Fastly Q1 2026 Earnings Investor Deck (5/6/2026) Q2 FY 2026 August 5, 2026 Investment highlights Large and growing addressable marfiet Internet and AI trends driving significant opportunity Multiple ways to accelerate and sustain growth Unified platform centered on innovation Mission-critical platform vital for customer operations Clear marfiet leader with differentiated technology ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 3 $687M LTM Revenue Q2'2026 23.3% YoY Revenue Growth Q2'2026 +97% Average CSAT Score ~$22B TAM 1 2026 5.0+ Trillion Average daily requests served 3 1,100+ Employees 2 117% LTM NRR Our mission is to make the internet a better place, where all experiences are fast, safe, and engaging. 600+ Large Customers 32% Faster average time to first byte than other CDNs 4 Note: All figures as of June 30, 2026 unless noted otherwise. LTM indicates last twelve month period. See Appendix for definitions. 1 TAM based on an average of forecasts from Gartner Edge Distribution Platforms Worldwide, 2025 and IDC Custom Solutions TAM Analysis, 2025 2 As of December 31, 2025 3 As of March 31, 2026 4 Based on Google's Chrome User Experience Report and data set run on October 17-18, 2023 ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 4 Growth of internet consumption presents a significant opportunity for Fastly 2026 traffic growth estimate: 15.4% YoY 1 Reached 33 exabytes per day 2 Growing coverage Service affordability 4K TV dominance More Access + Pixels Peak events Downloads Live event network traffic spike Events + Live Streaming AI generated content AI queries AI Inferencing Agentic AI API G Bot-heavy traffic AI Agents 1 IBIS World 2 AppLogic Networks (f.k.a. Sandvine) 2024 Report ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 5 Faster, more consistent user experiences Better performance at scale with lower costs Time-critical decisions, site-local state and caching, pre-processing/stream analytics "First-mile" enforcement (policy, security, QoS) near users and device Fastly partners with the Central Cloud with the goal of: Edge Cloud positioning Central Cloud Edge Cloud End Users Private Cloud Edge Cloud connects Central Cloud to the Users ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 6 Personalized, dyn able users and device amic, customiz e e "First-mile" enfo licy, xperiences at th Helps applications remain available at global scale rcement (po sec ear urity, QoS) n Lower egress traffic cost Edge Low latency (faster sites), snappier apps Lower Cost Enforcement G Security ssion Critic Resilient G Mi al Configurable Speed Observability Compute / AI Security Content G Application Delivery What is better done at the Edge? Why is the Edge better? ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 7 Fastly's strategic global edge network Legacy Solutions Deploying thousands of small, scattered POPs Slow and requires extensive hardware 166 POPs 622 Tbps Edge networfi capacity ✔ Fewer, more powerful POPs at strategic marfiets around the world ✔ Less hardware to deliver comprehensive global reach Single POP Multiple POPs Planned new POP Planned upgrade Note: All figures as of June 30, 2026 An Architecture for the Modern Internet ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 8 Recognized by analysts and customers LEADER Edge Development Only Vendor Awarded Customer Halo CUSTOMERS' CHOICE Edge Distribution Platforms CUSTOMERS' CHOICE Web App/API Protection 7 years in a row 2025 STUDY CUSTOMER VALUE App Security ROI 235% ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 9 Select customers in key industry verticals 624 Large Customers $1.11M Avg Large Customer Spend Annualized 117% LTM NRR Media, Gaming G Entertainment Omnichannel Retail SaaS Solutions Travel G Leisure FinTech Note: All figures as of June 30, 2026 ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 10 Platform strategy and transformation Strong momentum across our offerings driven by a platform-focused approach Other (4%) ● Compute +69% Observability Q2 YoY Growth Securit y (23%) ● WAF Networfi Bot Management DDoS API Discovery +43% Q2 YoY Growth Services ( 73% ) ● CSP Delivery Media Shield Live Streaming VOD +17% Q2 YoY Growth Note: All figures as of June 30, 2026 ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 11 Our growth drivers 1 Platform strategy and cross-sell opportunities 2 Accelerated RGD innovation and feature velocity 3 Share gains on competitive take-outs 4 Deeper penetration into international markets ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 12 Q2 FY 2026 ©2026 Fastly, Inc. Fastly Q1 2026 Earnings Investor Deck (5/6/2026) ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 13 Financial Results Q2 2026 Financial highlights $687M LTM Revenue 23% YoY Revenue Growth 43% YoY Security Revenue Growth 65.8% Non-GAAP Gross Margin (vs 59.0% in Q2 2025)* $341M Remaining Performance Obligations (RPO) Grew 38% YoY $34M LTM Free Cash Flow* *Non-GAAP measures. See Appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 14 Total revenue ($M), YoY growth and Non-GAAP gross margin Revenue and Non-GAAP gross margin performance Quarterly Results Revenue Non-GAAP GM 64.0% 65.1% 65.8% 62.8% Annual Results 60.9% 58.8% $183 $544 $624 58.6% 57.5% 57.3% 59.0% $137 $141 $144 $149 $158 $173 $173 YoY Q3:24 Q4:24 Q1:25 Q2:25 Q3:25 Q4:25 Q1:26 Q2:26 2024 2025 revenue 7% growth 2% 8% 12% 15% 23% 20% 23% 7% 15% Note: Non-GAAP measures. See Appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 15 Opex leverage over time Total Non-GAAP operating expenses % of revenue Quarterly Results Annual Results Non-GAAP RGD% Non-GAAP SGM% Non-GAAP GGA% Non-GAAP OPEX% 58% 59% 61% 62% 55% 52% 54% 51% 63% 57% 27% 29% 28% 27% 25% 23% 25% 24% 29% 18% 14% 18% 20% 13% 20% 14% 18% 14% 17% 18% 12% 12% 12% 16% 11% 19% 19% 14% 26% 13% Q3:24 Q4:24 Q1:25 Q2:25 Q3:25 Q4:25 Q1:26 Q2:26 2024 2025 Note: Non-GAAP measures. See Appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Percentages do not sum due to rounding. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 16 Increasingly efficient operating model Quarterly Results Non-GAAP Income from operations and FCF ($M) Non-GAAP OP Inc ($M) Free Cash Flow ($M) $27 Annual Results $46 $18 $21 $19 $22 $1 $(3) $(7) $(8) $8 $(6) $(5) $11 $12 $9 $4 $4 $(22) $(36) Q3:24 Q4:24 Q1:25 Q2:25 Q3:25 Q4:25 Q1:26 Q2:26 2024 2025 1% (5)% (2)% (6)% (4)% 6% (3)% 7% 7% 11% 12% 5% 11% 2% 15% 2% Margin (% of revenue) (4)% (7)% 4% 7% Note: Non-GAAP measures. See Appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 17 Financial Guidance Q3 2026 FY 2026 Revenue (millions) $184.0 - $190.0 $732.0 - $746.0 Growth % YoY (midpoint) 18% 18% Gross Margin * 65.0%, +/- 50 bps 65.0%, +/- 50 bps Operating Income * (millions) $20.0 - $24.0 $88.0 - $96.0 EPS, fully diluted * $0.11 - $0.13 $0.50 - $0.54 Free Cash Flow * (millions) - $40.0 - $50.0 * Non-GAAP measures. See Appendix for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Note: These forward loofiing statements were provided by us on August 5, 2026. This forward loofiing guidance speafis only as of such date and the inclusion of such guidance in this presentation should not be interpreted as a confirmation or affirmation of such guidance as of any other date. Except as required by law, we assume no obligation and do not intend to update these forward-loofiing statements or to conform these statements to actual results or to changes in our expectations. All guidance figures presented, other than revenue, are on an adjusted, non-GAAP basis. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-loofiing basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 18 ©2026 Fastly, Inc. Fastly Q1 2026 Earnings Investor Deck (5/6/2026) ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 19 Appendix Definitions Use of Non-GAAP financial measures: To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company uses the following non-GAAP measures of financial performance: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP basic and diluted net income (loss) per common share, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, free cash flow and adjusted EBITDA. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings releases. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per common share, non-GAAP research and development, non-GAAP sales and marketing, and non-GAAP general and administrative differ from GAAP in that they exclude stock-based compensation expense and related employer payroll taxes, amortization of capitalized stock-based compensation - cost of revenue, amortization of acquired intangible assets, executive transition costs, net gain on extinguishment of debt, impairment expense, restructuring charges, gain on modification of lease, and amortization of debt discount and issuance costs. Average large customer spend: Our average large customer spend is calculated by taking the annualized current quarter revenue contributed by large customers existing as of the current period, and dividing that by the number of large customers as of the current period. Large customer s: Our large customer count is defined as customers with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue we recognized for each customer in the current quarter and multiplying it by four. Free cash flow: Calculated as net cash used in operating activities less purchases of property and equipment, net of proceeds from sale of property and equipment, principal payments of finance lease liabilities, and capitalized internal-use software costs. Management specifically identifies adjusting items in the reconciliation of GAAP to non-GAAP financial measures. Management considers non-GAAP free cash flow to be a profitability and liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in Fastly's business and strengthening its balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The presentation of non-GAAP free cash flow is also not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity. LTM Net Retention Rate (LTM NRR): We calculate LTM Net Retention Rate by dividing the total customer revenue for the prior twelve-month period ("prior 12-month period") ending at the beginning of the last twelve-month period ("LTM period") minus revenue contraction due to billing decreases or customer churn, plus revenue expansion due to billing increases during the LTM period from the same customers by the total prior 12-month period revenue. We believe the LTM Net Retention Rate is supplemental as it removes some of the volatility that is inherent in a usage-based business model. Remaining Performance Obligations (RPO) : Include future committed revenue for periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied. ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 20 Gross profit Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 GAAP gross profit $ 74,740 $ 75,063 $ 76,798 $ 81,116 $ 92,329 $ 105,960 $ 108,181 $ 115,951 employer payroll taxes 1,911 1,910 1,939 2,573 2,861 2,764 2,748 3,026 Amortization of capitalized stock-based 1,338 1,371 1,641 1,581 1,664 1,662 1,688 1,694 Amortization of acquired intangible assets 2,475 2,475 2,475 2,475 2,475 - - - Non-GAAP gross profit $ 80,464 $ 80,819 $ 82,853 $ 87,745 $ 99,329 $ 110,386 $ 112,617 $ 120,671 GAAP gross margin 54.5 % 53.4 % 53.2 % 54.5 % 58.4 % 61.4 % 62.5 % 63.3 % Non-GAAP gross margin 58.6 % 57.5 % 57.3 % 59.0 % 62.8 % 64.0 % 65.1 % 65.8 % Research and development GAAP research and development $ 31,884 $ 32,742 $ 37,429 $ 42,221 $ 41,421 $ 41,591 $ 41,972 $ 42,071 Stock-based compensation expense and related (7,378) (7,922) (8,893) (11,755) (11,915) (11,890) (11,388) (12,967) Executive transition costs - - - - (326) (221) - - Non-GAAP research and development Sales and marketing $ 24,506 $ 24,820 $ 28,536 $ 30,466 $ 29,180 $ 29,480 $ 30,584 $ 29,104 GAAP sales and marketing $ 45,994 $ 50,050 $ 49,313 $ 51,100 $ 49,998 $ 51,023 $ 55,114 $ 56,735 Stock-based compensation expense and related (7,113) (7,047) (6,693) (8,176) (8,754) (9,348) (10,140) (10,869) Amortization of acquired intangible assets (2,300) (2,299) (2,301) (2,279) (2,159) (2,159) (2,159) (2,160) Executive transition costs - - - - - - (262) - Non-GAAP sales and marketing General and administrative $ 36,581 $ 40,704 $ 40,319 $ 40,645 $ 39,085 $ 39,516 $ 42,553 $ 43,706 GAAP general and administrative $ 27,173 $ 26,154 $ 28,235 $ 24,323 $ 29,698 $ 28,436 $ 34,990 $ 31,578 Stock-based compensation expense and related (8,614) (8,066) (8,057) (3,831) (9,599) (8,275) (13,592) (10,710) Executive transition costs - - (335) - (643) - (1,061) - Gain on modification of lease - - - 736 - - - - Non-GAAP general and administrative $ 18,559 $ 18,088 $ 19,843 $ 21,228 $ 19,456 $ 20,161 $ 20,337 $ 20,868 GAAP to Non-GAAP Quarterly Reconciliation Stock-based compensation expense and related compensation - Cost of revenue employer payroll taxes employer payroll taxes employer payroll taxes ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 21 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Operating income (loss) GAAP operating loss $ (40,590) $ (34,331) $ (38,179) $ (36,943) $ (28,788) $ (15,090) $ (23,895) $ (14,433) Stock-based compensation expense and 25,016 24,945 25,582 26,335 33,129 32,277 37,868 37,572 Amortization of capitalized stock-based 1,338 1,371 1,641 1,581 1,664 1,662 1,688 1,694 Restructuring charges 9,720 - - - - - - - Executive transition costs - - 335 - 969 221 1,323 - Gain on modification of lease - - - (736) - - - - Amortization of acquired intangible assets 4,775 4,774 4,776 4,754 4,634 2,159 2,159 2,160 Impairment expense Non-GAAP operating income (loss) Net income (loss) 559 $ 818 448 $ (2,793) - $ (5,845) 415 $ (4,594) - $ 11,608 - $ 21,229 - $ 19,143 - $ 26,993 GAAP net loss $ (38,016) $ (32,886) $ (39,148) $ (37,541) $ (29,483) $ (15,505) $ (20,524) $ (15,591) Stock-based compensation expense and 25,016 24,945 25,582 26,335 33,129 32,277 37,868 37,572 Amortization of capitalized stock-based 1,338 1,371 1,641 1,581 1,664 1,662 1,688 1,694 Restructuring charges 9,720 - - - - - - - Executive transition costs - - 335 - 969 221 1,323 - Gain on modification of lease - - - (736) - - - - Amortization of acquired intangible assets 4,775 4,774 4,776 4,754 4,634 2,159 2,159 2,160 Net gain on extinguishment of debt - (1,365) - - - (941) - - Impairment expense 559 448 - 415 - - - - GAAP to Non-GAAP Quarterly reconciliation (cont'd) related employer payroll taxes compensation - Cost of revenue related employer payroll taxes compensation - Cost of revenue Amortization of debt discount and issuance 358 318 217 217 216 257 401 366 costs Non-GAAP income (loss) $ 3,750 $ (2,395) $ (6,597) $ (4,975) $ 11,129 $ 20,130 $ 22,915 $ 26,201 GAAP net loss per common share-basic and diluted Non-GAAP net income (loss) per common share-basic Non-GAAP net income (loss) per common $ (0.27) $ (0.23) $ (0.27) $ (0.26) $ (0.20) $ (0.10) $ (0.13) $ (0.10) $ 0.03 $ (0.02) $ (0.05) $ (0.03) $ 0.08 $ 0.13 $ 0.15 $ 0.17 $ 0.03 $ (0.02) $ (0.05) $ (0.03) $ 0.07 $ 0.12 $ 0.13 $ 0.15 Weighted average basic common shares 139,237 141,085 143,284 145,780 148,129 150,324 153,579 157,596 Weighted average diluted common shares 143,415 141,085 143,284 145,780 161,229 164,074 176,494 180,304 share- diluted ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 22 Free Cash Flow Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Net cash flow provided by (used in) operations $ 5,002 $ 5,220 $ 17,288 $ 25,798 $ 28,924 $ 22,434 $ 28,866 $ 39,334 Capital expenditures (12,110) (13,125) (9,079) (14,887) (10,833) (13,836) (24,757) (35,761) Free cash flow $ (7,108) $ (7,905) $ 8,209 $ 10,911 $ 18,091 $ 8,598 $ 4,109 $ 3,573 ©2026 Fastly, Inc. Fastly Q2 2026 Earnings Investor Deck (8/5/2026) 23 ©2026 Fastly, Inc. Fastly Q1 2026 Earnings Investor Deck (5/6/2026) 24 2026 Earnings Investor Deck ( Attention : This is an excerpt of the original content. To continue reading it, access the original document here .