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Fastly Announces Record First Quarter 2026 Financial Results

May 6, 2026 4:05 PM

Record first quarter revenue of $173 million grew 20% year over year

Record first quarter gross margin of 62.5% and record non-GAAP gross margin of 65.1%

Record RPO of $369 million grew 63% year over year

SAN FRANCISCO--(BUSINESS WIRE)-- Fastly, Inc. (NASDAQ: FSLY), a leader in global edge cloud platforms, today announced financial results for its first quarter ended March 31, 2026.

“Our first quarter performance demonstrates continued discipline and velocity as we delivered record revenue, gross margin, and RPO,” said Kip Compton, CEO at Fastly. “Driven by an accelerated innovation roadmap, we delivered 47% year-over-year security revenue growth. This performance reflects expansion within our installed base and robust new business wins, enabling us to raise our 2026 guidance.”

Three months ended
March 31,

2026

2025

Revenue

$

173,021

$

144,474

Gross margin

GAAP gross margin

62.5 %

53.2 %

Non-GAAP gross margin(1)

65.1 %

57.3 %

Operating loss

GAAP operating loss

$

(23,895

)

$

(38,179

)

Non-GAAP operating income (loss)(1)

$

19,143

$

(5,845

)

Net income (loss) per share

GAAP net loss per common share — basic and diluted

$

(0.13

)

$

(0.27

)

Non-GAAP net income (loss) per common share — basic(1)

$

0.15

$

(0.05

)

Non-GAAP net income (loss) per common share — diluted(1)

$

0.13

$

(0.05

)

For a reconciliation of non-GAAP financial measures to their corresponding GAAP measures, please refer to the reconciliation table at the end of this press release.

First Quarter 2026 Financial Summary

Key Metrics

First Quarter Business and Product Highlights

Second Quarter and Full Year 2026 Guidance

Q2 2026

Full Year 2026

Total Revenue (millions)

$170.0 - $176.0

$710.0 - $725.0

Non-GAAP Operating Income (millions)

$12.0 - $16.0

$58.0 - $68.0

Non-GAAP Net Income per share(5)(6)

$0.05 - $0.08

$0.27 - $0.33

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future and cannot be reasonably determined or predicted at this time, although it is important to note that these factors could be material to Fastly’s future GAAP financial results.

Conference Call Information

Fastly will host an investor conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, May 6, 2026.

To access the conference call, please pre-register and dial-in using this link at least 15 minutes prior to the 1:30 p.m. PT start time. Registrants will receive an email confirmation with dial-in details.

A live webcast of the event can be accessed using this link. A replay of the webcast will be available on https://investors.fastly.com starting approximately two hours after the event and archived on the site for one quarter.

About Fastly, Inc.

Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Universal Music Group, and SeatGeek. Learn more about Fastly at https://www.fastly.com, and follow us @fastly.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, statements regarding our future financial and operating performance and shareholder returns, including our outlook and guidance and ability to improve liquidity; our ability to acquire new customers, expand cross-sell opportunities, and grow market share; our ability to enrich our revenue mix with platform enhancements; the performance of our existing and new platform enhancements; our ability to accelerate global growth; the performance, capabilities, and expectations regarding customer experiences with Bot Management with Content Guard, the API Security suite, including API Discovery, Next-Gen WAF, Fastly Agent Toolkit and its ability to enable coding agents to work with Fastly, and Object Storage; and Fastly's strategies, platform, and business plans. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including those more fully described in Fastly’s Annual Report on Form 10-K for the year ended December 31, 2025. Additional information will also be set forth in Fastly’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and other filings and reports that Fastly may file from time to time with the SEC. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.

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, and amortization of debt discount and issuance costs.

Adjusted EBITDA: excludes stock-based compensation expense and related employer payroll taxes, amortization of capitalized stock-based compensation - cost of revenue, depreciation and other amortization expenses, amortization of acquired intangible assets, executive transition costs, interest income, interest expense, including amortization of debt discount and issuance costs, other expense, net, and income taxes.

Amortization of Acquired Intangible Assets: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases and acquisitions. Management considers its operating results without this activity when evaluating its ongoing non-GAAP performance and its adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and acquisitions and may not be reflective of our core business, ongoing operating results, or future outlook.

Amortization of Debt Discount and Issuance Costs: consists primarily of amortization expense related to our debt obligations. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook. These are included in our total interest expense.

Capital Expenditures: consists of cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.

Depreciation and Other Amortization Expense: consists of non-cash charges that can be affected by the timing and magnitude of asset purchases. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of asset purchases and may not be reflective of our core business, ongoing operating results, or future outlook.

Executive Transition Costs: consists of one-time cash charges recognized with respect to changes in our executive’s employment status. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results, or future outlook.

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.

Income Taxes: consists primarily of expenses recognized related to state and foreign income taxes. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Expense: consists primarily of interest expense related to our debt instruments, including amortization of debt discount and issuance costs. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Interest Income: consists primarily of interest income related to our marketable securities. Management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Other Expense, Net: consists primarily of foreign currency transaction gains and losses. Management considers its operating results without this activity when evaluating its ongoing adjusted EBITDA performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Stock-Based Compensation Expense and Related Employer Payroll Taxes: consists of expenses for stock options, restricted stock units, performance awards and other shares issued under our equity incentive plans or our Employee Stock Purchase Plan (“ESPP”), as applicable, and the related employer payroll taxes. Although stock-based compensation and its related employer payroll taxes are expenses for the Company, management considers its operating results without this activity when evaluating its ongoing non-GAAP net income (loss) performance and its adjusted EBITDA performance, primarily because they are expenses not believed by management to be reflective of our core business, ongoing operating results, or future outlook. In addition, the value of some stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control.

Amortization of Capitalized Stock-Based Compensation - Cost of Revenue: in order to reflect the performance of our core business, ongoing operating results, or future outlook, and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies, similar to stock-based compensation, management considers it appropriate to exclude amortization of capitalized stock-based compensation from our non-GAAP financial measures.

Management believes these non-GAAP financial measures and adjusted EBITDA serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors' overall understanding of our current financial performance.

In the financial tables below, the Company provides a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this press release.

Key Metrics

1 Beginning with the quarter ended March 31, 2026, we are excluding stock-based compensation related employer payroll taxes from our non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) per common share — basic and non-GAAP net income (loss) per common share — diluted, because we consider our operating results without this activity when evaluating our ongoing non-GAAP net income (loss) performance and our adjusted EBITDA performance. We did not recast the presentation for all prior periods presented due to the immaterial amount of such payroll taxes.

2 Remaining Performance Obligations 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. During the third quarter of 2025, we identified an error in RPO calculations from certain contracts with a termination-for-convenience clause. We recast the presentation of RPO for all prior periods presented to reflect the correction of this error.

3 Our large customers are defined as those with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue for each customer within the quarter and multiplying it by four.

4 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.

5 Non-GAAP net income (loss) per share is calculated as Non-GAAP net income (loss) divided by weighted average diluted shares for 2026.

6 Assumes weighted average diluted shares outstanding of 182.6 million in Q2 2026 and 182.0 million for the full year 2026.

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)

Three months ended
March 31,

2026

2025

Revenue

$

173,021

$

144,474

Cost of revenue(1)

64,840

67,676

Gross profit

108,181

76,798

Operating expenses:

Research and development(1)

41,972

37,429

Sales and marketing(1)

55,114

49,313

General and administrative(1)

34,990

28,235

Total operating expenses

132,076

114,977

Loss from operations

(23,895

)

(38,179

)

Interest income

2,927

2,975

Interest expense

(3,306

)

(3,173

)

Other expense, net

(380

)

(80

)

Loss before income taxes

(24,654

)

(38,457

)

Income tax (benefit) expense

(4,130

)

691

Net loss

$

(20,524

)

$

(39,148

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.13

)

$

(0.27

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

153,579

143,284

__________

(1) Includes stock-based compensation expense as follows:

Three months ended
March 31,

2026

2025

Cost of revenue

$

2,536

$

1,939

Research and development

10,030

8,893

Sales and marketing

9,353

6,693

General and administrative

13,062

8,057

Total

$

34,981

$

25,582

Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, unaudited)

Three months ended
March 31,

2026

2025

Gross profit

GAAP gross profit

$

108,181

$

76,798

Stock-based compensation expense and related employer payroll taxes(1)

2,748

1,939

Amortization of capitalized stock-based compensation - Cost of revenue

1,688

1,641

Amortization of acquired intangible assets

—

2,475

Non-GAAP gross profit

$

112,617

$

82,853

GAAP gross margin

62.5 %

53.2 %

Non-GAAP gross margin

65.1 %

57.3 %

Research and development

GAAP research and development

$

41,972

$

37,429

Stock-based compensation expense and related employer payroll taxes(1)

(11,388

)

(8,893

)

Non-GAAP research and development

$

30,584

$

28,536

Sales and marketing

GAAP sales and marketing

$

55,114

$

49,313

Stock-based compensation expense and related employer payroll taxes(1)

(10,140

)

(6,693

)

Amortization of acquired intangible assets

(2,159

)

(2,301

)

Executive transition costs

(262

)

—

Non-GAAP sales and marketing

$

42,553

$

40,319

General and administrative

GAAP general and administrative

$

34,990

$

28,235

Stock-based compensation expense and related employer payroll taxes(1)

(13,592

)

(8,057

)

Executive transition costs

(1,061

)

(335

)

Non-GAAP general and administrative

$

20,337

$

19,843

Operating income (loss)

GAAP operating loss

$

(23,895

)

$

(38,179

)

Stock-based compensation expense and related employer payroll taxes(1)

37,868

25,582

Amortization of capitalized stock-based compensation - Cost of revenue

1,688

1,641

Executive transition costs

1,323

335

Amortization of acquired intangible assets

2,159

4,776

Non-GAAP operating income (loss)

$

19,143

$

(5,845

)

Net income (loss)

GAAP net loss

$

(20,524

)

$

(39,148

)

Stock-based compensation expense and related employer payroll taxes(1)

37,868

25,582

Amortization of capitalized stock-based compensation - Cost of revenue

1,688

1,641

Executive transition costs

1,323

335

Amortization of acquired intangible assets

2,159

4,776

Amortization of debt discount and issuance costs

401

217

Non-GAAP net income (loss)

$

22,915

$

(6,597

)

Non-GAAP net income (loss) per common share — basic

$

0.15

$

(0.05

)

Non-GAAP net income (loss) per common share — diluted

$

0.13

$

(0.05

)

Weighted average basic common shares

153,579

143,284

Weighted average diluted common shares

176,494

143,284

(1)

Similar to stock-based compensation, we believe it is also appropriate to exclude employer payroll taxes related to stock-based compensation from our non-GAAP financial measures in order to reflect the performance of our core business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies. However, we have not historically done so. In order to continue to improve the usefulness of our non-GAAP financial measures to the investors, starting with the quarter ended March 31, 2026, we are excluding stock-based compensation related employer payroll taxes from our non-GAAP financial measures. We did not recast the presentation for all prior periods presented due to the immaterial amount of such payroll taxes. Refer to Non-GAAP Financial Measures definition for further details.

Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, unaudited) (continued)

Three months ended
March 31,

2026

2025

Reconciliation of GAAP to Non-GAAP diluted shares

GAAP diluted shares

153,579

143,284

Other dilutive equity awards

22,915

—

Non-GAAP diluted shares

176,494

143,284

Non-GAAP diluted net income (loss) per share

0.13

(0.05

)

Three months ended
March 31,

2026

2025

Adjusted EBITDA

GAAP net loss

$

(20,524

)

$

(39,148

)

Stock-based compensation expense and related employer payroll taxes(1)

37,868

25,582

Amortization of capitalized stock-based compensation - Cost of revenue

1,688

1,641

Depreciation and other amortization

10,320

13,650

Amortization of acquired intangible assets

2,159

4,776

Amortization of debt discount and issuance costs

401

217

Executive transition costs

1,323

335

Interest income

(2,927

)

(2,975

)

Interest expense

2,905

2,956

Other expense, net

380

80

Income tax (benefit) expense

(4,130

)

691

Adjusted EBITDA

$

29,463

$

7,805

(1)

Similar to stock-based compensation, we believe it is also appropriate to exclude employer payroll taxes related to stock-based compensation from our non-GAAP financial measures in order to reflect the performance of our core business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies. However, we have not historically done so. In order to continue to improve the usefulness of our non-GAAP financial measures to the investors, starting with the quarter ended March 31, 2026, we are excluding stock-based compensation related employer payroll taxes from our non-GAAP financial measures. We did not recast the presentation for all prior periods presented due to the immaterial amount of such payroll taxes. Refer to Non-GAAP Financial Measures definition for further details.

Condensed Consolidated Balance Sheets
(in thousands, unaudited)

As of
March 31, 2026

As of
December 31, 2025

ASSETS

Current assets:

Cash and cash equivalents

$

146,670

$

180,563

Marketable securities

183,819

181,196

Accounts receivable, net of allowance for credit losses

130,037

118,029

Prepaid expenses and other current assets

29,560

26,921

Total current assets

490,086

506,709

Property and equipment, net

215,911

186,785

Operating lease right-of-use assets, net

57,697

52,067

Goodwill

670,356

670,356

Intangible assets, net

23,494

25,771

Other assets

55,984

57,789

Total assets

$

1,513,528

$

1,499,477

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

39,006

$

17,612

Accrued expenses

45,523

70,669

Long-term debt, current

—

38,557

Operating lease liabilities, current

28,107

24,427

Deferred revenue

39,560

35,234

Other current liabilities

11,244

7,499

Total current liabilities

163,440

193,998

Long-term debt, net

323,620

323,282

Operating lease liabilities, non-current

46,019

43,921

Other long-term liabilities

3,303

8,698

Total liabilities

536,382

569,899

Stockholders’ equity:

Common stock

3

3

Additional paid-in capital

2,112,577

2,044,103

Accumulated other comprehensive loss

(423

)

(41

)

Accumulated deficit

(1,135,011

)

(1,114,487

)

Total stockholders’ equity

977,146

929,578

Total liabilities and stockholders’ equity

$

1,513,528

$

1,499,477

Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)

Three months ended
March 31,

2026

2025

Cash flows from operating activities:

Net loss

$

(20,524

)

$

(39,148

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation expense

11,892

15,167

Amortization of intangible assets

2,277

4,900

Non-cash lease expense

6,198

5,655

Amortization of debt discount and issuance costs

401

217

Amortization of deferred contract costs

4,758

4,850

Stock-based compensation

34,981

25,582

Deferred income taxes

(4,330

)

422

Provision for credit losses

1,518

946

Loss on disposals of property and equipment

276

—

Accretion of discounts on investments

(798

)

(626

)

Other adjustments

(218

)

376

Changes in operating assets and liabilities:

Accounts receivable, net

(13,526

)

(3,993

)

Prepaid expenses and other current assets

(2,639

)

2,216

Other assets

1,350

(2,095

)

Accounts payable

6,812

2,575

Accrued expenses

3,523

(3,383

)

Operating lease liabilities

(5,809

)

(5,556

)

Other liabilities

2,724

9,183

Net cash provided by operating activities

28,866

17,288

Cash flows from investing activities:

Purchases of marketable securities

(179,340

)

(179,486

)

Maturities of marketable securities

177,143

7,969

Purchases of property and equipment

(21,021

)

(2,605

)

Capitalized internal-use software

(3,736

)

(4,763

)

Net cash used in investing activities

(26,954

)

(178,885

)

Cash flows from financing activities:

Repayment of convertible senior notes

(38,593

)

—

Payments of other debt issuance costs

(502

)

—

Repayments of finance lease liabilities

—

(1,711

)

Proceeds from exercise of vested stock options

1,043

408

Proceeds from employee stock purchase plan

2,279

2,131

Net cash (used in) provided by financing activities

(35,773

)

828

Effects of exchange rate changes on cash and cash equivalents

(32

)

78

Net decrease in cash and cash equivalents

(33,893

)

(160,691

)

Cash and cash equivalents at beginning of period

180,563

286,175

Cash and cash equivalents at end of period

146,670

125,484

Free Cash Flow
(in thousands, unaudited)

Three months ended
March 31,

2026

2025

Net cash provided by operating activities

$

28,866

$

17,288

Capital expenditures(1)

(24,757

)

(9,079

)

Free Cash Flow

$

4,109

$

8,209

(1)

Capital expenditures are defined as cash used for purchases of property and equipment, net of proceeds from sale of property and equipment, capitalized internal-use software and payments on finance lease obligations, as reflected in our statement of cash flows.

Investor Contact

Vernon Essi, Jr.

[email protected]

Media Contact

Stacey Hurwitz

[email protected]

Source: Fastly, Inc.

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