Fastly’s Q2 results for 2026 reflected a period of robust growth and operational improvement, though the market responded negatively. Management attributed the quarter’s performance to an expanding security business, increased adoption of its unified platform, and a notable rise in AI-driven and machine-generated traffic. CEO Charles Compton emphasized the significance of Fastly’s unified approach, stating the company’s “platform strategy is foundational to our success,” while also highlighting strong customer wins and deepening relationships with top clients. CFO Richard H. Wong pointed to ongoing operational discipline and efficiency gains as factors supporting record gross margins and the company’s sixth consecutive quarter of positive free cash flow.
Is now the time to buy FSLY? Find out in our full research report (it’s free for active Edge members).
Fastly (FSLY) Q2 CY2026 Highlights:
- Revenue: $183.3 million vs analyst estimates of $174 million (23.3% year-on-year growth, 5.3% beat)
- Adjusted EPS: $0.15 vs analyst estimates of $0.07 (significant beat)
- Adjusted EBITDA: $38.12 million vs analyst estimates of $26.45 million (20.8% margin, 44.1% beat)
- The company lifted its revenue guidance for the full year to $739 million at the midpoint from $717.5 million, a 3% increase
- Management raised its full-year Adjusted EPS guidance to $0.52 at the midpoint, a 73.3% increase
- Operating Margin: -7.9%, up from -24.8% in the same quarter last year
- Net Revenue Retention Rate: 117%
- Market Capitalization: $4.58 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Fastly’s Q2 Earnings Call
- Jackson Ader (KeyBanc Capital Markets) asked about the impact of AI-driven traffic and potential share gains in network services. CEO Charles Compton responded that AI is driving demand across products, with Fastly gaining share where performance matters most, but does not break out agentic traffic specifically.
- Frank Louthan (Raymond James) inquired about the nature of AI-related workflows and the drivers behind security growth. CFO Richard H. Wong explained that increased traffic complexity and new security features are boosting adoption, while Compton emphasized customers consolidating security on Fastly for effectiveness and resilience.
- Peter Levine (Evercore) questioned the process of co-innovation and customer input into product development. Compton described joint projects with customers addressing issues like piracy and AI traffic, noting these collaborations often yield new marketable products.
- Rudy Kessinger (D.A. Davidson) highlighted growing revenue concentration among top customers and asked about expectations for the rest of the year. Compton acknowledged the concentration and said efforts are ongoing to diversify, while Wong suggested top customer share could remain elevated.
- Fatima Boolani (Citi) asked about the pricing environment and the sustainability of the net retention rate. Wong reported stable, rational pricing with minor erosion due to volume discounts, and noted the net retention rate may face tougher comparisons in upcoming quarters.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will be monitoring (1) the pace of new customer acquisition and cross-sell of security and compute products, (2) ongoing diversification efforts to reduce reliance on top customers, and (3) the impact of AI-driven and automated traffic on overall usage and product uptake. We are also keeping an eye on Fastly’s ability to sustain margin improvements as infrastructure investments and hiring ramp up.
Fastly currently trades at $28.83, up from $26.03 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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