Q2 2026 Fastly Inc Earnings Call Transcript
Key Points
- Record revenue of $183 million, up 23% year-over-year, exceeding guidance.
- Fifth consecutive quarter of improving net retention rate, reaching 117%.
- Security revenue grew 43% year-over-year, with DDoS and bot management growing at triple-digit rates.
- Record gross margin of 65.8% and fourth consecutive quarter of operating profit.
- Sixth consecutive quarter of positive free cash flow, with strong cash position of $337 million.
- Revenue growth outside top 10 customers slowed to 12% year-over-year, indicating concentration risk.
- Top 10 customers now represent 37% of revenue, up from previous quarter, increasing customer concentration.
- Q3 revenue guidance implies a deceleration to 18% growth at midpoint, down from 23% in Q2.
- Operating expenses expected to rise in Q3 due to hiring and discretionary spend, pressuring margins.
- CapEx is front-loaded in 2026, with infrastructure spend expected to be 10-12% of revenue, up from 5% in 2025.
Good afternoon. My name is Corey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fastly second quarter 2026 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to turn the conference over to Vern Essi, Investor Relations at Fastly. Please go ahead.
Thank you, and welcome, everyone, to our second quarter 2026 earnings conference call. We have Fastly's CEO, Kip Compton; and CFO, Rich Wong, with us today. The webcast of this call can be accessed through our website, fastly.com and will be archived for 1 quarter. A copy of today's earnings press release, related financial tables and supplement, all of which are furnished in our 8-K filing today can be found in the Investor Relations portion of Fastly's website, along with the investor presentation.
During this call, we will make forward-looking statements, including statements related to the expected
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