Summary
Fastly reported second-quarter revenue of $148.7 million, up 12% from the prior-year quarter. GAAP gross profit was $81.1 million, up 11.3%, while GAAP gross margin was 54.5%, down 0.5 percentage points. The operating loss was $36.9 million, an improvement from the prior-year quarter. Operating margin was -24.8%, up 10.5 percentage points from the prior-year quarter. Net loss was $37.5 million, an improvement from the prior-year quarter. Diluted EPS was -$0.26, an improvement of $0.06.
Operating cash flow was $25.8 million, up $30.8 million from the prior-year quarter. Capital expenditures were $9.9 million, up $8.1 million. Free cash flow, a non-GAAP measure, was $10.9 million positive, compared with $18.5 million negative in the prior-year quarter. Deferred revenue was $41.5 million, up 11.9%. Remaining performance obligations were $315.1 million, up 41%. Non-GAAP operating loss was $4.6 million, non-GAAP net loss per share was $0.03, and adjusted EBITDA was $8.9 million. The cash generation marks a sharp swing from the prior year.
Enterprise customer count was 622, up 21 from the prior-year quarter. Total customer count was 3,097, down 198. Last-twelve-month net retention rate rose to 104% from 100% in the first quarter of 2025. The top ten customers accounted for 31% of revenue, down from 34% a year earlier. Product package deals grew more than 50% year over year, and deals involving renewals grew over 130%. Fastly released AI Bot Management to general availability, enhanced DDoS protection with Attack Insights, added IPv6 to Origin support, and expanded into Mexico with a point of presence.
Guidance frames the next few quarters. For the third quarter of 2025, revenue is guided to $149.0 million to $153.0 million. Third-quarter non-GAAP operating income (loss) is expected between negative $1.0 million and positive $3.0 million. Third-quarter non-GAAP net income (loss) per share is guided to negative $0.02 to positive $0.02. For the full year 2025, revenue is guided to $594.0 million to $602.0 million. Full-year non-GAAP operating income (loss) is guided to negative $9.0 million to negative $3.0 million. Full-year non-GAAP net income (loss) per share is guided to negative $0.10 to negative $0.04. The company also announced that Kip Compton became CEO, Richard Wong will become CFO effective August 11, 2025, Ronald Kisling is leaving, and Scott Lovett was promoted to President, Go to Market.
Risks include customer concentration. The top ten customers were 31% of revenue, and TikTok was one of the largest customers. The TikTok legislation could reduce United States traffic if ByteDance does not divest, which could hurt the business. International expansion raises bandwidth costs outside the United States and Europe, which may pressure gross margins. Competition for sales personnel and supply chain disruptions, including tariffs, could raise costs. Data localization and cross-border data transfer laws add uncertainty. The company also identified goodwill impairment triggering events in the quarter, including a decrease in stock price and market capitalization, though it concluded that fair value still exceeded carrying value.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $148.7M | $144.5M | +2.9% | $132.4M | +12.3% |
| Gross profit | $81.1M | $76.8M | +5.6% | $72.9M | +11.3% |
| Gross margin | 54.5% | 53.2% | +1.4 pp | 55.1% | -0.5 pp |
| Research & development | $42.2M | $37.4M | +12.8% | $35.1M | +20.3% |
| Sales & marketing | $51.1M | $49.3M | +3.6% | $53.0M | -3.5% |
| General & administrative | $24.3M | $28.2M | -13.9% | $28.4M | -14.5% |
| Total operating expenses | $118.1M | $115.0M | +2.7% | $119.6M | -1.3% |
| Operating income (loss) | -$36.9M | -$38.2M | +3.2% | -$46.7M | +21.0% |
| Operating margin | -24.8% | -26.4% | +1.6 pp | -35.3% | +10.5 pp |
| Net income (loss) | -$37.5M | -$39.1M | +4.1% | -$43.7M | +14.2% |
| Net margin | -25.2% | -27.1% | +1.9 pp | -33.0% | +7.8 pp |
| Diluted EPS | -$0.26 | -$0.27 | +$0.01 | -$0.32 | +$0.06 |
| Customers | 3,097 | 3,035 | +2.0% | 3,072 | +0.8% |
Risks
10 largest customers generated 32% of revenue in trailing 12 months ended June 30, 2025, down from 37% in prior-year trailing period, but affiliated streaming entertainment customers represented 8% of trailing 12-month revenue. Loss or reduced usage by a major customer would lower revenues.
TikTok was one of Fastly's largest customers for the three and six months ended June 30, 2025 and remains a customer. US legislation could effectively ban TikTok unless ByteDance divests, with non-enforcement instructions extended until September 17, 2025; reduced TikTok US traffic could hurt business.
Fastly relies on limited suppliers for server components and flagged US tariffs and retaliatory counter-tariffs as risks that may increase production costs and disrupt supply. In year ended December 31, 2024, it recognized $4.1 million of equipment, internal-use software, and right-of-use asset write-off charges.
Fastly disclosed a material weakness in internal control over financial reporting. Failure to remediate and maintain effective controls could cause investors to lose confidence in financial reports and seriously harm stock price.
Failure to effectively develop and expand marketing and sales capabilities was marked as a substantive risk change. Total customer count decreased to 3,097 as of June 30, 2025 from 3,295 as of June 30, 2024, while LTM NRR decreased to 104.4% from 109.6%, though enterprise customer count increased to 622 from 601.
Remaining 2026 Notes of $188.6 million principal mature March 15, 2026 unless converted, redeemed, or repurchased. Interest expense increased 582% for quarter ended June 30, 2025 primarily due to coupon interest on 2028 Notes issued December 2024. Ability to repay or settle conversions in cash may be limited.
Putative securities class action filed May 24, 2024 and related stockholder derivative complaints remain pending; motion to dismiss briefing completed as of April 30, 2025. Defense and any adverse outcome could result in substantial damages and management distraction.
Risk factor marked as substantive change: reliance on highly skilled personnel, including senior management and key employees. Loss or transition of one or more such personnel or a significant number of team members could harm business, and competition for sales personnel with required skills is significant.
Gross margin declined to 54% for six months ended June 30, 2025 from 55% in prior-year period due to increases in bandwidth costs, depreciation and amortization, software costs, and colocation costs. Higher international bandwidth costs outside US and Europe may pressure margins.
During quarter ended June 30, 2025, Fastly identified triggering events including a decrease in stock price and market capitalization. It concluded fair value still substantially exceeded carrying value, but further market cap declines could require goodwill impairment.
Laws on data localization and cross-border data transfers create uncertainty for data stored abroad and transferred across borders, which could impact customer growth and acquisition for customers and potential customers conducting business in Europe and elsewhere outside the United States.
Fastly faces competition from Akamai, Cloudflare, F5, Thales, AWS, Google Cloud, Microsoft Azure, and others. Existing customers have transitioned or notified intent to transition off the platform or pursue do-it-yourself CDN approaches, which may limit use.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Total Customer Count
Non-GAAP Operating Loss
Remaining Performance Obligations (RPO)
Enterprise Customer Revenue %
Adjusted EBITDA
LTM Net Retention Rate
Top Ten Customer Revenue %
Enterprise Customer Count (>$100K ARR)
Summary, forecast, risks and KPIs are extracted from Fastly, Inc.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.