Fastly, Inc. 10-Q

Item 1. Financial Statements FASTLY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) As of June 30, 2026 As of December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 89,798 $ 180,563 Marketable securities 247,700 181,196 Accounts receivable, net of allowance for credit losses of $ 6,967 and $ 6,262 as of June 30, 2026 and December 31, 2025, respectively 114,216 118,029 Prepaid expenses and other current assets 27,333 26,921 Total current assets 479,047 506,709 Property and equipment, net 220,354 186,785 Operating lease right-of-use assets, net 58,213 52,067 Goodwill 670,356 670,356 Intangible assets, net 21,232 25,771 Other assets 54,441 57,789 Total assets $ 1,503,643 $ 1,499,477 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 20,124 $ 17,612 Accrued expenses 52,937 70,669 Long-term debt, current — 38,557 Operating lease liabilities, current 30,100 24,427 Deferred revenue 34,266 35,234 Other current liabilities 5,096 7,499 Total current liabilities 142,523 193,998 Long-term debt, net 323,958 323,282 Operating lease liabilities, non-current 44,234 43,921 Other long-term liabilities 2,111 8,698 Total liabilities 512,826 569,899 Commitments and contingencies (Note 9) Stockholders’ equity: Class A common stock, $ 0.00002 par value; 1,000,000,000 shares authorized as of both June 30, 2026 and December 31, 2025; 159,073,910 and 151,537,271 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 3 3 Class B common stock, $ 0.00002 par value; 4,191,275 shares authorized as of June 30, 2026 and December 31, 2025; no shares issued and outstanding as of both June 30, 2026 and December 31, 2025 — — Additional paid-in capital 2,141,909 2,044,103 Accumulated other comprehensive loss ( 493 ) ( 41 ) Accumulated deficit ( 1,150,602 ) ( 1,114,487 ) Total stockholders’ equity 990,817 929,578 Total liabilities and stockholders’ equity $ 1,503,643 $ 1,499,477 The accompanying notes are an integral part of the condensed consolidated financial statements. 5 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue $ 183,317 $ 148,709 $ 356,338 $ 293,183 Cost of revenue 67,366 67,593 132,206 135,269 Gross profit 115,951 81,116 224,132 157,914 Operating expenses: Research and development 42,071 42,221 84,043 79,650 Sales and marketing 56,735 51,100 111,849 100,413 General and administrative 31,578 24,323 66,568 52,558 Impairment expense — 415 — 415 Total operating expenses 130,384 118,059 262,460 233,036 Loss from operations ( 14,433 ) ( 36,943 ) ( 38,328 ) ( 75,122 ) Interest income 2,842 3,084 5,769 6,059 Interest expense ( 3,348 ) ( 3,164 ) ( 6,654 ) ( 6,337 ) Other (expense) income, net ( 400 ) 39 ( 780 ) ( 41 ) Loss before income taxes ( 15,339 ) ( 36,984 ) ( 39,993 ) ( 75,441 ) Income tax expense (benefit) 252 557 ( 3,878 ) 1,248 Net loss $ ( 15,591 ) $ ( 37,541 ) $ ( 36,115 ) $ ( 76,689 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.10 ) $ ( 0.26 ) $ ( 0.23 ) $ ( 0.53 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 157,596 145,780 155,598 144,539 The accompanying notes are an integral part of the condensed consolidated financial statements. 6 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Net loss $ ( 15,591 ) $ ( 37,541 ) $ ( 36,115 ) $ ( 76,689 ) Other comprehensive loss: Unrealized loss on investments in available-for-sale securities ( 70 ) ( 39 ) ( 452 ) ( 69 ) Total other comprehensive loss ( 70 ) ( 39 ) ( 452 ) ( 69 ) Comprehensive loss $ ( 15,661 ) $ ( 37,580 ) $ ( 36,567 ) $ ( 76,758 ) There were no material reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2026 and 2025. Additionally, there was no material tax impact on the amounts presented. The accompanying notes are an integral part of the condensed consolidated financial statements. 7 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands; unaudited) Three months ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2026 156,368 $ 3 $ 2,112,577 $ ( 423 ) $ ( 1,135,011 ) $ 977,146 Exercise of vested stock options 31 — 92 — — 92 Vesting of restricted stock units 2,178 — — — — — Shares issued under employee stock purchase program 497 — 4,609 — — 4,609 Stock-based compensation — — 24,631 — — 24,631 Net loss — — — — ( 15,591 ) ( 15,591 ) Other comprehensive loss — — — ( 70 ) — ( 70 ) Balance at June 30, 2026 159,074 $ 3 $ 2,141,909 $ ( 493 ) $ ( 1,150,602 ) $ 990,817 Three months ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at March 31, 2025 144,686 $ 3 $ 1,989,108 $ ( 130 ) $ ( 1,031,958 ) $ 957,023 Exercise of vested stock options 149 — 279 — — 279 Vesting of restricted stock units 1,823 — — — — — Shares issued under employee stock purchase program 514 — 3,325 — — 3,325 Stock-based compensation — — 19,600 — — 19,600 Net loss — — — — ( 37,541 ) ( 37,541 ) Other comprehensive loss — — — ( 39 ) — ( 39 ) Balance at June 30, 2025 147,172 $ 3 $ 2,012,312 $ ( 169 ) $ ( 1,069,499 ) $ 942,647 8 Six months ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2025 151,537 $ 3 $ 2,044,103 $ ( 41 ) $ ( 1,114,487 ) $ 929,578 Exercise of vested stock options 255 — 1,135 — — 1,135 Vesting of restricted stock units 4,605 — — — — — Shares issued under bonus program 2,180 — 39,455 — — 39,455 Shares issued under employee stock purchase program 497 — 4,609 — — 4,609 Stock-based compensation — — 52,607 — — 52,607 Net loss — — — — ( 36,115 ) ( 36,115 ) Other comprehensive loss — — — ( 452 ) — ( 452 ) Balance at June 30, 2026 159,074 $ 3 $ 2,141,909 $ ( 493 ) $ ( 1,150,602 ) $ 990,817 Six months ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 142,086 $ 3 $ 1,958,157 $ ( 100 ) $ ( 992,810 ) $ 965,250 Exercise of vested stock options 317 — 687 — — 687 Vesting of restricted stock units 3,304 — — — — — Shares issued under bonus program 951 — 6,898 — — 6,898 Shares issued under employee stock purchase program 514 — 3,325 — — 3,325 Stock-based compensation — — 43,245 — — 43,245 Net loss — — — — ( 76,689 ) ( 76,689 ) Other comprehensive loss — — — ( 69 ) — ( 69 ) Balance at June 30, 2025 147,172 $ 3 $ 2,012,312 $ ( 169 ) $ ( 1,069,499 ) $ 942,647 The accompanying notes are an integral part of the condensed consolidated financial statements. 9 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited) Six months ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 36,115 ) $ ( 76,689 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation expense 24,612 30,129 Amortization of intangible assets 4,539 9,778 Non-cash lease expense 13,085 11,349 Amortization of debt discount and issuance costs 767 434 Amortization of deferred contract costs 9,491 9,697 Stock-based compensation 70,153 51,917 Deferred income taxes ( 4,353 ) 749 Provision for credit losses 2,532 1,994 Loss (gain) on disposals of property and equipment 267 ( 43 ) Accretion of discounts and amortization of premiums, net ( 1,817 ) ( 1,982 ) Impairment expense — 415 Non-cash interest expense 969 969 Other adjustments ( 275 ) 292 Changes in operating assets and liabilities: Accounts receivable, net 1,281 ( 3,324 ) Prepaid expenses and other current assets ( 412 ) 2,337 Other assets ( 1,845 ) ( 8,171 ) Accounts payable 8,309 6,021 Accrued expenses 872 ( 1,806 ) Operating lease liabilities ( 12,923 ) ( 7,888 ) Other liabilities ( 10,937 ) 16,908 Net cash provided by operating activities 68,200 43,086 Cash flows from investing activities: Purchases of marketable securities ( 266,602 ) ( 272,926 ) Maturities of marketable securities 201,472 45,805 Purchases of property and equipment ( 52,644 ) ( 12,457 ) Proceeds from sale of property and equipment 10 44 Capitalized internal-use software ( 7,884 ) ( 9,305 ) Net cash used in investing activities ( 125,648 ) ( 248,839 ) Cash flows from financing activities: Repayment of convertible senior notes ( 38,593 ) — Payments of other debt issuance costs ( 502 ) — Repayments of finance lease liabilities — ( 2,248 ) Proceeds from exercise of vested stock options 1,135 687 Proceeds from employee stock purchase plan 4,676 3,371 Net cash (used in) provided by financing activities ( 33,284 ) 1,810 Effects of exchange rate changes on cash and cash equivalents ( 33 ) 255 Net decrease in cash and cash equivalents ( 90,765 ) ( 203,688 ) Cash and cash equivalents at beginning of period 180,563 286,175 Cash and cash equivalents at end of period $ 89,798 $ 82,487 The accompanying notes are an integral part of the condensed consolidated financial statements. 10 FASTLY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—Continued (in thousands) (unaudited) Six months ended June 30, 2026 2025 Supplemental disclosure of cash flow information: Cash paid for interest $ 5,925 $ 5,733 Cash paid for income taxes, net of refunds received $ 597 $ 745 Cash paid for finance lease interest $ — $ 15 Noncash investing and financing activities: Property and equipment additions not yet paid in cash or financed $ 2,416 $ 2,193 Capitalized stock-based compensation $ 3,238 $ 3,487 Assets obtained in exchange for operating lease obligations $ 14,858 $ 2,946 Net non-cash change in operating lease assets and liabilities associated with modifications and terminations $ 4,374 $ 11,223 Deployments of prepaid capital equipment $ — $ 6,498 The accompanying notes are an integral part of the condensed consolidated financial statements. 11 1. Nature of Business Fastly, Inc. is an edge cloud platform that can process, serve, and secure its customers' applications as close to their end users as possible. The Company was incorporated in Delaware in 2011 and is headquartered in San Francisco, California. As used herein, “Fastly,” “the Company,” “its,” and similar terms include Fastly, Inc. and its subsidiaries, unless the context indicates otherwise. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted, and accordingly the balance sheet as of June 30, 2026, and related disclosures, have been derived from the audited consolidated financial statements, but do not include all of the information required by U.S. GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments that are necessary for the fair statement of the Company’s condensed consolidated financial information. Certain prior year information has been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit. The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with Item 8, “Financial Statements and Supplementary Data” included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026. Principles of Consolidation The Company’s condensed consolidated financial statements include its accounts and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. Actual results and outcomes could differ significantly from the Company’s estimates, judgments, and assumptions. Significant estimates, judgments, and assumptions used in these financial statements include, but are not limited to, those related to revenue and revenue reserves, the allowance for credit losses, the incremental borrowing rate related to the Company’s lease liabilities, the useful lives of long-lived assets, fair value of financial instruments, the period of benefit for deferred contract acquisition costs, income tax reserves, and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates are reflected in the condensed consolidated financial statements in the period of change and prospectively from the date of the change in estimate. The Company has implemented software and hardware initiatives to manage its global network more efficiently and has determined, effective January 1, 2026, that the effective useful life of its servers has increased from five years to six years . As a result, depreciation expense as well as net loss decreased by $ 2.9 million and $ 6.2 million for the three and six months ended June 30, 2026, respectively. Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies as compared to those described in “Note 2 – Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 12 Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03 “Disaggregation of Income Statement Expenses,” which aims to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for the Company's annual periods beginning in 2027 and interim periods beginning in the first quarter of fiscal year 2028. The Company is currently evaluating the impact of the new guidance. In November 2024, the FASB issued ASU 2024-04 “Induced Conversions of Convertible Debt Instruments,” which amends ASC 470-20 to clarify the requirements related to accounting for the settlement of a debt instrument as an induced conversion. The guidance is effective for the Company's annual periods beginning in 2026 and interim periods within those annual reporting periods. The Company adopted the standard effective January 1, 2026 on a prospective basis. Adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which aims to clarify and modernize the accounting for costs related to internal-use software. The guidance is effective for the Company's interim and annual periods beginning in 2028. The Company is currently evaluating the impact of the new guidance. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. The Company’s cash, cash equivalents, and marketable securities primarily consisted of U.S. government money market funds, investment-grade commercial paper, corporate notes and bonds, U.S. treasury securities, municipal bonds, and certificates of deposit. The primary focus of its investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy limits the amount of credit exposure with any one financial institution or commercial issuer. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents to the extent recorded in the balance sheets. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically dispersed customers diversified across several industries. For purposes of assessing concentration of credit risk, a group of entities known to the Company to be under common control is considered as a single customer. This definition was previously described as affiliated customers that are business units of a single company. The update to the definition does not impact the nature of the assessment or its conclusions, which are consistent with prior periods presented. As of June 30, 2026, one customer accounted for 10 % of the Company's receivables. As of December 31, 2025, no customers accounted for 10% or more of the Company's receivables. For the three months ended June 30, 2026, there was one customer who accounted for 11 % of the Company's revenue. For the six months ended June 30, 2026, there was one customer who accounted for 10 % of the Company's revenue. For the three months ended June 30, 2025, there was one customer who accounted for 10 % of the Company's revenue. For the six months ended June 30, 2025, there were no customers who accounted for 10% or more of the Company's revenue. 13 3. Revenue Disaggregation of Revenue Revenue by geography is based on the billing address of the customer. Aside from the United States, no other single country accounted for 10 % or more of revenue for the three and six months ended June 30, 2026 and 2025. The following table presents the Company’s net revenue by geographic region: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands) United States $ 128,745 $ 112,770 $ 251,611 $ 221,541 All other countries 54,572 35,939 104,727 71,642 Total revenue $ 183,317 $ 148,709 $ 356,338 $ 293,183 The Company reports its revenue by three product lines: Network Services, Security, and Other. Network Services include solutions designed to improve performance of websites, apps, application programming interfaces (“APIs”), and digital media. Security includes products designed to protect websites, apps, APIs, and users. Other includes Compute solutions that allow developers to build and deploy modern web applications on Fastly's edge cloud platform and Observability solutions that provide real-time logs, data, and metrics streamed from Fastly's edge platform for actionable insights. The following table presents the Company’s revenue by product line: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands) Network Services $ 133,897 $ 114,877 $ 260,134 $ 228,106 Security 41,723 29,267 80,485 55,702 Other 7,697 4,565 15,719 9,375 Total revenue $ 183,317 $ 148,709 $ 356,338 $ 293,183 Contract Balances The Company records a contract asset, or unbilled receivable, when a contractual right to consideration exists for both completed and partially completed performance obligations that have not been invoiced. Contract assets are typically related to the Company's subscription services and platform usage. Contract assets are included in accounts receivable, net on the Company's condensed consolidated balance sheets. The Company records a contract liability, or deferred revenue, when a contract is billed to customers in advance of revenue being recognized. Deferred revenue primarily consists of the unearned portions of billings for the Company’s security subscription services and the unearned portion of committed edge cloud platform usage. Contract liabilities are included in deferred revenue for the current portion and other long term liabilities for the long-term portion on the condensed consolidated balance sheets. The following table presents the Company’s contract assets and contract liabilities as of June 30, 2026 and as of December 31, 2025: As of June 30, 2026 As of December 31, 2025 (in thousands) Contract assets $ 1,319 $ 1,668 Contract liabilities $ 36,244 $ 40,819 14 The following table presents revenue recognized during the three and six months ended June 30, 2026 and 2025 from amounts included in contract liability at the beginning of the period: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands) Revenue recognized in the period from amounts included in contract liability at the beginning of the period $ 15,211 $ 13,473 $ 24,227 $ 20,696 Remaining Performance Obligations (“RPO”) Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods for non-cancelable subscription arrangements and usage commitments. The Company’s RPO excludes performance obligations from on-demand arrangements when there are no minimum purchase commitments associated with these arrangements. As of June 30, 2026, the aggregate amount of the transaction price in our contracts allocated to remaining performance obligations that are unsatisfied or partially unsatisfied was $ 340.9 million. As of June 30, 2026, the Company expects to recognize approximately 79 % of its remaining performance obligations over the next 12 months. The Company’s typical contractual term with its customers is one year, although terms may vary by contract. 4. Investments and Fair Value Measurements Fair Value of Financial Instruments The Company measures its cash equivalents and marketable securities at fair value. The Company classifies its cash equivalents and marketable securities within Level 1 or Level 2 because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company classifies its investments, which are comprised of corporate notes and bonds, commercial paper, U.S. treasury securities, certificates of deposit, and municipal securities within Level 2 of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. Financial assets and liabilities are measured and recorded at fair value on a recurring basis. The following table summarizes adjusted cost, gross unrealized gains and losses, and fair value related to cash equivalents and available-for-sale securities on the accompanying condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. For certain of the Company’s financial instruments, including cash held in banks, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to their short maturities, and are therefore excluded from the fair value tables below. As of June 30, 2026 Reported as: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash equivalents* Marketable securities: (in thousands) Level 1: Money market funds $ 21,652 $ — $ — $ 21,652 $ 21,652 $ — Level 2: U.S. Treasury securities 70,776 — ( 87 ) 70,689 4,783 65,906 Corporate notes and bonds 92,276 — ( 158 ) 92,118 — 92,119 Commercial paper 91,100 — ( 134 ) 90,966 3,691 87,275 Municipal Securities 500 — — 500 500 — Certificates of deposit 2,400 — ( 1 ) 2,399 — 2,400 Total $ 278,704 $ — $ ( 380 ) $ 278,324 $ 30,626 $ 247,700 15 * Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 59.2 million of cash, as of June 30, 2026. As of December 31, 2025 Reported as: Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Cash equivalents* Marketable securities: (in thousands) Level 1: Money market funds $ 44,032 $ — $ — $ 44,032 $ 44,032 $ — Level 2: U.S. Treasury securities 64,273 27 — 64,300 8,290 56,010 Corporate notes and bonds 50,942 19 — 50,961 4,570 46,391 Commercial paper 111,706 20 ( 2 ) 111,724 33,928 77,796 Municipal Securities 1,600 — — 1,600 1,600 — Certificates of deposit 1,399 — — 1,399 400 999 Total $ 273,952 $ 66 $ ( 2 ) $ 274,016 $ 92,820 $ 181,196 * Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 87.7 million of cash, as of December 31, 2025. The contractual maturities of the Company's marketable securities are all due in one year or less as of June 30, 2026. There were no transfers of assets and liabilities measured at fair value between Level 1 and Level 2, or between Level 2 and Level 3, during the three and six months ended June 30, 2026 and 2025. For the three and six months ended June 30, 2026 and 2025, the Company did not record any impairment charges for its marketable debt securities in its condensed consolidated statements of operations. 5. Balance Sheet Information Property and Equipment, Net Property and equipment, net consisted of the following: As of June 30, 2026 As of December 31, 2025 (in thousands) Computer and networking equipment $ 325,069 $ 278,181 Leasehold improvements 8,174 8,181 Furniture and fixtures 2,663 2,430 Office equipment 1,225 1,232 Internal-use software 159,344 148,419 Property and equipment, gross $ 496,475 $ 438,443 Accumulated depreciation and amortization ( 276,121 ) ( 251,658 ) Property and equipment, net $ 220,354 $ 186,785 Depreciation on property and equipment for the three months ended June 30, 2026 and 2025 was approximately $ 12.7 million and $ 15.0 million, respectively. Included in these amounts was amortization expense for capitalized internal-use software costs of approximately $ 5.9 million and $ 5.4 million for the three months ended June 30, 2026 and 2025, respectively. Depreciation on property and equipment for the six months ended June 30, 2026 and 2025 was approximately $ 24.6 million and $ 30.1 million, respectively. Included in these amounts was amortization expense for capitalized internal-use software costs of approximately $ 11.8 million and $ 11.0 million for the six months ended June 30, 2026 and 2025, respectively. 16 Other Assets Other assets consisted of the following: As of June 30, 2026 As of December 31, 2025 (in thousands) Deferred contract costs, net $ 42,890 $ 47,586 Other assets 11,551 10,203 Total other assets $ 54,441 $ 57,789 During the three months ended June 30, 2026 and 2025, the Company recognized $ 4.7 million and $ 4.8 million of amortization related to deferred contract costs, respectively. These costs are recorded within sales and marketing expenses on the accompanying condensed consolidated statements of operations. During the six months ended June 30, 2026 and 2025, the Company recognized $ 9.5 million and $ 9.7 million of amortization related to deferred contract costs, respectively. These costs are recorded within sales and marketing expenses on the accompanying condensed consolidated statements of operations. Accrued Expenses Accrued expenses consisted of the following: As of June 30, 2026 As of December 31, 2025 (in thousands) Accrued compensation and related benefits $ 28,332 $ 46,611 Accrued colocation and bandwidth costs 16,619 13,944 Other tax liabilities 4,568 4,800 Other accrued expenses 3,418 5,314 Total accrued expenses $ 52,937 $ 70,669 6. Leases The Company has operating leases for corporate offices and data centers (“colocation” leases). The Company’s operating leases have remaining lease terms ranging from less than 1 year to 8 years, some of which include options to extend the leases. The Company also subleases a portion of its corporate office space. The Company’s sublease has a remaining lease term of 4 years. The components of operating lease cost were as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands) Operating lease cost $ 8,139 $ 6,719 $ 15,532 $ 13,301 Variable lease cost 6,021 5,154 11,397 10,127 Total operating lease costs $ 14,160 $ 11,873 $ 26,929 $ 23,428 The short-term lease costs were not material for either of the three and six months ended June 30, 2026 and 2025. The Company did not recognize any material impairment charges on its operating lease right-of-use assets for either of the three and six months ended June 30, 2026 or 2025. As of June 30, 2026 As of December 31, 2025 Weighted Average Remaining Lease Term (in years) 4.08 4.39 Weighted Average Discount Rate 7.13 % 7.16 % 17 Future minimum lease payments under non-cancellable operating leases as of June 30, 2026 were as follows: (in thousands) Remaining 2026 $ 22,150 2027 35,776 2028 19,494 2029 8,744 2030 5,152 Thereafter 15,288 Total future minimum lease payments $ 106,604 Less: imputed interest ( 12,738 ) Present value of operating lease liabilities $ 93,866 As of June 30, 2026, the Company has undiscounted commitments of $ 19.5 million for operating leases that have not yet commenced, and therefore are not included in the right-of-use asset or operating lease liability. These operating leases will commence in subsequent quarters of 2026 with lease terms of up to 5 years. 7. Goodwill and Intangible Assets Goodwill As of June 30, 2026 and December 31, 2025, the Company’s goodwill was $ 670.4 million. The Company did no t record an impairment charge on goodwill during either of the three and six months ended June 30, 2026 and 2025. Intangible Assets, net As of June 30, 2026 and December 31, 2025, the Company’s intangible assets consisted of the following: As of June 30, 2026 As of December 31, 2025 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in thousands) Intangible assets: Customer relationships $ 69,100 $ ( 49,666 ) $ 19,434 $ 69,100 $ ( 45,347 ) $ 23,753 Developed technology 49,500 ( 49,500 ) — 49,500 ( 49,500 ) — Trade names 3,300 ( 3,300 ) — 3,300 ( 3,300 ) — Internet protocol addresses 4,984 ( 3,186 ) 1,798 4,984 ( 2,966 ) 2,018 Total intangible assets $ 126,884 $ ( 105,652 ) $ 21,232 $ 126,884 $ ( 101,113 ) $ 25,771 Amortization expense was $ 2.3 million and $ 4.9 million for the three months ended June 30, 2026 and 2025, respectively. Amortization expense was $ 4.5 million and $ 9.8 million for the six months ended June 30, 2026 and 2025, respectively. 18 The expected amortization expense of intangible assets subject to amortization as of June 30, 2026 is as follows: As of June 30, 2026 (in thousands) Remainder of 2026 $ 4,525 2027 9,051 2028 6,891 2029 378 2030 281 Thereafter 106 Total $ 21,232 8. Debt Instruments Senior Secured Credit Facilities Credit Agreement On February 16, 2021, the Company entered into a Senior Secured Credit Facilities Credit Agreement (as amended, restated, amended and restated, supplemented, restructured, or otherwise modified from time to time, the “Credit Agreement”) with the lenders from time to time party thereto (the “Lenders”) and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as a lender and as administrative agent and collateral agent for the Lenders. The Credit Agreement provides for a $ 60.0 million senior secured revolving facility, with a maturity date of the earlier of (i) April 30, 2027 and (ii) so long as any of our permitted convertible debt is outstanding after January 30, 2027 and if Net Liquidity (as defined in the Credit Agreement) is less than $ 200.0 million (or, if the amount of outstanding permitted convertible debt is less than $ 35.0 million, $ 120.0 million), such date. The Company recorded $ 0.6 million of debt issuance costs associated with the Credit Agreement in other assets on the Company’s condensed consolidated balance sheets. The revolving loans bear interest, at the Company’s election, at an annual rate based on the ABR (as defined in the Credit Agreement) plus 1.00 % (such loans, the “ABR Loans”) or the Adjusted Term SOFR (as defined in the Credit Agreement) plus 2.00 % (such loans, the “SOFR Loans”). Interest payments on outstanding borrowings are due, with respect to SOFR Loans, on the last day of each interest period and with respect to ABR Loans, on the last calendar day of each month. The Credit Agreement has a commitment fee on the unused portion of the borrowing commitment, which is payable on the last day of each calendar quarter at a rate per annum of 0.20 % to 0.25 % depending on the average daily outstanding balance of all loans and letters of credit under the Credit Agreement. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain a consolidated adjusted quick ratio of at least 1.25 to 1.00 tested on a quarterly basis as well as a springing revenue growth covenant not to be less than 5 % on a quarterly basis for certain periods if the Company’s consolidated adjusted quick ratio falls below 1.75 to 1.00 on the last day of any fiscal quarter. The Credit Agreement requires the Company to comply with various affirmative and negative covenants, and contains customary events of default. As of June 30, 2026, the Company was in compliance with all of the Credit Agreement’s covenants. During the three and six months ended June 30, 2026 and 2025, no amounts were drawn down on the Credit Agreement. As of June 30, 2026 and December 31, 2025, no amounts were outstanding under the Credit Agreement. Convertible Senior Notes On March 5, 2021, the Company issued approximately $ 948.8 million aggregate principal amount of 0 % convertible senior unsecured notes due 2026 (the “2026 Notes”), including the exercise in full by the initial purchasers of their option to purchase up to an additional approximately $ 123.8 million principal amount of the 2026 Notes. The 2026 Notes were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The net proceeds from the issuance of the 2026 Notes were approximately $ 930.0 million after deducting the initial purchasers’ discounts and transaction costs. 19 On May 25, 2022, the Company entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase (the “Repurchases”) $ 235.0 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 176.4 million and aggregate transaction costs of $ 0.7 million. During the year ended December 31, 2023, the Company entered into several separate privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 367.3 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 309.1 million and aggregate transaction costs of $ 2.0 million. During the year ended December 31, 2024, the Company entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to exchange $ 157.9 million aggregate principal amount of the 2026 Notes for $ 150.0 million aggregate principal amount of 7.75 % convertible senior unsecured notes due 2028 (the “2028 Notes”), which were issued in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. During the six months ended June 30, 2026, the 2026 Notes matured and were repaid in full. During the year ended December 31, 2025, the Company issued $ 180.0 million aggregate principal amount of 0 % convertible senior unsecured notes due in 2030 (the “2030 Notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. Concurrentl y with issuance of the 2030 Notes, the Company also entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase $ 150.0 million aggregate principal amount of the 2026 Notes for an aggregate cash repurchase price of $ 148.9 million. The repurchase was accounted for as a debt extinguishment and resulted in a net gain of $ 0.9 million, which was recorded as non-operating income on the Company’s condensed consolidated statement of operations for the year ended December 31, 2025. As of June 30, 2026, the Company's outstanding convertible senior note s (collectively, the "Notes") had a par value totaling $ 330.0 million. The following table summarizes further details of the Notes: Notes Issuance Date Maturity Date Principal amount (in thousands) Coupon Interest Rate Effective Interest Rate 2028 Notes December 5, 2024 June 1, 2028 $ 150,000 7.75 % 7.77 % 2030 Notes December 9, 2025 December 15, 2030 $ 180,000 0 % 0.76 % Capped Calls In connection with the pricing of the issuance of the 2030 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the "Capped Calls") in the year ended December 31, 2025. The Capped Calls associated with the 2030 Notes each had an initial strike price of approximately $ 15.26 per share. These Capped Calls had initial cap prices of $ 23.04 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the 2030 Notes, with such offset subject to a cap based on the cap price. The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offers and the announcement of such events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, increased cost of hedging and hedging disruptions. For accounting purposes, the Capped Calls are separate transactions and not part of the terms of the 2030 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity resulting in an $ 18.2 million decrease in additional paid in capital as of December 31, 2025. Redemption Rights of the Notes The Company may not redeem the 2028 Notes prior to the maturity date. The 2030 Notes may not be redeemed by the Company prior to December 20, 2028. On or after December 20, 2028, if the common stock price is at least 130 % of the conversion price for the 2030 Notes in effect for at least 20 of any 30 consecutive trading day period, the Company may redeem all or part of the 2030 Notes at a redemption price equal to the principal amount and accrued and unpaid interest with at least 35 days’ notice to holders. If the Company undergoes a fundamental change at any time prior to the maturity date of the 2030 Notes, holders of the 2030 Notes will have the right, at their option, to require the Company to repurchase for cash all or any portion of their 2030 Notes at a repurchase price equal to 100 % of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. 20 Conversion Rights of the Notes Prior to the close of business on the business day immediately preceding the conversion date, as noted in the table below, under the following circumstances a holder may exercise their conversion right: (1) During any calendar quarter commencing after the calendar quarter ended March 31, 2025 for the 2028 Notes and March 31, 2026 for the 2030 Notes (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (2) During the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the respective Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or (3) Upon the occurrence of specified corporate events. On or after the respective conversion date, as noted in the table below, holders may convert all or any portion of their respective Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The conversion rights of the Notes are as follows: Notes Conversion Date Conversion Rate (1) Conversion Price per share 2028 Notes March 1, 2028 50.6586 $ 19.74 2030 Notes September 16, 2030 65.5136 $ 15.26 (1) The conversion rate for the Notes is established as a number of shares of the Company's common stock per $1,000 principal amount of the Notes, that is equivalent to the conversion price per share, subject to adjustments in certain events. Upon the occurrence of certain corporate events the Company will increase the conversion rate for a holder that elects to convert its Notes. The circumstances described in paragraph (1) above were met for the 2030 Notes during the second quarter of 2026 and as a result, the 2030 Notes are convertible at the option of the holder from July 1, 2026 until September 30, 2026. Carrying Value of the Notes as follows : 2030 Notes 2028 Notes 2026 Notes As of June 30, 2026 Principal amount $ 180,000 $ 150,000 $ — Less: unamortized debt discount and issuance costs ( 5,963 ) ( 79 ) — Net carrying amount $ 174,037 $ 149,921 $ — As of December 31, 2025 Principal amount $ 180,000 $ 150,000 $ 38,594 Less: unamortized debt discount and issuance costs ( 6,620 ) ( 98 ) ( 37 ) Net carrying amount $ 173,380 $ 149,902 $ 38,557 For the three months ended June 30, 2026 and 2025, interest expense related to the Company’s debt obligations was $ 3.3 million and $ 3.2 million, respectively. For the six months ended June 30, 2026 and 2025, interest expense related to the Company's debt obligations was $ 6.7 million and $ 6.3 million, respectively. 21 The fair values were determined based on the quoted prices of the Notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 within the fair value hierarchy. As of June 30, 2026 and December 31, 2025, the total estimated fair value of the Notes was $ 484.7 million and $ 379.5 million, respectively. 9. Commitments and Contingencies Purchase Commitments As of June 30, 2026, the Company had long-term commitments for cost of revenue related agreements (i.e., bandwidth usage, peering and other managed services with various network service providers, fixed asset vendors, and other third-party vendors). The Company also has non-cost of revenue long-term commitments for various non-cancelable agreements. Aside from the Company’s operating lease commitments, including its colocation operating commitments, which have been disclosed in Note 6 — Leases, the minimum future commitments related to the Company's purchase commitments as of June 30, 2026 were as follows: Total Purchase Commitments Remainder of 2026 $ 33,092 2027 46,395 2028 14,177 2029 371 2030 108 Thereafter 8 Total $ 94,151 Legal Matters From time to time, the Company has been and may be subject to legal proceedings and claims. Such matters are subject to many uncertainties and outcomes are not predictable. The Company accrues for contingencies when it believes that a loss is probable and that the Company can reasonably estimate the amount of any such loss. On May 24, 2024, a purported securities class action lawsuit was filed in the United States District Court for the Northern District of California, captioned Ken Kula v. Fastly, Inc., et al. (Case No. 4:24-cv-03170), naming the Company and certain of its officers as defendants. Motions for lead plaintiff were filed on July 23, 2024. On August 22, 2024, the court appointed lead plaintiff (“Lead Plaintiff ” ) and lead counsel. On November 1, 2024, Lead Plaintiff filed an amended complaint. The amended complaint alleges violations of Section 10(b) and 20(a) of the Exchange Act purportedly on behalf of all those who purchased or acquired Fastly securities between November 15, 2023 and August 7, 2024. The complaint seeks unspecified compensatory damages, and other relief. Defendants filed a motion to dismiss on January 15, 2025. Lead Plaintiff filed an opposition to the defendants’ motion to dismiss on March 17, 2025. Defendants filed a reply in support of the motion to dismiss on April 30, 2025. On September 24, 2025, the court issued an order granting in part and denying in part the motion to dismiss. On October 24, 2025, Lead Plaintiff filed a second amended complaint. On December 9, 2025, Defendants filed a motion to dismiss the second amended complaint. On January 26, 2026, Lead Plaintiff filed an opposition. Defendants filed a reply in support of the motion to dismiss the second amended complaint on February 19, 2026. A hearing scheduled for April 30, 2026 on Defendants’ motion to dismiss the second amended complaint was vacated, and the Company is awaiting a ruling on the motion. It is possible that additional lawsuits will be filed, or allegations made by stockholders, regarding these same or other matters and also naming as defendants the Company and its officers and directors. On June 12, 2024, certain of the Company’s officers and directors were named as defendants in a stockholder derivative action filed in the United States District Court for the Northern District of California, captioned Roy v. Nightingale, et al. (Case No. 3:24-cv-03549-JCS). On July 1, 2024, a stockholder derivative complaint was also filed against certain of the Company's officers and directors in the same court, captioned Steffens v. Nightingale et al. (Case No. 4:24-cv-03984-DMR). The derivative complaints are based on substantially similar allegations as those in the securities class action. The derivative complaints assert that defendants breached their fiduciary duties as directors and/or officers of the Company, as well as claims of unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, aiding and abetting, violations of 22 Section 14(a) of the Exchange Act, and contribution under Sections 10(b) and 21D of the Exchange Act. The court consolidated and stayed the derivative actions until after resolution of the Company’s motion(s) to dismiss in the above-referenced securities class action. On August 23, 2024, a substantially similar stockholder derivative complaint was filed against certain of the Company’s officers and directors in the United States District Court for the District of Delaware, captioned Sweitzer v. Nightingale, et al. (Case No. 1:24-cv-00969-GBW) (the “Sweitzer Action”). On September 26, 2024, the court stayed the Sweitzer Action until after resolution of the Company's motion(s) to dismiss in the above-referenced securities class action. On December 20, 2024, a substantially similar stockholder derivative complaint was filed against certain of the Company’s officers and directors in the Court of Chancery for the State of Delaware, captioned Bushansky v. Nightingale, et al. (Case No. 2024-1322) (the “Bushansky Action”). On January 8, 2025, the court stayed the Bushansky Action until after resolution of the Company’s motion(s) to dismiss in the above-referenced securities class action. On June 29, 2026, a substantially similar stockholder derivative complaint was filed against certain of the Company’s officers and directors in the United States District Court for the Northern District of California, captioned Suver v. Nightingale, et al . (Case No. 3:26-cv-06483-TSH) (the “Suver Action”). It is possible that additional lawsuits will be filed, or allegations made by stockholders, regarding these same or other matters and also naming as defendants the Company and its officers and directors. The Company is also party to various disputes that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material effect on the Company's business, results of operations, financial conditions, or cash flows. The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and it may not prevail. In addition, the Company may incur substantial legal fees and costs in connection with such lawsuits. The Company is not currently able to estimate the possible cost to it from these matters, as the pending lawsuits are currently at an early stage, and it cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages that it may be required to pay. Such amounts could be material to the Company's financial statements if the Company does not prevail in the defense against the pending lawsuits and any other related lawsuits, or even if it does prevail. As of June 30, 2026, the Company has not recorded any significant accruals for loss contingencies associated with the above mentioned lawsuits as it does not believe an outcome resulting in a loss is probable. It will accrue for loss contingencies if it becomes both probable that it will incur a loss and if the Company can reasonably estimate the amount or range of the loss. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright, or other intellectual property right, breach of the Company’s security or data protection obligations, or its negligence, willful misconduct, or violation of law. Subject to applicable statutes of limitation, the term of these indemnification agreements is generally for the duration of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to the Company’s services and could limit its exposure in that respect. The Company has agreed to indemnify each of its officers and directors during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is, was, or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable it to recover a portion of certain future amounts paid. To date, the Company has not encountered material costs as a result of such indemnification obligations and has not accrued any related liabilities in its financial statements. In assessing whether to establish an accrual, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. 23 10. Stockholders' Equity Equity Incentive Plans The Company maintains five equity incentive plans: the 2019 Equity Incentive Plan (the “2019 Plan”), 2011 Equity Incentive Plan (“2011 Plan”), 2019 Employee Stock Purchase Plan (“ESPP”), the Signal Sciences Corp. 2014 Stock Option and Grant Plan, as amended (the “Signal Plan”), and the 2025 Employment Inducement Incentive Plan (the "2025 Inducement Plan"). The 2019 Plan became effective in May 2019 and replaced the 2011 Plan. The Company’s 2019 Plan provides for the issuance of incentive stock options, non-statutory stock options, restricted stock units, performance-based stock awards, and other forms of equity compensation, which are collectively referred to as stock awards to its employees, directors, and consultants. The Signal Plan includes 251,754 registered shares which can be exercised to purchase shares of Fastly’s common stock. The 2025 Inducement Plan provides for the grant of non-statutory stock options, restricted stock units, performance based stock awards, and other forms of equity compensation. As of June 30, 2026 and December 31, 2025, there were 7.2 million and 5.8 million shares of common stock available for issuance under the 2019 Plan, respectively. As of June 30, 2026 and December 31, 2025, a total of 0.3 million and 0.5 million shares were available for grant under the 2025 Inducement Plan, respectively. As of June 30, 2026 and December 31, 2025, 159.1 million and 151.5 million shares of common stock were issued and outstanding, respectively. Restricted Stock Units (“RSUs”) The Company began granting RSUs under the 2019 Plan during the fiscal year ended December 31, 2019 as well as under the 2025 Inducement Plan during the three months ended September 30, 2025. The fair value of RSUs is based on the grant date fair value and is expensed on a straight-line basis over the applicable vesting period. RSUs granted to new hires typically vest over three or four years , at the rate of 33 % or 25 %, respectively, on the first anniversary of the vesting start date and ratably on a quarterly basis over the remaining 24-month or 36-month period thereafter, respectively. RSUs granted to existing employees typically vest in equal quarterly installments over a three or four-year service period. All vesting is contingent on continued service. Forfeitures are recognized as they occur. The following table summarizes RSU activity during the six month s ended June 30, 2026: Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Unvested RSUs as of December 31, 2025 14,001 $ 8.25 Granted 6,377 19.89 Vested ( 6,088 ) 12.92 Cancelled/forfeited ( 940 ) 8.55 Unvested RSUs as of June 30, 2026 13,350 $ 11.65 During the three months ended June 30, 2026 and 2025, the Company recognized stock-based compensation expense related to RSUs of $ 18.5 million and $ 21.7 million, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized stock-based compensation expense related to RSUs of $ 41.1 million and $ 43.5 million, respectively. 24 Performance-Based Restricted Stock Units (“PSUs”) Performance Stock Awards for Executive Officers (“Executive PSUs”) Pursuant to the Company’s 2019 Plan, the Company grants certain employees shares of Executive PSUs, which are to vest based on the level of achievement of certain Company-wide targets related to the Company’s operating plan for the relevant fiscal year. The Company has accounted for these awards as equity-based awards and will recognize stock-based compensation expense over the employees’ requisite service period based on the expected attainment of the Company-wide targets as of the end of each reporting period. Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Nonvested PSUs as of December 31, 2025 1,445 $ 7.08 Granted 1,039 20.04 Vested ( 586 ) 7.16 Cancelled/forfeited ( 242 ) 6.98 Nonvested PSUs as of June 30, 2026 1,656 $ 15.20 During the three months ended June 30, 2026 and 2025, the Company recognized $ 3.4 million of stock-based compensation expense and $ 0.4 million of stock-based compensation benefit associated with these awards, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized $ 5.4 million and $ 0.4 million of stock-based compensation expense associated with these awards, respectively. Company-wide Bonus Programs (“Bonus Programs”) In February 2025, the Compensation Committee approved a Bonus Program, including performance targets, to most of the Company’s employees on active payroll in fiscal year 2025 (“2025 Bonus Program”). Shares awarded under the program were paid out in February 2026 in fully vested RSUs and based on the final attainment of Company-wide performance targets which were tied to its operating plan for fiscal year 2025. The Company recognized stock-based compensation expense over the employees' requisite service period, based on the final attainment of the Company-wide targets. In February 2026, the Company paid out 2.2 million restricted stock units associated with the 2025 Bonus Program, and correspondingly recorded a charge to additional paid-in-capital of $ 39.5 million. In February 2026, the Compensation Committee approved a Bonus Program, including performance targets, for the current fiscal year to most of the Company’s employees on active payroll in fiscal year 2026 (“2026 Bonus Program”). Shares awarded under the program will be in fully vested RSUs and will be based on the final attainment of Company-wide performance targets which are tied to its operating plan for fiscal year 2026. The payout of the 2026 Bonus Program will vary linearly between 50 %, 100 %, and 150 % based on the achievement of these targets. Employees are required to be employed through the payout date to earn the awards. The Company has accounted for these awards as liability-based awards, since the monetary value of the obligation associated with the award is based predominantly on a fixed monetary amount known at inception, and it has an unconditional obligation that it must or may settle by issuing a variable number of its equity shares. The Company is recognizing the stock-based compensation expense over the employees requisite service period, based on the expected attainment of the Company-wide targets as of the end of each reporting period. During the three months ended June 30, 2026 and 2025, the Company recognized $ 12.3 million and $ 8.6 million of stock-based compensation expense associated with the Bonus Programs, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized $ 20.8 million and $ 12.3 million of stock-based compensation expense associated with the Bonus Programs, respectively. Employee Stock Purchase Plan (“ESPP”) The ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 15 % of their eligible compensation. The ESPP provides for six-month offering periods, commencing in May and November of each year. At the end of each offering period employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the date of purchase. 25 During the three months ended June 30, 2026 and 2025, the Company recognized $ 1.1 million and $ 0.4 million in stock-based compensation expense related to the ESPP, respectively. During the six months ended June 30, 2026 and 2025 the Company recognized $ 2.1 million and $ 0.5 million in stock-based compensation expense related to the ESPP, respectively. During each of the three and six months ended June 30, 2026 and 2025, 0.5 million shares of the Company’s common stock was purchased under the ESPP offering period that commenced in November of the previous year. Stock-Based Compensation Expense The following table summarizes the components of total stock-based compensation expense included in the accompanying condensed consolidated statements of operations: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands) Cost of revenue $ 2,757 $ 2,573 $ 5,293 $ 4,512 Research and development 11,902 11,755 21,932 20,648 Sales and marketing 10,344 8,176 19,697 14,869 General and administrative 10,169 3,831 23,231 11,888 Total stock-based compensation expense $ 35,172 $ 26,335 $ 70,153 $ 51,917 For the three months ended June 30, 2026 and 2025, the Company capitalized $ 1.7 million and $ 1.9 million of stock-based compensation expense, respectively. For the six months ended June 30, 2026 and 2025, the Company capitalized $ 3.2 million and $ 3.6 million of stock-based compensation expense, respectively. 11. Net Loss Per Share Attributable to Common Stockholders Basic net loss per share is computed by dividing net loss by basic weighted-average shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by diluted weighted-average shares outstanding, including potentially dilutive securities. The following table presents the computation of basic and diluted net loss per share of common stock: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (in thousands, except per share amounts) Net loss attributable to common stockholders $ ( 15,591 ) $ ( 37,541 ) $ ( 36,115 ) $ ( 76,689 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 157,596 145,780 155,598 144,539 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.10 ) $ ( 0.26 ) $ ( 0.23 ) $ ( 0.53 ) 26 The following securities were excluded from the computation of diluted net loss per share of common stock for the periods presented as their effect would have been antidilutive: Number of Shares As of June 30, 2026 2025 (in thousands) Stock options 1,456 1,823 RSUs 13,350 15,589 PSUs 2,378 1,337 Shares issuable pursuant to the ESPP 326 649 Convertible senior notes (if-converted) 19,391 9,433 Total 36,901 28,831 The dilution table above excludes RSUs to be awarded under the Company’s 2026 Bonus Program, which is expected to have an impact on its outstanding awards in the first quarter of 2027. Refer to Note 10 — Stockholders' Equity for further details on the Company’s 2026 Bonus Program. 12. Income Taxes The Company’s provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company continues to maintain a full valuation allowance on the Company’s U.S. Federal and state net deferred tax assets. In the three months ended June 30, 2026 and 2025, the Company recorded income tax expense of $ 0.3 million and $ 0.6 million, respectively, primarily due to foreign tax expense. In the six months ended June 30, 2026 and 2025, the Company recorded income tax benefit of $ 3.9 million and income tax expense of $ 1.2 million, respectively. The tax benefit for the six months ended June 30, 2026 was primarily due to the recognition of a previously unrecognized tax benefit of $ 4.3 million which resulted from the lapse of the applicable statute of limitations in the UK. The tax expense for the six months ended June 30, 2025 was primarily due to foreign tax expense. 13. Segment and Geographic Information Segment The Company operates as one single operating and reportable segment. The Chief Operating Decision Maker is the Company's Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about its revenue, for purposes of making operating decisions, assessing financial performance and allocating resources. Net loss is the Company's primary measure of profit or loss, and all costs and expense categories on the Company's condensed consolidated statements of operations, as well as stock-based compensation, depreciation and amortization expenses, are significant. Refer to Note 10 — Stockholders' Equity for additional information about the Company's stock-based compensation expense. Refer to Note 5 — Balance Sheet Information for additional information about the Company's depreciation and amortization expenses. The Company's other segment items include interest income, interest expense, other expense, and net and income tax expense on the Company's condensed consolidated statements of operations. Revenue Revenue by geography is based on the billing address of the customer. Refer to Note 3 — Revenue for more information on net revenue by geographic area. 27 Long-Lived Assets The Company’s property and equipment and operating lease right-of-use assets, each net, by geographic area were as follows: As of June 30, 2026 As of December 31, 2025 (in thousands) United States $ 182,440 $ 168,887 All other countries 96,127 69,965 Total long-lived assets $ 278,567 $ 238,852 28