Fastly, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q. Our fiscal year ends on December 31.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements based upon current plans, expectations, and beliefs that involve risks and uncertainties as described under the heading Special Note Regarding Forward-Looking Statements following the Table of Contents of this Quarterly Report on Form 10-Q. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q. Our fiscal year ends on December 31.

Previous wording

Many jurisdictions have enacted laws on data localization and cross-border data transfers, and the evolving enforcement and interpretation of such laws has created uncertainty regarding 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 of the United States. In addition, we cannot be certain what actions the United States or another country’s government may take with respect to certain of our customers that may adversely affect our ability to do business with our customers that operate in China, target China as a market or that have strong business ties to China, and any such governmental action could have a negative impact on our business. In April 2024, under the prior administration, a bill was signed into law that would effectively ban TikTok in the United States if ByteDance, its China-based parent company, does not sell its stake in TikTok within a set time frame. Following a series of executive orders in 2025 that suspended enforcement of this law, on January 22, 2026, ByteDance announced the establishment of TikTok USDS Joint Venture LLC in compliance with the law to secure United States user data, apps, and the algorithm through data privacy and cybersecurity measures. TikTok was one of our largest customers for the three months ended March 31, 2026 and remains a customer of ours. We do not know how the restructuring may impact our traffic levels. For additional details, refer to the section titled “Risk Factors.”

Current wording

Many jurisdictions have enacted laws on data localization, data sovereignty, and cross-border data transfers, and the evolving enforcement and interpretation of such laws has created uncertainty regarding 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 of the United States. In addition, we cannot be certain what actions the United States or another country’s government may take with respect to certain of our customers that may adversely affect our ability to do business with our customers that operate in China, target China as a market or that have strong business ties to China, and any such governmental action could have a negative impact on our business. For additional details, refer to the section titled “Risk Factors.”

Previous wording

We are closely monitoring various global conflicts and developments, including, but not limited to, the conflict between Russia and Ukraine, the recent military conflict involving Iran, the United States, and Israel, as well as other conflicts in the Middle East, and their global impacts. While the conflicts are still evolving and the outcomes remain highly uncertain, we do not believe these or other conflicts will have a material impact on our business and results of operations. We do not have Points of Presence (“POPs”) in Russia, Ukraine, Iran, or Israel. However, some threat actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. If such conflicts continue or worsen, leading to greater global economic disruptions and uncertainty, our business and results of operations could be materially impacted.

Current wording

We are closely monitoring various global conflicts and developments, including, but not limited to, the conflict between Russia and Ukraine, conflicts in the Middle East, including the recent military conflict involving Iran, the United States, and Israel, and their global impacts. While the conflicts are still evolving and the outcomes remain highly uncertain, we do not believe these or other conflicts will have a material impact on our business and results of operations. We do not have Points of Presence (“POPs”) in Russia, Ukraine, Iran, or Israel. However, some threat actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. If such conflicts continue or worsen, leading to greater global economic disruptions and uncertainty, our business and results of operations could be materially impacted.

Previous wording

We must continue to invest in our platform and network infrastructure to maintain our position in the market. We expect our revenue growth to be dependent on an expanding customer base and continued adoption of our edge cloud delivery, security, and other products and services. In anticipation of winning new customers and staying ahead of our customers’ needs, we plan to continue to invest in order to expand the scale and capacity of our software-defined modern network. This could result in increased network service provider fees, which could adversely affect our gross margins if we are unable to offset these costs with revenue from new customers and increase revenue from existing customers. Our customers require constant innovation within their own organizations and expect the same from us. Therefore, we will continue to invest in resources to enhance our development capabilities and introduce new products and features on our platform. We believe that investment in research and development will contribute to our long-term growth but may also negatively impact our short-term profitability. For the three months ended March 31, 2026 and 2025, our research and development expenses as a percentage of revenue were 24% and 26%, respectively. Our research and development expenses in each period are impacted by the amount of software development costs that meet the criteria for capitalization. We may also seek to acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform, enhance our technical capabilities, or otherwise offer growth opportunities.

Current wording

We must continue to invest in our platform and network infrastructure to maintain our position in the market. We expect our revenue growth to be dependent on an expanding customer base and continued adoption of our edge cloud delivery, security, and other products and services. In anticipation of winning new customers and staying ahead of our customers’ needs, we plan to continue to invest in order to expand the scale and capacity of our software-defined modern network. This could result in increased network service provider fees, which could adversely affect our gross margins if we are unable to offset these costs with revenue from new customers and increase revenue from existing customers. Our customers require constant innovation within their own organizations and expect the same from us. Therefore, we will continue to invest in resources to enhance our development capabilities and introduce new products and features on our platform. We believe that investment in research and development will contribute to our long-term growth but may also negatively impact our short-term profitability.

Previous wording

Our definition of a customer consists of identifiable operating entities with which we have a billing relationship in good standing and which we have recognized revenue from during the reporting period. An identifiable operating entity is defined as a company, a government entity, or a distinct business unit of a larger company that has a relationship with us through direct sales or through one of our reseller partners where charges are identified on an end-customer basis. We may treat separate subsidiaries, segments, divisions, or business units of a single organization that use our platform as unique customers where they have distinct account identifiers. In cases where charges are identified through a reseller partner rather than on an end-customer basis, we would count the reseller as a single customer in our customer count. Our customer groupings may be impacted by changes to our customers’ business, including any impact from acquisition activities, internal business reorganizations leading to operational and decision-making changes, and corporate structure changes such as subsidiary consolidation and reorganization that may arise in the future.

Current wording

Our definition of a customer consists of identifiable operating entities with which we have a billing relationship in good standing and which we have recognized revenue from during the reporting period, which differs from the definition used for purposes of assessing concentration of credit risk. An identifiable operating entity is defined as a company, a government entity, or a distinct business unit of a larger company that has a relationship with us through direct sales or through one of our reseller partners where charges are identified on an end-customer basis. We may treat separate subsidiaries, segments, divisions, or business units of a single organization that use our platform as unique customers where they have distinct account identifiers. In cases where charges are identified through a reseller partner rather than on an end-customer basis, we would count the reseller as a single customer in our customer count. Our customer groupings may be impacted by changes to our customers’ business, including any impact from acquisition activities, internal business reorganizations leading to operational and decision-making changes, and corporate structure changes such as subsidiary consolidation and reorganization that may arise in the future.

Previous wording

Historically our revenue has been driven primarily by a subset of our customers, our large customers, who have leveraged our platform substantially from a usage standpoint. We believe that the recruitment and cultivation of large customers is critical to our long-term success. Our large customer count is defined as customers with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue we recognized for each customer in the current quarter and multiplying it by four. As of March 31, 2026, we had 634 of such large customers which generated 94% of the total annualized current quarter revenue for our total customers for the three months ended March 31, 2026. As of March 31, 2025, we had 595 of such large customers which generated 93% of the total annualized current quarter revenue for our total customers for the three months ended March 31, 2025.

Current wording

Historically our revenue has been driven primarily by a subset of our customers, our large customers, who have leveraged our platform substantially from a usage standpoint. We believe that the recruitment and cultivation of large customers is critical to our long-term success. Our large customer count is defined as customers with annualized current quarter revenue in excess of $100,000. This is calculated by taking the revenue we recognized for each customer in the current quarter and multiplying it by four. As of June 30, 2026, we had 624 of such large customers which generated 94% of the total annualized current quarter revenue for our total customers for the three months ended June 30, 2026. As of June 30, 2025, we had 622 of such large customers which generated 94% of the total annualized current quarter revenue for our total customers for the three months ended June 30, 2025.

Previous wording

Our LTM NRR removes some of the volatility that is inherent in a usage-based business model from the measurement of the NRR metric. We calculate LTM NRR 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. For the trailing twelve months ended March 31, 2026 and 2025 our LTM NRR was 113.0% and 100.0%, respectively.

Current wording

Our LTM NRR removes some of the volatility that is inherent in a usage-based business model from the measurement of the NRR metric. We calculate LTM NRR 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. For the trailing twelve months ended June 30, 2026 and 2025, our LTM NRR was 117.2% and 104.4%, respectively.

Previous wording

RPO represent 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. As of March 31, 2026, the aggregate amount of the transaction price in our contracts allocated to RPO that were unsatisfied or partially unsatisfied was $368.7 million.

Current wording

RPO represent 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. As of June 30, 2026, the aggregate amount of the transaction price in our contracts allocated to RPO that were unsatisfied or partially unsatisfied was $340.9 million.

Previous wording

We generate substantially all of our revenue from charging our customers based on their usage of our platform, and we generate a substantial majority of our revenue from customers that have negotiated contracts with us. Customers typically choose to utilize our platform for Network Services, for which we charge fees based on their committed or actual use of our platform, as measured in gigabytes and requests. Many of our customers generate billings in excess of their minimum commitment. We also generate revenue from Security and Other product lines, including Compute and Observability, as well as professional and other services, such as implementation, account management and enhanced customer support. We charge a flat one-time or recurring monthly fee depending on the additional products and services selected. Typically, the term of our contracts with customers is 12 months and includes a minimum monthly billing commitment in exchange for more favorable pricing terms. In addition, customers can sign up online by providing their credit card information and agreeing to a minimum monthly fee.

Current wording

We derive our revenue primarily from usage-based fees earned from customers using our platform. The majority of our customers choose to utilize our platform for Network Services, for which we charge fees based on their committed or actual use of our platform, as measured in gigabytes and requests. Many of our customers generate billings in excess of their minimum commitment. We also earn fixed-rate recurring revenue from Security and Other products and services, including Compute and Observability, as well as professional and other services, such as implementation, account management and enhanced customer support. We charge a flat one-time or recurring monthly fee depending on the additional products and services selected. Typically, the term of our contracts with customers is 12 months and includes a minimum monthly billing commitment in exchange for more favorable pricing terms. In addition, customers can sign up online by providing their credit card information and agreeing to a minimum monthly fee.

Previous wording

We present our disaggregated 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 our edge cloud platform, and Observability solutions that provide real-time logs, data and metrics streamed from our edge platform for actionable insights.

Current wording

We report our revenue bythree 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 our edge cloud platform, and Observability solutions that provide real-time logs, data and metrics streamed from our edge platform for actionable insights.

Previous wording

Sales and marketing expenses consist primarily of personnel costs, including commissions for our sales employees, salaries, benefits, bonuses, and stock-based compensation. Sales and marketing expenses also include expenditures related to advertising, marketing, our brand awareness activities, bandwidth and co-location costs for free trial users, costs related to our customer events, including our customer conferences, professional services fees, amortization of our intangible assets, and an allocation of our general overhead expenses.

Current wording

Sales and marketing expenses consist primarily of personnel costs, including commissions for our sales employees, salaries, benefits, bonuses, and stock-based compensation. Sales and marketing expenses also include third-party commission costs, expenditures related to advertising, marketing, our brand awareness activities, bandwidth costs for free trial users, costs related to our customer events, including our customer conferences, professional services fees, amortization of our intangible assets, and an allocation of our general overhead expenses.

Previous wording

Our interest income consists primarily of interest earned on our cash, cash equivalents, and investments. Our interest expense consists primarily of the interest expense on our finance leases, amortization of discount, coupon interest expense, and debt issuance costs associated with our debt obligations. Our other expense, net, consists primarily of foreign currency transaction gains and losses.

Current wording

Our interest income consists primarily of interest earned on our cash, cash equivalents, and investments. Our interest expense consists primarily of the amortization of discount, coupon interest expense, and debt issuance costs associated with our debt obligations. Our other expense, net, consists primarily of foreign currency transaction gains and losses.

Previous wording

In the three months ended March 31, 2026 and 2025, revenue was primarily from existing customers, as revenue from new customers contributed less than 10% of our revenue. The proportion of the revenue contribution between new and existing customers is consistent with prior periods and typical customer behavior as customers tend to contribute more revenue over time as their use of the platform increases. The remainder of our revenue was generated by our other products and services, including support and professional services.

Current wording

During the three and six months ended June 30, 2026 and 2025, our revenue was primarily generated from transactions with existing customers, as revenue from new customers contributed less than 10% of our revenue. The proportion of the revenue contribution between new and existing customers is consistent with prior periods and typical customer behavior as customers tend to contribute more revenue over time as their use of the platform increases. The remainder of our revenue was generated by our other products and services, including support and professional services.

Previous wording

Network Services revenue was $126.2 million for the three months ended March 31, 2026, compared to $113.3 million for the three months ended March 31, 2025, an increase of $12.9 million, or 11%. The increase in Network Services revenue was primarily driven by growth in usage from existing customers. Security revenue was $38.8 million for the three months ended March 31, 2026, compared to $26.4 million for the three months ended March 31, 2025, an increase of $12.4 million, or 47%. The increase in Security revenue was primarily driven by an increase in Next-Gen WAF revenue. Other revenue was $8.0 million for the three months ended March 31, 2026, compared to $4.8 million for the three months ended March 31, 2025, an increase of $3.2 million, or 67%. The increase in Other revenue was primarily driven by further adoption of our Compute solutions.

Current wording

Network Services revenue was $133.9 million for the three months ended June 30, 2026, compared to $114.9 million for the three months ended June 30, 2025, an increase of $19.0 million, or 17%. The increase in Network Services revenue was primarily driven by growth in usage from existing customers. Security revenue was $41.7 million for the three months ended June 30, 2026, compared to $29.3 million for the three months ended June 30, 2025, an increase of $12.4 million, or 43%. The increase in Security revenue was primarily driven by an increase in Next-Gen WAF revenue. Other revenue was $7.7 million for the three months ended June 30, 2026, compared to $4.5 million for the three months ended June 30, 2025, an increase of $3.2 million, or 69%. The increase in Other revenue was primarily driven by further adoption of our Compute solutions.

Previous wording

Gross profit was$108.2 million for the three months ended March 31, 2026 compared to $76.8 million for the three months ended March 31, 2025, an increase of $31.4 million, or 41%. Gross margin was 63% for the three months ended March 31, 2026 and 53% for the three months ended March 31, 2025. The increase in gross margin was driven by revenue growth during the three months ended March 31, 2026 combined with the decreases in cost of revenue.

Current wording

Gross profit was$116.0 million for the three months ended June 30, 2026 compared to $81.1 million for the three months ended June 30, 2025, an increase of $34.9 million, or 43%. Gross margin was 63% for the three months ended June 30, 2026 and 55% for the three months ended June 30, 2025, an increase of 8 percentage points. The increase in gross margin was driven by revenue growth during the three months ended June 30, 2026 combined with relatively flat cost of revenue.

Previous wording

Sales and marketing expenses were $55.1 million for the three months ended March 31, 2026 compared to $49.3 million for the three months ended March 31, 2025, an increase of $5.8 million, or 12%. The increase was primarily due to a $3.0 million increase in personnel-related costs including commission expense, a $2.7 million increase in stock-based compensation expenses, as well as a $0.7 million increase in third-party commission expenses. The increase was partially offset by a $0.7 million decrease in software costs.

Current wording

Sales and marketing expenses were $56.7 million for the three months ended June 30, 2026 compared to $51.1 million for the three months ended June 30, 2025, an increase of $5.6 million, or 11%. The increase was primarily due to a $2.2 million increase in stock-based compensation expense, a $1.7 million increase in third-party commission costs, a $1.6 million increase in personnel-related costs including commission expense, and a $0.6 million increase in marketing-related expenses. The increase was partially offset by a $0.3 million decrease of corporate costs as well as a $0.3 million decrease in software costs.

Previous wording

Income tax benefit was $4.1 million for the three months ended March 31, 2026 compared to income tax expense of $0.7 million for the three months ended March 31, 2025, a decrease of $4.8 million. The decrease was primarily due to the recognition of a previously unrecognized tax benefit of $4.3 million resulting from the lapse of the applicable statute of limitations in the UK. The Company continues to maintain a full valuation allowance in the U.S. and the tax expense/(benefit) for the periods were primarily due to foreign tax expense/(benefit).

Current wording

Income tax benefit was $3.9 million for the six months ended June 30, 2026 compared to income tax expense of $1.2 million for the six months ended June 30, 2025, a decrease of $5.1 million. The decrease was primarily due to the recognition of a previously unrecognized tax benefit of $4.3 million resulting from the lapse of the applicable statute of limitations in the UK. The Company continues to maintain a full valuation allowance in the U.S. and the tax expense for the periods were primarily due to foreign tax expense.

Previous wording

As of March 31, 2026, we had cash, cash equivalents, and marketable securities totaling $330.5 million. Our cash, cash equivalents, and marketable securities primarily consisted of money market funds, investment-grade commercial paper, corporate notes and bonds, U.S. treasury securities, municipal bonds, agency bonds, and certificates of deposit. As of March 31, 2026, we did not have any marketable securities classified as non-current.

Current wording

As of June 30, 2026, we had cash, cash equivalents, and marketable securities totaling $337.5 million. Our 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. As of June 30, 2026, we did not have any marketable securities classified as non-current.

Previous wording

In 2021, we entered into the Credit Agreement (as defined in Note 8 in our condensed consolidated financial statements). As of March 31, 2026, we were in compliance with the covenants described in Note 8 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, and we expect to continue to be in compliance for at least the next 12 months. During the three months ended March 31, 2026 and 2025, no amounts were drawn down on the Credit Agreement.

Current wording

In 2021, we entered into the Credit Agreement (as defined in Note 8 in our condensed consolidated financial statements). As of June 30, 2026, we were in compliance with the covenants described in Note 8 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, and we expect to continue to be in compliance for at least the next 12 months. During the six months ended June 30, 2026 and 2025, no amounts were drawn down on the Credit Agreement.

Previous wording

During the year ended December 31, 2024, we 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 notes due 2028 (the “2028 Notes”) and aggregate transaction costs of $5.8 million.

Current wording

During the year ended December 31, 2024, we 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”) and aggregate transaction costs of $5.8 million.

Previous wording

During the quarter ended March 31, 2026, the 2026 Notes matured and were repaid in full.

Current wording

During the six months ended June 30, 2026, the 2026 Notes matured and were repaid in full.

Previous wording

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”). The Capped Calls resulted in an $18.2 million outflow of cash. Refer to Note 8 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

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”). The Capped Calls resulted in an $18.2 million outflow of cash in the three months ended December 31, 2025. Refer to Note 8 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

For the three months ended March 31, 2026, cash provided by operating activities was $28.9 million, consisting primarily of our net loss of $20.5 million, adjusted for non-cash items of $57.0 million, and net cash flows used in operating assets and liabilities of $7.6 million. The main drivers of the changes in operating assets and liabilities were an increase in accounts receivable of $13.5 million, a $5.8 million operating lease payment, and an increase in prepaid expenses and other current assets of $2.6 million. This was partially offset by an increase in accounts payable of $6.8 million, an increase in accrued expenses of $3.5 million, an increase in other liabilities of $2.7 million, and a decrease in other assets of $1.4 million.

Current wording

For the six months ended June 30, 2026, cash provided by operating activities was $68.2 million, consisting primarily of our net loss of $36.1 million, adjusted for non-cash items of $120.0 million, and net cash flows used in operating assets and liabilities of $15.7 million. The main drivers of the changes in operating assets and liabilities were $12.9 million in operating lease payments, a decrease in other liabilities of $10.9 million, an increase in other assets of $1.8 million and a $0.4 million increase in prepaid expenses and other current assets. This was partially offset by a decrease in accounts receivable of $1.3 million, primarily due to the timing of cash receipts from our customers, an increase in accounts payable of $8.3 million due to timing of payments, and an increase in accrued expenses of $0.9 million.

Previous wording

For the three months ended March 31, 2025, cash provided by operating activities was$17.3 million, consisting primarily of our net loss of$39.1 million, adjusted for non-cash items of$57.5 million, and net cash flows used in operating assets and liabilities of$1.1 million. The main drivers of the changes in operating assets and liabilities were$5.6 million of operating lease payments, a net decrease of accounts receivable of$4.0 million, primarily due to the timing of cash receipts from our customers, a$3.4 million decrease in accrued expenses due to timing of payments and a$2.1 million decrease in other assets. This was offset by a$9.2 million increase in other liabilities, a$2.6 million increase in accounts payable due to timing of payments, and a$2.2 million increase in prepaid expenses and other current assets.

Current wording

For the six months ended June 30, 2025, cash provided by operating activities was $43.1 million, consisting primarily of our net loss of $76.7 million, adjusted for non-cash items of $115.7 million, and net cash flows provided by operating assets and liabilities of $4.1 million. The main drivers of the changes in operating assets and liabilities were a $16.9 million increase in other liabilities, a $6.0 million increase in accounts payable due to timing of payments, and a $2.3 million decrease in prepaid expenses and other current assets. This was offset by a $8.2 million increase in other assets, $7.9 million of net operating lease payments, a net increase of accounts receivable of $3.3 million, primarily due to the timing of cash receipts from our customers and a $1.8 million decrease in accrued expenses due to timing of payments.

Previous wording

For the three months ended March 31, 2026, cash used in investing activities was $27.0 million, primarily consisting of $179.3 million purchases of marketable securities, $21.0 million of payments related to purchases of property and equipment to expand our network, and $3.7 million of additions to capitalized internal-use software. The cash outflow was partially offset by $177.1 million of maturities of marketable securities.

Current wording

For the six months ended June 30, 2026, cash used in investing activities was $125.6 million, primarily consisting of $266.6 million purchases of marketable securities, $52.6 million of payments related to purchases of property and equipment to expand our network, and $7.9 million of additions to capitalized internal-use software. The cash outflow was partially offset by $201.5 million of maturities of marketable securities.

Previous wording

For the three months ended March 31, 2025, cash used in investing activities was $178.9 million, primarily consisting of $179.5 million purchases of marketable securities, $4.8 million of additions to capitalized internal-use software, and $2.6 million of payments related to purchases of property and equipment to expand our network. The cash outflow was partially offset by $8.0 million of maturities of marketable securities.

Current wording

For the six months ended June 30, 2025, cash used in investing activities was $248.8 million, primarily consisting of $272.9 million purchases of marketable securities, $12.5 million of payments related to purchases of property and equipment to expand our network, and $9.3 million of additions to capitalized internal-use software. The cash outflow was partially offset by $45.8 million of maturities of marketable securities.

Previous wording

For the three months ended March 31, 2026, cash used in financing activities was $35.8 million, primarily consisting of repayment of the remaining balance of 2026 Notes and $0.5 million from payment of 2030 Notes issuance cost that was unpaid as of December 31, 2025. This was partially offset by $2.3 million in proceeds from the employee stock purchase plan and $1.0 million in proceeds from stock option exercises by our employees.

Current wording

For the six months ended June 30, 2026, cash used in financing activities was $33.3 million, primarily consisting of a $38.6 million repayment of the remaining balance of 2026 Notes and $0.5 million from payment of 2030 Notes issuance cost that was unpaid as of December 31, 2025. This was partially offset by $4.7 million in proceeds from the employee stock purchase plan and $1.1 million in proceeds from stock option exercises by our employees.

Previous wording

For the three months ended March 31, 2025, cash provided by financing activities was $0.8 million, primarily consisting of $2.1 million in proceeds from the employee stock purchase plan and $0.4 million in proceeds from stock option exercises by our employees. The cash inflow was partially offset by $1.7 million of finance lease payments.

Current wording

For the six months ended June 30, 2025, cash provided by financing activities was $1.8 million, primarily consisting of $3.4 million in proceeds from the employee stock purchase plan (“ESPP”) and $0.7 million in proceeds from stock option exercises by our employees. The cash inflow was partially offset by $2.2 million of finance lease payments.

Previous wording

We prepare our condensed consolidated financial statements in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses, and related disclosures. Actual results and outcomes could differ significantly from our estimates, judgments, and assumptions. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

Current wording

We prepare our condensed consolidated financial statements in accordance with U.S. GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses, and related disclosures. Actual results and outcomes could differ significantly from our estimates, judgments, and assumptions. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.