Fastly, Inc.

Previous wording

Fastly focuses holistically on the edge cloud from developer creation to end-user experience, with our global footprint and integrated security core to our platform. Our platform is poised to capitalize on the rise of agentic AI, where autonomous agent consumption is driving the bulk of internet traffic. Fastly is uniquely positioned – and has laid the groundwork – to lead the intelligence fabric that helps enterprises adapt to this shift. We are capturing this opportunity by supporting edge workloads and AI traffic management, allowing organizations to optimize AI-driven services alongside human interactions. We play a unique role in helping enterprises optimize and accelerate interactions with authorized AI agents and blocking abuse, powering their differentiation and AI-fueled innovation.

Current wording

Fastly focuses holistically on the edge cloud from developer creation to end-user experience, with our global footprint and integrated security core to our platform. Our platform is poised to capitalize on the rise of agentic AI, where autonomous agent consumption is driving the bulk of Internet traffic. We believe Fastly is uniquely positioned – and has laid the groundwork – to lead the intelligence fabric that helps enterprises adapt to this shift. We are capturing this opportunity by supporting edge workloads and AI traffic management, allowing organizations to optimize AI-driven services alongside human interactions. We play a unique role in helping enterprises optimize and accelerate interactions with authorized AI agents and blocking abuse, powering their differentiation and AI-fueled innovation.

Previous wording

We emphasize retaining our customers and expanding their usage of our platform and adoption of our other products. Customers often begin with smaller deployments of one of our products and then expand their usage over time. Our platform includes a variety of offerings across Network Services, Security, and Other product lines, including Compute and Observability. As our customers mature, we assist them in expanding their use of our platform, including the use of additional offerings beyond content delivery or security. In addition, given that customer acquisition costs are incurred largely for acquiring and initial onboarding, we may gain operating leverage to the extent that existing customers expand their use of our platform and products. Our ability to retain customers and expand their usage could be impaired for a variety of reasons, including a customer moving to another provider or reducing usage within the term of their contract. Even if our customers expand their usage of our platform, we cannot guarantee that they will maintain those usage levels for any meaningful period of time or that they will renew their commitments.

Current wording

We emphasize retaining our customers and expanding their usage of our platform and adoption of our other products. Customers often begin with smaller deployments of one of our products and then expand their usage over time. As our customers mature, we assist them in expanding their use of our platform, including the use of additional offerings beyond content delivery or security. In addition, given that customer acquisition costs are incurred largely for acquiring and initial onboarding, we may gain operating leverage to the extent that existing customers expand their use of our platform and products. Our ability to retain customers and expand their usage could be impaired for a variety of reasons, including a customer moving to another provider or reducing usage within the term of their contract. Even if our customers expand their usage of our platform, we cannot guarantee that they will maintain those usage levels for any meaningful period of time or that they will renew their commitments.

Previous wording

We intend to continue expanding our efforts to attract customers outside of the United States by augmenting our sales teams and strategically increasing our presence in the number of markets in select international locations. Our international expansion, including our global sales efforts, continues to add increased complexity and cost to our business. This requires us to continue to expand our sales and marketing capabilities outside of the United States, increase the number of markets we have a presence in around the world to support our customers, and manage the administrative aspects of a global organization, each of which place a strain on our business and culture. In addition, our bandwidth costs are higher in markets outside of the United States and Europe, which may impact our gross margins.

Current wording

We intend to continue expanding our efforts to attract customers outside of the United States by augmenting our sales teams and strategically increasing our presence in a number of markets in select international locations. Our international expansion, including our global sales efforts, continues to add increased complexity and cost to our business. This requires us to continue to expand our sales and marketing capabilities outside of the United States, increase the number of markets we have a presence in around the world to support our customers, and manage the administrative aspects of a global organization, each of which places a strain on our business and culture. In addition, our bandwidth costs are higher in markets outside of the United States and Europe, which may impact our gross margins.

Previous 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.

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 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.

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 offerings. 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

Developers use our platform to build custom applications and require a state-of-the-art infrastructure to test and run these applications. We will continue to invest in our network infrastructure by strategically increasing our POPs. We also anticipate making investments in upgrading our technology and hardware to continue providing our customers a fast and secure platform. Our gross margins and operating results are impacted by these investments. As we continue to experience growth, we may face challenges managing adequate server capacity in our POPs due to potential component delays, shortages, price increases, hardware efficiencies gained through internal development, or any potential changes in server architecture, including due to technological advances or obsolescence. If we have server asset levels in excess of forecasted network capacity needs, we have in the past and may need to continue to write-down or write-off server assets. Conversely, if we underestimate network capacity needs, we may in future periods be unable to meet demand and be required to incur higher costs to secure necessary parts and components of our servers.

Current wording

Developers use our platform to build custom applications and require a state-of-the-art infrastructure to test and run these applications. We will continue to invest in our network infrastructure by strategically increasing our POP locations. We also anticipate making investments in upgrading our technology and hardware to continue providing our customers a fast and secure platform. Our gross margins and operating results are impacted by these investments. As we continue to experience growth, we may face challenges managing adequate server capacity in our POPs due to potential component delays, shortages, price increases, hardware efficiencies gained through internal development, or any potential changes in server architecture, including due to technological advances or obsolescence. If we have server asset levels in excess of forecasted network capacity needs, we have in the past and may need to continue to write-down or write-off server assets. Conversely, if we underestimate network capacity needs, we may in future periods be unable to meet demand and be required to incur higher costs to secure necessary parts and components of our servers.

Previous wording

In addition, international trade disputes may further disrupt or delay our supply chain for these components or lead to pricing increases. For example, the United States has imposed or indicated an intention to impose tariffs on certain countries which may lead to retaliatory actions such as counter-tariffs and increase production costs and disruptions in our supply chain. The United States and other jurisdictions have also leveraged various trade and value chain requirements, including on environmental and social criteria, which may make sourcing more costly, require us to change suppliers, or otherwise adversely impact our operations. Further, it is possible that government policy changes, including policy changes made with little to no advance notice, and related uncertainty about policy changes could increase market volatility. If our supply of certain components is further disrupted or delayed, there can be no assurance that we will be able to obtain adequate replacements for the existing components or that supplies will be available on terms and prices that are favorable to us, if at all. In the event that there are errors in software, failures of hardware, damages to a facility or misconfigurations of any of our services, whether caused by our own error, security breaches, third-party error, or natural disasters, we could experience lengthy interruptions in our platform availability as well as delays and additional expenses in arranging new facilities and services. In addition, there can be no assurance that we are adequately prepared for unexpected increases in bandwidth demands by our customers, particularly when we or our customers experience cyber-attacks. The bandwidth we have contracted to purchase may become unavailable for a variety of reasons, including service outages, payment disputes, network providers going out of business, natural disasters, networks imposing traffic limits, or governments adopting regulations that impact network operations.

Current wording

In addition, international trade disputes may further disrupt or delay our supply chain for these components or lead to pricing increases. For example, the United States has imposed or indicated an intention to impose tariffs on certain countries which may lead to retaliatory actions such as counter-tariffs and increase production costs and disruptions in our supply chain. The United States and other jurisdictions have also leveraged various trade and value chain requirements, including on environmental and social criteria, which may make sourcing more costly, require us to change suppliers, or otherwise adversely impact our operations. Further, it is possible that government policy changes, including policy changes made with little to no advance notice and related uncertainty about policy changes could increase market volatility. If the supply of certain components upon which we rely is further disrupted or delayed, there can be no assurance that we will be able to obtain adequate replacements for the existing components or that supplies will be available on terms and prices that are favorable to us, if at all. In the event that there are errors in software, failures of hardware, damages to a facility or misconfigurations of any of our services, whether caused by our own error, security breaches, third-party error, or natural disasters, we could experience lengthy interruptions in our platform availability as well as delays and additional expenses in arranging new facilities and services. In addition, there can be no assurance that we are adequately prepared for unexpected increases in bandwidth demands by our customers, particularly when we or our customers experience cyber-attacks. The bandwidth we have contracted to purchase may become unavailable for a variety of reasons, including service outages, payment disputes, network providers going out of business, natural disasters, networks imposing traffic limits, cyber incidents, or governments adopting regulations that impact network operations.

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 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.

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 September 30, 2026, we had 634 of such large customers which generated 95% of the total annualized current quarter revenue for our total customers for the three months ended September 30, 2026. As of September 30, 2025, we had 627 of such large customers which generated 94% of the total annualized current quarter revenue for our total customers for the three months ended September 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 June 30, 2026 and 2025, our LTM NRR was 117.2% and 104.4%, 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 September 30, 2026 and 2025, our LTM NRR was 118.9% and 105.8%, 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 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.

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 September 30, 2026, the aggregate amount of the transaction price in our contracts allocated to RPO that were unsatisfied or partially unsatisfied was $333.5 million.

Previous wording

The majority of our revenue is usage based and changes in usage by our largest customers can create volatility in our revenue. We receive a substantial portion of our revenue from a limited number of customers and within a limited number of industries, such as media and entertainment. The length of our sales cycles, from initial evaluation to payment, can range from several months to well over a year and can vary substantially from customer to customer. Similarly, the onboarding and ramping process with new as well as existing large customers with new business can take several months and can be subject to delays for unanticipated reasons. The timing of new revenue from our sales efforts and changes in usage by our largest customers can make revenue difficult to predict.

Current wording

The majority of our revenue is usage based and changes in usage by our largest customers can create volatility in our revenue. We receive a substantial portion of our revenue from a limited number of customers and within a limited number of industries, such as media and entertainment. The length of our sales cycles, from initial evaluation to payment, can range from several months to well over a year and can vary substantially from customer to customer. Similarly, the onboarding and adoption process with new as well as existing large customers with new business can take several months and can be subject to delays for unanticipated reasons. The timing of new revenue from our sales efforts and changes in usage by our largest customers can make revenue difficult to predict.

Previous wording

Our income tax expense (benefit) consists primarily of income taxes in certain foreign jurisdictions where we conduct business and state minimum income taxes in the United States. We currently maintain a full valuation allowance on our U.S. Federal and state net deferred tax assets. We expect to maintain this valuation allowance for the foreseeable future.

Current wording

Our income tax (benefit) expense consists primarily of income taxes in certain foreign jurisdictions where we conduct business and state minimum income taxes in the United States. We currently maintain a full valuation allowance on our U.S. Federal and state net deferred tax assets. We expect to maintain this valuation allowance for the foreseeable future.

Previous wording

The following tables set forth our results of operations for the period presented:

Current wording

The following tables set forth our results of operations for the periods presented:

Previous wording

The following tables set forth our results of operations for the period presented as a percentage of our revenue:

Current wording

The following tables set forth our results of operations for the periods presented as a percentage of our revenue:

Previous 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.

Current wording

During the three and nine months ended September 30, 2026 and 2025, our revenue was primarily generated from transactions with existing customers. This trend is consistent with prior periods and it represents a typical customer behavior as customers tend to contribute more revenue over time as their use of the platform increases.

Previous wording

Cost of revenue was $67.4 million for the three months ended June 30, 2026 compared to $67.6 million for the three months ended June 30, 2025, a decrease of $0.2 million, or 0.3%. The decrease was primarily due to a $2.6 million decrease in depreciation expense primarily due to a change in the useful life of our servers as well as a $2.5 million decrease in intangible asset amortization expense due to fully amortized assets. The decrease was partially offset by a $2.6 million increase in colocation costs, a $1.4 million increase in software costs, and a $0.9 million increase in personnel-related costs.

Current wording

Cost of revenue was $69.8 million for the three months ended September 30, 2026 compared to $65.9 million for the three months ended September 30, 2025, an increase of $3.9 million, or 6%. The increase was primarily due to a $4.0 million increase in colocation costs, a $1.5 million increase in software costs, a $1.3 million increase in personnel-related costs, a $0.5 million increase in amortization of capitalized software costs, and a $0.5 million increase in transit-related costs. The increase was partially offset by a $2.5 million decrease in intangible asset amortization expense due to fully amortized assets as well as a $2.0 million decrease in depreciation expense primarily due to a change in the useful life of our servers.

Previous wording

Cost of revenue was $132.2 million for the six months ended June 30, 2026 compared to $135.3 million for the six months ended June 30, 2025, a decrease of $3.1 million, or 2%. The decrease was primarily due to a $6.2 million decrease in depreciation expense primarily due to a change in the useful life of our servers as well as a $5.0 million decrease in intangible asset amortization expense due to fully amortized assets. The decrease was also due to a $1.6 million decrease in bandwidth costs, and a $0.4 million decrease in equipment purchases. The decrease was partially offset by a $4.4 million increase in colocation costs, a $2.6 million increase in software costs, a $1.9 million increase in personnel-related costs, a $0.8 million increase in amortization of capitalized software costs, and a $0.8 million increase in stock-based compensation expenses.

Current wording

Cost of revenue was $202.0 million for the nine months ended September 30, 2026 compared to $201.2 million for the nine months ended September 30, 2025, an increase of $0.8 million, or 0.4%. The increase was primarily driven by an $8.4 million increase in colocation costs, a $4.1 million increase in software costs, a $3.2 million increase in personnel-related costs, a $1.3 million increase in amortization of capitalized software costs, and a $0.7 million increase in stock-based compensation expenses. The increase was partially offset by an $8.2 million decrease in depreciation expense primarily due to a change in the useful life of our servers, a $7.5 million decrease in intangible asset amortization expense due to fully amortized assets as well as a $1.2 million decrease in transit-related costs.

Previous wording

Gross profit was$224.1 million for thesix months ended June 30, 2026 compared to $157.9 million for the six months ended June 30, 2025, an increase of $66.2 million, or 42%. Gross margin was 63% for the six months ended June 30, 2026 compared to 54% for the six months ended June 30, 2025, an increase of 9 percentage points. The increase in gross margin was driven by revenue growth during the six months ended June 30, 2026 combined with the decreases in cost of revenue.

Current wording

Gross profit was$120.4 million for the three months ended September 30, 2026 compared to $92.3 million for the three months ended September 30, 2025, an increase of $28.1 million, or 30%. Gross margin was 63% for the three months ended September 30, 2026 and 58% for the three months ended September 30, 2025, an increase of 5 percentage points. The increase in gross margin was driven by revenue growth during the three months ended September 30, 2026 outpacing the increases in the costs incurred to support the growth of our network.

Previous 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.

Current wording

Gross profit was $344.5 million for the nine months ended September 30, 2026 compared to $250.2 million for the nine months ended September 30, 2025, an increase of $94.3 million, or 38%. Gross margin was 63% for the nine months ended September 30, 2026 compared to 55% for the nine months ended September 30, 2025, an increase of 8 percentage points. The increase in gross margin was driven by revenue growth during the nine months ended September 30, 2026 combined with relatively flat cost of revenue.

Previous wording

Research and development expenses were $84.0 million for the six months ended June 30, 2026 compared to $79.7 million for the six months ended June 30, 2025, an increase of $4.3 million, or 6%. The increase was primarily due to a $3.4 million increase in personnel-related costs, a $1.4 million decrease in capitalized software, and a $1.3 million increase in stock-based compensation expense. The increase was partially offset by a $1.4 million decrease in software costs as well as a $0.6 million decrease in corporate costs.

Current wording

Research and development expenses were $126.8 million for the nine months ended September 30, 2026 compared to $121.1 million for the nine months ended September 30, 2025, an increase of $5.7 million, or 5%. The increase was primarily due to a $3.8 million increase in personnel-related costs, a $2.3 million decrease in capitalized software development costs, a $0.8 million increase in travel expenses, and a $0.5 million increase in stock-based compensation expenses. The increase was partially offset by a $1.4 million decrease in software costs as well as a $0.4 million decrease in corporate costs.

Previous 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.

Current wording

Sales and marketing expenses were $56.6 million for the three months ended September 30, 2026 compared to $50.0 million for the three months ended September 30, 2025, an increase of $6.6 million, or 13%. The increase was primarily due to a $2.5 million increase in personnel-related costs, a $1.7 million increase in stock-based compensation expenses, a $1.3 million increase in third-party commissions, a $0.4 million increase in travel and entertainment costs, and a $0.4 million increase in marketing-related expenses.

Previous wording

Sales and marketing expenses were $111.8 million for the six months ended June 30, 2026 compared to $100.4 million for the six months ended June 30, 2025, an increase of $11.4 million, or 11%. The increase was primarily due to a $4.8 million increase in stock-based compensation expense, a $4.7 million increase in personnel-related costs including commission expense, a $2.4 million increase in third-party commissions, and a $0.7 million increase in marketing expenses. The increase was partially offset by a $0.9 million decrease in software costs, as well as $0.3 million decrease in travel and entertainment costs.

Current wording

Sales and marketing expenses were $168.5 million for the nine months ended September 30, 2026 compared to $150.4 million for the nine months ended September 30, 2025, an increase of $18.1 million, or 12%. The increase was primarily due to a $7.2 million increase in personnel-related costs, a $6.5 million increase in stock-based compensation expenses, a $3.7 million increase in third-party commissions, and a $1.1 million increase in marketing-related expenses. The increase was partially offset by a $0.9 million decrease in software costs.

Previous wording

General and administrative expenses were $66.6 million for the six months ended June 30, 2026 compared to $52.6 million for the six months ended June 30, 2025, an increase of $14.0 million, or 27%. The increase was primarily due to a $11.3 million increase in stock-based compensation expense, a $2.1 million increase in personnel-related costs, a $1.0 million increase in corporate costs, and a $0.7 million increase in executive transition costs. The increase was partially offset by a $0.8 million decrease in professional fees, and $0.6 million of tax-related benefits during the six months ended June 30, 2026.

Current wording

General and administrative expenses were $31.3 million for the three months ended September 30, 2026 compared to $29.7 million for the three months ended September 30, 2025, an increase of $1.6 million, or 5%. The increase was primarily due to a $2.4 million increase in personnel-related costs, a $1.0 million increase in stock-based compensation expenses, and a $0.4 million increase in professional fees. The increase was partially offset with $1.5 million of primarily tax-related benefits, a $0.6 million decrease in executive transition costs, and a $0.5 million decrease in provision for credit losses.

Previous wording

Income tax expense was $0.3 million for the three months ended June 30, 2026 compared to $0.6 million for the three months ended June 30, 2025, a decrease of $0.3 million. 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.

Current wording

Income tax benefit was $0.5 million for the three months ended September 30, 2026 compared to income tax expense of $0.6 million for the three months ended September 30, 2025, a decrease of $1.0 million. The decrease was primarily due to the recognition of Canada tax credits. The Company continues to maintain a full valuation allowance in the U.S., and the tax (benefit) expense for the periods were primarily due to foreign taxes.

Previous 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.

Current wording

Income tax benefit was $4.3 million for the nine months ended September 30, 2026 compared to income tax expense of $1.8 million for the nine months ended September 30, 2025, a decrease of $6.1 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

Previous 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.

Current wording

As of September 30, 2026, we had cash, cash equivalents, and marketable securities totaling $365.2 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, agency bonds, U.S. treasury securities, municipal bonds, and certificates of deposit. As of September 30, 2026, we did not have any marketable securities classified as non-current.

Previous wording

To date, we have financed our operations primarily through equity issuances, payments received from customers, the net proceeds we received through sales of our debt securities, and proceeds from our convertible notes. Our principal uses of cash in the near term have primarily been around funding our operations, our capital expenditures, business acquisitions, and investments and fulfilling our debt and contractual commitments. We have also entered into longer term commitments to support our operations, including arrangements to directly lease and operate our infrastructure assets and colocation facilities. We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.

Current wording

To date, we have financed our operations primarily through equity issuances, payments received from customers, the net proceeds we received through sales of our debt securities, proceeds from our convertible notes, and borrowings under our credit facilities. Our principal uses of cash in the near term have primarily been around funding our operations, our capital expenditures, business acquisitions, and investments and fulfilling our debt and contractual commitments. We have also entered into longer term commitments to support our operations, including arrangements to directly lease and operate our infrastructure assets and colocation facilities. We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.

Previous 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.

Current wording

In 2021, we entered into the Credit Agreement (as defined in Note 8 in our condensed consolidated financial statements). We then entered into a Fourth Amendment to Credit Agreement (as defined in Note 8 in our condensed consolidated financial statements) on August 17, 2026. As of September 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 nine months ended September 30, 2026 and 2025, no amounts were drawn down on the Credit Agreement.

Previous wording

During the year ended December 31, 2025, we 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 and aggregate transaction costs of $6.7 million. We also issued $180.0 million aggregate principal amount of 0% convertible senior unsecured notes due in 2030 (the “2030 Notes”) in private offerings to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act.

Current wording

During the year ended December 31, 2025, we 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 and aggregate transaction costs of $6.7 million. We also 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.

Previous wording

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

Current wording

During the nine months ended September 30, 2026, the 2026 Notes matured and were repaid in full.

Previous wording

The following table summarizes our cash flows for the period indicated:

Current wording

The following table summarizes our cash flows for the periods indicated:

Previous 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.

Current wording

For the nine months ended September 30, 2026, cash provided by operating activities was $108.2 million, consisting primarily of our net loss of $47.4 million, adjusted for non-cash items of $188.0 million, and net cash flows used in operating assets and liabilities of $32.5 million. The main drivers of the changes in operating assets and liabilities were $21.3 million in operating lease payments, a decrease in other liabilities of $6.7 million, a decrease in accrued expenses of $4.3 million, an increase in other assets of $4.0 million, an increase in accounts receivable of $0.6 million, primarily due to the timing of cash receipts from our customers, and a $0.3 million increase in prepaid expenses and other current assets. This was partially offset by an increase in accounts payable of $4.8 million due to timing of payments.

Previous 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.

Current wording

For the nine months ended September 30, 2025, cash provided by operating activities was $72.0 million, consisting primarily of our net loss of $106.2 million, adjusted for non-cash items of $182.7 million, and net cash flows used in operating assets and liabilities of $4.5 million. The main drivers of the changes in operating assets and liabilities were a $14.9 million increase in other liabilities, a decrease of accounts receivable of $3.6 million, a $3.3 million increase in accounts payable due to timing of payments, and a $0.8 million decrease in prepaid expenses and other current assets. This was offset by $13.7 million of operating lease payments, a $13.0 million increase in other assets, and a $0.5 million decrease in accrued expenses.

Previous 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.

Current wording

For the nine months ended September 30, 2026, cash used in investing activities was $144.5 million, primarily consisting of $319.6 million purchases of marketable securities, $63.6 million of payments related to purchases of property and equipment to expand our network, $11.7 million of additions to capitalized internal-use software, and $0.9 million of purchases of intangible assets. The cash outflow was partially offset by $251.4 million of maturities of marketable securities.

Previous 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.

Current wording

For the nine months ended September 30, 2025, cash used in investing activities was $249.2 million, primarily consisting of $352.1 million purchases of marketable securities, $18.5 million of payments related to purchases of property and equipment to expand our network, and $14.0 million of additions to capitalized internal-use software. The cash outflow was partially offset by $117.2 million of maturities of marketable securities and $18.1 million from the sale of marketable securities.

Previous 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.

Current wording

For the nine months ended September 30, 2026, cash used in financing activities was $30.8 million, primarily consisting of a $38.6 million repayment of the remaining balance of 2026 Notes and $0.7 million primarily from payment of 2030 Notes issuance cost that was unpaid as of December 31, 2025. This was partially offset by $7.2 million in proceeds from the ESPP and $1.3 million in proceeds from stock option exercises by our employees.

Previous 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.

Current wording

For the nine months ended September 30, 2025, cash provided by financing activities was $3.9 million, primarily consisting of $5.5 million in proceeds from the ESPP and $0.8 million in proceeds from stock option exercises by our employees. The cash inflow was partially offset by $2.3 million of finance lease payments.

Previous wording

Our principal commitments consist of obligations under operating and finance leases, purchase obligations for capital expenditures, purchase obligations for contracts with our cloud infrastructure providers, network service providers, and other vendors, and outstanding debt. There have not been any material changes in our contractual obligations and commitments from our most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2025, except for those described under Note 6, Note 8, and Note 9 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our principal commitments consist of obligations under operating leases, purchase obligations for capital expenditures, purchase obligations for contracts with our cloud infrastructure providers, network service providers, and other vendors, and outstanding debt. There have not been any material changes in our contractual obligations and commitments from our most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2025, except for those described under Note 6, Note 8, and Note 9 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.