{
  "@context": "https://orbyd.app/schemas/dossier.v1.json",
  "ticker": "FSLY",
  "name": "Fastly, Inc.",
  "url": "https://orbyd.app/dossiers/FSLY/",
  "json_url": "https://orbyd.app/dossiers/FSLY.json",
  "status": "DORMANT",
  "current_conviction": "MEDIUM",
  "graded_conviction": null,
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Security-led margin inflection: the 2026-08-05 Q2 print put adj EBITDA at $38.1M vs $8.9M YoY and lifted the FY26 adj EPS guide to $0.50-0.54 from $0.27-0.33 — and the stock fell ~10%. Narrative reads MATURING: three target raises to $28-30 on 2026-08-06 came with two neutral ratings, and no dated company catalyst lands before the ~November Q3 print.",
  "invalidation_trigger": "A weekly close below $20.50 gives back the entire pre-print base (early-May level and the mid-July 10b5-1 weighted average both sat near that shelf); secondary break is a cut to the FY2026 $732-746M revenue guide at the Q3 print.",
  "catalyst_date": null,
  "outcome": "OPEN",
  "outcome_date": null,
  "invalidation_fired": null,
  "themes": [
    "ai-chips-memory",
    "cybersecurity",
    "ai-enterprise-software"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "FY2026 guidance of $0.50-0.54 EPS is non-GAAP; adjusted figures exclude stock-based compensation and are not comparable to GAAP results.",
    "Top-ten customers were 37% of Q2 2026 revenue (31% a year earlier) — quarterly results are sensitive to one large account's traffic decisions.",
    "A universal automatic shelf (Form S-3ASR) appears in EDGAR filings from August 2026, so equity issuance capacity is standing rather than requiring a new registration.",
    "CEO share sales run under a Rule 10b5-1 plan adopted 2025-08-27; the disposals are pre-scheduled and not discretionary timing signals.",
    "Short-interest figures for FSLY differ materially between vendors (~16% of shares out vs ~10% of float); check the FINRA settlement-date file before citing a level."
  ],
  "body_markdown": "## Current Thesis\nThe narrative leg on offer is a margin inflection at a company the market still prices as a decelerating CDN. Q2 FY26, reported 2026-08-05, put revenue at $183.3M (+23% YoY, consensus $173.9M), adjusted EBITDA at $38.1M against $8.9M a year earlier, and record non-GAAP gross margin of 65.8%. Management raised the FY2026 revenue guide to $732–746M from $710–725M and nearly doubled the FY2026 adjusted EPS guide to $0.50–0.54 from $0.27–0.33. Coverage on 2026-08-05 (Benzinga, Seeking Alpha) described shares falling roughly 10% on that print. The setup is the distance between what the income statement did and what the tape did with it.\n\n## Bull Case\n- Revenue $183.3M in Q2 FY26, +23% YoY and a record quarter, versus the $173.9M Street estimate (reported 2026-08-05).\n- Security revenue $41.7M, +43% YoY; Network Services $133.9M, +17%; Other $7.7M, +69%. The mix shift toward security is measurable in the segment lines, not asserted from strategy slides.\n- Adjusted EBITDA $38.1M vs $8.9M in Q2 2025, a 21% margin — the largest single-quarter step in the profitability story to date.\n- Remaining performance obligations $341M vs $247M in Q2 2025 (+38%), i.e. contracted-but-unrecognised revenue grew faster than reported revenue.\n- LTM net revenue retention 117%, which the company described as the highest in over three years.\n- Q3 FY26 guide of $184–190M revenue and $0.11–0.13 adjusted EPS sits above consensus of $179.8M and $0.06.\n- Cash, equivalents, marketable securities and investments of roughly $337M at 2026-06-30, up $7M from 2026-03-31.\n- Every broker that moved on 2026-08-06 raised its target: RBC to $28, Piper Sandler to $28, KeyBanc to $30 — all above the 2026-08-07 close of $22.96.\n\n## Bear Case\n- Two of those three revisions carry non-Buy ratings (RBC Sector Perform, Piper Sandler Neutral). Estimates went up; stances did not.\n- Top-ten customers were 37% of Q2 2026 revenue against 31% in Q2 2025. Concentration widened in the same quarter revenue accelerated, so a single traffic-optimisation decision at one account carries more of the guide than it did a year ago.\n- Free cash flow was $3.6M versus $10.9M in the year-ago quarter, with infrastructure capex at roughly 17% of revenue. The EBITDA line moved far more than the cash line.\n- The \"Other\" bucket, where compute and edge-AI workloads sit, is $7.7M on a $183.3M base. Growing 69%, still too small to carry the re-rating on its own.\n- Post-print sell-side commentary summarised by Seeking Alpha on 2026-08-05 pointed at RPO and compute revenue. The headline RPO number was +38% YoY, so the objection concerns the trajectory inside the balance rather than its level — worth watching at the next print rather than dismissing.\n\n- A universal automatic shelf registration (Form S-3ASR) appears in Fastly's EDGAR filings in August 2026, leaving standing issuance capacity into any strength.\n\n## Setup & Price Structure\nLast completed daily close $22.96 (2026-08-07). The 52-week high is $33.50, leaving price 31.5% below it. RSI(14) at 60; three-month return +11.9%, which implies a starting level near $20.5 in early May — corroborated independently by the $20.74 weighted-average price on the CEO's mid-July plan sales. So the stock climbed into the print off a $20.50-ish shelf, surrendered part of that advance on 2026-08-05/06, and is currently holding above it. The three fresh targets sit 22–31% above the last close.\n\n**Life-cycle: MATURING.** The fundamentals accelerated on 2026-08-05, but participation did not follow: a beat on revenue and EPS plus a raise on both the quarter and the year produced a decline, and the 2026-08-06 target increases arrived with two neutral-equivalent ratings attached. That is the signature of a story that still works while the marginal bid thins. It is not SATURATED — the stock is 31.5% under its 52-week high and there is no evidence of retail-sentiment clustering in the coverage. It is not ACCELERATING either, because the fresh headline was sold.\n\nCrowding and positioning observables, stated as observables: three price-target revisions inside 24 hours of the print, all clustered in a $28–30 band; RSI 60 with price nearly a third below the annual high; insider sales in each of June, July and August 2026 under a pre-set plan; a universal shelf on file as of August 2026; and short-interest vendor data that disagrees materially (one source showing roughly 16% of shares outstanding short, another roughly 10% of float), which means the level should be treated as unverified until a FINRA settlement-date file confirms it.\n\n## Catalyst Calendar (next 30 days)\n- **2026-08-08 → 2026-09-07:** no company-scheduled event. The binary for this cycle resolved on 2026-08-05 and there is nothing dated to re-rate against inside the window.\n- **2026-09-30:** Q3 FY26 period close — the quarter measured against the $184–190M revenue guide.\n- **~2026-11-04 (est.):** Q3 FY26 print. First read on whether NRR holds at or above 117%, whether RPO extends past $341M, and whether the FY2026 $732–746M revenue guide survives contact with the second half.\n- **Ongoing, undated:** further Form 4s under the CEO's 10b5-1 plan; any 424B takedown off the August 2026 shelf.\n\n## What Would Change Our Mind\nThe structure that matters is the pre-print base near $20.50 — the level the stock rallied from in May and the zone where mid-July plan sales printed at a $20.74 weighted average. Losing it would mean the 2026-08-05 beat-and-raise bought nothing durable. **A weekly close below $20.50** is the gradeable break.\n\nThree fundamental conditions would do the same work at the next print: FY2026 revenue guidance cut below the $732–746M range; top-ten customer concentration climbing above the 37% recorded in Q2 2026; or Security revenue growth decelerating from +43% toward the +17% pace of Network Services, which would collapse the mix-shift argument. A second beat-and-raise met with another decline would date the narrative as SATURATED rather than MATURING.\n\nConversely, a weekly close above $28 — the level where both RBC and Piper Sandler pinned their raised targets on 2026-08-06 — with those ratings still at Sector Perform and Neutral would say the re-rating is running ahead of the sell-side rather than waiting on it.\n\n## Correlation Notes\nDirect comparables are Cloudflare (NET) and Akamai (AKAM): the same edge-delivery-to-security transition, the same debate about whether inference workloads land at the edge. Read-across is inferred, not measured here — no correlation coefficient is being claimed — but pricing commentary and traffic-growth disclosure from either name is the most likely source of a move in FSLY outside its own reporting dates. As a sub-$5B software name with an unresolved short-interest picture and a shelf on file, it also carries beta to small-cap risk appetite (IWM) and to the unprofitable-software complex generally, which historically trades against the front end of the rate curve. Segment-level exposure differs from the peers in one respect: at 73% of Q2 2026 revenue, Network Services still dominates, so a CDN price-per-gigabyte reset would hit FSLY harder than a security-weighted comparable.",
  "first_seen": "2026-07-28",
  "last_analyzed": "2026-08-08T07:49:54+00:00",
  "last_synthesized": "2026-08-08",
  "last_update_source": "watchlist_research",
  "license": "Content © orbyd. Cite the canonical URL."
}