Akamai Technologies Earnings Call Transcripts
Fiscal Year 2026
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Q1 2026 saw strong revenue growth, highlighted by a record $1.8B CIS contract and robust security demand amid rising AI threats. CIS revenue surged 40% year-over-year, and full-year guidance was raised, with double-digit growth expected in 2027.
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The business is rapidly expanding from delivery and security into public cloud and edge AI inference, with strong growth in compute services and a robust pipeline for AI workloads. Margins are temporarily lower due to upfront investments, but long-term economics remain attractive, especially as utilization increases.
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Security and cloud infrastructure are driving strong growth, with AI inference and edge computing as major innovation areas. Capital is being allocated to Inference Cloud and buybacks, while memory costs are being managed through resource optimization. Cloud positioning is validated by hyperscaler and enterprise adoption.
Fiscal Year 2025
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Q4 2025 saw 7% revenue growth and 11% EPS growth, with cloud infrastructure services accelerating 45% year-over-year. A major $200M, four-year CIS contract was signed, and 2026 guidance projects 5–8% revenue growth, 45–50% CIS growth, and higher CapEx due to AI investments and hardware inflation.
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Security and AI-driven compute are fueling growth, with distributed GPU inference and cloud infrastructure services expanding globally. Focus remains on reliability, cost efficiency, and new customer acquisition, while legacy compute and delivery segments stabilize.
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Q3 revenue grew 5% year-over-year to $1.055 billion, with non-GAAP EPS up 17% and strong performance in cloud infrastructure and security. Akamai launched its Inference Cloud with NVIDIA, signed all three major U.S. cloud providers to CIS, and projects continued growth in AI and security segments.
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Strong execution led to raised guidance, with cloud infrastructure and security segments driving growth. Delivery business has stabilized, compute is shifting to high-growth cloud services, and operational changes are boosting sales efficiency. AI is seen as a major future driver.
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The business is evolving from CDN to a unified platform focused on security and compute, with AI driving new product categories and increased demand for advanced security. Financially, security and cloud infrastructure are key growth engines, with a goal of sustainable double-digit revenue growth and expanding margins.
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Q2 2025 saw revenue and EPS exceed guidance, with strong growth in security and compute, especially Cloud Infrastructure Services. Large contracts, new AI solutions, and improved delivery trends support a positive outlook, with full-year revenue and EPS guidance raised.
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The company has evolved from a CDN provider to a diversified platform with security and compute as growth drivers. Security now represents over half of revenue, with rapid expansion in API and micro-segmentation, while compute infrastructure is positioned for high growth. Strong operating leverage, cost advantages, and innovation in AI and edge computing differentiate the platform.
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A shift to channel-driven sales and a focus on compute and security are driving growth, with new security products and cloud computing for media customers as key opportunities. AI is both a challenge and a catalyst for security innovation, while the CDN business is stabilizing amid market consolidation.
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The meeting covered director elections, amendments to governance documents, and shareholder proposals on special meetings, all of which were approved. A $10 million tariff expense was discussed, and forward-looking risks were noted.
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Q1 2025 saw 3% revenue growth year-over-year, with security and compute now 69% of total revenue. Guidance for 2025 remains positive, with security and compute expected to drive growth, while delivery stabilizes and CapEx remains front-loaded.
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The company is shifting from CDN to security and compute, with web security and Linode driving growth. Security is expected to grow at 10% and compute at 20%, with acquisitions and innovation fueling expansion. Margin expansion and business mix shift should enable double-digit earnings growth within a few years.
Fiscal Year 2024
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Q4 revenue grew 3% year-over-year to $1.02B, with security and compute now 69% of total revenue. Security surpassed $2B annually, and cloud infrastructure ARR rose 35%. 2025 guidance projects up to 6% revenue growth in constant currency, with double-digit growth targeted long-term.
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Expansion into compute and security is driving growth, with enterprise adoption of Linode and strong synergies across products. Security and compute now make up most revenue, while delivery faces short-term challenges but benefits from industry consolidation.
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Q3 2024 saw record revenue, with security and compute driving growth while delivery declined due to industry headwinds. Major restructuring and investments are underway to accelerate cloud and security expansion, with strong guidance for these segments into 2025.
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Security now drives over half of revenue and continues to grow, while compute is rapidly scaling, expected to double its run rate by year-end. The delivery business faces headwinds from weak internet traffic growth, but pricing discipline and strategic M&A support overall momentum.
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Significant investments in cloud infrastructure and enterprise capabilities are driving strong ARR growth, with broad-based sales traction and a focus on cost efficiency. CapEx is success-based, margins are stable, and security revenues are growing, while delivery revenues are expected to stabilize as traffic recovers.
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Q2 saw 5% revenue growth, with security and compute now making up 66% of total revenue. Security revenue rose 15% and compute 23% year-over-year, while delivery declined. Full-year guidance was raised, with strong momentum in enterprise compute and API security, and margins remain robust.
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Compute and security segments are driving strong growth, with security at a $2B run rate and compute enterprise ARR at $50M, growing 300%. CDN remains profitable but flat, funding innovation in security and compute. API security and micro-segmentation are key growth drivers, and margin expansion is expected as scale increases.