📢 Earnings Summary — AKAM

Akamai delivered a strong Q3, beating expectations on revenue, margins, and EPS, with continued momentum in security and an acceleration in cloud infrastructure services. CIS grew 39% and security grew 10%, while delivery declines moderated to 4%, supporting overall 5% revenue growth and a 31% non-GAAP operating margin. The company launched Akamai Inference Cloud with NVIDIA, expanding its edge AI strategy with 17 sites live and notable early customer interest. Management guided to Q4 revenue growth of 4%–6% and maintained full-year targets, including solid operating margins and EPS. While Q4 margins will be seasonally lower and FX a minor headwind, ARR growth targets for CIS and high-growth security remain robust. Overall tone was confident, emphasizing platform differentiation, large wins, and expanding opportunities in edge AI inference.

📈 Growth Highlights

• Total revenue $1.055B, +5% YoY reported (+4% cc)
• Non-GAAP EPS $1.86, +17% YoY (reported and cc), above guidance high end by $0.20
• CIS (Cloud Infrastructure Services) revenue $81M, +39% YoY (accelerated from ~30% in Q2)
• Security revenue $568M, +10% YoY reported (+9% cc)
• High-growth security (API security + Zero Trust) revenue $77M, +35% YoY (+34% cc)
• Compute revenue $180M, +8% YoY (+7% cc); prior-year $7M OCA one-time raised the base (5-pt growth headwind)
• Delivery revenue $306M, -4% YoY (better than expected, continued stabilization)
• International revenue $525M, +9% YoY (+8% cc), 50% of total

🔨 Business Development

• Expanded multiyear renewal with one of the top three U.S. cloud providers; positioned as premier distributed cloud computing provider; leveraging Akamai-managed container service
• CIS wins/expansions with: major South Korean appliance/consumer electronics maker; multinational financial services (Singapore); leading U.S. analytics software developer; U.S. supply-chain planning software vendor; European cybersecurity provider; major U.S. airline; leading U.S. video game company; leading Indian media & entertainment firm; one of the world’s largest media companies
• Multinational gaming company in Japan: CIS included within a $37M, 2-year renewal across products
• Zero Trust segmentation: $3M expansion at large North American healthcare technology company; $1M net-new European insurer; multiyear win at large Korean insurer; expansion with large Mexican bank
• API security: $7M with major European bank (part of $31M multiyear security + compute); adoption within $20M expansion at one of the world’s largest airlines; expansion within $42M portfolio deal with one of the world’s largest software companies; $2.6M with large Asian life insurer; competitive displacement at Brazilian FinTech; additional 7-figure deals with two of the 10 largest U.S. FIs and a large Canadian bank
• Recognition: Customers’ Choice in Gartner Voice of the Customer for WAAP (6th straight year) and for online fraud detection

💵 Financial Performance

• Non-GAAP operating margin 31% in Q3; Q4 guide 28%–30%
• Cash gross margin guide Q4: ~72%–73%
• Q4 EBITDA margin guide: ~42%–43%
• Q3 CapEx $224M (~21% of revenue), primarily to support CIS growth; Q4 CapEx guide $171M–$181M (~16% of revenue)
• FX impact: +$8M YoY and +$4M QoQ in Q3 revenue; Q4 FX expected -$5M QoQ, +$11M YoY; FY25 FX +$13M YoY to revenue at current rates
• International mix: 50% of revenue
• Q3 non-GAAP net income $269M
• Tax: Q4 non-GAAP tax expense $57M–$60M (18%–19% rate); new U.S. tax law (July 2025) not material to 2025 tax rate

🏦 Capital & Funding

• Cash, cash equivalents and marketable securities: ~$1.8B (Sep 30, 2025)
• Share repurchases: none in Q3; YTD $800M for ~10M shares (largest annual buyback in company history)
• Capital allocation: continue buybacks to offset dilution; opportunistic on M&A and repurchases
• Q4 diluted share count assumption: ~147M

🧠 Operations & Strategy

• Continued transformation from CDN pioneer to leader in cloud security and distributed cloud computing (IDC report highlighted strategy and differentiation)
• Launched Akamai Inference Cloud, combining Akamai’s edge footprint with NVIDIA Blackwell AI infrastructure; 17 locations live with more points of presence planned
• Focus on AI inference at the edge for low-latency, globally scalable workloads; positioning as complementary to hyperscalers
• Strength in distributed managed container services to bring business logic closer to end users
• Security, delivery, and compute portfolio synergies emphasized by customers; leveraging edge security alongside compute
• Seasonal Q4 increase in sales commissions expected as top reps hit accelerators

🌍 Market Outlook

• Q4 revenue guide: $1.065B–$1.085B (+4%–6% reported; +3%–5% cc vs. Q4’24)
• FY2025 outlook: total revenue +4%–5% cc; non-GAAP operating margin ~29%–30%; non-GAAP EPS $6.93–$7.13
• CIS ARR expected +40%–45% YoY cc exiting 2025
• High-growth security ARR expected +30%–35% YoY cc in 2025
• API security run-rate expected ~+$100M exiting 2025
• Q4 seasonality: higher media traffic and e-commerce activity; magnitude difficult to predict

⚠ Risks & Headwinds

• Delivery segment still declining YoY (-4%), though stabilizing
• Q4 expense seasonality (sales commission accelerators) pressuring margins and EPS sequentially
• Traffic and e-commerce seasonal uplift inherently unpredictable
• FX volatility (expected -$5M QoQ impact in Q4)
• Execution and adoption risk for new Inference Cloud and edge AI strategy; competitive dynamics with hyperscalers
• Macro, geopolitical, and acquisition integration risks noted in forward-looking statements

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.