Core Insights - Akamai Technologies reported revenue of $1.04 billion for the quarter ended June 2025, reflecting a year-over-year increase of 6.5% [1] - Earnings per share (EPS) for the quarter was $1.73, up from $1.58 in the same quarter last year, representing an EPS surprise of +11.61% against the consensus estimate of $1.55 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.02 billion by +2.17% [1] Revenue Breakdown - Security revenue was $551.91 million, slightly below the average estimate of $553.57 million, with a year-over-year increase of +10.7% [4] - Compute revenue reached $171.46 million, compared to the average estimate of $173.75 million, marking a year-over-year increase of +13.2% [4] - Delivery revenue was reported at $320.13 million, exceeding the estimated $295.2 million, but showing a year-over-year decline of -2.8% [4] Stock Performance - Over the past month, shares of Akamai Technologies have returned -7.6%, contrasting with the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $1,043,000,000, representing a 7% year-over-year increase as reported and a 6% increase in constant currency [6][19] - Non-GAAP operating margin was 30%, and non-GAAP earnings per share (EPS) was $1.73, up 9% year-over-year as reported and in constant currency, exceeding guidance by $0.15 [6][25] - Non-GAAP net income for Q2 was $251,000,000, with a cash gross margin projected at approximately 72% to 73% for Q3 [25][32] Business Line Data and Key Metrics Changes - Cloud Infrastructure Services (CIS) revenue was $71,000,000, up 30% year-over-year as reported and 29% in constant currency, with expectations for accelerated growth due to large contracts signed earlier in the year [20][7] - Compute revenue was $171,000,000, up 13% year-over-year as reported and in constant currency [20] - Security revenue was $552,000,000, up 11% year-over-year as reported and 10% in constant currency, with API security and Zero Trust enterprise security combined revenue at $67,000,000, up 48% year-over-year [23][24] - Delivery revenue was $320,000,000, down 3% year-over-year as reported and down 4% in constant currency, but showing improvements in pricing and traffic growth [24] Market Data and Key Metrics Changes - International revenue was $516,000,000, up 10% year-over-year or 8% in constant currency, representing 49% of total revenue in Q2 [24] - U.S. foreign exchange fluctuations positively impacted revenue by $17,000,000 sequentially and $8,000,000 year-over-year [25] Company Strategy and Development Direction - The company is focusing on cloud infrastructure services and AI applications, with significant investments in these areas to capture growth opportunities [7][9] - Akamai is enhancing its go-to-market strategy by increasing sales capacity and expanding partnerships to drive new revenue growth [30] - The introduction of new AI solutions, such as the AI gateway and firewall for AI, aims to address challenges in deploying large language models [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of CIS, projecting a year-over-year growth rate of 40% to 45% in constant currency by year-end [20][39] - The competitive landscape has improved, with several major competitors exiting the market, allowing for better pricing and traffic trends [44] - Management anticipates a lower operating margin in the second half of the year due to investments in sales and marketing [30] Other Important Information - The company repurchased approximately 3,900,000 shares for $300,000,000 during Q2, with $1,200,000,000 remaining on the current repurchase authorization [26][27] - The recent legislation signed into law is not expected to materially impact the company's tax rate in 2025 [31] Q&A Session Summary Question: Can you walk us through how the first half of the year transpired versus expectations for compute revenue? - Management noted that compute, particularly CIS, has exceeded expectations, with significant customer signings and a forecast of 40% to 45% growth in ARR by year-end [38][39] Question: What is the competitive environment for the delivery business? - Management highlighted that four major competitors have exited the market, leading to improved pricing and traffic trends, with expectations for stable performance moving forward [44] Question: Can you provide insight into the guidance and the impact of TikTok revenue? - Management indicated that TikTok revenue is expected to contribute approximately $40,000,000 to $50,000,000, but overall guidance reflects strength across multiple areas [55] Question: What is the pipeline for CIS contracts? - Management reported a healthy pipeline for CIS, with participation from various verticals and larger deal sizes than typical [68] Question: What is driving demand for API and micro-segmentation security? - Management noted that enterprises are increasingly recognizing the need for security solutions, with significant growth expected in both API security and micro-segmentation [75][76]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $1,043 million, representing a 7% year-over-year increase as reported and a 6% increase in constant currency [5][17] - Non-GAAP operating margin was 30%, and non-GAAP earnings per share (EPS) was $1.73, up 9% year-over-year as reported and in constant currency, exceeding guidance by $0.15 [5][17] - Non-GAAP net income for Q2 was $251 million, with a cash gross margin projected at approximately 72% to 73% for Q3 [23][32] Business Line Data and Key Metrics Changes - Cloud Infrastructure Services (CIS) revenue was $71 million, up 30% year-over-year as reported and 29% in constant currency, with expectations for accelerated growth due to large contracts signed earlier in the year [6][18] - Compute revenue was $171 million, up 13% year-over-year as reported and in constant currency [18] - Security revenue was $552 million, up 11% year-over-year as reported and 10% in constant currency, with API security and Zero Trust enterprise security combined revenue at $67 million, up 48% year-over-year [20][21] - Delivery revenue was $320 million, down 3% year-over-year as reported and down 4% in constant currency, but showing improvements in pricing and traffic growth [22] Market Data and Key Metrics Changes - International revenue was $516 million, up 10% year-over-year or 8% in constant currency, representing 49% of total revenue in Q2 [22] - The company noted a positive impact from foreign exchange fluctuations, contributing $17 million sequentially and $8 million year-over-year [23] Company Strategy and Development Direction - The company is focusing on the growth of its cloud infrastructure services portfolio, particularly in AI applications, and is investing in expanding its sales capacity and partnerships [6][30] - The management highlighted the importance of security solutions in response to increasing cyber threats, particularly ransomware, and emphasized the growth potential in API security and micro-segmentation [12][78] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of CIS, projecting a year-over-year growth rate of 40% to 45% in constant currency by year-end [18][39] - The competitive landscape has improved due to the exit of several CDN peers, allowing for better pricing and traffic trends [44] - The company anticipates a lower operating margin in the second half of the year due to investments in sales and marketing [30] Other Important Information - The company repaid $1,150 million of outstanding convertible senior notes and issued $1,725 million in new senior convertible notes [24] - The company plans to continue share buybacks to offset dilution from employee equity programs [25] Q&A Session Summary Question: Can you walk us through how the first half of the year transpired versus expectations for compute revenue? - Management noted that compute, particularly CIS, has exceeded expectations with significant customer signings, projecting a growth rate of 40% to 45% in ARR by year-end [38][39] Question: What is the competitive environment like for the delivery business? - Management indicated that the competitive landscape has changed significantly, with four major competitors exiting the market, leading to improved pricing and traffic trends [44] Question: Can you provide insight into the guidance and the impact of TikTok revenue? - Management clarified that TikTok revenue is expected to contribute approximately $40 million to $50 million, but the overall guidance reflects strength across multiple areas [56] Question: What is driving the demand for API and micro-segmentation security? - Management highlighted the increasing need for security solutions as enterprises face more vulnerabilities, with strong demand for their market-leading solutions [76][78]

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[Second Quarter 2025 Financial Results](index=1&type=section&id=AKAMAI%20REPORTS%20SECOND%20QUARTER%202025%20FINANCIAL%20RESULTS) This section details Akamai's strong Q2 2025 financial performance, exceeding expectations and leading to raised full-year guidance [Performance Summary](index=1&type=section&id=Performance%20Summary) Akamai reported strong Q2 2025 results, exceeding revenue and profitability expectations. Total revenue grew 7% year-over-year to $1.043 billion, driven by significant growth in Security (+11%) and Cloud Computing (+13%), particularly Cloud Infrastructure Services which surged 30%. This performance led the company to raise its full-year guidance for both revenue and earnings. Non-GAAP net income per diluted share increased by 9% to $1.73 Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 | Growth (YoY) | Growth (YoY, Constant Currency) | | :--- | :--- | :--- | :--- | | **Total Revenue** | $1.043 billion | 7% | 6% | | **Cloud Infrastructure Services Revenue** | $71 million | 30% | 29% | | **GAAP Net Income per Diluted Share** | $0.71 | -17% | -18% | | **Non-GAAP Net Income per Diluted Share** | $1.73 | 9% | 9% | - CEO Tom Leighton highlighted strong momentum, leading to increased full-year guidance. He emphasized that investments in security and cloud computing are paying off and sees AI as a strong tailwind for the business[2](index=2&type=chunk) Q2 2025 Revenue Breakdown (YoY, Constant Currency) | Revenue by Solution | Amount | Growth (YoY, CC) | | :--- | :--- | :--- | | Security | $552 million | 10% | | Delivery | $320 million | -4% | | Cloud Computing | $171 million | 13% | | **Revenue by Geography** | **Amount** | **Growth (YoY, CC)** | | U.S. | $528 million | 4% | | International | $516 million | 8% | - The company executed **$300 million** in share repurchases during the quarter, buying back **3.9 million shares** at an average price of **$77.51**[6](index=6&type=chunk) [Financial Guidance](index=2&type=section&id=Financial%20guidance) Akamai has raised its financial outlook for the remainder of the year. For the third quarter of 2025, the company projects revenue between $1.035 billion and $1.050 billion, with non-GAAP EPS of $1.62 to $1.66. For the full year 2025, revenue is now expected to be in the range of $4.135 billion to $4.205 billion, with non-GAAP EPS between $6.60 and $6.80 Q3 and Full Year 2025 Financial Guidance | Guidance Metric | Q3 2025 | Full Year 2025 | | :--- | :--- | :--- | | **Revenue** | $1,035M - $1,050M | $4,135M - $4,205M | | **Non-GAAP Operating Margin** | 28% | 29% | | **Non-GAAP EPS** | $1.62 - $1.66 | $6.60 - $6.80 | [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Akamai's condensed consolidated balance sheets, income statements, and cash flow statements [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Akamai's balance sheet shows total assets of $10.54 billion, a slight increase from $10.37 billion at year-end 2024. Key changes include a decrease in marketable securities and a significant increase in convertible senior notes, reflecting financing activities during the period. Total stockholders' equity decreased from $4.88 billion to $4.47 billion Balance Sheet Summary (as of June 30, 2025) | Account | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $2,033,827 | $2,578,097 | | **Total Assets** | $10,536,135 | $10,368,785 | | **Total Current Liabilities** | $880,519 | $2,091,323 | | **Convertible senior notes (non-current)** | $4,100,977 | $2,396,695 | | **Total Liabilities** | $6,068,627 | $5,490,428 | | **Total Stockholders' Equity** | $4,467,508 | $4,878,357 | [Condensed Consolidated Statements of Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the three months ended June 30, 2025, Akamai generated revenue of $1.043 billion, up from $980 million in the prior year period. However, due to higher operating expenses and a larger provision for income taxes, GAAP net income decreased to $104 million from $132 million year-over-year, resulting in a GAAP diluted EPS of $0.71 compared to $0.86 Income Statement Highlights (Three Months Ended June 30) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenue** | $1,043,494 | $979,580 | | **Income from Operations** | $151,461 | $147,986 | | **Net Income** | $103,618 | $131,688 | | **Diluted EPS** | $0.71 | $0.86 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In the second quarter of 2025, Akamai generated strong net cash from operating activities of $459 million. Investing activities resulted in a net cash outflow of $683 million, primarily due to purchases of property, equipment, and marketable securities. Financing activities showed a net cash outflow of $41 million, driven by $300 million in common stock repurchases, offset by proceeds from the issuance of new convertible senior notes and related transactions Cash Flow Summary (Three Months Ended June 30, 2025) | Activity (in thousands) | Q2 2025 | | :--- | :--- | | **Net cash provided by operating activities** | $459,149 | | **Net cash used in investing activities** | ($682,866) | | **Net cash used in financing activities** | ($41,205) | [Supplemental Financial Data](index=8&type=section&id=Supplemental%20Financial%20Data) This section provides additional detailed breakdowns of revenue by solution and geography, along with other key operational metrics [Revenue by Solution](index=8&type=section&id=SUPPLEMENTAL%20REVENUE%20DATA%20%E2%80%93%20REVENUE%20BY%20SOLUTION) In Q2 2025, Security revenue grew 11% year-over-year to $552 million, and Cloud Computing revenue increased 13% to $171 million. Conversely, Delivery revenue continued its decline, falling 3% to $320 million. On a constant currency basis, Security grew 10% while Delivery declined 4% Q2 2025 Revenue by Solution (YoY Growth) | Solution | Revenue (in thousands) | YoY Growth | YoY Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | **Security** | $551,914 | 11% | 10% | | **Delivery** | $320,125 | -3% | -4% | | **Cloud computing** | $171,455 | 13% | 13% | [Revenue by Geography](index=8&type=section&id=SUPPLEMENTAL%20REVENUE%20DATA%20%E2%80%93%20REVENUE%20BY%20GEOGRAPHY) Geographically, International revenue growth outpaced U.S. growth in Q2 2025. International revenue grew 10% year-over-year (8% in constant currency) to $516 million, while U.S. revenue grew 4% to $528 million Q2 2025 Revenue by Geography (YoY Growth) | Geography | Revenue (in thousands) | YoY Growth | YoY Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | **U.S.** | $527,607 | 4% | 4% | | **International** | $515,887 | 10% | 8% | [Other Supplemental Data](index=9&type=section&id=OTHER%20SUPPLEMENTAL%20DATA) This section provides detailed breakdowns of key operational and financial metrics. For Q2 2025, total stock-based compensation was $112.8 million. Total capital expenditures on an accrual basis were $214.2 million, representing 21% of revenue for the quarter. The company's employee count stood at 10,944 at the end of the period - Total stock-based compensation for Q2 2025 was **$112.8 million**, an increase from **$98.5 million** in Q2 2024[17](index=17&type=chunk) - Total capital expenditures (accrual basis) were **$214.2 million** in Q2 2025, equivalent to **21% of revenue**, up from **17% of revenue** in the prior year quarter[17](index=17&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP financial results to non-GAAP measures for income from operations, net income, and diluted earnings per share [Reconciliation of Income from Operations and Net Income](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20INCOME%20FROM%20OPERATIONS%2C%20NET%20INCOME%20AND%20TAX%20RATE) For Q2 2025, Akamai's GAAP income from operations was $151.5 million. After adjusting for items such as stock-based compensation ($112.8 million) and amortization of acquired intangible assets ($27.7 million), the non-GAAP income from operations was $308.6 million. Similarly, GAAP net income of $103.6 million was reconciled to a non-GAAP net income of $251.4 million Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | GAAP | Key Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Income from Operations** | $151,461 | +$157,162 | $308,623 | | **Operating Margin** | 15% | | 30% | | **Net Income** | $103,618 | +$147,738 | $251,356 | [Reconciliation of Net Income per Diluted Share](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20NET%20INCOME%20PER%20DILUTED%20SHARE) The company's GAAP net income per diluted share of $0.71 for Q2 2025 is reconciled to a non-GAAP figure of $1.73. The primary adjustments adding back to the EPS were stock-based compensation ($0.78) and amortization of acquired intangible assets ($0.19), partially offset by tax effects - GAAP EPS of **$0.71** was adjusted upwards by a net **$1.02** to arrive at a Non-GAAP EPS of **$1.73** for Q2 2025. The largest positive adjustment was for stock-based compensation, contributing **$0.78 per share**[20](index=20&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=12&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20INCOME%20TO%20ADJUSTED%20EBITDA) Akamai's Adjusted EBITDA for Q2 2025 was $444.4 million, representing an Adjusted EBITDA margin of 43%. This was derived from a GAAP net income of $103.6 million by adding back items including depreciation and amortization ($135.8 million), stock-based compensation ($112.8 million), and provision for income taxes ($48.3 million) Q2 2025 Net Income to Adjusted EBITDA Reconciliation (in thousands) | Metric | Amount | | :--- | :--- | | **Net Income (GAAP)** | $103,618 | | **Adjustments (Taxes, Interest, D&A, Stock Comp, etc.)** | +$340,762 | | **Adjusted EBITDA** | $444,380 | | **Adjusted EBITDA Margin** | 43% | [Non-GAAP Financial Measures and Forward-Looking Statements](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Forward-Looking%20Statements) This section explains the company's use of non-GAAP financial measures and provides a safe harbor statement regarding forward-looking information [Use and Definition of Non-GAAP Financial Measures](index=13&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Akamai utilizes non-GAAP financial measures to supplement its GAAP results, believing they provide a better understanding of ongoing business performance and facilitate comparisons across periods. These measures exclude items that may be infrequent or not reflective of core operations - Management uses non-GAAP measures for operational decision-making, planning, and evaluating financial performance[23](index=23&type=chunk) - Key adjustments to derive non-GAAP figures include excluding: - Amortization of acquired intangible assets - Stock-based compensation - Acquisition-related costs - Restructuring charges - Amortization of debt issuance costs[26](index=26&type=chunk)[36](index=36&type=chunk) [Safe Harbor Statement](index=15&type=section&id=Akamai%20Statement%20Under%20the%20Private%20Securities%20Litigation%20Reform%20Act) This section serves as a safe harbor statement, cautioning that the press release contains forward-looking statements, including financial guidance, which are subject to various risks and uncertainties. It warns that actual results could differ materially from expectations due to factors like economic trends, competition, geopolitical events, and other risks detailed in SEC filings - The release contains forward-looking statements regarding future financial performance and prospects, which are not guarantees of future results[41](index=41&type=chunk) - Key risks that could impact results include macroeconomic trends, competition, geopolitical instability, supply chain issues, and the ability to integrate acquisitions[41](index=41&type=chunk) - Akamai disclaims any obligation to update these forward-looking statements in the future[42](index=42&type=chunk)

Second quarter revenue of $1.043 billion, up 7% year-over-year and up 6% when adjusted for foreign exchange* Cloud Infrastructure Services** revenue of $71 million, up 30% year-over-year and up 29% when adjusted for foreign exchange* GAAP net income per diluted share of $0.71, down 17% year-over-year and down 18% when adjusted for foreign exchange*, and non-GAAP net income per diluted share* of $1.73, up 9% year-over-year and when adjusted for foreign exchange* CAMBRIDGE, Mass., Aug. 7, 2025 /PRNewswire/ -- ...

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Key Takeaways Akamai is expected to post Q2 revenue growth driven by strength in security and compute verticals.New cloud deals and AI-driven product upgrades likely boosted demand across core markets in Q2.AKAM launched security tools like Firewall for AI and DNS Posture Management during the quarter.Akamai Technologies, Inc. (AKAM) is scheduled to release second-quarter 2025 results on Aug. 7, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.6%. It pull ...

Core Insights - Aqua Security and Akamai Technologies have formed a strategic partnership to provide integrated security solutions for AI applications, ensuring protection from the AI workload to the edge [1][2][3] - The collaboration combines Aqua's Secure AI runtime protection with Akamai's Firewall for AI, addressing security challenges such as prompt injection and data exfiltration [2][3] - The joint solution enables enterprises to monitor AI interactions, enforce security policies, and protect against emerging threats without requiring code changes or infrastructure modifications [3][4] Company Overview - Aqua Security specializes in cloud native application protection, offering full lifecycle security for AI workloads and container environments [6] - Akamai Technologies is a leader in edge and application security, providing solutions that enhance digital experiences while mitigating online threats [8] Key Capabilities of the Joint Solution - AI Model and Agentic Service Discovery: Identifies and tracks AI models and services across environments, monitoring prompt-related traffic [7] - Prompt Defense: Detects and mitigates threats such as prompt injection and sensitive data exposure in real time [7] - AI Workload Protection: Monitors runtime behavior to detect anomalies and prevent attacks like remote code execution and model tampering [7] - Model-Aware Behavior Profiling: Establishes behavioral baselines for AI workloads to identify deviations indicating potential compromise [7] - Frictionless Deployment: Ensures protection of AI workloads without the need for code changes or infrastructure modifications [7]

Core Insights - The Akamai report highlights the emergence of a new quadruple extortion tactic in ransomware campaigns, alongside the continued prevalence of double extortion methods [1][2] - Quadruple extortion involves using distributed denial-of-service (DDoS) attacks and harassing third parties to increase pressure on victims, building on the existing double extortion strategy [2][3] - The report emphasizes that ransomware threats have evolved beyond mere data encryption, now incorporating stolen data, public exposure, and service outages to create significant business crises for organizations [3] Industry Trends - The report discusses the current state of legal and regulatory frameworks affecting organizational responses to ransomware, noting that while existing laws apply, specific regulations aim to discourage ransom payments [3] - Akamai stresses the importance of robust cybersecurity measures, incident reporting, and risk management strategies, such as Zero Trust and microsegmentation, to enhance resilience against ransomware threats [3] Emerging Threats - The report identifies that generative AI and large language models (LLMs) are facilitating the rise in frequency and scale of ransomware attacks, enabling less technically skilled individuals to launch sophisticated campaigns [6] - Hacktivist groups are increasingly utilizing ransomware as a service (RaaS) platforms, with a shift in focus from major corporations to smaller organizations with weaker security [6] - Cryptomining attacks are also on the rise, with nearly half targeting nonprofit and educational organizations due to their limited resources [6] - The TrickBot malware family has extorted over US$724 million in cryptocurrency from victims since 2016, indicating the ongoing threat posed by established malware families [6]