[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company's unaudited statements show total assets of $10.54 billion, six-month revenue of $2.06 billion, and net income of $226.8 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - Total assets increased to **$10.54 billion** as of June 30, 2025, while total liabilities grew to **$6.07 billion**, driven by an increase in long-term convertible senior notes[10](index=10&type=chunk)[11](index=11&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $850,302 | $517,707 | | Total current assets | $2,033,827 | $2,578,097 | | Total assets | $10,536,135 | $10,368,785 | | **Liabilities & Equity** | | | | Total current liabilities | $880,519 | $2,091,323 | | Convertible senior notes (long-term) | $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=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) - Q2 2025 revenue increased to **$1.04 billion**, but net income decreased to **$103.6 million** due to a higher tax provision, resulting in a diluted EPS of **$0.71**[12](index=12&type=chunk) Key Income Statement Data (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,043,494 | $979,580 | $2,058,633 | $1,966,550 | | Income from operations | $151,461 | $147,986 | $306,044 | $314,714 | | Net income | $103,618 | $131,688 | $226,789 | $307,106 | | Diluted EPS | $0.71 | $0.86 | $1.53 | $1.97 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) - Comprehensive income for Q2 2025 rose to **$151.6 million**, driven by a significant positive foreign currency translation adjustment of **$46.7 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) - For the first six months of 2025, operating cash flow decreased to **$710.3 million**, while higher stock repurchases drove an increase in cash used in financing activities[15](index=15&type=chunk)[17](index=17&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $710,349 | $782,841 | | Net cash provided by (used in) investing activities | $193,980 | $(438,265) | | Net cash used in financing activities | $(593,455) | $(376,426) | | Net increase (decrease) in cash | $332,375 | $(41,156) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) - Total stockholders' equity decreased to **$4.47 billion** by June 30, 2025, primarily due to **$805.3 million** in common stock repurchases[22](index=22&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - In May 2025, the company issued **$1.725 billion** of convertible senior notes due 2033 and repaid **$1.15 billion** of matured notes[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - For the first six months of 2025, Security revenue was **$1.08 billion**, Delivery was **$639.1 million**, and Cloud Computing was **$336.9 million**[69](index=69&type=chunk) - The effective income tax rate for the first half of 2025 was **30.3%**, a significant increase from 13.5% in the prior year period[73](index=73&type=chunk) - The company repurchased **10.0 million shares for $800.0 million** in the first half of 2025, with **$1.18 billion** remaining under the repurchase program[64](index=64&type=chunk)[65](index=65&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth from Security and Cloud solutions, profitability pressures, and capital management strategies [Overview and Key Trends](index=28&type=section&id=MD&A%20Overview) - The company's financial success depends on recurring revenue from its security and compute portfolios amid moderating network traffic growth[83](index=83&type=chunk) - Revenue trends show strong sales of security and cloud solutions, though some media and gaming customers are optimizing traffic due to macroeconomic headwinds[85](index=85&type=chunk) - Profitability is impacted by **declining prices on renewals**, rising co-location costs for the new compute platform, and increased payroll expenses[86](index=86&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Revenue by Solution Category (in thousands) | Solution | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Security | $551,914 | $498,708 | 11% | | Delivery | $320,125 | $329,399 | (3)% | | Cloud computing | $171,455 | $151,473 | 13% | | **Total revenue** | **$1,043,494** | **$979,580** | **7%** | - Security revenue growth was driven by API security, web application, and Guardicore segmentation solutions[92](index=92&type=chunk) - Delivery revenue declined due to **downward pricing on renewals** and customer cost optimization, partially offset by acquisitions[93](index=93&type=chunk) - Cost of revenue increased **6%** for the first six months of 2025, driven by higher costs related to the compute platform expansion[96](index=96&type=chunk) - R&D expenses increased **8%** for the six-month period due to higher payroll and stock compensation costs[99](index=99&type=chunk) [Use of Non-GAAP Financial Measures](index=36&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) - Management uses non-GAAP measures like Adjusted EBITDA to evaluate performance, excluding items such as stock-based compensation and restructuring charges[117](index=117&type=chunk)[118](index=118&type=chunk) Reconciliation of GAAP to Non-GAAP Net Income (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | GAAP Net Income | $226,789 | $307,106 | | Non-GAAP Adjustments (net of tax) | $280,663 | $191,037 | | **Non-GAAP Net Income** | **$507,452** | **$498,143** | Reconciliation of GAAP Net Income to Adjusted EBITDA (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | GAAP Net Income | $226,789 | $307,106 | | Adjustments | $658,908 | $518,933 | | **Adjusted EBITDA** | **$885,697** | **$826,039** | | Adjusted EBITDA Margin | 43% | 42% | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company held **$1.6 billion** in cash, cash equivalents, and marketable securities[129](index=129&type=chunk) - Net cash from operating activities decreased to **$710.3 million** for the first half of 2025 from $782.8 million in 2024[133](index=133&type=chunk) - In May 2025, the company issued **$1.725 billion** in convertible senior notes due 2033 and repaid **$1.15 billion** of matured notes[136](index=136&type=chunk)[138](index=138&type=chunk) - The company repurchased **10.0 million shares for $800.0 million** in the first half of 2025, with **$1.2 billion** remaining under its authorization[137](index=137&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates, foreign currency exchange, and customer credit - A hypothetical **100 basis point increase** in interest rates would cause the fair value of the investment portfolio to decline by approximately **$10.4 million**[149](index=149&type=chunk) - The company has significant exposure to foreign currency risk, as a **strengthening U.S. dollar negatively impacts reported revenue**[153](index=153&type=chunk)[214](index=214&type=chunk) - Credit risk is considered limited due to a large, dispersed customer base, with **no single customer accounting for 10% or more** of accounts receivable[157](index=157&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective at the reasonable assurance level**[159](index=159&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2025[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation matters not expected to have a material effect on its financial condition - The company does not currently expect any litigation matters to have a **material effect** on its business, financial condition, or cash flows[161](index=161&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to operations, regulations, and investments, including competition and cybersecurity threats [Financial and Operational Risks](index=47&type=section&id=Financial%20and%20Operational%20Risks) - **Slowing revenue growth**, particularly in the delivery solutions segment due to pricing pressure and customer DIY initiatives, poses a significant risk[163](index=163&type=chunk)[164](index=164&type=chunk) - The business is **intensely competitive**, especially in cloud computing, where failure to compete could lead to loss of market share[175](index=175&type=chunk)[177](index=177&type=chunk) - **Cybersecurity breaches** are a major risk that could damage reputation, lead to customer loss, and result in significant costs[187](index=187&type=chunk)[191](index=191&type=chunk) - The business depends on sourcing adequate transmission capacity and co-location facilities, and **hardware supply chain disruptions** could harm service quality[197](index=197&type=chunk)[198](index=198&type=chunk) [Legal and Regulatory Risks](index=58&type=section&id=Legal%20and%20Regulatory%20Risks) - Evolving global privacy laws like **GDPR and CCPA** could increase compliance costs and reduce demand for offerings[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - Changes to laws governing internet content liability, such as **Section 230**, could expose the company to greater legal liability[227](index=227&type=chunk)[228](index=228&type=chunk) - The company faces risks from potential **patent or copyright infringement claims**, which could result in substantial costs and damages[231](index=231&type=chunk) [Investment-Related Risks](index=60&type=section&id=Investment-Related%20Risks) - The company's **stock price has been and may continue to be volatile** due to variations in operating results and market fluctuations[237](index=237&type=chunk)[240](index=240&type=chunk) - The company has a significant amount of debt (**$4.14 billion in convertible senior notes**), and an inability to meet obligations could harm the business[241](index=241&type=chunk) - **Failure to maintain an effective system of internal controls** could lead to inaccurate financial reporting and loss of investor confidence[245](index=245&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 3.9 million shares in Q2 2025, with $1.18 billion remaining under its repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $1,480,514,000 | | May 2025 | 3,870,468 | $77.51 | $1,180,514,000 | | June 2025 | — | $— | $1,180,514,000 | | **Total** | **3,870,468** | **$77.51** | | - The board of directors authorized a **$2.0 billion share repurchase program** effective May 2024 through June 2027[249](index=249&type=chunk) [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the second quarter - **No director or officer** adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[249](index=249&type=chunk) [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including indentures, credit agreements, and certifications - Key exhibits filed include the indenture for the **0.25% Convertible Senior Notes due 2033** and amendments to the 2022 credit facility and 2013 Stock Incentive Plan[250](index=250&type=chunk)

Financial Performance - Akamai's cloud infrastructure services revenue is up 30% year-over-year and is expected to accelerate to 40%+ year-over-year by the end of the year [1] - Akamai achieved a strong beat on the quarter with earnings per share up 9% at $1.73 [2] Strategic Direction & Market Opportunity - Akamai is pursuing a tremendous market opportunity in cloud infrastructure, driven by customer demand and strong tailwinds from Gen AI [1][3] - Akamai's distributed platform, with points of presence in 750 cities, allows it to offer enterprise compute instances and containers closer to end users, resulting in lower latency, better performance, and potentially lower prices [3] - A hyperscaler is an early adopter of Akamai's new managed container service, seeking to have compute instances in hundreds of cities [4] Security Landscape - Security is a major revenue driver for Akamai, with market-leading solutions for web app firewall, bot management, API security, and ransomware protection [1][7] - Attack rates and penetrations are increasing, driving demand for Akamai's security solutions that stop damage caused by attacks, including ransomware [7][8] Generative AI & Skills - Generative AI is making the field of security more evolving and nimble [9] - Akamai is seeing tremendous efficiencies across most job types by leveraging Gen AI, and is providing training to employees to use Gen AI tools [10] TikTok Situation - While there's always risk, Akamai believes a deal regarding TikTok has been structured, and the ban has been postponed several times [5][6]

Core Insights - Akamai Technologies, Inc. (AKAM) reported strong second-quarter 2025 results, with both revenue and net income exceeding the Zacks Consensus Estimate [1][2] Financial Performance - GAAP net income decreased to $103.6 million or 71 cents per share from $131.7 million or 86 cents per share year-over-year, impacted by high operating expenses [2] - Non-GAAP net income increased to $251.4 million or $1.73 per share compared to $242.6 million or $1.58 per share a year ago, beating the Zacks Consensus Estimate by 18 cents [2] - Quarterly net sales reached $1.04 billion, a 7% increase from $979.6 million in the prior year, driven by strong momentum in the Security and Compute verticals, surpassing the Zacks Consensus Estimate of $1.02 billion [3] Revenue Breakdown - Security Technology Group revenues were $551.9 million, up 11% from $498.7 million year-over-year, primarily due to demand for Guardicore Segmentation Solution and API security solutions [4] - Delivery segment revenues fell to $320 million from $329.4 million year-over-year, but exceeded the estimate of $301.6 million [5] - Compute segment revenues increased to $171.4 million from $151.5 million in the prior year, driven by demand for cloud infrastructure services, beating the estimate of $165.7 million [5] Regional Performance - Net sales from the United States were $527.6 million, a 4% year-over-year increase, while international revenues totaled $515.9 million, up from $470.8 million in the previous year [6] Operating Expenses and Margins - Total operating expenses rose to $892 million from $831.6 million year-over-year, while non-GAAP income from operations improved to $308.6 million from $281.5 million, with margins of 30% and 29% respectively [7] - Adjusted EBITDA increased to $444.4 million from $408.9 million in the prior year [7] Cash Flow and Share Repurchase - Akamai generated $459.1 million in cash from operating activities compared to $430.9 million in the prior year [8] - As of June 30, 2025, the company had $850.3 million in cash and cash equivalents and repurchased approximately 3.9 million shares for around $300 million [9] Future Outlook - For Q3 2025, Akamai expects revenues between $1.03 billion and $1.05 billion, with a non-GAAP operating margin projected at 28% [10] - For the full year 2025, revenues are expected to be in the range of $4.135 billion to $4.2 billion, with non-GAAP earnings projected between $6.60 and $6.80 per share [11]

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]

We're about 2 minutes away from the end of the trading day. Scarlet Fu and Katie Greifeld here and here to help you take you through the top. All of us taking you through the closing bell is a global sign.Is it Friday yet. Finally, I think we need it right eve it's Friday issue that is Carol Massar of course a Norah Mulinda who is in for Tim Stenovec. And of course in doing so we bring together our Bloomberg Television, Bloomberg radio crew and our YouTube audiences worldwide to parse through the most cruci ...

[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)

Core Insights - Akamai Technologies reported a second quarter revenue of $1.043 billion, representing a 7% year-over-year increase and a 6% increase when adjusted for foreign exchange [1][2] - The company experienced significant growth in its Cloud Infrastructure Services, with revenue reaching $71 million, up 30% year-over-year and 29% when adjusted for foreign exchange [1][2] - GAAP net income per diluted share was $0.71, down 17% year-over-year, while non-GAAP net income per diluted share was $1.73, up 9% year-over-year [1][4] Financial Performance - Revenue for the second quarter was $1.043 billion, a 7% increase from $980 million in the same quarter of 2024 [2] - GAAP income from operations was $151 million, a 2% increase from the previous year, with a GAAP operating margin of 15% [3] - Non-GAAP income from operations was $309 million, a 10% increase year-over-year, with a non-GAAP operating margin of 30%, up 1 percentage point from the previous year [3][4] Income and Earnings - GAAP net income was $104 million, a 21% decrease from the second quarter of 2024, while non-GAAP net income was $251 million, up 4% year-over-year [4] - Adjusted EBITDA was $444 million, reflecting a 9% increase from the same quarter in 2024 [4] Cash Flow and Share Repurchases - Cash from operations for the second quarter was $459 million, representing 44% of revenue [5] - The company repurchased $300 million worth of its common stock, acquiring 3.9 million shares at an average price of $77.51 per share [5] Revenue Guidance - For the third quarter and full year 2025, Akamai expects security revenue to be $552 million, up 11% year-over-year, while delivery revenue is projected to be $320 million, down 3% year-over-year [6] - Cloud computing revenue is anticipated to reach $171 million, up 13% year-over-year, with U.S. revenue expected to be $528 million, up 4% year-over-year [6] Revenue Breakdown - Security revenue for the second quarter was $551.9 million, up 11% year-over-year, while delivery revenue was $320.1 million, down 3% [18] - Cloud computing revenue was $171.5 million, reflecting a 13% increase year-over-year [18] - U.S. revenue was $527.6 million, up 4% year-over-year, and international revenue was $515.9 million, up 10% year-over-year [19]

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