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]

Financial Data and Key Metrics Changes - First quarter revenue reached $1,015 million, representing a 3% year-over-year increase and a 4% increase in constant currency [4][23] - Non-GAAP operating margin was reported at 30%, exceeding guidance [4] - Non-GAAP earnings per share (EPS) was $1.7, up 4% year-over-year and up 6% in constant currency, surpassing the high end of guidance [4][26] - Total Q1 CapEx was $226 million, accounting for 22% of revenue [26] Business Line Data and Key Metrics Changes - Security and compute combined accounted for 69% of total revenue, growing 10% year-over-year as reported and 11% in constant currency [5][24] - Security revenue was $531 million, growing 8% year-over-year as reported and 10% in constant currency [24] - Compute revenue grew to $165 million, a 14% year-over-year increase as reported and 15% in constant currency [23][24] - Delivery revenue was $319 million, down 9% year-over-year as reported and down 8% in constant currency [24] Market Data and Key Metrics Changes - International revenue was $486 million, up 2% year-over-year or 5% in constant currency, representing 48% of total revenue [24] - Foreign exchange fluctuations negatively impacted revenue by $5 million sequentially and $14 million year-over-year [24] Company Strategy and Development Direction - Akamai is transforming from a CDN pioneer into a cybersecurity and cloud computing company, focusing on security solutions like Guardicore and API security [5][6] - The company introduced new products such as the firewall for AI, aimed at protecting AI applications from emerging threats [10][11] - Akamai aims to enhance its edge computing capabilities with the introduction of a managed container service [17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential recession impacts on bookings later in the year, although no current impacts were noted [20] - The company expects to lose a few million dollars in revenue in the latter half of 2025 due to federal cutbacks, but sees potential for increased revenue from solutions that generate savings for federal agencies [21] - Akamai remains committed to maintaining strong customer relationships and trust, which are core values for the company [22] Other Important Information - Akamai's capital allocation strategy includes share buybacks, with approximately $1.5 billion remaining on the current repurchase authorization [27] - The company completed the migration of Edgeio customers to its platform, expecting revenue contributions from Edgeio to remain between $85 million to $105 million for 2025 [28] Q&A Session Summary Question: What drove the upside in delivery revenue? - Management indicated that traffic growth was the primary driver, with strong performance across various sub-verticals [38][39] Question: How did security revenue perform in March? - Security revenue met internal expectations, with growth driven by strong API security and Guardicore performance [41][42] Question: What role can Akamai play with AgenTic AI and its AI firewall? - Akamai's AI firewall is designed to protect AI applications from various attacks, ensuring the integrity of AI agents and their data [47][50] Question: What differentiates Akamai's segmentation product in the market? - Akamai's scale, ease of use, and trustworthiness set it apart, allowing it to protect large enterprises effectively [56][60] Question: What are the expectations for security revenue growth? - Management expects security revenue growth of approximately 10% in constant currency for 2025, driven by strong demand for segmentation and API security solutions [34][90]

Financial Data and Key Metrics Changes - Akamai reported total revenue of $1.02 billion for Q4 2024, representing a 3% year-over-year increase [45] - Non-GAAP earnings per share (EPS) was $1.66, exceeding guidance and down 2% year-over-year [50] - Security revenue reached $535 million, growing 14% year-over-year, while compute revenue grew to $167 million, a 24% year-over-year increase [46][48] Business Line Data and Key Metrics Changes - Security became the majority revenue contributor for the first time, surpassing $2 billion in annual revenue and growing 16% year-over-year [10] - Cloud computing revenue was $630 million, growing 25% over 2023, with cloud infrastructure services contributing $230 million, up 32% [10] - Combined revenue from security and compute accounted for 69% of total revenue in Q4 [48] Market Data and Key Metrics Changes - International revenue was $490 million, up 2% year-over-year, representing 48% of total revenue [49] - The company anticipates a decline in delivery revenue to shrink to about 10% year-over-year in 2025, with signs of improvement in the delivery marketplace [36] Company Strategy and Development Direction - Akamai is transforming from a CDN pioneer to a cybersecurity and cloud computing company, focusing on expanding its security offerings and cloud infrastructure services [9][12] - The company aims to achieve a compounded annual growth rate (CAGR) of about 10% for security products over the next three to five years, targeting over $3 billion in security revenue by the end of the decade [16][17] - Akamai plans to focus more on compute investments, expecting cloud infrastructure services ARR to grow by 40% to 45% in 2025 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong demand for security solutions and cloud infrastructure services [41] - The company expects to see revenue growth acceleration in 2025, driven by improvements in product mix and operational efficiency [40] - Management acknowledged challenges from foreign exchange fluctuations and the impact of a major customer pursuing a DIY strategy [37][59] Other Important Information - Akamai's capital expenditures (CapEx) for Q4 were $193 million, representing 19% of revenue, with plans to continue share buybacks [51][52] - The company expects to generate approximately $85 million to $105 million in revenue from the Edgio transaction in 2025 [53] Q&A Session Summary Question: Can you expand on the large cloud deal and the competitive environment? - Management indicated that the customer is increasing usage of Akamai's cloud infrastructure services and that a data center is being built in Scandinavia to meet specific needs [81][82] Question: Is the $100 million compute deal the same as the five-year deal with the largest delivery customer? - Management confirmed that they are the same customer [86] Question: Can you elaborate on the $60 million headwind from the largest customer? - The headwind is primarily due to the customer's DIY build-out, which will reduce reliance on Akamai's services [92] Question: What is the outlook for retaining Edgio contracts? - Management expressed confidence in retaining the Edgio customer base, with no significant churn anticipated [120] Question: What steps are being taken to minimize disruption from changes in the go-to-market strategy? - Management is in the early stages of a two-year process to transform the sales force and improve account segmentation and pricing strategies [105][106]