Akamai Technologies (NasdaqGS:AKAM) FY Conference December 09, 2025 06:30 AM ET Company ParticipantsTom Leighton - CEOModeratorAll right, almost lunchtime. We're super excited to have the CEO of Akamai, Tom Leighton. Tom, thank you for joining us at Nasdaq London, and once again.Tom LeightonThank you.ModeratorI appreciate it, Tom. We're going to focus a lot of conversation on, I think, what the key investor excitement is around what you guys are doing in compute, specifically with GPU inference. Before we g ...

CAMBRIDGE, Mass., Dec. 01, 2025 (GLOBE NEWSWIRE) --  Akamai Technologies, Inc. (NASDAQ: AKAM), the cybersecurity and cloud computing company that powers and protects business online, today announced that it has acquired Fermyon the serverless WebAssembly company. As artificial intelligence (AI) inference shifts to the edge, combining Fermyon’s cloud-native WebAssembly (Wasm) function-as-a-service (FaaS) with Akamai’s globally distributed platform enables enterprises to build edge-native applications that of ...

​Akamai Technologies, Inc. (NASDAQ:AKAM) is one of the Best Cloud Stocks to Buy Now. On November 17, Param Singh from Oppenheimer initiated Akamai Technologies, Inc. (NASDAQ:AKAM) with a Buy rating and a $100 price target. Earlier on November 13, Michael Elias from TD Cowen had reiterated a Hold rating on the stock, but raised the price target from $98 to $104. ​The positive outlook on the stock follows the fiscal Q3 2025 earnings beat. The company released results for Q3 2025 on November 6, with revenue ...

Core Insights - The article discusses the potential of AI and the cloud computing sector, highlighting the transformative nature of AI while cautioning about the possibility of an AI bubble, drawing parallels to the dotcom era [2][3] - A list of the 13 best cloud stocks to buy is provided, based on a methodology that includes analysis of hedge fund sentiment and market capitalization [5][7] AI Market Insights - Kim Posnett from Goldman Sachs emphasizes that it is too early to determine if there is an AI bubble, noting that 75% of major technology innovations over the last 175 years led to equity price bubbles [2] - Despite similarities to previous bubbles, current research indicates that there is not yet an AI bubble [2] Cloud Stocks Methodology - The list of cloud stocks was curated from the top holdings of three ETFs, sorted by market capitalization, and focused on pureplay cloud computing stocks with positive analyst upside potential [5] - Hedge fund sentiment was also considered, as research shows that imitating top hedge fund stock picks can lead to market outperformance [7] Akamai Technologies, Inc. (NASDAQ:AKAM) - Akamai has a market capitalization of $12.57 billion and an analyst upside potential of 3.00% with 42 hedge fund holders [8][9] - The company reported Q3 2025 earnings with a revenue increase of 4.97% year-over-year to $1.05 billion, exceeding estimates by $10.74 million [10] - Cloud Infrastructure revenue grew 39% year-over-year to $81 million, and management anticipates Q4 2025 revenue between $1.065 billion and $1.085 billion [10][11] Nutanix, Inc. (NASDAQ:NTNX) - Nutanix has a market capitalization of $15.87 billion and an analyst upside potential of 51.90% with 58 hedge fund holders [12] - The company is positioned to attract dissatisfied VMware customers and has received bullish ratings from analysts ahead of its fiscal Q1 2026 results [12][13] - Management expects revenue for Q1 2026 to be in the range of $670 million to $690 million, with a non-GAAP operating margin of 19.5% to 20.5% [14][15]

Core Insights - The demand for AI infrastructure is expanding significantly as AI applications evolve, with a shift from centralized cloud architectures to edge computing for real-time AI processing [1][2][5] - Akamai and NVIDIA have launched the Akamai Inference Cloud, a distributed generative edge platform designed for low-latency, real-time AI processing globally [1][5] - The AI inference workload is expected to far exceed training workloads, necessitating a reevaluation of computational infrastructure to support real-time AI processing demands [2][3] Industry Trends - The AI industry is transitioning from model development to practical application, with AI applications evolving from simple request-response models to complex multi-step reasoning and real-time decision-making [2][3] - Edge computing is becoming essential for AI inference, moving away from its previous role as a support for centralized cloud services to a primary function that enhances user experience and operational efficiency [2][3] Market Potential - The global edge AI market is projected to exceed $140 billion by 2032, a significant increase from $19.1 billion in 2023, indicating explosive growth [4] - The edge computing market could reach $3.61 trillion by 2032, with a compound annual growth rate (CAGR) of 30.4% [4] Competitive Landscape - Major tech companies, including Google, Microsoft, and Amazon, are actively investing in edge computing, leveraging their technological strengths and large user bases [5][6] - Akamai has established a global platform with over 4,200 edge nodes, enhancing its capability to support AI inference services and improve competitiveness in overseas markets [6]

Core Insights - Akamai Technologies, Inc. shares increased by 6.92% in after-hours trading to $78.06 following the release of its third-quarter financial results [1] - The company reported a quarterly revenue of $1.055 billion, reflecting a 5% increase from $1.005 billion in the same quarter last year [2] - Non-GAAP net income per diluted share rose 17% year over year to $1.86 [2] Revenue Breakdown - Security segment revenue reached $568 million, showing a 10% year-over-year growth [2] - Cloud Infrastructure Services generated $81 million in revenue, marking a significant 39% growth compared to the previous year [2] Margin and New Initiatives - Non-GAAP operating margin improved to 31%, up 2 percentage points from the same period last year [3] - The company launched Akamai Inference Cloud, leveraging NVIDIA AI infrastructure for secure, low-latency AI performance at the edge [3] Future Guidance - Akamai projects fourth-quarter revenue between $1.065 billion and $1.085 billion, with non-GAAP operating margins expected to range from 28% to 30% [4] Stock Performance - Year-to-date, Akamai shares have decreased by 23.50% [5] - The stock has traded between $67.60 and $104.99 over the past year, with a current market capitalization of $10.47 billion [5]

Financial Data and Key Metrics Changes - Akamai reported Q3 2025 revenue of $1.055 billion, representing a 5% year-over-year increase as reported and a 4% increase in constant currency [4][20] - Non-GAAP operating margins improved to 31%, and non-GAAP earnings per share was $1.86, up 17% year-over-year as reported and in constant currency [4][20] - Non-GAAP net income for Q3 was $269 million, with a non-GAAP EPS of $1.86, exceeding guidance by $0.20 [21][24] Business Line Data and Key Metrics Changes - Cloud Infrastructure Services (CIS) revenue was $81 million, up 39% year-over-year as reported and in constant currency, accelerating from a 30% growth rate in Q2 [6][19] - Security revenue reached $568 million, up 10% year-over-year as reported and 9% in constant currency, with high-growth security products generating $77 million, an increase of 35% year-over-year [20][14] - Delivery revenue was $306 million, down 4% year-over-year as reported and in constant currency, but showing improved trends [20] Market Data and Key Metrics Changes - International revenue was $525 million, up 9% year-over-year, representing 50% of total revenue in Q3 [20] - Foreign exchange fluctuations positively impacted revenue by $4 million sequentially and $8 million year-over-year [20] Company Strategy and Development Direction - Akamai is transitioning from a CDN pioneer to a leader in cloud security and distributed cloud computing, with a focus on AI inference capabilities [5][10] - The launch of Akamai Inference Cloud aims to support the growing demand for AI inference on the internet, positioning the company to leverage its distributed architecture [7][11] - The company emphasizes the importance of reliability, aiming for five nines of uptime, which is critical for attracting major clients like banks [75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of CIS and high-growth security solutions, anticipating continued strong demand for AI-related services [20][24] - The company expects Q4 revenue to be in the range of $1.065 billion to $1.085 billion, reflecting a 4%-6% increase as reported [23] - Management noted that the AI inference market is at a transition point, with significant growth expected as AI systems are adopted at scale [10][12] Other Important Information - Akamai's CapEx for Q3 was $224 million, representing 21% of revenue, as the company continues to invest in its CIS business [21] - The company has not repurchased any shares in Q3 but has spent $800 million year-to-date on share buybacks, marking the largest annual buyback in its history [21][22] Q&A Session Summary Question: Guidance on security and compute growth - Management reiterated security growth at about 10% and compute growth slightly under 15% for the year, with momentum in CIS [28] Question: Insights on Akamai Inference Cloud - Management indicated strong interest and demand for AI applications, with many customers looking to adopt inference capabilities [30][32] Question: Hiring strategy for sales reps - The company is continuing to hire sales reps to support new business sales in security and compute, with a transformation expected to be largely complete by Q2 next year [36][37] Question: Confidence in benefiting from capacity constraints at hyperscalers - Management highlighted Akamai's unique platform and extensive points of presence, which allow it to provide faster services compared to hyperscalers [41][42] Question: Opportunities in API Security - Management confirmed ongoing efforts to extend API security into new agentic protocols, with strong interest from customers [44] Question: CapEx requirements for inference - Management noted that CapEx will closely follow revenue and demand, with expectations for similar gross margins to current compute margins [46][47] Question: Traffic mix and future trends - Management indicated that video delivery currently dominates traffic, but AI applications are expected to increase traffic significantly in the future [68][70]

Core Insights - Akamai Technologies reported a strong performance in Q3 2025, with revenue reaching $1.055 billion, a 5% increase year-over-year, and a 4% increase when adjusted for foreign exchange [1][2] - The company experienced significant growth in its Cloud Infrastructure Services, with revenue of $81 million, marking a 39% year-over-year increase [1][9] - GAAP net income per diluted share was $0.97, reflecting a 155% increase year-over-year, while non-GAAP net income per diluted share was $1.86, up 17% year-over-year [1][5] Financial Performance - Revenue for Q3 2025 was $1.055 billion, up from $1.005 billion in Q3 2024, with a 5% increase year-over-year [2][15] - GAAP income from operations was $166 million, a 135% increase from Q3 2024, with an operating margin of 16%, up 9 percentage points [4][20] - Non-GAAP income from operations was $322 million, a 9% increase from Q3 2024, with a non-GAAP operating margin of 31%, up 2 percentage points [4][20] Income and Earnings - GAAP net income was $140 million, a 142% increase from Q3 2024, while non-GAAP net income was $269 million, up 10% [5][20] - Adjusted EBITDA for Q3 2025 was $458 million, an 8% increase from Q3 2024 [5][20] - Cash from operations was $442 million, representing 42% of revenue [6] Shareholder Actions - The company did not repurchase shares in Q3 2025 but spent $800 million to repurchase 10 million shares at an average price of $79.77 per share during the first nine months of 2025 [7] Revenue Breakdown - Security revenue was $568 million, up 10% year-over-year, while delivery revenue was $306 million, down 4% [9][15] - Cloud computing revenue reached $180 million, an 8% increase year-over-year [9][15] - U.S. revenue was $530 million, up 1% year-over-year, while international revenue was $525 million, up 9% [9][16] Financial Guidance - For Q4 2025, Akamai expects revenue between $1.065 billion and $1.085 billion, and for the full year, revenue is projected between $4.178 billion and $4.198 billion [8]

Core Insights - Akamai is experiencing a surge in demand for its Inference Cloud platform, indicating a shift from experimentation to execution in AI applications across various industries [2][3] - The platform is designed to operationalize AI in real-world environments, facilitating use cases in video, personalization, customer support, and consumer products [3][4] Company Overview - Akamai is a cybersecurity and cloud computing company that provides solutions to power and protect businesses online [2][6] - The company leverages its expertise in globally distributed architectures and NVIDIA Blackwell AI infrastructure to enhance AI processing capabilities [4][6] Product Features - Akamai Inference Cloud enables low-latency, real-time edge AI processing, which is crucial for applications like live sports production and personalized video streaming [4][5] - The platform supports advanced functionalities such as transcoding 8K multi-camera feeds and generating AI-powered play summaries in real-time [4][5] Use Cases - Current applications of Akamai Inference Cloud include live sports production, personalized live streams, recommendation engines, assistive agents, AI-powered fit rooms, and AI-powered toys [5] - Companies like Monks and Harmonic are utilizing the platform to enhance video content delivery and user experiences [4][5]

Core Insights - Akamai Technologies has launched Akamai Inference Cloud, a platform designed to enhance AI inference capabilities by moving processing closer to users and devices, thereby reducing latency and improving performance [1][2][4] Company Overview - Akamai Inference Cloud leverages Akamai's global edge network, which consists of over 4,200 locations, and NVIDIA's advanced AI infrastructure to provide scalable, low-latency AI processing [4][5] - The platform aims to support the next generation of AI applications, including personalized digital experiences and real-time decision systems, by enabling intelligent, agentic AI inference at the edge [2][3] Technological Advancements - The platform integrates NVIDIA RTX PRO Servers and BlueField DPUs, enhancing the ability to process AI workloads efficiently from core to edge [4][5] - Akamai Inference Cloud is designed to facilitate streaming inference and agentic AI workflows, allowing for near-instantaneous responses and improved user engagement [5][9] Market Positioning - The launch targets 20 initial locations globally, with plans for further expansion, positioning Akamai as a leader in edge AI processing [6] - The collaboration with NVIDIA aims to redefine AI inference by decentralizing data processing and routing requests to optimal models, enhancing the capabilities of smart commerce agents and financial decision-making [5][9]