Core Viewpoint - Akamai Technologies, Inc. is facing challenges despite strong Q4 performance, with future guidance not meeting market expectations, leading to a decline in stock price [2][6]. Financial Performance - Q4 revenues reached $1.09 billion, reflecting a 7.4% year-over-year increase [2][6]. - GAAP net income decreased to $85.1 million or 58 cents per share, down from $139.9 million or 91 cents per share in the previous year [4]. Future Guidance - The company's Q1 EPS guidance is projected between $1.50 and $1.67, while FY26 EPS guidance is between $6.20 and $7.20, both falling short of market expectations [2][6]. - Akamai projects 2026 revenue to be between $4.4 billion and $4.55 billion, exceeding Wall Street predictions [5]. Segment Performance - The Cloud Infrastructure Services (CIS) segment saw a significant revenue increase of 45% year-over-year, reaching $94 million, driven by demand for ISV solutions, IaaS, storage customers, and AI-related services [3][6]. - Security revenue increased by 11%, supported by demand for the Guardicore Segmentation platform and API security offerings [4]. Market Reaction - Following the guidance announcement, Akamai's stock experienced a 14.07% decline, equating to a $15.42 drop, with a trading volume of 15,779,607 shares [5][6]. - Goldman Sachs maintained a "Sell" rating on Akamai, adjusting the stock's price target to $76 [1].

Core Insights - Akamai Technologies reported strong financial performance for Q4 and full-year 2025, with notable revenue growth in key product areas, particularly in Cloud Infrastructure Services and security solutions [4][5][6]. Financial Performance - Q4 2025 revenue reached $1.095 billion, a 7% increase from Q4 2024, and a 6% increase when adjusted for foreign exchange [5][6]. - Full-year 2025 revenue totaled $4.208 billion, up 5% year-over-year, and adjusted for foreign exchange [5][6]. - Cloud Infrastructure Services revenue for Q4 was $94 million, reflecting a 45% year-over-year increase, and $314 million for the full year, up 36% [5][6]. - Security revenue for Q4 was $592 million, an 11% increase year-over-year, and $2.243 billion for the full year, up 10% [6][10]. Profitability Metrics - GAAP net income for Q4 was $85 million, a 39% decrease from Q4 2024, while full-year GAAP net income was $452 million, down 10% year-over-year [10][11]. - Non-GAAP net income for Q4 was $270 million, up 6% year-over-year, and $1.046 billion for the full year, a 5% increase [11][12]. - GAAP net income per diluted share for Q4 was $0.58, down 36% from the previous year, while for the full year it was $3.07, down 6% [12][10]. Operational Efficiency - GAAP income from operations for Q4 was $95 million, a 36% decrease from Q4 2024, while full-year GAAP income from operations was $567 million, a 6% increase [8][9]. - Non-GAAP income from operations for Q4 was $316 million, a 6% increase year-over-year, and $1.254 billion for the full year, up 7% [9][8]. Cash Flow and Capital Management - Cash from operations for Q4 was $367 million, representing 33% of revenue, and for the full year, it was $1.519 billion, or 36% of revenue [13][24]. - The company did not repurchase shares in Q4 2025 but spent $800 million to repurchase 10 million shares throughout the year [14]. Geographic Revenue Breakdown - U.S. revenue for Q4 was $553 million, up 4% year-over-year, and $2.139 billion for the full year, up 3% [15][27]. - International revenue for Q4 was $542 million, up 11% year-over-year, and $2.069 billion for the full year, up 8% [15][27]. Future Guidance - For Q1 2026, Akamai expects revenue between $1.060 billion and $1.085 billion, with a non-GAAP operating margin of 26% to 27% [16]. - For the full year 2026, revenue guidance is set between $4.400 billion and $4.550 billion, with a non-GAAP net income per diluted share expected to be between $6.20 and $7.20 [16].