Akamai Technologies (AKAM) 2025 Conference Summary Company Overview - **Company**: Akamai Technologies (AKAM) - **Date**: September 04, 2025 - **Key Speaker**: Tom Leighton, CEO and Founder Key Achievements and Financial Performance - Akamai had a strong year, exceeding initial plans and raising full-year guidance for both top and bottom lines [4] - Cloud infrastructure services (CIS) ended the previous year with an Annual Recurring Revenue (ARR) of approximately $250 million, with a target growth of 40% to 45% for the current year [4] - Security services, including API Security and Akamai Guardicore Segmentation, are also performing well, with an expected ARR growth of 30% to 35% [5] Delivery Business Insights - The delivery marketplace faced challenges due to competitors selling below cost, but the situation has stabilized with fewer competitors [11] - Traffic levels are recovering, contributing to a more stable delivery business, although not at the peak levels seen during the COVID-19 pandemic [13] - The potential for increased traffic growth exists with the rise of generative AI and video content [15][16] Security Business Strategy - Security now constitutes over half of Akamai's revenue, positioning the company as one of the largest security vendors globally, with revenues exceeding $2 billion [21] - The company is focusing on developing new capabilities, including the recently launched Firewall for AI, and is open to strategic acquisitions to enhance its security portfolio [22] - The security business is sensitive to episodic buying patterns, often driven by recent cyber incidents [27][28] Compute Business Developments - The acquisition of Linode has been transformational, expanding Akamai's capabilities and infrastructure [30] - The company is focusing on cloud infrastructure services, with significant investments in scalability and reliability [30] - Akamai anticipates a 40% to 45% growth in ARR for CIS, supported by a compelling value proposition and a large market opportunity [32][33] Capital Expenditure and Business Model - The capital intensity of the delivery business has decreased from 9% to 4% of revenue, while compute remains capital-intensive due to growth [46][47] - A dollar of compute CapEx is expected to generate approximately a dollar of revenue annually, indicating attractive economics [40][44] Market Position and Investor Perception - Akamai is perceived as undervalued by investors, with a strong focus on improving communication regarding its growth trajectory in cloud infrastructure and security [60][62] - The company is actively increasing investments in its sales organization to enhance go-to-market strategies [51][53] Future Outlook - The transition towards AI and generative AI is expected to create significant demand for compute resources, presenting both opportunities and security challenges [56][59] - Akamai is well-positioned to capitalize on these trends, with a focus on enhancing its infrastructure and security capabilities to meet evolving market demands [49][57]

Core Insights - Akamai Technologies, Inc. (AKAM) is set to release its second-quarter 2025 results on August 7, with expectations of higher revenues year over year due to strong demand in security and compute verticals [1][9] - The company achieved an earnings surprise of 7.6% in the last quarter and has a trailing four-quarter average earnings surprise of 4.8% [1] Factors at Play - Akamai announced that Devsisters Inc. will utilize its Akamai Cloud platform to enhance its global game services infrastructure, aiming for improved deployment and scaling for new game releases [2] - A strategic partnership with Cloudinary was formed to integrate AI-powered video solutions into Akamai Video Manager, addressing common video management challenges [3] - Collaboration with FPT aims to assist customers in building and optimizing distributed cloud applications on Akamai Cloud, likely generating incremental revenues [3] Product Launches and Innovations - Akamai launched Firewall for AI, providing multilayered protection for AI applications against various threats [4] - The introduction of App & API Protector Hybrid enhances security for applications and APIs, while Akamai API Security features were upgraded to counter evolving threats [4] - The launch of Akamai DNS Posture Management offers unified visibility over DNS assets, enabling real-time monitoring and remediation of security risks [5] Revenue Expectations - Revenue estimates for the security segment are projected at $553 million, reflecting a 10.9% year-over-year growth [6] - The compute vertical is expected to generate $165.7 million, indicating a 9.4% improvement year over year [6] - Delivery segment revenues are anticipated to decline by 8.4%, projected at $301.6 million [6] Overall Financial Projections - The Zacks Consensus Estimate for total revenues in Q2 is $1.02 billion, up from $980 million year over year [7] - The consensus estimate for adjusted earnings per share is $1.55, down from $1.58 reported a year ago [7]

Core Insights - Akamai Technologies has launched a new solution called Firewall for AI, designed to provide multilayered protection for AI applications against various security threats [1][4] Group 1: AI Security Challenges - The rapid deployment of large language models (LLMs) and other AI tools introduces new security vulnerabilities, including adversarial attacks and data scraping, which traditional web application firewalls (WAFs) cannot effectively mitigate [2] - Existing security solutions are inadequate for addressing AI-specific threats, necessitating a new approach to secure AI applications [3] Group 2: Features of Firewall for AI - Firewall for AI offers multilayered protection by blocking adversarial inputs, unauthorized queries, and large-scale data scraping, thereby preventing model manipulation and data exfiltration [8] - The solution includes real-time AI threat detection that adapts to evolving AI-based attacks, ensuring compliance and data protection for AI-generated outputs [8] - Flexible deployment options are available, allowing integration into existing security frameworks via Akamai edge, REST API, or reverse proxy [8] Group 3: Enhancements to Security Capabilities - Akamai is also introducing API LLM Discovery, which automatically identifies and categorizes GenAI and LLM API endpoints, continuously updating security policies to prevent unauthorized access [5]