Akamai Technologies, Inc.

Akamai said Q2 revenue was $1.1 billion, up 5% year over year as reported and in constant currency. Non-GAAP net income was $236 million, or $1.59 per diluted share, down 8% year over year as reported and down 6% in constant currency. Cloud infrastructure services revenue was $99 million, up 39% year over year, while security revenue was $4 million, up 10% year over year as reported and 9% in constant currency; delivery and other cloud applications revenue was $396 million, down 6% year over year as reported and down 5% in constant currency. Non-GAAP operating margin was 25%, and Q2 CapEx was $347 million, or 32% of revenue. For Q3, management guided revenue to $1.105 billion to $1.130 billion, non-GAAP EPS to $1.60 to $1.80, non-GAAP operating margin to 24% to 26%, EBITDA margin to approximately 38% to 40%, and CapEx to $475 million to $525 million. For full-year 2026, management guided revenue to $4.445 billion to $4.530 billion, non-GAAP EPS to $6.40 to $7.05, non-GAAP operating margin to approximately 25% to 26%, and CapEx to approximately 40% of revenue.

Tom Leighton framed the quarter around Akamai becoming a key infrastructure provider for the AI-driven economy, with emphasis on distributed inference at the edge and the company’s long-standing platform strengths in delivery and security. He highlighted more than $600 million in a new 4-year CIS commitment and said signed CIS commitments this year now exceed $2.8 billion, which supports his view that overall revenue growth can accelerate into the low teens in 2027. His tone was strongly optimistic, repeatedly stressing AI tailwinds, customer validation, and Akamai’s ability to serve both cloud and security use cases on one platform.

Ed McGowan said the quarter was in line with expectations on CIS and reiterated that the new $600 million robotics-related deal would not materially affect 2026 revenue but should fully ramp through 2027. He noted Q2 non-GAAP operating margin of 25%, expects margins to stay in the mid-20s for the rest of the year, and said Q2 CapEx of $347 million was below plan because GPU shipments arrived later than expected. He also said the company raised $3.5 billion of zero-coupon convertible debt in May, spent about $410 million on buybacks in Q2, paused repurchases to fund CIS growth, ended June with about $4.6 billion of cash, and expects LayerX to be dilutive to 2026 non-GAAP EPS by about $0.02.

Analysts focused heavily on how quickly the new CIS deals will turn into revenue, whether capacity constraints limit additional signings, and how margins will hold up as the company scales into larger GPU deployments. Management said large deals typically convert to revenue in about 6 to 9 months, with a quarter being a common timeframe, and described Q4 as the point where a “big hockey stick” of CIS acceleration should begin as inventory is deployed and new contracts start generating revenue. They also said pricing in CIS is structured to pass through higher hardware and memory costs, and that customers increasingly want reserved-capacity style commitments rather than hourly spot rental.