Johanna Schmitt Mark Stoutenberg
Contacts: Johanna Schmitt Mark Stoutenberg Media Relations Investor Relations Akamai Technologies Akamai Technologies AkamaiPR@akamai.com mstouten@akamai.com
$1.1 billion, up 6% year-over-year and up 7% when adjusted for foreign exchange*
Cloud Infrastructure Services revenue of $109 million, up 34% year-over-year and up 35% when adjusted for foreign exchange*
Security revenue of $622 million, up 9% year-over-year and up 10% when adjusted for foreign exchange*
GAAP net income per diluted share of $0.77, down 21% year-over-year and down 15% when adjusted for foreign exchange*, and non-GAAP net income per diluted share* of $1.77, down 5% year-over-year and down 2%
2027 Cloud Infrastructure Services revenue projected to be $1.1 billion to $1.3 billion, with total company revenue growth of 17% to 22% year-over-year when adjusted for foreign exchange*
– Akamai Technologies, Inc. (Nasdaq: AKAM), the cloud company that powers and protects an AI-driven world, today reported financial results for the third quarter ended September 30, 2026.
“Akamai delivered solid third quarter results, driven by continued momentum across security and Cloud Infrastructure Services (CIS),” said Dr. Tom Leighton, Akamai's Chief Executive Officer. “We are especially excited by the exceptional progress in Cloud Infrastructure Services, with more than $14 billion worth of multi-year commitments signed so far this year. We also recently expanded our cloud portfolio with the launch of Akamai Inference and Akamai Agent Sandbox. These new services enable enterprises to build and tune open-weight models based on their proprietary data and run agents within strictly enforced boundaries — all secured and powered on Akamai's AI-optimized cloud platform.
Given our CIS momentum, track record of execution and continued strong pipeline, we expect Akamai's overall revenue growth to accelerate to 17% to 22% year-over- year when adjusted for foreign exchange* in 2027. We expect further acceleration in 2028 with total revenue projected to exceed $7.0 billion,” Leighton added.
Akamai delivered the following results for the third quarter ended September 30, 2026:
Revenue: Revenue was $1.122 billion, a 6% increase over third quarter 2025 revenue of $1.055 billion and a 7% increase when adjusted for foreign exchange.*
• Security revenue was $622 million, up 9% year-over-year and up 10% when adjusted for foreign exchange*
• Delivery and other cloud applications revenue was $391 million, down 3% year- over-year and when adjusted for foreign exchange*
• Cloud infrastructure services revenue was $109 million, up 34% year-over-year and up 35% when adjusted for foreign exchange* 1 Revenue by geography:
• International revenue was $563 million, up 7% year-over-year and up 9% when adjusted for foreign exchange*
Income from operations: GAAP income from operations was $109 million, a 35% decrease from third quarter 2025. GAAP operating margin for the third quarter was 10%, down 6 percentage points from the same period last year.
Non-GAAP income from operations* was $286 million, an 11% decrease from third quarter 2025. Non-GAAP operating margin* for the third quarter was 25%, down 6 percentage points from the same period last year.
Net income: GAAP net income was $117 million, a 16% decrease from third quarter 2025. Non-GAAP net income* was $262 million, down 3% from third quarter 2025.
EPS: GAAP net income per diluted share was $0.77, a 21% decrease from third quarter 2025 and a 15% decrease when adjusted for foreign exchange.* Non-GAAP net income per diluted share* was $1.77, a 5% decrease from third quarter 2025 and a 2% decrease when adjusted for foreign exchange.*
Adjusted EBITDA*: Adjusted EBITDA* was $435 million, a 5% decrease from third quarter 2025.
Supplemental cash information: Cash from operations for the third quarter of 2026 was $433 million, or 39% of revenue. Cash, cash equivalents and marketable securities was $4.239 billion as of September 30, 2026.
Share repurchases: The Company did not repurchase shares of its common stock in the third quarter of 2026. The Company spent $616 million during the nine months ended September 30, 2026 to repurchase 5 million shares of common stock at a weighted average price of $123.19 per share. The Company had 144 million shares of common stock outstanding as of September 30, 2026.
Financial guidance: The Company reports the following financial guidance for the fourth quarter and full year 2026:
The Company also reports the following revenue guidance for the full year 2027 and full year 2028:
• 2027 cloud infrastructure services revenue projected to be $1.1 billion to $1.3 billion, with total company revenue growth of 17% to 22% year-over-year when adjusted for foreign exchange*
The guidance that is provided on a non-GAAP basis cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items Akamai excludes from non-GAAP measures. For example, stock-based compensation is unpredictable for Akamai’s performance-based awards, which can fluctuate significantly based on current expectations of the future achievement of performance-based targets. Amortization of intangible assets, acquisition- related costs and restructuring costs are all impacted by the timing and size of potential future actions, which are difficult to predict. In addition, from time to time, Akamai excludes certain items that occur infrequently, which are also inherently difficult to predict and estimate. It is also difficult to predict the tax effect of the items Akamai excludes and to estimate certain discrete tax items, such as the resolution of tax audits or changes to tax laws. As such, the costs that are being excluded from non-GAAP guidance are difficult to predict and a reconciliation or a range of results could lead to disclosure that would be imprecise or potentially misleading. Material changes to any one of the exclusions could have a significant effect on our guidance and future GAAP results. 2 * See Use of Non-GAAP Financial Measures below for definitions
Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-833-634-5020 (or 1-412-902-4238 for international calls) and using passcode Akamai Technologies call. A live webcast of the call may be accessed at www.akamai.com in the Investor Relations section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-855-669-9658 (or 1-412-317-0088 for international calls) and using passcode 9787784. The archived webcast of this event may be accessed through the Akamai website.
Akamai is the cloud company that powers and protects an AI-driven world. Our cloud platform extends high-performance cloud computing from the core to the edge, enabling organizations to build and scale next-generation AI applications and providing comprehensive, multilayered security to safeguard enterprises against evolving cyberthreats. Learn more at akamai.com and akamai.com/blog, or follow Akamai Technologies on X and LinkedIn. 3
(1) Beginning with the first quarter of 2026, the Company began reporting its revenue in three solution categories: security, delivery and other cloud applications and cloud infrastructure services. Recognizing cloud infrastructure services as a primary growth area and a significant focus of investment in the Company's cloud computing portfolio, the Company began reporting its revenue separately. Prior period amounts reported in the table for revenue by solution category have been recast to reflect this change.
(2) Amortization of capitalized stock-based compensation and interest expense in this table excludes amortization of capitalized stock-based compensation and interest expense capitalized related to cloud-computing arrangements. However, the amounts are included in our total amortization of capitalized stock-based compensation and interest expense that is excluded from our non-GAAP measures (see reconciliations of GAAP to non-GAAP measures).
(3) Capital expenditures presented in this table are reported on an accrual basis, which differs from the cash-basis presentation in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods. 9
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND TAX RATE
(1) Shares used in non-GAAP per diluted share calculations have been adjusted for the three and nine months ended September 30, 2026 and for the three months ended June 30, 2026 for the benefit of Akamai's note hedge transactions. During these periods, Akamai's average stock price exceeded the initial conversion price of one or more of Akamai's convertible senior notes. See Use of Non-GAAP Financial Measures below for further definition. 11
In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non- GAAP financial measures). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate Akamai's financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP tax rate, capital expenditures, non-GAAP depreciation and amortization, capex as a percentage of revenue and impact of foreign currency exchange rates, as discussed below.
Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparison of financial results across accounting periods and to those of our peer companies. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may exclude expenses and gains that may be unusual in nature, infrequent or not reflective of Akamai's ongoing operating results.
The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial measures and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP. Akamai has provided a reconciliation of non-GAAP financial measures used in its financial reporting and investor presentations to the most directly comparable GAAP financial measures. This reconciliation can be found in the “Supplemental Financial Information” on the Investor Relations section of Akamai's website.
The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below:
– Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions Akamai has made. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and is unique to each acquisition; therefore, Akamai excludes amortization of acquired intangible assets from its non-GAAP financial measures to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
Stock-based compensation and amortization of capitalized stock-based compensation – Stock-based compensation is an important aspect of the compensation paid to Akamai's employees which includes long-term incentive plans to encourage retention, performance-based plans to encourage achievement of specified financial targets, short-term incentive awards with a one year vest and shares issued as part of a retirement savings program. The grant date fair value of the stock-based compensation awards varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of Akamai's current financial results to previous and future periods difficult to interpret; therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from its non-GAAP financial measures in order to highlight the performance of Akamai's core business and to be consistent with the way many investors evaluate its performance and compare its operating results to peer companies.
– Acquisition-related costs include transaction fees, advisory fees, due diligence costs and other direct costs associated with strategic activities. Acquisition-related costs are impacted by the timing and size of the acquisitions, and Akamai excludes acquisition-related costs from its non-GAAP financial measures to provide a useful comparison of operating results to prior periods and to peer companies because such amounts vary significantly based on the magnitude of the acquisition transactions and do not reflect Akamai's core operations.
– Akamai has incurred restructuring charges from programs that have significantly changed either the scope of the business undertaken by the Company or the manner in which that business is conducted. These charges include severance and related expenses for workforce reductions, impairments of long- lived assets that will no longer be used in operations (including acquired intangible assets, right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. Akamai excludes these items from its non- GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business. 13
Amortization of debt issuance costs and capitalized interest expense – The issuance costs of Akamai's convertible senior notes are amortized to interest expense and are excluded from Akamai's non-GAAP results because management believes the non-cash amortization expense is not representative of ongoing operating performance.
– Akamai has recorded gains and losses from the disposition, changes to fair value and impairment of cost method investments. Akamai believes excluding these amounts from its non-GAAP financial measures is useful to investors as the types of events giving rise to these gains and losses are not representative of Akamai's core business operations and ongoing operating performance.
Income tax effect of non-GAAP adjustments and certain discrete tax items – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as the impact of intercompany sales of intellectual property related to acquisitions), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows Akamai to highlight income attributable to its core operations.
– GAAP income from operations adjusted for the following items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; amortization of capitalized interest expense; acquisition-related costs; restructuring charges; legal settlements; and other non-recurring or unusual items that may arise from time to time.
– GAAP net income adjusted for the following tax-affected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; amortization of debt issuance costs; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time.
– Non-GAAP net income divided by weighted average diluted common shares outstanding. Diluted weighted average common shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to Akamai pursuant to the note hedge transactions entered into in connection with the issuances of Akamai's convertible senior notes. Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully- diluted share calculation until they are delivered. However, Akamai would receive a benefit from the note hedge transactions and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of operating performance. With respect to the convertible senior notes due in each of 2033, 2032, 2030, 2029 and 2027, and those that matured in 2025, unless Akamai's weighted average stock price is greater than $93.01, $190.81, $201.41, $126.31, $116.18 and $95.10, respectively, the initial conversion prices, there will be no difference between GAAP and non-GAAP diluted weighted average common shares outstanding.
– GAAP net income excluding the following items: interest and marketable securities income and losses; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; foreign exchange gains and losses; interest expense; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time.
– GAAP tax rate excluding the tax effect of non-GAAP adjustments and certain discrete tax items.
– Purchases of property and equipment and capitalization of internal-use software development costs presented on an accrual basis, which differs from the cash-basis presentation included in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods.
– GAAP depreciation and amortization (which consists of depreciation and amortization of property and equipment, capitalized stock-based compensation, capitalized interest expense and acquired intangible assets), less depreciation and amortization excluded from non-GAAP results (which consists of depreciation and amortization of capitalized stock-based compensation, capitalized interest expense and acquired intangible assets).
– Revenue and earnings from international operations have historically been an important contributor to Akamai's financial results. Consequently, Akamai's financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, when the local currencies of our international subsidiaries weaken, generally its consolidated results stated in U.S. dollars are negatively impacted.
Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. The dollar impact of changes in foreign currency exchange rates presented is calculated by translating current period results using monthly average foreign currency exchange rates from the comparative period and comparing them to the reported amount. The percentage change at constant currency presented is calculated by comparing the prior period amounts as reported and the current period amounts translated using the same monthly average foreign currency exchange rates from the comparative period.
This release and related management commentary on our quarterly earnings conference call scheduled for later today contain statements that are not statements of historical fact and constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about expected future financial performance, expectations, plans and prospects of Akamai, including our outlook, guidance, growth objectives, statements about anticipated revenue growth rates and profitability trends for future periods, statements about the anticipated benefits, timing, revenue and capital expenditure associated with customer commitments, statements about the expected economics and profitability of our cloud infrastructure services contracts, statements about expected levels of capital expenditure and infrastructure deployment and statements about our products, including Akamai Inference Cloud, and their anticipated capabilities, scalability and performance. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “committed,” “positioned,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Actual results may differ materially from those indicated by these forward- looking statements as a result of various important factors including, but not limited to, inability to continue to generate cash at the same level as prior years; failure of our investments in innovation to generate solutions that are accepted in the market; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; effects of competition, including pricing pressure, changing business models and competition from established and emerging providers of AI infrastructure and cloud computing services; changes in customer or user preferences or demands; impact of macroeconomic trends, including economic uncertainty, turmoil in the financial services industry, the effects of inflation, fluctuating interest rates, foreign currency exchange rate and monetary supply fluctuations, international tensions and volatility in capital markets; conditions and uncertainties in the geopolitical environment, including sanctions and disruptions resulting from the ongoing war in Ukraine and the U.S.-Israel military conflict with Iran and related hostilities in the Middle East; continuing supply chain and logistics costs, constraints, changes or disruptions; risks associated with large customer commitments, including the customer’s ability to fulfill its purchase obligations, our ability to deploy the infrastructure necessary to service such commitments on anticipated timelines and our ability to procure sufficient hardware and memory at anticipated costs and on anticipated delivery schedules; our ability to convert pipeline opportunities into signed contracts; our ability to achieve projected levels of capital expenditure and the anticipated returns therefrom; defects or disruptions in our products or IT systems, including outages, cyber-attacks, data breaches or malware; difficulties in integrating our acquisitions and investments; failure to realize the expected benefits of any of our acquisitions, reorganizations or investments; changes to economic, political and regulatory conditions in the United States and internationally, including changes in government policies, regulations and resources; our ability to attract and retain key personnel; delay in developing or failure to develop new products, service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities or failure of such solutions to operate as expected, and other factors that are discussed in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents filed with the SEC.
In addition, the statements in this press release and on our quarterly earnings conference call represent Akamai's expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point 15 in the future, it specifically disclaims any obligation to do so. These forward- looking statements should not be relied upon as representing Akamai's expectations or beliefs as of any date subsequent to the date of this press release. 16
Full text with the tables
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
Johanna Schmitt Mark Stoutenberg
Media Relations Investor Relations
Akamai Technologies Akamai Technologies
AkamaiPR@akamai.com mstouten@akamai.com
AKAMAI REPORTS THIRD QUARTER 2026 FINANCIAL RESULTS
Third quarter revenue of
$1.1 billion, up 6% year-over-year and up 7% when adjusted for foreign exchange*
Cloud Infrastructure Services revenue of $109 million, up 34% year-over-year and
up 35% when adjusted for foreign exchange*
Security revenue of $622 million, up 9% year-over-year and up 10% when adjusted
for foreign exchange*
GAAP net income per diluted share of $0.77, down 21% year-over-year and down 15%
when adjusted for foreign exchange*, and non-GAAP net income per diluted share*
of $1.77, down 5% year-over-year and down 2%
when adjusted for foreign exchange*
2027 Cloud Infrastructure Services revenue projected to be $1.1 billion to $1.3
billion, with total company revenue growth of 17% to 22% year-over-year when
adjusted for foreign exchange*
2028 total company revenue projected to exceed $7.0 billion
CAMBRIDGE, Mass.
–
November 5, 2026
– Akamai Technologies, Inc. (Nasdaq: AKAM), the cloud company that powers and
protects an AI-driven world, today reported financial results for the third
quarter ended September 30, 2026.
“Akamai delivered solid third quarter results, driven by continued momentum
across security and Cloud Infrastructure Services (CIS),” said Dr. Tom Leighton,
Akamai's Chief Executive Officer. “We are especially excited by the exceptional
progress in Cloud Infrastructure Services, with more than $14 billion worth of
multi-year commitments signed so far this year. We also recently expanded our
cloud portfolio with the launch of Akamai Inference and Akamai Agent Sandbox.
These new services enable enterprises to build and tune open-weight models based
on their proprietary data and run agents within strictly enforced boundaries —
all secured and powered on Akamai's AI-optimized cloud platform.
Given our CIS momentum, track record of execution and continued strong pipeline,
we expect Akamai's overall revenue growth to accelerate to 17% to 22% year-over-
year when adjusted for foreign exchange* in 2027. We expect further acceleration
in 2028 with total revenue projected to exceed $7.0 billion,” Leighton added.
Akamai delivered the following results for the third quarter ended September 30,
2026:
Revenue: Revenue was $1.122 billion, a 6% increase over third quarter 2025
revenue of $1.055 billion and a 7% increase when adjusted for foreign exchange.*
Revenue by solution:
• Security revenue was $622 million, up 9% year-over-year and up 10% when
adjusted for foreign exchange*
• Delivery and other cloud applications revenue was $391 million, down 3% year-
over-year and when adjusted for foreign exchange*
• Cloud infrastructure services revenue was $109 million, up 34% year-over-year
and up 35% when adjusted for foreign exchange*
1
Revenue by geography:
• U.S. revenue was $559 million, up 5% year-over-year
• International revenue was $563 million, up 7% year-over-year and up 9% when
adjusted for foreign exchange*
Income from operations: GAAP income from operations was $109 million, a 35%
decrease from third quarter 2025. GAAP operating margin for the third quarter
was 10%, down 6 percentage points from the same period last year.
Non-GAAP income from operations* was $286 million, an 11% decrease from third
quarter 2025. Non-GAAP operating margin* for the third quarter was 25%, down 6
percentage points from the same period last year.
Net income: GAAP net income was $117 million, a 16% decrease from third quarter
2025. Non-GAAP net income* was $262 million, down 3% from third quarter 2025.
EPS: GAAP net income per diluted share was $0.77, a 21% decrease from third
quarter 2025 and a 15% decrease when adjusted for foreign exchange.* Non-GAAP
net income per diluted share* was $1.77, a 5% decrease from third quarter 2025
and a 2% decrease when adjusted for foreign exchange.*
Adjusted EBITDA*: Adjusted EBITDA* was $435 million, a 5% decrease from third
quarter 2025.
Supplemental cash information: Cash from operations for the third quarter of
2026 was $433 million, or 39% of revenue. Cash, cash equivalents and marketable
securities was $4.239 billion as of September 30, 2026.
Share repurchases: The Company did not repurchase shares of its common stock in
the third quarter of 2026. The Company spent $616 million during the nine months
ended September 30, 2026 to repurchase 5 million shares of common stock at a
weighted average price of $123.19 per share. The Company had 144 million shares
of common stock outstanding as of September 30, 2026.
Financial guidance: The Company reports the following financial guidance for the
fourth quarter and full year 2026:
Thr…
Mon… Year
End… End…
Dec… Dec…
31, 31,
2026 2026
──────────────────────────────────────────────────────────────────────────────
Low High Low High
End End End End
Rev…
(in $ 1,1… $ 1,1… $ 4,4… $ 4,4…
mil…
Non…
ope… 24 % 24 % 25 % 25 %
mar…
Non…
net
inc… $ 1.50 $ 1.70 $ 6.47 $ 6.68
per
dil…
sha…
Non…
tax 18 % 18 % 18.5 % 18.5 %
rat…
Sha…
used
in
non…
per 149 149 148 148
dil…
sha…
cal…
(in
mil…
The Company also reports the following revenue guidance for the full year 2027
and full year 2028:
• 2027 cloud infrastructure services revenue projected to be $1.1 billion to
$1.3 billion, with total company revenue growth of 17% to 22% year-over-year
when adjusted for foreign exchange*
• 2028 total company revenue projected to exceed $7.0 billion
The guidance that is provided on a non-GAAP basis cannot be reconciled to the
closest GAAP measures without unreasonable effort because of the
unpredictability of the amounts and timing of events affecting the items Akamai
excludes from non-GAAP measures. For example, stock-based compensation is
unpredictable for Akamai’s performance-based awards, which can fluctuate
significantly based on current expectations of the future achievement of
performance-based targets. Amortization of intangible assets, acquisition-
related costs and restructuring costs are all impacted by the timing and size of
potential future actions, which are difficult to predict. In addition, from time
to time, Akamai excludes certain items that occur infrequently, which are also
inherently difficult to predict and estimate. It is also difficult to predict
the tax effect of the items Akamai excludes and to estimate certain discrete tax
items, such as the resolution of tax audits or changes to tax laws. As such, the
costs that are being excluded from non-GAAP guidance are difficult to predict
and a reconciliation or a range of results could lead to disclosure that would
be imprecise or potentially misleading. Material changes to any one of the
exclusions could have a significant effect on our guidance and future GAAP
results.
2
* See Use of Non-GAAP Financial Measures below for definitions
Quarterly Conference Call
Akamai will host a conference call today at 4:30 p.m. ET that can be accessed
through 1-833-634-5020 (or 1-412-902-4238 for international calls) and using
passcode Akamai Technologies call. A live webcast of the call may be accessed at
www.akamai.com in the Investor Relations section. In addition, a replay of the
call will be available for two weeks following the conference by calling
1-855-669-9658 (or 1-412-317-0088 for international calls) and using passcode
9787784. The archived webcast of this event may be accessed through the Akamai
website.
About Akamai
Akamai is the cloud company that powers and protects an AI-driven world. Our
cloud platform extends high-performance cloud computing from the core to the
edge, enabling organizations to build and scale next-generation AI applications
and providing comprehensive, multilayered security to safeguard enterprises
against evolving cyberthreats. Learn more at akamai.com and akamai.com/blog, or
follow Akamai Technologies on X and LinkedIn.
3
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
(in thousands) 2026 2025
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash $ 1,149,359 $ 930,231
equivalents
Marketable securities 2,369,959 256,302
Accounts receivable, 958,463 793,666
net
Prepaid expenses and
other current 329,132 306,481
assets
Total current assets 4,806,913 2,286,680
Marketable securities 719,261 733,228
Property and equipment, 2,965,225 2,333,462
net
Operating lease 1,801,891 1,469,700
right-of-use assets
Acquired intangible 588,948 614,542
assets, net
Goodwill 3,352,563 3,206,525
Deferred income tax 874,082 622,776
assets
Other assets 438,041 212,730
Total assets $ 15,546,924 $ 11,479,643
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 203,902 $ 125,054
Accrued expenses 303,771 319,622
Deferred revenue 198,903 151,186
Convertible senior 1,148,346 —
notes
Operating lease 391,037 336,613
liabilities
Other current 13,025 35,043
liabilities
Total current 2,258,984 967,518
liabilities
Deferred revenue 21,143 17,088
Deferred income tax 46,275 31,089
liabilities
Convertible senior 6,419,341 4,105,355
notes
Operating lease 1,489,575 1,233,420
liabilities
Other liabilities 162,978 147,802
Total liabilities 10,398,296 6,502,272
Total stockholders’ 5,148,628 4,977,371
equity
Total liabilities and
stockholders’ $ 15,546,924 $ 11,479,643
equity
4
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in
thou…
exce…
per Three Sept… June Sept… Nine Sept… Sep…
share Mont… 30, 30, 30, Mont… 30, 30,
data) Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Rev… $ 1,12… $ 1,09… $ 1,05… $ 3,29… $ 3,1…
Cos…
and
ope…
exp…
Cost
of 504,… 485,… 429,… 1,46… 1,2…
rev…
(2)
Res…
and 141,… 148,… 124,… 431,… 374…
dev…
Sal…
and 164,… 170,… 144,… 491,… 425…
mar…
Gen…
and 174,… 187,… 161,… 525,… 480…
adm…
(2)
Amo…
of
acq… 26,3… 25,0… 27,7… 76,6… 83,…
int…
ass…
Res…
cha… 2,166 1,825 -15 4,174 3,4…
(be…
Tot…
cos…
and 1,01… 1,01… 888,… 2,99… 2,6…
ope…
exp…
Inc…
from 108,… 80,2… 166,… 303,… 472…
ope…
Int…
and
mar… 41,7… 31,6… 18,8… 90,9… 52,…
sec…
inc…
net
Int… -10,… -9,0… -7,9… -27,… -22…
exp…
Oth…
exp… -1,3… -2,8… -3,8… -6,0… -3,…
net
Inc…
bef…
pro… 138,… 100,… 173,… 360,… 498…
for
inc…
tax…
Pro…
for 21,3… 20,6… 32,9… 57,6… 131…
inc…
tax…
Net $ 117,… $ 79,4… $ 140,… $ 302,… $ 366…
inc…
Net
inc…
per
sha…
Bas… $ 0.81 $ 0.55 $ 0.98 $ 2.09 $ 2.52
Dil… $ 0.77 $ 0.52 $ 0.97 $ 2.00 $ 2.50
Sha…
used
in
per
sha…
cal…
Bas… 143,… 144,… 143,… 144,… 145…
Dil… 151,… 153,… 144,… 151,… 147…
(1) Includes stock-based compensation (see supplemental table for figures)
(2) Includes depreciation and amortization (see supplemental table for figures)
5
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Sept… June Sept… Nine Sep… Sept…
(in Mont… 30, 30, 30, Mont… 30, 30,
thou… Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash
flo…
from
ope…
act…
Net $ 117,… $ 79,4… $ 140,… $ 302… $ 366,…
inc…
Adj…
to
rec…
net
inc…
to
net
cash
pro…
by
ope…
act…
Dep…
and 191,… 185,… 176,… 560… 526,…
amo…
Sto… 131,… 146,… 115,… 406… 340,…
com…
(Be…
pro…
for -17,… -2,7… -19,… -21… 24,3…
def…
inc…
tax…
Amo…
of
debt 4,572 3,032 1,926 9,7… 5,176
iss…
cos…
Gain
on — — — — -9,3…
inv…
Oth…
non…
rec… 5,118 3,716 1,359 11,… 5,341
ite…
net
Cha…
in
ope…
ass…
and
lia…
net
of
eff…
of
acq…
Acc… -5,5… -77,… 8,551 -17… -24,…
rec…
Pre…
exp…
and 19,0… -23,… 11,5… -14… -18,…
oth…
cur…
ass…
Acc…
pay…
and 11,7… 26,9… 22,0… -3,… -62,…
acc…
exp…
Def… -5,8… -2,2… -19,… 48,… 3,757
rev…
Oth…
cur… -646 -11,… -2,1… -22… -24,…
lia…
Oth…
non…
ass… -18,… -994 5,317 -28… 19,3…
and
lia…
Net
cash
pro… 433,… 326,… 441,… 1,0… 1,15…
by
ope…
act…
Cash
flo…
from
inv…
act…
Cash
(pa…
rec…
for
bus… -191… -37 — -19… 790
acq…
net
of
cash
acq…
Cash
paid
for — — — — -29,…
ass…
acq…
Pur…
of
pro…
and
equ…
and -605… -225… -195… -1,… -614…
cap…
of
int…
sof…
dev…
cos…
Pur…
of
sho…
and -62,… -2,1… -181… -2,… -851…
lon…
mar…
sec…
Pro…
from
sal…
mat…
and
red… 97,7… 79,4… 6,999 212… 1,32…
of
sho…
and
lon…
mar…
sec…
Oth… 207 -1,3… 1,156 -2,… -5,3…
net
Net
cash
used -760… -2,2… -368… -3,… -174…
in
inv…
act…
6
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
Thr… Nine
Mon… Mont…
End… Ended
Sep… June Sept… Sept… Sept…
(in 30, 30, 30, 30, 30,
th… 2026 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Ca…
fl…
fr…
fi…
ac…
Pr…
fr…
bo…
un… — — — — 250…
re…
cr…
fa…
Re…
of
bo…
un… — — — — -25…
re…
cr…
fa…
(P…
pr…
fr…
the
is…
of
co… -589 3,4… -392 3,4… 1,7…
se…
no…
net
of
is…
co…
Pr…
fr…
the
is…
of
wa… — 657… — 657… 330…
re…
to
co…
se…
no…
Pu…
of
no…
he…
re… — -89… — -89… -60…
to
co…
se…
no…
Re…
of
co… — — — — -1,…
se…
no…
Pr…
fr…
the
is…
of 22,… 14,… 19,… 58,… 48,…
co…
st…
un…
st…
pl…
Em…
ta…
pa…
re…
to
net -19… -43… -12… -16… -10…
sh…
se…
of
st…
aw…
Re…
of — -40… — -61… -79…
co…
st…
Ot… -77 -591 -91 -1,… -2,…
net
Net
ca…
pr…
by 2,3… 2,7… 7,1… 2,4… -58…
(u…
in)
fi…
ac…
Ef…
of
ex…
ra…
ch…
on -2,… 6,2… -759 -1,… 20,…
ca…
ca…
eq…
and
re…
ca…
Net
(d…
in…
in
ca… -32… 854… 79,… 222… 412…
ca…
eq…
and
re…
ca…
Ca…
ca…
eq…
and
re… 1,4… 626… 851… 931… 519…
ca…
at
be…
of
pe…
Ca…
ca…
eq…
and
re… $ 1,1… $ 1,4… $ 931… $ 1,1… $ 931…
ca…
at
end
of
pe…
7
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE BY SOLUTION
(1)
Th… Se… Ju… Se… Nine Se… Sep…
(in Mo… 30, 30, 30, Mon… 30, 30,
th… En… 20… 20… 20… End… 20… 2025
──────────────────────────────────────────────────────────────────────────────
S… $ 62… $ 60… $ 56… $ 1,… $ 1,6…
D…
a…
o… 39… 39… 40… 1,… 1,2…
c…
a…
C…
i… 10… 99… 81… 30… 220…
s…
T… $ 1,… $ 1,… $ 1,… $ 3,… $ 3,1…
r…
R…
g…
r…
y…
S… 9 % 10 % 10 % 10 % 9 %
D…
a…
o… -3 -6 -5 -5 -4
c…
a…
C…
i… 34 39 39 37 33
s…
T… 6 % 5 % 5 % 6 % 5 %
r…
R…
g…
r…
y…
a…
f…
t…
i…
of
f…
e…
r…
S… 10 % 9 % 9 % 9 % 9 %
D…
a…
o… -3 -5 -6 -5 -4
c…
a…
C…
i… 35 39 39 37 33
s…
T… 7 % 5 % 4 % 6 % 5 %
r…
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE BY GEOGRAPHY
Th… Se… Ju… Se… Nine Se… Sep…
(in Mo… 30, 30, 30, Mon… 30, 30,
th… En… 20… 20… 20… End… 20… 2025
──────────────────────────────────────────────────────────────────────────────
U… $ 55… $ 55… $ 52… $ 1,… $ 1,5…
I… 56… 54… 52… 1,… 1,5…
T… $ 1,… $ 1,… $ 1,… $ 3,… $ 3,1…
r…
R…
g…
r…
y…
U… 5 % 4 % 1 % 4 % 3 %
I… 7 6 9 8 7
T… 6 % 5 % 5 % 6 % 5 %
r…
R…
g…
r…
y…
a…
f…
t…
i…
of
f…
e…
r…
U… 5 % 4 % 1 % 4 % 3 %
I… 9 7 8 7 7
T… 7 % 5 % 4 % 6 % 5 %
r…
(1) Beginning with the first quarter of 2026, the Company began reporting its
revenue in three solution categories: security, delivery and other cloud
applications and cloud infrastructure services. Recognizing cloud infrastructure
services as a primary growth area and a significant focus of investment in the
Company's cloud computing portfolio, the Company began reporting its revenue
separately. Prior period amounts reported in the table for revenue by solution
category have been recast to reflect this change.
(2) See Use of Non-GAAP Financial Measures below for a definition
8
AKAMAI TECHNOLOGIES, INC.
OTHER SUPPLEMENTAL DATA
(in
th…
ex…
end
of Th… Se… Ju… Sep… Ni… Sep… Se…
pe… Mo… 30, 30, 30, Mo… 30, 30,
st… En… 20… 20… 2025 En… 2026 20…
──────────────────────────────────────────────────────────────────────────────
S…
c…
C…
of $ 21… $ 24… $ 19,… $ 67,… $ 57…
r…
R…
a… 51… 53… 42,… 153… 12…
d…
S…
a… 24… 26… 22,… 76,… 67…
m…
G…
a… 35… 41… 30,… 109… 90…
a…
T…
s… $ 13… $ 14… $ 115… $ 406… $ 34…
c…
D…
a…
a…
N… $ 90… $ 84… $ 82,… $ 259… $ 24…
d…
C…
i…
s… 43… 43… 37,… 129… 11…
d…
a…
O…
d… 15… 17… 16,… 50,… 47…
a…
a…
N…
d… 14… 14… 136… 438… 40…
a…
a…
C…
s… 15… 14… 12,… 44,… 36…
c…
a…
C…
i… 170 168 127 497 364
e…
a…
A…
of
a… 26… 25… 27,… 76,… 83…
i…
a…
T…
d… $ 19… $ 18… $ 176… $ 560… $ 52…
a…
a…
C…
e…
(…
P…
of
p… $ 37… $ 26… $ 141… $ 757… $ 42…
a…
e…
C…
i…
s… 87… 84… 82,… 259… 23…
d…
c…
T…
c… $ 46… $ 34… $ 224… $ 1,0… $ 66…
e…
C…
as
a 41 % 32 % 21 % 31 % 21 %
p…
of
r…
E…
of
p…
s…
N…
of 11… 11… 11,…
e…
(1) See Use of Non-GAAP Financial Measures below for a definition
(2) Amortization of capitalized stock-based compensation and interest expense in
this table excludes amortization of capitalized stock-based compensation and
interest expense capitalized related to cloud-computing arrangements. However,
the amounts are included in our total amortization of capitalized stock-based
compensation and interest expense that is excluded from our non-GAAP measures
(see reconciliations of GAAP to non-GAAP measures).
(3) Capital expenditures presented in this table are reported on an accrual
basis, which differs from the cash-basis presentation in the statements of cash
flows. The primary difference between the two is the change in purchases of
property and equipment and capitalization of internal-use software development
costs accrued for, but not paid, at period end versus prior periods.
9
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND TAX
RATE
Th… Se… Ju… Sep… Ni… Sep… Se…
(in Mo… 30, 30, 30, Mo… 30, 30,
th… En… 20… 20… 2025 En… 2026 20…
──────────────────────────────────────────────────────────────────────────────
I…
f… $ 10… $ 80… $ 166… $ 303… $ 47…
o…
G…
o… 10 % 7 % 16 % 9 % 15 %
m…
A…
of
a… 26… 25… 27,… 76,… 83…
i…
a…
S… 13… 14… 115… 406… 34…
c…
A…
of
c…
s…
c… 16… 15… 12,… 46,… 37…
a…
c…
i…
e…
R…
c… 2,… 1,… -15 4,1… 3,…
(…
A… 491 1,… 17 1,5… 1,…
c…
O… 17… 19… 155… 535… 46…
a…
N…
i… $ 28… $ 27… $ 321… $ 839… $ 93…
f…
o…
N…
o… 25 % 25 % 31 % 25 % 30 %
m…
N… $ 11… $ 79… $ 140… $ 302… $ 36…
i…
O…
a… 17… 19… 155… 535… 46…
(…
a…
A…
of
d… 4,… 3,… 1,9… 9,7… 5,…
i…
c…
G…
on
c… — — — — -9…
m…
i…
n…
I…
t…
e…
of
a…
n… -3… -3… -29… -11… -5…
a…
a…
c…
d…
t…
i…
N…
n… $ 26… $ 23… $ 268… $ 737… $ 77…
i…
G…
t… 15 % 21 % 19 % 16 % 26 %
r…
I…
t…
e…
of
n…
a… 3 -1 — 3 -7
a…
c…
d…
t…
i…
N…
t… 18 % 20 % 19 % 19 % 19 %
r…
10
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED SHARE
(in
thou…
exce…
per Three Sept… June Sept… Nine Sep… Sept…
share Mont… 30, 30, 30, Mont… 30, 30,
data) Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
net
inc… $ 0.77 $ 0.52 $ 0.97 $ 2.00 $ 2.50
per
dil…
sha…
Adj…
to
net
inc…
Amo…
of
acq… 0.17 0.16 0.19 0.51 0.57
int…
ass…
Sto… 0.87 0.95 0.80 2.68 2.31
com…
Amo…
of
cap…
sto…
com… 0.11 0.10 0.09 0.31 0.25
and
cap…
int…
exp…
Res…
cha… 0.01 0.01 — 0.03 0.02
(be…
Acq… — 0.01 — 0.01 0.01
cos…
Amo…
of
debt 0.03 0.02 0.01 0.06 0.04
iss…
cos…
Gain
on
cost — — — — -0.06
met…
inv…
net
Inc…
tax
eff…
of
abo…
non… -0.24 -0.24 -0.20 -0.… -0.35
adj…
and
cer…
dis…
tax
ite…
Adj…
for 0.04 0.06 — 0.11 —
sha…
Non…
net
inc… $ 1.77 $ 1.59 $ 1.86 $ 4.97 $ 5.28
per
dil…
sha…
Sha…
used
in
GAAP 151,… 153,… 144,… 151… 147,…
per
dil…
sha…
cal…
Imp…
of
ben…
from -3,4… -5,3… — -3,… —
note
hed…
tra…
Sha…
used
in
non… 147,… 148,… 144,… 148… 147,…
per
dil…
sha…
cal…
(1) Shares used in non-GAAP per diluted share calculations have been adjusted
for the three and nine months ended September 30, 2026 and for the three months
ended June 30, 2026 for the benefit of Akamai's note hedge transactions. During
these periods, Akamai's average stock price exceeded the initial conversion
price of one or more of Akamai's convertible senior notes. See Use of Non-GAAP
Financial Measures below for further definition.
11
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
Th… Se… Ju… Sep… Ni… Sep… Se…
(in Mo… 30, 30, 30, Mo… 30, 30,
th… En… 20… 20… 2025 En… 2026 20…
──────────────────────────────────────────────────────────────────────────────
N… $ 11… $ 79… $ 140… $ 302… $ 36…
i…
N…
i… 10 % 7 % 13 % 9 % 12 %
m…
I…
a…
m… -4… -3… -18… -90… -5…
s…
i…
n…
P…
f… 21… 20… 32,… 57,… 13…
i…
t…
D…
a… 14… 14… 136… 438… 40…
a…
A…
of
c…
s…
c… 16… 15… 12,… 46,… 37…
a…
c…
i…
e…
A…
of
a… 26… 25… 27,… 76,… 83…
i…
a…
S… 13… 14… 115… 406… 34…
c…
R…
c… 2,… 1,… -15 4,1… 3,…
(…
A… 491 1,… 17 1,5… 1,…
c…
I… 10… 9,… 7,9… 27,… 22…
e…
G…
on
c… — — — — -9…
m…
i…
n…
O…
e… 1,… 2,… 3,8… 6,0… 12…
n…
A… $ 43… $ 41… $ 458… $ 1,2… $ 1,…
E…
A…
E… 39 % 38 % 43 % 39 % 43 %
m…
12
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted
accounting principles in the United States of America (GAAP), Akamai provides
additional financial metrics that are not prepared in accordance with GAAP (non-
GAAP financial measures). Management uses non-GAAP financial measures, in
addition to GAAP financial measures, to understand and compare operating results
across accounting periods, for financial and operational decision making, for
planning and forecasting purposes, to measure executive compensation and to
evaluate Akamai's financial performance. These non-GAAP financial measures are
non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income,
non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin,
non-GAAP tax rate, capital expenditures, non-GAAP depreciation and amortization,
capex as a percentage of revenue and impact of foreign currency exchange rates,
as discussed below.
Management believes that these non-GAAP financial measures reflect Akamai's
ongoing business in a manner that allows for meaningful comparisons and analysis
of trends in the business, as they facilitate comparison of financial results
across accounting periods and to those of our peer companies. Management also
believes that these non-GAAP financial measures enable investors to evaluate
Akamai's operating results and future prospects in the same manner as
management. These non-GAAP financial measures may exclude expenses and gains
that may be unusual in nature, infrequent or not reflective of Akamai's ongoing
operating results.
The non-GAAP financial measures do not replace the presentation of Akamai's GAAP
financial measures and should only be used as a supplement to, not as a
substitute for, Akamai's financial results presented in accordance with GAAP.
Akamai has provided a reconciliation of non-GAAP financial measures used in its
financial reporting and investor presentations to the most directly comparable
GAAP financial measures. This reconciliation can be found in the “Supplemental
Financial Information” on the Investor Relations section of Akamai's website.
The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP
financial measures, are outlined below:
•
Amortization of acquired intangible assets
– Akamai has incurred amortization of intangible assets, included in its GAAP
financial statements, related to various acquisitions Akamai has made. The
amount of an acquisition's purchase price allocated to intangible assets and
term of its related amortization can vary significantly and is unique to each
acquisition; therefore, Akamai excludes amortization of acquired intangible
assets from its non-GAAP financial measures to provide investors with a
consistent basis for comparing pre- and post-acquisition operating results.
•
Stock-based compensation and amortization of capitalized stock-based
compensation – Stock-based compensation is an important aspect of the
compensation paid to Akamai's employees which includes long-term incentive plans
to encourage retention, performance-based plans to encourage achievement of
specified financial targets, short-term incentive awards with a one year vest
and shares issued as part of a retirement savings program. The grant date fair
value of the stock-based compensation awards varies based on the stock price at
the time of grant, varying valuation methodologies, subjective assumptions and
the variety of award types. This makes the comparison of Akamai's current
financial results to previous and future periods difficult to interpret;
therefore, Akamai believes it is useful to exclude stock-based compensation and
amortization of capitalized stock-based compensation from its non-GAAP financial
measures in order to highlight the performance of Akamai's core business and to
be consistent with the way many investors evaluate its performance and compare
its operating results to peer companies.
•
Acquisition-related costs
– Acquisition-related costs include transaction fees, advisory fees, due
diligence costs and other direct costs associated with strategic activities.
Acquisition-related costs are impacted by the timing and size of the
acquisitions, and Akamai excludes acquisition-related costs from its non-GAAP
financial measures to provide a useful comparison of operating results to prior
periods and to peer companies because such amounts vary significantly based on
the magnitude of the acquisition transactions and do not reflect Akamai's core
operations.
•
Restructuring charge
– Akamai has incurred restructuring charges from programs that have
significantly changed either the scope of the business undertaken by the Company
or the manner in which that business is conducted. These charges include
severance and related expenses for workforce reductions, impairments of long-
lived assets that will no longer be used in operations (including acquired
intangible assets, right-of-use assets, other facility-related property and
equipment and internal-use software) and termination fees for any contracts
cancelled as part of these programs. Akamai excludes these items from its non-
GAAP financial measures when evaluating its continuing business performance as
such items vary significantly based on the magnitude of the restructuring action
and do not reflect expected future operating expenses. In addition, these
charges do not necessarily provide meaningful insight into the fundamentals of
current or past operations of its business.
13
•
Amortization of debt issuance costs and capitalized interest expense – The
issuance costs of Akamai's convertible senior notes are amortized to interest
expense and are excluded from Akamai's non-GAAP results because management
believes the non-cash amortization expense is not representative of ongoing
operating performance.
•
Gains and losses on cost method investments
– Akamai has recorded gains and losses from the disposition, changes to fair
value and impairment of cost method investments. Akamai believes excluding these
amounts from its non-GAAP financial measures is useful to investors as the types
of events giving rise to these gains and losses are not representative of
Akamai's core business operations and ongoing operating performance.
•
Income tax effect of non-GAAP adjustments and certain discrete tax items – The
non-GAAP adjustments described above are reported on a pre-tax basis. The income
tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP
income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax
income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes
certain discrete tax items (such as the impact of intercompany sales of
intellectual property related to acquisitions), if any. Akamai believes that
applying the non-GAAP adjustments and their related income tax effect allows
Akamai to highlight income attributable to its core operations.
Akamai's definitions of its non-GAAP financial measures are outlined below:
Non-GAAP income from operations
– GAAP income from operations adjusted for the following items: amortization of
acquired intangible assets; stock-based compensation; amortization of
capitalized stock-based compensation; amortization of capitalized interest
expense; acquisition-related costs; restructuring charges; legal settlements;
and other non-recurring or unusual items that may arise from time to time.
Non-GAAP operating margin
– Non-GAAP income from operations stated as a percentage of revenue.
Non-GAAP net income
– GAAP net income adjusted for the following tax-affected items: amortization of
acquired intangible assets; stock-based compensation; amortization of
capitalized stock-based compensation; acquisition-related costs; restructuring
charges; legal settlements; amortization of debt issuance costs; amortization of
capitalized interest expense; gains and losses on cost method investments; and
other non-recurring or unusual items that may arise from time to time.
Non-GAAP net income per diluted share, or EPS
– Non-GAAP net income divided by weighted average diluted common shares
outstanding. Diluted weighted average common shares outstanding are adjusted in
non-GAAP per share calculations for the shares that would be delivered to Akamai
pursuant to the note hedge transactions entered into in connection with the
issuances of Akamai's convertible senior notes. Under GAAP, shares delivered
under hedge transactions are not considered offsetting shares in the fully-
diluted share calculation until they are delivered. However, Akamai would
receive a benefit from the note hedge transactions and would not allow the
dilution to occur, so management believes that adjusting for this benefit
provides a meaningful view of operating performance. With respect to the
convertible senior notes due in each of 2033, 2032, 2030, 2029 and 2027, and
those that matured in 2025, unless Akamai's weighted average stock price is
greater than $93.01, $190.81, $201.41, $126.31, $116.18 and $95.10,
respectively, the initial conversion prices, there will be no difference between
GAAP and non-GAAP diluted weighted average common shares outstanding.
Adjusted EBITDA
– GAAP net income excluding the following items: interest and marketable
securities income and losses; income taxes; depreciation and amortization of
tangible and intangible assets; stock-based compensation; amortization of
capitalized stock-based compensation; acquisition-related costs; restructuring
charges; legal settlements; foreign exchange gains and losses; interest expense;
amortization of capitalized interest expense; gains and losses on cost method
investments; and other non-recurring or unusual items that may arise from time
to time.
Adjusted EBITDA margin
– Adjusted EBITDA stated as a percentage of revenue.
Non-GAAP tax rate
– GAAP tax rate excluding the tax effect of non-GAAP adjustments and certain
discrete tax items.
Capital expenditures, or capex
– Purchases of property and equipment and capitalization of internal-use
software development costs presented on an accrual basis, which differs from the
cash-basis presentation included in the statements of cash flows. The primary
difference between the two is the change in purchases of property and equipment
and capitalization of internal-use software development costs accrued for, but
not paid, at period end versus prior periods.
Capex as a percentage of revenue
– Capital expenditures, or capex, stated as a percentage of revenue.
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Non-GAAP depreciation and amortization
– GAAP depreciation and amortization (which consists of depreciation and
amortization of property and equipment, capitalized stock-based compensation,
capitalized interest expense and acquired intangible assets), less depreciation
and amortization excluded from non-GAAP results (which consists of depreciation
and amortization of capitalized stock-based compensation, capitalized interest
expense and acquired intangible assets).
Impact of foreign currency exchange rates
– Revenue and earnings from international operations have historically been an
important contributor to Akamai's financial results. Consequently, Akamai's
financial results have been impacted, and management expects they will continue
to be impacted, by fluctuations in foreign currency exchange rates. For example,
when the local currencies of our international subsidiaries weaken, generally
its consolidated results stated in U.S. dollars are negatively impacted.
Because exchange rates are a meaningful factor in understanding period-to-period
comparisons, management believes the presentation of the impact of foreign
currency exchange rates on revenue and earnings enhances the understanding of
our financial results and evaluation of performance in comparison to prior
periods. The dollar impact of changes in foreign currency exchange rates
presented is calculated by translating current period results using monthly
average foreign currency exchange rates from the comparative period and
comparing them to the reported amount. The percentage change at constant
currency presented is calculated by comparing the prior period amounts as
reported and the current period amounts translated using the same monthly
average foreign currency exchange rates from the comparative period.
Akamai Statement Under the Private Securities Litigation Reform Act
This release and related management commentary on our quarterly earnings
conference call scheduled for later today contain statements that are not
statements of historical fact and constitute forward-looking statements for
purposes of the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995, including, but not limited to, statements about expected
future financial performance, expectations, plans and prospects of Akamai,
including our outlook, guidance, growth objectives, statements about anticipated
revenue growth rates and profitability trends for future periods, statements
about the anticipated benefits, timing, revenue and capital expenditure
associated with customer commitments, statements about the expected economics
and profitability of our cloud infrastructure services contracts, statements
about expected levels of capital expenditure and infrastructure deployment and
statements about our products, including Akamai Inference Cloud, and their
anticipated capabilities, scalability and performance. In some cases, you can
identify forward-looking statements by the following words: “may,” “will,”
“could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,”
“committed,” “positioned,” or the negative of these terms or other comparable
terminology, although not all forward-looking statements contain these words.
Actual results may differ materially from those indicated by these forward-
looking statements as a result of various important factors including, but not
limited to, inability to continue to generate cash at the same level as prior
years; failure of our investments in innovation to generate solutions that are
accepted in the market; inability to increase our revenue at the same rate as in
the past and keep our expenses from increasing at a greater rate than our
revenues; effects of competition, including pricing pressure, changing business
models and competition from established and emerging providers of AI
infrastructure and cloud computing services; changes in customer or user
preferences or demands; impact of macroeconomic trends, including economic
uncertainty, turmoil in the financial services industry, the effects of
inflation, fluctuating interest rates, foreign currency exchange rate and
monetary supply fluctuations, international tensions and volatility in capital
markets; conditions and uncertainties in the geopolitical environment, including
sanctions and disruptions resulting from the ongoing war in Ukraine and the
U.S.-Israel military conflict with Iran and related hostilities in the Middle
East; continuing supply chain and logistics costs, constraints, changes or
disruptions; risks associated with large customer commitments, including the
customer’s ability to fulfill its purchase obligations, our ability to deploy
the infrastructure necessary to service such commitments on anticipated
timelines and our ability to procure sufficient hardware and memory at
anticipated costs and on anticipated delivery schedules; our ability to convert
pipeline opportunities into signed contracts; our ability to achieve projected
levels of capital expenditure and the anticipated returns therefrom; defects or
disruptions in our products or IT systems, including outages, cyber-attacks,
data breaches or malware; difficulties in integrating our acquisitions and
investments; failure to realize the expected benefits of any of our
acquisitions, reorganizations or investments; changes to economic, political and
regulatory conditions in the United States and internationally, including
changes in government policies, regulations and resources; our ability to
attract and retain key personnel; delay in developing or failure to develop new
products, service offerings or functionalities, and if developed, lack of market
acceptance of such service offerings and functionalities or failure of such
solutions to operate as expected, and other factors that are discussed in our
Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents
filed with the SEC.
In addition, the statements in this press release and on our quarterly earnings
conference call represent Akamai's expectations and beliefs as of the date of
this press release. Akamai anticipates that subsequent events and developments
may cause these expectations and beliefs to change. However, while Akamai may
elect to update these forward-looking statements at some point
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in the future, it specifically disclaims any obligation to do so. These forward-
looking statements should not be relied upon as representing Akamai's
expectations or beliefs as of any date subsequent to the date of this press
release.
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