Please note that today's comments include forward-looking statements, including those regarding revenue and earnings guidance. The factors include, but are not limited to, any impact from macroeconomic trends, the integration of any acquisition, geopolitical developments, and other risk factors identified in our filings with the SEC. I'm pleased to report that Akamai had a strong third quarter with results coming in above expectations for revenue, margin, and earnings per share. Revenue grew to $1.055 billion, up 5% year-over-year as reported, and up 4% in constant currency.
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. Our revenue for Cloud Infrastructure Services in Q3 was $81 million, up 39% year-over-year as reported and in constant currency. That is an acceleration from the 30% growth rate we had in Q2. developer of analytic software, a U.S.-based supply chain planning software vendor, a European cybersecurity provider, a major U.S.
This is how Akamai can power the new generation of AI applications: conversational, personalized, and agentic, all designed to scale in real time to meet unprecedented demand. To train foundation models, AI pioneers have relied on hyperscale clouds and their centralized data centers with their enormous concentrations of compute, power, and capital. As AI systems are adopted at scale, we expect the growth of inference will drive enormous demand to this new intelligent layer of the internet. The service is available today with 17 locations around the world, and we're building out more points of presence as customer demand grows.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | Q4 2025 | $1.065B-$1.085B, up 4%-6% reported (3%-5% cc) |
| Non-GAAP operating margin | Q4 2025 | approximately 28%-30% |
| Non-GAAP EPS | Q4 2025 | $1.65-$1.85 |
| Cash gross margin | Q4 2025 | approximately 72%-73% |
| Non-GAAP operating expenses | Q4 2025 | $322M-$331M |
| EBITDA margin | Q4 2025 | approximately 42%-43% |
| CapEx | Q4 2025 | approximately $171M-$181M (~16% of revenue) |
| Non-GAAP tax rate | Q4 2025 | approximately 18%-19% ($57M-$60M) |
| Total revenue growth | FY2025 | 4%-5% in constant currency |
| Non-GAAP operating margin | FY2025 | approximately 29%-30% |
| Non-GAAP EPS | FY2025 | $6.93-$7.13 |
| CIS ARR growth (year-end) | FY2025 | 40%-45% year-over-year in constant currency |
| High-growth security combined ARR | FY2025 | up 30%-35% year-over-year in constant currency |
| API Security exit run rate | FY2025 | approximately $100 million |
| Compute revenue growth | FY2025 | a touch under 15% |
| Security revenue growth | FY2025 | approximately 10% |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +5% reported (+4% cc) | $1.055B, above guidance, driven by strength across security and compute plus continued delivery stabilization. |
| Non-GAAP EPS | +17% | $1.86, $0.20 above the high end of guidance, on higher-than-expected revenue and strong execution across the board. |
| Non-GAAP net income | n/a | $269 million for the quarter. |
| Non-GAAP operating margin | improved to 31% | Strong execution, higher capitalization of labor productivity, and better procurement/colocation/bandwidth pricing. |
| Security revenue | +10% reported (+9% cc) | $568M, driven by segmentation and rapidly growing API Security adoption. |
| High-growth security (API Security + Zero Trust) | +35% reported (+34% cc) | $77M; API Security more than doubled in its first quarter of full organic year-on-year growth after the NoName acquisition. |
| Compute revenue (CIS + OCA) | +8% reported (+7% cc) | $180M; growth held back ~5 pts by the $7M one-time deferred-revenue benefit in Q3 2024 (OCA). |
| Cloud Infrastructure Services (CIS) | +39% reported and cc | $81M, accelerating from ~30% in Q2 as all three top U.S. cloud providers now use CIS and new contracts ramped. |
| Other Cloud Applications (OCA) | n/a | ~$100M, roughly flat quarter-over-quarter amid storage and video-optimization workflow headwinds; not an investment focus. |
| Delivery revenue | -4% reported and cc | $306M, slightly better than expected; traffic growth plus moderating price declines and fewer competitors. |
| International revenue | +9% reported (+8% cc) | $525M, 50% of total revenue; strength led by APJ compute and healthier Western Europe. |
| CapEx | n/a | $224M, 21% of revenue, reflecting continued investment in the fast-growing CIS business. |
| Foreign exchange impact | +$8M YoY (+$4M sequential) | Positive FX tailwind on revenue in Q3. |
| Share repurchases | n/a | No shares bought back in Q3; $800M / ~10M shares year-to-date, the largest annual buyback in company history. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| AI inference at the edge | NVIDIA GPUs introduced at the edge in 2024 (Blackwell 4000-class) | Launched Akamai Inference Cloud at NVIDIA GTC on Blackwell 6000 across 17 locations; described as 'first inning' with strong demand and potential $50M-$100M-scale deals. | — |
| Business transformation (CDN to distributed cloud) | Ongoing pivot from CDN pioneer to security and distributed cloud | Validated by new IDC report 'Akamai: Navigating the Cloud Frontier, A Transformation from CDN to Distributed Cloud Provider.' | — |
| Hyperscaler relationships | Some top cloud providers using Akamai's distributed platform | All three top U.S. cloud providers now use CIS (edge worker ad logic, API orchestration, Managed Container Service for media workflow); one signed an expanded multi-year renewal in Q3. | — |
| API Security / agentic web | NoName acquisition closed June; building API Security | First quarter of full organic YoY growth, more than doubled; extending into AI Firewall and protection for AI agents, MCP/A2A, and shadow AI; exiting 2025 at ~$100M run rate. | — |
| Delivery stabilization | Structural decline moderating | Down only 4% and better than expected; fewer competitors, moderating price declines, and possible AI-driven traffic upside longer term. | — |
| Go-to-market transformation | Hiring hunters and specialists for security and compute | Transformation largely complete by early 2026 with continued rep hiring through at least 1H26; incenting longer-term, larger deals (visible in RPO). | — |
| Capital allocation | Steady quarterly buybacks to offset dilution plus opportunistic M&A | No Q3 buyback but record $800M YTD; strategy unchanged, remaining opportunistic on M&A and repurchases. | — |
| Platform reliability / distribution | Over 4,000 points of presence across 700+ cities | Targeting and achieving five-nines reliability as a differentiator versus competitors' outages, especially for regulated banking customers. | — |