Akamai Q2 Earnings Beat Estimates, Revenues Up Y/Y on Solid Demand

Net Income

GAAP net income declined to $79.4 million or 52 cents per share from $103.6 million or 71 cents per share in the year-ago quarter. Despite top-line growth, higher costs and operating expenses impacted the bottom line.

Non-GAAP net income was $235.8 million or $1.59 per share compared with $251.4 million or $1.73 per share a year ago. The bottom line beat the Zacks Consensus Estimate of $1.58.

Revenues

Quarterly net sales were $1.1 billion compared with $1.04 billion reported in the year-ago quarter, driven by solid growth in the Security and Cloud Infrastructure Services segments. Revenues surpassed the Zacks Consensus Estimate of 1.09 billion.

By solution, revenues from the Security Technology Group were $604.4 million compared with $551.9 million in the year-ago quarter, primarily due to continued strong demand for cybersecurity solutions including API Security, Web Application Firewall and Guardicore Segmentation offerings.

The Delivery and other cloud applications segment contributed $395.9 million, down from $420.1 million in the year-ago quarter. The Cloud Infrastructure Services segment registered $99.3 million in revenues, up from $71.5 million in the prior-year quarter. The 39% year-over-year growth reflects strong demand for AI cloud infrastructure services, increased GPU deployments and continued customer adoption of its cloud platform. 

Region-wise, net sales from the United States were $550.4 million, up 4% year over year. International revenues totaled $549.3 million, up from $515.9 million in the year-earlier quarter.

Other Details

In the June quarter, total operating expenses increased to $1.02 billion from $892 million reported in the prior-year period. Non-GAAP income from operations decreased to $270.7 million from $308.6 million in the year-ago period on higher operating expenses. Adjusted EBITDA was $416.1 million, down from $444.4 million in the year-ago quarter.

Cash Flow & Liquidity

In the second quarter, Akamai generated $326.3 million in cash from operations compared with $459.1 million in the year-earlier quarter. In the first six months of 2026, the company generated $638.8 million in cash compared with $710.3 million in the year-ago period. As of June 30, 2026, it had $1.5 billion in cash and cash equivalents with $1.41 billion of operating lease liabilities.

Outlook

For the third quarter of 2026, Akamai expects revenues in the range of $1.105 billion to $1.13 billion. Non-GAAP operating margin is projected to be in the band of 24-26%. Non-GAAP earnings are forecasted to be in the range of $1.60-$1.80 per share. 

For 2026, Akamai expects revenues to be between $4.445 billion and $4.53 billion. It anticipates a non-GAAP operating margin of 25-26%. Non-GAAP earnings are projected to be in the range of $6.40-$7.05 per share.

Zacks Rank    

Akamai currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release third-quarter fiscal 2026 earnings on Aug. 18. The Zacks Consensus Estimate for earnings is pegged at $2.46 per share, suggesting growth of 43.02% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 19.44%. The company delivered an average earnings surprise of 9.46% in the last four reported quarters.

Analog Devices, Inc. ADI is set to release third-quarter fiscal 2026 earnings Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, implying growth of 62.44% from the year-ago reported figure.

Analog Devices has a long-term earnings growth expectation of 31.04%. The company delivered an average earnings surprise of 5.48% in the last four reported quarters.

Applied Materials, Inc. AMAT is scheduled to release third-quarter fiscal 2026 earnings on Aug. 13. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, suggesting growth of 35.48% from the year-ago reported figure.

Applied Materials has a long-term earnings growth expectation of 32.44%. The company delivered an average earnings surprise of 6.06% in the last four reported quarters.

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