Akamai Q2 Earnings Highlight AI Growth, Cloud Gains and Margin Risk

Second-quarter revenue increased 5% year over year to $1.1 billion, exceeding the Zacks Consensus Estimate of $1.09 billion. Non-GAAP earnings came in at $1.59 per share, ahead of the $1.58 consensus estimate. Revenue increased despite continued pressure on the Delivery business.

Non-GAAP net income declined 6% year over year to $235.8 million, while non-GAAP income from operations fell 12% to $270.7 million. Adjusted EBITDA declined 6% to $416.1 million, highlighting the profitability impact of higher investment and operating costs.

Akamai Cloud Revenue Surges 39%

Cloud Infrastructure Services revenue rose 39% year over year to $99.3 million from $71.5 million. The increase reflected demand for AI infrastructure, higher GPU deployments and continued adoption of Akamai’s distributed cloud platform.

Akamai has signed more than $2.8 billion of multiyear Cloud Infrastructure Services commitments year to date, including a four-year agreement worth more than $600 million with a U.S.-based technology company for robotics development. Management now expects overall revenue growth to accelerate into the low teens in 2027.

Competition remains a key consideration, with Cloudflare, Inc. NET and NVIDIA Corporation NVDA investing heavily in AI infrastructure, networking and cloud technologies. Continued innovation and differentiation will be important for Akamai to strengthen its position as AI and cloud adoption accelerates.

Akamai Security Sustains Double-Digit Growth

Security revenue increased 10% year over year to $604.4 million, supported by API Security, Web Application Firewall and Guardicore Segmentation. Management expects the Security portfolio to generate more than $2.4 billion of revenue in 2026.

Workforce Protector, following the LayerX acquisition, expands Akamai’s Zero Trust capabilities around browser, SaaS and AI usage. The company is also seeing increased demand for security solutions as enterprises adopt AI applications and workloads.

Akamai’s Guidance Highlights Investment Costs

Akamai expects third-quarter revenue of $1.105 billion to $1.13 billion, with a non-GAAP operating margin of 24%-26%. For 2026, revenue guidance stands at $4.445 billion-$4.53 billion, with a non-GAAP operating margin of 25%-26% and non-GAAP EPS of $6.40-$7.05.

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The margin outlook reflects continued investment in cloud infrastructure. Capital expenditures reached $346.5 million in the second quarter, while management expects third-quarter capital expenditures of $475 million-$525 million as it expands capacity to support the Cloud Infrastructure Services pipeline.

Akamai’s Rank Adds a Caution Signal

Akamai currently carries a Zacks Rank #4 (Sell), alongside a Value Score of D, Growth Score of F, Momentum Score of A and VGM Score of D. The Momentum Score indicates favorable recent momentum characteristics, but the weaker Value, Growth and VGM Scores point to less favorable characteristics across those styles.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Style Score framework treats the Zacks Rank as the first step in stock selection and states that investors should not buy a stock with a Zacks Rank #4 or #5 even if it has an A or B Style Score. The framework also emphasizes that Style Scores are designed to complement the Zacks Rank rather than replace it.

Akamai’s Q2 results strengthen the case for AI infrastructure and cybersecurity as growth drivers. However, Delivery declines, margin pressure and substantial investment requirements remain material offsets. The earnings update supports monitoring the AI growth trajectory while waiting for clearer evidence that the new businesses can translate into sustained earnings growth.

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