Akamai Technologies (AKAM) investor relations material

Executive summary

• Revenue reached $1.074 billion in Q1 2026, up 6% year-over-year, driven by security and cloud infrastructure services, partially offset by declines in delivery and other cloud applications.

• Achieved a landmark seven-year, $1.8 billion Cloud Infrastructure Services (CIS) contract, the largest in company history, and a $200 million CIS deal announced in February.

• Security solutions remain the largest revenue contributor, with 11% growth, while CIS revenue surged 40% year-over-year.

• Net income declined to $106 million, reflecting higher costs and operating expenses from investments in network expansion, AI infrastructure, and payroll.

• Major milestones reached in cloud computing strategy, including the rollout of thousands of NVIDIA RTX PRO 6000 GPUs and the industry's first global-scale implementation of NVIDIA's AI Grid.

Financial highlights

• Q1 2026 total revenue was $1.074 billion, up 6% year-over-year as reported, and 4% in constant currency.

• CIS revenue reached $95 million, up 40% year-over-year as reported, and 39% in constant currency.

• Security revenue was $590 million, up 11% year-over-year as reported, and 9% in constant currency.

• Delivery and other cloud applications revenue was $389 million, down 7% year-over-year as reported.

• GAAP net income was $106 million, down 14% year-over-year; non-GAAP net income was $239 million ($1.61 per diluted share), down 5%.

• Non-GAAP operating margin was 26%; GAAP operating margin was 11%.

• Adjusted EBITDA was $427 million, a 40% margin.

• Cash flow from operations was $313 million, representing 29% of revenue.

• Q1 CapEx was $206 million (19% of revenue); $206 million spent on share repurchases.

Outlook and guidance

• 2026 revenue guidance: $4.445 billion–$4.55 billion, up 6%–8% as reported.

• CIS revenue expected to grow at least 50% year-over-year in constant currency.

• Security revenue growth expected in the high single digits; delivery and other cloud apps expected to decline mid-single digits.

• Q2 2026 revenue projected at $1.075 billion–$1.1 billion, up 3%–5% year-over-year.

• Q2 non-GAAP EPS guidance: $1.45–$1.65; full-year non-GAAP EPS: $6.40–$7.15.

• Non-GAAP operating margin expected at 25%–26% for Q2 and full year.

• Full-year CapEx expected at 40%–42% of revenue, including $700 million for the $1.8 billion contract.

• Double-digit annual top-line revenue growth expected in 2027.

• Management expects continued cost increases in co-location, bandwidth, depreciation, and stock-based compensation due to ongoing investments in cloud infrastructure and AI.

• Macroeconomic and geopolitical headwinds are expected to moderate traffic growth and impact customer spending.