Summary
Akamai's first quarter of fiscal 2025 showed a familiar split. Revenue reached $1.015 billion, up 2.9% from the prior-year quarter. GAAP operating income fell 7.3% to $154.58 million. Operating margin was 15.2%, down 1.7 percentage points year over year. GAAP net income fell 29.8% to $123.17 million, and diluted EPS fell 26.1% to $0.82. The bottom line took a much harder hit than the top line. Non-GAAP results were steadier. Non-GAAP income from operations was $307 million, up 5%, and non-GAAP net income was $256 million, flat. Non-GAAP operating margin was 30%, flat year over year. Non-GAAP net income per diluted share was $1.70, up 4%. Adjusted EBITDA was $441 million, up 6%.
Operationally, the mix kept shifting toward higher-growth areas. Security and cloud computing represented 69% of total revenue and combined grew 10% year over year, or 11% adjusted for foreign exchange. Security revenue grew 8%, and cloud computing revenue grew 14%. Delivery remained the weak spot, with revenue down 9% year over year and down 8% adjusted for foreign exchange. Management tied the delivery decline to continued downward pricing at contract renewals and a large social media customer's cost optimization and do-it-yourself efforts, which reduced traffic on Akamai's network. The company also cited growth in web application, API security and Guardicore segmentation solutions, along with cloud optimization offerings. Backlog gave a more encouraging signal. Remaining performance obligations rose 26.5% to $4.30 billion, and current deferred revenue rose 18.9% to $169.53 million.
Cash generation slowed. Operating cash flow fell 28.6% to $251.20 million, while capital expenditures rose 25.6% to $117.78 million. Cash from operations represented 25% of revenue. The company said the operating cash flow decline reflected timing of customer collections and payroll funding, severance payments tied to the third-quarter 2024 restructuring action, and higher income tax payments. Capex as a percentage of revenue was 22% on an accrual basis, according to supplemental data. Akamai spent $500 million to repurchase 6.2 million shares at an average price of $81.19, leaving 146 million shares outstanding as of March 31, 2025. The company also repaid $1,150.0 million of convertible notes in May 2025 and had $2,415.0 million of convertible notes outstanding after that repayment.
Guidance points to modest growth with stable non-GAAP margins. For the second quarter ending June 30, 2025, management guided revenue to $1.012 billion to $1.032 billion and non-GAAP net income per diluted share to $1.52 to $1.58. For the full year 2025, revenue guidance is $4.050 billion to $4.200 billion, with non-GAAP net income per diluted share of $6.10 to $6.40. Non-GAAP operating margin is guided at 28% for both periods, and the non-GAAP tax rate is 19% to 20%. Capex as a percentage of revenue is guided to 22% to 23% for the second quarter and 19% to 20% for the full year. Risks remain familiar. Macroeconomic and geopolitical uncertainty could keep pressuring customer spending and traffic. Contract renewals face pricing pressure, especially in delivery. The large social media customer's DIY shift may continue to hurt traffic and revenue. Foreign exchange rates unfavorably affected revenue by $14.0 million in the quarter. Competition, supply chain disruptions, tariffs, interest rates, cybersecurity threats and regulatory changes also sit on the risk list.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.02B | $1.02B | -0.5% | $987.0M | +2.9% |
| Gross profit | $596.2M | $605.6M | -1.6% | $592.2M | +0.7% |
| Gross margin | 58.7% | 59.4% | -0.6 pp | 60.0% | -1.3 pp |
| Research & development | $123.5M | $120.2M | +2.7% | $116.9M | +5.7% |
| Sales & marketing | $134.1M | $144.6M | -7.3% | $134.6M | -0.3% |
| General & administrative | $155.9M | $155.5M | +0.3% | $152.4M | +2.3% |
| Total operating expenses | $860.6M | $871.9M | -1.3% | $820.2M | +4.9% |
| Operating income (loss) | $154.6M | $148.1M | +4.4% | $166.7M | -7.3% |
| Operating margin | 15.2% | 14.5% | +0.7 pp | 16.9% | -1.7 pp |
| Net income (loss) | $123.2M | $139.9M | -12.0% | $175.4M | -29.8% |
| Net margin | 12.1% | 13.7% | -1.6 pp | 17.8% | -5.6 pp |
| Diluted EPS | $0.82 | $0.91 | -$0.09 | $1.11 | -$0.29 |
Risks
A large social media customer has lowered costs and reduced reliance on U.S. providers, including a DIY component, which reduced traffic on the network and negatively impacted delivery revenue. Management expects revenue from this customer to decline over the next few years, and delivery solutions revenue decreased 9% for the three months ended March 31, 2025 versus the prior-year period.
Global macroeconomic and geopolitical conditions, including tariffs, inflation, and reluctance of non-U.S. companies to contract with U.S. providers, can cause customers to reduce spending or adopt DIY initiatives. The filing cites the large social media customer's cost cutting as partly a reaction to geopolitical pressures and notes the Israel-Hamas war could impair operations because approximately 6% of global employees are in Israel.
Intense competition in security, delivery, and cloud computing, with larger cloud competitors and pricing pressure at contract renewals, has contributed to declining delivery revenue. The filing says some competitors may offer lower prices, bundle competitive products, or have greater resources, which could result in price and revenue reductions.
Significant investment in the cloud computing buildout, including co-location and depreciation, is increasing costs ahead of utilization and may reduce gross and operating margins. Operating margin fell to 15.2% in the quarter ended March 31, 2025 from 16.9% in the prior-year quarter, down 1.7 percentage points, while capital expenditures rose 25.6% to $117.78 million.
Despite revenue rising 2.9% to $1.02 billion in the quarter ended March 31, 2025 versus the prior-year quarter, operating income fell 7.3% to $154.58 million, net income fell 29.8% to $123.17 million, and operating cash flow fell 28.6% to $251.20 million. The filing cites higher income tax payments, restructuring severance payments, and timing of customer collections and payroll funding.
U.S. legislation and executive orders concerning a Chinese application customer create uncertainty about potential liability, fines, litigation, or indemnification claims even though enforcement has been delayed. The filing also notes content restrictions, such as India's 2020 ban on identified Chinese-owned applications, reduced revenue.
Akamai faces significant competition and an evolving regulatory landscape in AI; its AI efforts may not succeed and competitors may incorporate AI into their products more successfully. Use of AI trained on open-source repositories may increase intellectual property and malicious code risks.
The compute platform buildout depends on server components and co-location capacity, and the filing cites continued volatility in server component costs, including from recently imposed tariffs, plus potential tariff-driven supply chain disruptions. Inability to obtain equipment at attractive prices could harm service quality and revenue.
Management introduced changes to the sales organization and compensation structure in 2025 to align incentives with faster-growing areas, and prior restructuring reduced headcount. These changes and restructuring activities may disrupt operations, reduce productivity, or cause unanticipated turnover.
Competition for talent in security and cloud computing increases cash and stock-based compensation costs and may dilute stockholders. The filing notes equity compensation is a significant part of pay, and geopolitical events such as the Israel-Hamas War could impact retention in Israel.
Akamai regularly faces cyber attacks, and the use of AI by bad actors may heighten sophistication. The Linode cloud integration still has ongoing vulnerabilities to mitigate, and abuse of cloud computing products could cause customer loss and reputational damage.
Akamai had $3,565.0 million of convertible senior notes outstanding as of March 31, 2025, and repaid $1,150.0 million in May 2025. Interest and marketable securities income decreased 30% in the quarter ended March 31, 2025 versus prior year, partly due to repositioning investments to cash equivalents to repay the notes.
SaaS KPIs
All quarters →Adjusted EBITDA margin
Non-GAAP operating margin
Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from AKAMAI TECHNOLOGIES INC's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.