Summary
Akamai Technologies reported third quarter revenue of $1.05 billion, up 5.0% from the prior-year quarter. Year-to-date revenue was $3.11 billion, up 4.8%. GAAP operating income was $166.02 million, up 135.0%. GAAP operating margin was 15.7%, up 8.7 percentage points. GAAP net income was $140.17 million, up 142.1%, and diluted EPS was $0.97, up 155.3%. Year-to-date operating income was $472.07 million, up 22.5%. Year-to-date net income was $366.96 million, up 0.5%. Year-to-date diluted EPS was $2.50, up 5.9%. Year-to-date operating margin was 15.2%, up 2.2 percentage points. The prior-year quarter included a restructuring charge that did not recur, which management said drove much of the GAAP income and EPS increase. Top-line growth came from security and cloud computing solutions, while delivery revenue declined because of downward pricing of contract renewals, according to MD&A.
On a non-GAAP basis, income from operations was $322 million, up 9%, and non-GAAP operating margin was 31%, up 2 percentage points. Non-GAAP net income was $269 million, up 10%, and non-GAAP diluted EPS was $1.86, up 17%. Adjusted EBITDA was $458 million, up 8%. Management pointed to the continued success of high-growth security products and momentum in Cloud Infrastructure Services, where revenue growth accelerated to 39% year over year. The company launched Akamai Inference Cloud, powered by NVIDIA AI infrastructure, to enable AI at the edge. RPO was $4.80 billion, up 37.1% from the prior-year quarter. Deferred revenue, current portion, was $162.45 million, up 16.9%.
Cash generation was solid in the quarter. Operating cash flow was $441.83 million, up 12.6% from the prior-year quarter. For the first nine months, operating cash flow was $1.15 billion, down 2.0%. Capital expenditures were $112.78 million in the quarter, flat versus the prior-year quarter. Year-to-date capital expenditures were $376.09 million, up 26.4%. The company did not repurchase shares in the third quarter, but spent $800 million in the first nine months to repurchase 10.0 million shares at a weighted average price of $79.77. It had 144 million shares of common stock outstanding at quarter end. The MD&A said the year-to-date operating cash flow decline was due to timing of customer collections and severance payments, as well as higher income tax payments.
Guidance for the fourth quarter and for the full year points to continued growth. For the fourth quarter, revenue is expected between $1.065 billion and $1.085 billion. Full-year revenue guidance is $4.178 billion to $4.198 billion. Non-GAAP operating margin is guided to 28% to 30% for the fourth quarter and 29% to 30% for the full year. Non-GAAP diluted EPS is guided to $1.65 to $1.85 for the fourth quarter and $6.93 to $7.13 for the full year. Non-GAAP tax rate is 18% to 19% for the fourth quarter and 19% for the full year. Capex as a percentage of revenue is guided to 16% for the fourth quarter and 20% for the full year. Management said it expects cost of revenue to increase for the remainder of the year, particularly co-location fees and depreciation of network equipment, as it invests in the compute platform.
Risks include delivery revenue pressure from competition and customer traffic optimization, foreign exchange fluctuations, macroeconomic and geopolitical uncertainty, and supply chain and logistics costs. The company also expects amortization of acquired intangible assets to remain a factor in future periods, with amortization of acquired intangible assets of $27.78 million in the quarter. As of September 30, 2025, $1.2 billion remained available for future share repurchases under the authorization program.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.05B | $1.04B | +1.1% | $1.00B | +5.0% |
| Gross profit | $625.1M | $617.0M | +1.3% | $595.9M | +4.9% |
| Gross margin | 59.3% | 59.1% | +0.2 pp | 59.3% | -0.0 pp |
| Research & development | $124.7M | $125.8M | -0.9% | $120.3M | +3.6% |
| Sales & marketing | $144.9M | $146.2M | -0.9% | $138.6M | +4.6% |
| General & administrative | $161.7M | $162.6M | -0.5% | $160.0M | +1.1% |
| Total operating expenses | $888.6M | $892.0M | -0.4% | $934.0M | -4.9% |
| Operating income (loss) | $166.0M | $151.5M | +9.6% | $70.6M | +135.0% |
| Operating margin | 15.7% | 14.5% | +1.2 pp | 7.0% | +8.7 pp |
| Net income (loss) | $140.2M | $103.6M | +35.3% | $57.9M | +142.1% |
| Net margin | 13.3% | 9.9% | +3.4 pp | 5.8% | +7.5 pp |
| Diluted EPS | $0.97 | $0.71 | +$0.26 | $0.38 | +$0.59 |
Risks
Delivery solutions revenue decreased 4% in the quarter and 5% year to date due to downward pricing at contract renewals and customers optimizing traffic, even as total revenue rose 5.0% in the quarter. Continued delivery erosion could pressure overall growth if security and cloud computing do not fully offset it.
Akamai recently launched Akamai Inference Cloud (AIC) as a direct AI market offering, placing it against established and emerging AI infrastructure and inference providers. The filing cites significant competition, evolving regulation, potential intellectual property risks from AI training data, and no assurance that AI initiatives will succeed.
A large social media customer has used a DIY component and reduced reliance on U.S. providers, reducing network traffic and negatively impacting revenue in 2024. Akamai expects revenue from this customer to decline over the next few years even if it can continue operating in the United States.
Regulatory uncertainty remains around a Chinese application customer, including U.S. legislation and Executive Orders that extended enforcement delay to January 23, 2026. The company could still face fines, litigation, indemnification claims, or service interruptions despite the Attorney General's determination.
Akamai is investing heavily in its compute platform and AIC, with capital expenditures up 26.4% year to date and co-location and network build-out costs rising. Costs are being incurred ahead of full utilization, and the filing warns these efforts may reduce gross and operating margins or fail to attract enough customers.
Global macroeconomic and geopolitical conditions, including tariffs, inflation, foreign exchange volatility, and Middle East conflict, are affecting customers and spending. Approximately six percent of global employees are in Israel and have been or may be required to report for military duty, which could impact security offerings and compute platform migration.
Intense competition from larger cloud, security, and telecommunications providers and smaller nimble rivals can lead to price reductions, customer loss, and lower market share. The filing notes delivery and security customers have seen prices decline at contract renewal due to competition, pressuring revenue growth.
Hiring and retaining key employees is critical for security and cloud computing growth, but competition for talent increases cash and stock compensation costs and may dilute stockholders. Middle East hostilities have required employee military service and could disrupt workforce availability.
SaaS KPIs
All quarters →Adjusted EBITDA margin
Non-GAAP operating margin
Cash from operations
Summary, forecast, risks and KPIs are extracted from AKAMAI TECHNOLOGIES INC's SEC filings for Q3 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.