Summary
Akamai's fiscal fourth quarter delivered solid top-line growth alongside a sharp drop in reported earnings. Revenue for the three months ended December 31, 2025 was $1.095 billion, up 7% from $1.020 billion in the prior-year quarter. Full-year revenue reached $4.208 billion, up 5% from $3.991 billion. Security and cloud computing carried the growth, with security revenue up 11% and cloud computing revenue up 14% in the quarter, while delivery revenue slipped 2%. The newer products did the heavy lifting: Guardicore Segmentation and API Security revenue rose 36%, and Cloud Infrastructure Services revenue rose 45%. Management tied the cloud momentum to customer interest in the new Akamai Inference Cloud and the spread of AI applications and agents. Delivery stayed the weak spot, with full-year delivery revenue down 5% as renewals reprice lower and customers keep optimizing traffic.
Reported profitability fell hard. GAAP operating income for the quarter was $94.9 million, down 35.9% from $148.1 million a year earlier, and the GAAP operating margin fell to 8.7% from 14.5%. A $55 million restructuring charge, mainly severance and impairments of certain intangible assets, drove most of the decline. GAAP net income for the quarter was $85.1 million, down 39.2% from $139.9 million. The picture improved at the full-year operating line, where GAAP operating income of $566.9 million rose 6.3% from $533.4 million, but GAAP net income of $452.0 million fell 10.5% from $504.9 million. Full-year GAAP diluted EPS was $3.07, down 6.1% from $3.27. The effective tax rate for 2025 climbed to 25% from 14%, hurt by a lower tax benefit related to stock-based compensation and the absence of an intercompany sale of intellectual property that helped the prior year.
Non-GAAP results were steadier. Non-GAAP operating income for the quarter was $316 million, up 6%, and the non-GAAP operating margin was 29%. Non-GAAP net income was $270 million, up 6%, while non-GAAP diluted EPS of $1.84 rose 11% from $1.66. Adjusted EBITDA for the quarter was $458 million, up 7%. For the full year, non-GAAP diluted EPS was $7.12, up 10% from $6.48. Operating cash flow for the quarter was $366.6 million, up 6.6% from $343.8 million, and full-year operating cash flow of $1.519 billion was flat against the prior year. Capital spending rose sharply, with fourth-quarter capital expenditures of $131.7 million up 41.8% and full-year capital expenditures of $507.8 million up 30.1%.
Committed demand offers some cushion. Remaining performance obligations stood at $5.20 billion, up 20.9% from $4.30 billion a year earlier, and current deferred revenue was $151.2 million, up 1.3%. Cash, cash equivalents and marketable securities totaled $1.920 billion at December 31, 2025, and 145 million shares were outstanding. Akamai spent $800 million during 2025 to repurchase 10.0 million shares at an average price of $79.77, and it bought back nothing in the fourth quarter.
Guidance covers both the first quarter and the full year 2026, and the margin outlook sits below where the business landed in 2025. For the first quarter of 2026, Akamai guides a non-GAAP operating margin of 26% to 27% and non-GAAP diluted EPS of $1.50 to $1.67. For the full year 2026, the company guides a non-GAAP operating margin of 26% to 28%, non-GAAP diluted EPS of $6.20 to $7.20, and capex at 23% to 26% of revenue. Management expects cost of revenue, research and development, sales and marketing, and general and administrative expenses all to rise, citing co-location, server and memory price increases tied to hyperscaler-driven market dynamics, a go-to-market rebuild, and higher stock-based compensation. Delivery pricing pressure, customer traffic optimization, competition, and macroeconomic and geopolitical headwinds round out the risk list. Whether security and cloud computing growth can outrun that cost base is the central question heading into 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.09B | $1.05B | +3.8% | $1.02B | +7.4% |
| Gross profit | $642.4M | $625.1M | +2.8% | $605.6M | +6.1% |
| Gross margin | 58.7% | 59.3% | -0.6 pp | 59.4% | -0.7 pp |
| Research & development | $139.5M | $124.7M | +11.8% | $120.2M | +16.0% |
| Sales & marketing | $149.1M | $144.9M | +2.9% | $144.6M | +3.1% |
| General & administrative | $176.5M | $161.7M | +9.1% | $155.5M | +13.5% |
| Total operating expenses | $1.00B | $888.6M | +12.5% | $871.9M | +14.7% |
| Operating income (loss) | $94.9M | $166.0M | -42.9% | $148.1M | -35.9% |
| Operating margin | 8.7% | 15.7% | -7.1 pp | 14.5% | -5.8 pp |
| Net income (loss) | $85.1M | $140.2M | -39.3% | $139.9M | -39.2% |
| Net margin | 7.8% | 13.3% | -5.5 pp | 13.7% | -6.0 pp |
| Diluted EPS | $0.58 | $0.97 | -$0.39 | $0.91 | -$0.33 |
Risks
Total revenue rose 5.4% year to date, but the filing says Akamai has continued to experience revenue declines in delivery solutions due to competition, pricing pressure, and customer DIY or alternative sourcing. Those pressures may continue to reduce traffic on Akamai's network and negatively impact revenue.
A large social media customer has used a DIY component to lower costs and reduce reliance on U.S. providers, which reduced traffic on Akamai's network and negatively impacted revenue in 2024 and may continue to do so. If multiple additional large customers shift to DIY, contracted revenue commitments could decrease more significantly.
Akamai faces intense competition in AI and cloud computing from large incumbents with priority access to servers, memory, co-location capacity and power. The MD&A says hyperscaler-driven market dynamics are raising co-location, server and memory costs, and Q4 operating margin fell to 8.7% from 14.5% in the prior-year quarter, down 5.9 percentage points.
The build-out of Akamai's compute platform depends on co-location space, power, servers and memory, and the filing cites continued volatility in server component costs and tariff-related increases. Capital expenditures rose 30.1% year to date to $507.79 million and 41.8% in Q4, increasing future depreciation and cost pressure.
Expenses are expected to increase in 2026 across cost of revenue, research and development, sales and marketing, and general and administrative, including higher stock-based compensation. Q4 operating income fell 35.9% to $94.88 million and Q4 net income fell 39.2% to $85.07 million, showing margin pressure despite year-to-date revenue growth.
The PAFACA matter involving a Chinese-owned application remains subject to possible future governmental review or litigation even after the January 22, 2026 divestiture, and Akamai may face fines, indemnification claims or liability for continuing services. New digital sovereignty and AI regulations could also increase costs, lengthen sales cycles or limit service delivery in certain markets.
The filing says the 2025 effective income tax rate increased and may fluctuate due to stock-based compensation, tax law changes, and settlements of tax audits. Akamai has recorded tax reserves, and adverse audit outcomes could require additional charges that affect financial results.
Akamai committed to restructuring actions in Q4 2025, including headcount reductions, and has changed its sales organization and compensation structure to optimize performance. Disruptions, decreased productivity or unanticipated turnover from these actions could adversely affect operating results.
Competition for security and cloud computing talent is intense and can increase cash and stock-based compensation costs and dilute stockholders. The filing also cites geopolitical impacts on employees, including approximately six percent of global employees located in Israel who have been or may be required to report for military duty.
SaaS KPIs
All quarters →Adjusted EBITDA margin
Non-GAAP operating margin
Summary, forecast, risks and KPIs are extracted from AKAMAI TECHNOLOGIES INC's SEC filings for Q4 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.