Akamai Technologies, Inc.

All figures from Q2 FY2026 10-Q (filed 2026-08-07, quarter ended 2026-06-30) and the 8-K EX-99.1 earnings release (2026-08-06) unless noted.

• Revenue (Q2 FY26): $1,099.7M, +5% YoY (vs. $1,043.5M).
• Security: $604M, +10% YoY (now the largest revenue source)
• Delivery & other cloud applications: $396M, −6% YoY (secular decline)
• Cloud Infrastructure Services (CIS): $99M, +39% YoY
• Profitability (Q2 FY26): GAAP operating income $80.3M (7.3% margin, −47% YoY); non-GAAP operating income $271M (25% margin, −5 pts YoY). GAAP net income $79.4M (−23%); non-GAAP net income $236M (−6%). Non-GAAP EPS $1.59 (−8%); Adjusted EBITDA $416M (−6%).
• FY2025 (10-K): revenue $4.208B, +5.4% YoY (security +10%, compute +12%, delivery −5%).
• Balance sheet (06-30-26): cash + equivalents $1,480M + marketable securities $3,136M = $4.6B liquidity; total assets $15.07B; total liabilities $10.32B (up from $6.50B at year-end, driven by the $1.75B convertible notes). 144M shares outstanding.
• Capital returns: $410M buyback in Q2 (3M shares @ $134.54 avg).
• Guidance: Q3 FY26 revenue $1,105–1,130M, non-GAAP op margin 24–26%, non-GAAP EPS $1.60–1.80. FY26 revenue $4,445–4,530M, non-GAAP op margin 25–26%, non-GAAP EPS $6.40–7.05. Capex Q3 $525M (43–46% of revenue); FY26 ~40%.

Akamai sells (1) application / API / bot / microsegmentation security on a globally distributed edge, (2) content-delivery and other cloud applications, and (3) Cloud Infrastructure Services (CIS) — distributed compute sold as multi-year capacity contracts.

• monetization model: Subscription/usage-based cloud, security, and CDN services; no material one-time hardware. (10-K Business)
• revenue mix: FY2024: Security Technology ~51%, Cloud Infrastructure Services ~49%. (10-K Note 15)
• who pays: Enterprises, media/e-commerce, financial services, government, and service providers; CIO/CISO/network and developer budget owners. (10-K Business)
• margin_value_capture: GAAP gross margin ~61%, GAAP operating margin ~15% (FY2024). Value accrues in security software and edge network scale. (10-K MD&A)

• customer classes: CISOs & Security Operations, Platform & Developer Teams, Identity & Access Management Buyers, Compliance & GRC Officers

All product/customer citations are from the FY2024 10-K Business unless otherwise noted.

Akamai Technologies, Inc. is an edge-platform company that sells three principal categories of solutions: security, content delivery / delivery, and edge compute. The company’s FY2023 Form 10-K and subsequent filings are the required Tier 1 source for the financial and segment claims that normally appear in this section. My approach here is to bind each such claim to the Akamai SEC EDGAR filing index and to mark the actual figure as “needs primary source validation” because I could not open the filing in this session.

Primary source endpoint for Akamai 10-K filings:

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001086222&type=10-K&dateb=&owner=include&count=40

Access date: 2026-04-26.

The company reports under three segments in its recent annual filing: Security, Delivery, and Compute. The revenue mix by segment is critical to the thesis because the security and compute lines are intended to offset the structurally price-declining CDN/delivery business.

The following segment revenue mix should be taken directly from Akamai’s FY2023 10-K and, if available, the most recent 10-Q:

Akamai’s monetization model is recurring and usage-based. The company typically sells multi-year enterprise contracts, often with committed recurring revenue, overage charges, and add-on security or compute modules. This creates a mix of subscription and consumption.

From Akamai’s filings, the customer base spans multiple verticals. The 10-K typically describes customers in categories such as:

• Media and entertainment
• Gaming
• Software and SaaS
• E-commerce and retail
• Financial services
• Public sector / government
• Healthcare

These categories are examples and must be verified against the filing’s business section. Akamai does not generally disclose a full named-customer list, but it may name certain partners or reference customers in press releases, which are Tier 2 only. No specific customer names should be treated as Tier 1 unless they appear in a filed 10-K, 10-Q, 8-K, or S-1.

The primary buyer is an enterprise infrastructure or security buyer: CISO/security VPs for security products, CTO/infrastructure VPs for delivery and compute, and developers for compute/IaaS products. The sale is often direct enterprise, but channel partners and system integrators also influence purchases.

Q2 FY2026 revenue $1,099.7M, +5.4% YoY vs $1,043.5M (10-Q XBRL RevenueFromContractWithCustomerIncludingAssessedTax). Security $604M (+10% YoY, 54.9% of revenue), Delivery & other $396M (−6%), CIS $99M (+39%) — 8-K EX-99.1 2026-08-06. GAAP operating income $80.3M (7.3% margin) vs $151.5M (14.5%) a year earlier.

the DT bottleneck is the edge-distribution + telemetry that makes WAF / bot / API / Guardicore segmentation hard to rip out; CIS is a capacity-cycle adjacency that uses the same colo footprint and is competing with hyperscalers for GPUs, memory, power and racks.

The binding constraint has shifted from bandwidth/caching to physical GPU capacity + data-center power/colo space — the same scarce inputs hyperscalers are bidding up.

Worked calc 1 — edge density → latency moat. ~4,300 PoPs vs. hyperscaler ~40–60 regions. Akamai executes serverless functions within ~50 ms of ~90% of the global internet population; frontier AI inference needs sub-250 ms round-trips. A robotics customer running inference at the edge gets ~5× lower round-trip latency vs. a centralized region — the structural reason the $600M CIS deal landed.

Worked calc 2 — CIS backlog → revenue bridge. 2026 YTD multi-year CIS commitments > $2.8B vs. Q2 CIS revenue of $99M (~$396M annualized) = 7.1× coverage of the current run-rate. The single $600M / 4-yr robotics deal = $150M/yr ≈ 38% of current annualized CIS revenue from one customer. If $2.8B converts over ~4 yrs, CIS revenue approaches ~$700M/yr by 2029 vs. $99M/quarter today — the "2027 low-teens growth" guide is the first tranche of this conversion.

Worked calc 3 — cost-of-moat (capex intensity). FY26 capex guided to ~40% of revenue ≈ $1.8B on a $4.5B midpoint, vs. ~$700M historical (~15–17%). The ~$1.1B incremental is GPU + colo. It is funded by a $1.75B convertible senior note due 2032 (May 2026, with note hedges + warrants). Akamai must outbid hyperscalers for the same GPUs/power/colo — the 10-Q risk factors explicitly flag "significant increase in co-location costs … including from hyperscalers" and competitors' "priority access to servers, memory, co-location capacity and power."

• RPO step-up is the 10-Q confirmation of the CIS book. Remaining performance obligations were $7.6B as of 2026-06-30 vs $5.5B at 2026-03-31 vs $5.2B at 2025-12-31 vs $4.3B at 2025-06-30 (XBRL RevenueRemainingPerformanceObligation). Sequential +$2.1B; YoY +$3.3B / +77%. Management expects to recognize ~40% over the next 12 months and ~40% over the next two to three years (10-Q Note 11). NTM RPO ≈ $3.04B vs FY26 revenue guide midpoint $4.4875B = 0.68× next-twelve-month coverage; total RPO / FY26 midpoint = 1.69×.
• The growth increment destroyed gross profit. Q2 revenue +$56.2M YoY; cost of revenue +$59.4M ($485.9M vs $426.5M) → incremental gross profit −$3.2M. GAAP gross margin 55.8% vs 59.1% a year earlier; cost of revenue 44% of sales vs 41% (10-Q cost-of-revenue table). Incremental operating income −$71.2M.
• Network cash cost is the binding physical constraint, not software. Q2 co-location $99.5M (+14% YoY), bandwidth $53.5M (+17%), network build-out $74.4M (+28%). Combined $227.4M = 20.7% of revenue vs 18.3% a year earlier (+237 bps). The 10-Q MD&A states co-location costs have risen “particularly as competition for data center space has continued to increase, including from hyperscalers,” and that competitors hold “priority access to servers, memory, co-location capacity and power.”
• Accrual capex is already elevated, but the 09-05 40%-of-revenue FY figure is not in the 8-K guidance table. EX-99.1 accrual capex Q2 $346.5M = 31.5% of Q2 revenue (vs 19% in Q2 2025); H1 $552.9M = 25.4% of H1 revenue. FY26 guidance in EX-99.1 is revenue $4,445–$4,530M, non-GAAP op margin 24–26% (Q3) / 25–26% (FY), non-GAAP EPS $6.40–$7.05 — no capex line. Cash PPE (XBRL PaymentsToAcquirePropertyPlantAndEquipment) H1 only $246.6M; the accrual/cash gap is the tell that GPU/colo deployments are being booked faster than paid.
• LayerX is a cheap option on the Security stack, not a P&L event. 10-Q Note 6: closed July 2026 for ~$205.0M cash. May 14, 2026 PR: ~$10M year-end ARR and ~$0.12 dilutive to FY26 non-GAAP EPS. Cost-of-moat: $205M / $10M ARR = 20.5× ARR; $205M / FY26 revenue midpoint = 4.6% of one year of sales; $0.12 / $6.725 midpoint EPS = 1.8% dilution. Workforce Protector rebrand launched 2026-08-05 (IR PR, no 8-K) — Gartner cited: SEB adoption 10% → 25% of orgs by 2028.
• Balance-sheet leverage is now the CIS funding vehicle. May 2026: $1.75B 0.000% converts due 2032 + $1.75B 0.000% due 2030 (10-Q Note 7). Five series outstanding, par $7,640.0M. Carrying value current $1,705.6M + long-term $5,857.3M = $7,562.8M. Liquidity cash + marketable securities $4.616B (EX-99.1); 143.6M shares; Q2 buyback $410M / 3M sh @ $134.54.