Akamai Technologies Reports Strong Q4 and Full-Year 2025 Results

Key Points and Investor Highlights

Akamai Technologies, Inc. (NASDAQ: AKAM), a leading cybersecurity and cloud computing company, has released its financial results for the fourth quarter and full-year ended December 31, 2025. The report showcases robust revenue growth in high-priority segments but also reveals some underlying operational challenges and strategic shifts that investors should closely monitor.

Financial Performance Overview

• Q4 2025 Revenue: \$1.095 billion, up 7% year-over-year and 6% when adjusted for foreign exchange.
• Full-Year 2025 Revenue: \$4.208 billion, up 5% year-over-year.
• Cloud Infrastructure Services (CIS): Q4 revenue of \$94 million (up 45% YoY), full-year revenue of \$314 million (up 36% YoY).
• Security Segment: Q4 revenue of \$592 million (up 11% YoY), full-year revenue of \$2.243 billion (up 10% YoY).
• Guardicore Segmentation & API Security: Q4 revenue of \$90 million (up 36% YoY), full-year revenue of \$293 million (up 43% YoY).
• Delivery Segment: Q4 revenue of \$311 million (down 2% YoY), full-year revenue of \$1.257 billion (down 5% YoY).
• Cloud Computing: Q4 revenue of \$191 million (up 14% YoY), full-year revenue of \$708 million (up 12% YoY).
• Geographic Split: US Q4 revenue was \$553 million (up 4% YoY); International Q4 revenue was \$542 million (up 11% YoY).

Profitability Metrics

• GAAP Net Income: Q4 was \$85 million (down 39% YoY), full-year was \$452 million (down 10% YoY).
• GAAP EPS: Q4 was \$0.58 (down 36% YoY), full-year was \$3.07 (down 6% YoY).
• Non-GAAP Net Income: Q4 was \$270 million (up 6% YoY), full-year was \$1.046 billion (up 5% YoY).
• Non-GAAP EPS: Q4 was \$1.84 (up 11% YoY), full-year was \$7.12 (up 10% YoY).
• Adjusted EBITDA: Q4 was \$458 million (up 7% YoY), full-year was \$1.802 billion (up 7% YoY).
• GAAP Operating Margin: Q4 was 9% (down from 15% YoY), full-year was 13% (flat YoY).
• Non-GAAP Operating Margin: Q4 was 29% (flat YoY), full-year was 30% (up 1pt YoY).

Strategic and Operational Highlights

• Restructuring Charge: Akamai incurred a \$55 million charge in Q4, mainly due to severance and asset impairments as it aligned investments with long-term growth priorities. This affected Q4 GAAP profitability.
• Share Repurchases: No buybacks in Q4. For full-year 2025, Akamai spent \$800 million repurchasing 10 million shares at an average price of \$79.77/share. 145 million shares were outstanding as of December 31, 2025.
• Cash Position: Cash from operations was \$367 million in Q4 (33% of revenue), \$1.519 billion for the year (36% of revenue). Total cash, equivalents, and marketable securities was \$1.92 billion at year-end.
• Capex: Capital expenditures totaled \$817.9 million for 2025 (19% of revenue), reflecting significant investment in infrastructure and product development.

Forward Guidance (2026)

• Q1 2026 Revenue: \$1.06 – \$1.085 billion.
• Full-Year 2026 Revenue: \$4.4 – \$4.55 billion.
• Non-GAAP Operating Margin: 26% – 28% for the year.
• Non-GAAP EPS: \$6.20 – \$7.20 for the year.
• Non-GAAP Tax Rate: 19%.
• Capex as % of Revenue: 23% – 26% for the year.

Product and Market Developments

• Akamai Inference Cloud: CIS’s growth is fueled by customer interest in Akamai’s new Inference Cloud and the expanding AI marketplace. The CEO cited these products as key drivers for future revenue acceleration.
• Security Offerings: Guardicore Segmentation and API Security products saw 36% revenue growth in Q4, indicating strong market demand and successful product innovation.

Key Issues for Shareholders and Price-Sensitive Factors

• Restructuring and Profitability: The \$55 million restructuring charge and workforce reduction may signal a strategic shift and could affect investor sentiment, especially given the decline in GAAP profitability for Q4.
• Continued Investment: High capital expenditure (19% of revenue) and significant share buybacks reflect confidence in long-term growth, but also limit available cash for other uses.
• Product Momentum: Exceptional growth in Cloud Infrastructure Services and Security segments, especially Guardicore and API Security, positions Akamai as a leader in high-growth markets, potentially driving share price upward.
• Guidance Risks: While guidance for 2026 is optimistic, investors should note that Akamai does not reconcile non-GAAP to GAAP guidance due to unpredictability in excluded costs (stock-based compensation, intangible amortization, acquisition and restructuring costs, etc.). Material changes in these could significantly impact GAAP results.
• Macro and Geopolitical Risks: The company highlights risks from economic uncertainty, currency fluctuations, geopolitical tensions (including Ukraine and Israel-Hamas wars), supply chain issues, and competition, which may affect future performance and share value.
• Segment Performance: Delivery segment continues to decline (-2% Q4, -5% full-year), which could offset gains in other segments if not stabilized.
• International Growth: International revenue grew strongly (up 11% YoY in Q4), boosting overall performance and signaling global expansion potential.

Detailed Financial Tables and Metrics

• Balance Sheet: Total assets rose to \$11.48 billion from \$10.37 billion YoY. Convertible senior notes outstanding increased from \$2.4 billion to \$4.1 billion.
• Employee Statistics: Workforce grew to 11,382 employees by year-end, up from 10,748 last year.
• Stock-Based Compensation: Increased to \$459.4 million for the year, reflecting ongoing investment in talent.
• Depreciation & Amortization: \$708.6 million for 2025, up from \$648.4 million in 2024.

Investor Conference Call

Akamai will host an investor conference call, accessible via phone and webcast, with a replay available for two weeks. Further details are available on Akamai’s investor relations website.

Conclusion

The report presents a mix of strong growth in key segments, ongoing investment in infrastructure and innovation, and some challenges in profitability due to restructuring. The company’s optimistic guidance and accelerating product momentum in AI and security may drive share price higher, but investors should closely monitor risks from macro factors, segment performance, and operational adjustments.

Disclaimer: This article is based on Akamai Technologies’ official financial statements and disclosures for Q4 and full-year 2025. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Investors should review Akamai’s SEC filings and consult financial advisors before making investment decisions. This report does not constitute investment advice.

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