AKAM · Q4 2025 Earnings

Cautious

Akamai Technologies

Reported February 19, 2026

30-second summary

Akamai closed FY25 with Q4 revenue of $1.095B (+7% YoY, +3.9% QoQ), beating its own guide by $10M, and CIS accelerated to 45% YoY from 39% last quarter — anchored by a newly disclosed $200M inference cloud customer commitment. But the FY26 guide is the real story: revenue $4.40–$4.55B (+4.6–8.1% YoY, decelerating from +5%), non-GAAP operating margin guided to 26–28% (a 200–400bps step-down vs. FY25 actual of 30%, ~300bps at midpoint), capex guided to 23–26% of revenue (vs. FY25 actual of 19%), and FY26 EPS midpoint $6.70 vs. FY25 actual $7.12 (−5.9%) — an explicit earnings decline in the initial FY26 guide. Management is making a deliberate, expensive bet on AI inference; the question is whether 2026 is a one-year investment trough or the new shape of the P&L.

Headline numbers

EPS

Q4 FY2025

$1.84

Revenue

Q4 FY2025

$1.09B

+7.0% YoY

Gross margin

Q4 FY2025

58.6%

Operating margin

Q4 FY2025

8.7%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$1.09B	+7.0%	$1.05B	+3.8%
EPS	$1.84	—	$1.86	-1.1%
Gross margin	58.6%	—	59.3%	-70bps
Operating margin	8.7%	—	15.7%	-700bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	$1,065–$1,085 million	$1,095 million	+$10 million above high end of guide	Beat
Non-GAAP EPS	Q4 FY2025	$1.65–$1.85	$1.84	$0.01–$0.19 below high end; slightly below midpoint of $1.75	Beat
Non-GAAP Operating Margin	Q4 FY2025	28% to 30%	29%	in-line with mid-range	Beat
Revenue	FY2025	$4,178–$4,198 million	$4,208 million	+$10 million above high end of guide	Beat
Non-GAAP EPS	FY2025	$6.93–$7.13	$7.12	$0.01–$0.19 below high end; in-line with range	Beat
Non-GAAP Operating Margin	FY2025	29% to 30%	30%	at high end of guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	FY2026	$4,400–$4,550 million	+4.6% to +8.1% YoY

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-GAAP EPS	FY2026	$6.93–$7.13	$6.20–$7.20	Midpoint lowered from $7.03 to $6.70 (−$0.33 or −4.7%); range widened and slightly below prior range	Lowered
Non-GAAP Operating Margin	FY2026	29% to 30%	26% to 28%	Margin guidance lowered 100–200 basis points; midpoint down from 29.5% to 27%	Lowered
Capex as percentage of revenue	FY2026	20%	23% to 26%	+300–600 basis points; prior guidance was a fixed point (20%), new guidance is a range (23–26%)	Raised

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Security	$0.592B	+11.0%
Guardicore Segmentation and API Security	$0.09B	+36.0%
Delivery	$0.311B	-2.0%
Cloud computing	$0.191B	+14.0%
Cloud Infrastructure Services	$0.094B	+45.0%
Cloud Infrastructure Services YoY Growth	45%	—
Security Revenue YoY Growth	11%	—

Profitability

Q4 FY2025

Segment	Q4 FY2025
Non-GAAP Operating Margin	29%
Adjusted EBITDA Margin	42%
Operating Cash Flow	$367 million (33% of revenue)
Non-GAAP Operating Margin (Full Year)	30%
Adjusted EBITDA (Full Year)	$1.802 billion

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
U.S.	$0.553B	+4.0%
International	$0.542B	+11.0%
International Revenue YoY Growth	11%	—

Management tone

Narrative arc: Q2 CIS inflection thesis → Q3 Akamai Inference Cloud launch → Q4 inference platform monetized with $200M anchor and $250M capex commitment.

Two quarters ago AI inference was a thesis backed by an NVIDIA partnership announcement. Last quarter it had a name (Akamai Inference Cloud) and 20 cities of GPU deployment. This quarter management disclosed that the inference cloud "is already sold out, even though it's not generally available yet, just from the beta customers" and that a single customer has committed $200M, with revenue recognition beginning Q4 2026. The framing: "the AI market is entering a critical transition point, the first inning of a long game to come, where inference, or the execution of queries against a trained model, is the new frontier." What this signals: management has moved from positioning to monetizing, and is willing to take a one-year hit to margin and EPS to capture what it believes is a multi-year structural opportunity. The earnings step-down is voluntary, not forced.

The capital intensity step-up is the most consequential disclosure of the quarter. FY25 capex landed at 19% of revenue, just below the 20% guide. FY26 capex is now guided to 23–26%, with $250M earmarked specifically for AI inference cloud expansion. Combined with a 200–400bp operating margin step-down vs FY25, this is the largest single-year reinvestment the company has telegraphed in years. Management was candid about the driver: "we have recently observed significant inflationary pressure within the computer hardware market due to unprecedented industry investment in AI." GPU and memory chip supply is the binding constraint, not demand — which is both a validation of the opportunity and a margin risk if hardware inflation persists.

Security narrative quietly degraded again. Last quarter management withdrew the explicit ~10% constant-currency security revenue guide and pivoted to ARR metrics. This quarter the FY26 reported security revenue guide is "high single digits constant currency" — a step down from the prior trajectory. The headline +11% Q4 print is decelerating against a stack where the Guardicore + API Security bucket (+36%) is growing faster than ever. Translation: the legacy WAF/DDoS/bot book is decaying faster than management implied two quarters ago. The high-growth ARR story is real, but the blended revenue line is going to look worse before it looks better.

Delivery genuinely stabilized. -2% YoY is the narrowest decline in years, validating last quarter's "steadying" framing — though it remains a -2% segment in a portfolio that needs +growth segments to dominate the math.

Confidence level reads as 4/5 — management is leaning further into the AI inference thesis than at any prior point and is putting capital behind it.

Recurring themes management leaned on this quarter:

AI inference cloud as strategic inflection point and primary growth vectorCIS acceleration driven by existing customer expansion and new verticalsSecurity tailwinds from both increased attack surface and new AI-specific needsCapital intensity increase to capture AI opportunity despite hardware inflation headwindsShift to longer-term customer commitments across all business segments

Risks management surfaced:

Macroeconomic trends and geopolitical developments impacting revenueCo-location market tightness requiring premium pricingGPU and memory chip supply constraints driving unprecedented hardware cost inflationForeign exchange volatility with $1.3B revenue denominated in foreign currencyDelivery market pricing competition from vendors willing to accept low margins

Answers to last quarter's watch list

Total Cloud Computing re-accelerating from +8% — Cloud Computing accelerated to +14% in Q4 (from +8% in Q3, $191M). The non-CIS compute book stopped being a drag this quarter.

Resolved positively

Initial Akamai Inference Cloud customer commitments or ARR disclosed on Q4 call — Management disclosed a $200M customer commitment for the AI inference platform with revenue beginning Q4 2026, plus stated the existing 20-city inference cloud deployment is "sold out" from beta customers.

Resolved positively

API security exit run rate against ~$100M target and disclosure of broader high-growth ARR base — API security exited 2025 at a run rate exceeding $100M (per transcript), confirming last quarter's target. Combined Guardicore + API Security Q4 revenue was $90M (+36% YoY).

Resolved positively

Security blended revenue holding at +10% vs. deceleration after withdrawn guide — Q4 security revenue was +11% YoY ($592M), holding the line. But the FY26 guide is now "high single digits constant currency" — a forward step-down that confirms the legacy security book's decay is accelerating.

Resolved negatively

Delivery YoY — trough or continued erosion — Delivery was -2% in Q4 ($311M), an improvement from -4% in Q3 and the narrowest decline in over a year. The stabilization narrative held this quarter.

Resolved positively

Q4 operating margin landing within 28–30% guide — Non-GAAP operating margin landed at 29%, mid-range. The Q3 31% print proved partly timing — Q4 margin compressed sequentially as investment ramped — and the FY26 guide of 26–28% confirms the cost base is moving structurally higher, not lower.

Resolved negatively

What to watch into next quarter

Whether CIS Q1 growth holds at or above 45% — the FY26 guide of 45–50% assumes acceleration continues; any deceleration on the print after four straight quarters of acceleration would shift the FY26 risk profile materially. The $200M contract revenue doesn't start until Q4 2026, so Q1–Q3 growth has to come from the existing customer base and new logos.

Any second large inference cloud customer commitment disclosed alongside or after the $200M anchor. One $200M deal is validation; two would confirm a pattern and de-risk the FY26 CIS growth guide.

Q1 non-GAAP operating margin landing within the 26–27% guide. With FY26 margin guided 200–400bps below FY25 actual, a Q1 print below 26% would suggest the hardware inflation pressure is running ahead of management's modeling and put the FY26 EPS low end ($6.20) in play.

Hardware inflation commentary — specifically whether GPU/memory cost pressure is being passed through to customers or absorbed in margin. Co-location market tightness was flagged this quarter.

Security revenue growth trajectory in Q1. If the FY26 "high single digits constant currency" guide implies Q1 prints at +7–8% reported, that's a meaningful deceleration from Q4's +11% and would confirm the legacy book is the dominant drag.

Updated disclosure of the high-growth security ARR base (API security + Guardicore) in dollar terms, not just growth rates, so investors can model the crossover quarter when the high-growth bucket starts driving the blended line.

Early traction on the GPU-by-the-hour rental service going GA this quarter — utilization and mix vs. reserved-cluster commitments will inform whether the dollar-of-capex-per-dollar-of-revenue ratio improves or compresses further.

Sources

Akamai Q4 2025 Press Release / Form 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1086222/000108622226000017/exhibit991-q42025.htm
Akamai Q4 2025 earnings call prepared remarks and Q&A (transcript excerpts as provided)
Akamai Q3 2025 Tapebrief coverage (prior-quarter guidance baseline)

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