Akamai Technologies delivered third-quarter results that surpassed Wall Street’s revenue and earnings expectations, prompting a positive market reaction. Management attributed performance to accelerating demand for its Cloud Infrastructure Services, strong growth in high-value security products, and stabilizing delivery revenue. CEO Tom Leighton highlighted that Akamai’s distributed platform and differentiated approach are increasingly recognized by both customers and industry analysts. Leighton pointed out, “Our business performed well across the spectrum of our portfolio with accelerating momentum for our Cloud Infrastructure Services, continued strong demand for our high-growth security products, and continued stabilization of our delivery revenue.”
Is now the time to buy AKAM? Find out in our full research report (it’s free for active Edge members).
Akamai Technologies (AKAM) Q3 CY2025 Highlights:
- Revenue: $1.05 billion vs analyst estimates of $1.04 billion (5% year-on-year growth, 1% beat)
- Adjusted EPS: $1.86 vs analyst estimates of $1.64 (13.7% beat)
- Adjusted Operating Income: $322 million vs analyst estimates of $291.1 million (30.5% margin, 10.6% beat)
- Revenue Guidance for Q4 CY2025 is $1.08 billion at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $7.03 at the midpoint, a 4.9% increase
- Operating Margin: 15.7%, up from 7% in the same quarter last year
- Market Capitalization: $12.96 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Akamai Technologies’s Q3 Earnings Call
- Michael Cikos (Needham & Company) asked about the components of growth in security and compute; CFO Ed McGowan clarified the company expects about 10% growth in security and just under 15% in compute for the full year, with momentum in CIS possibly accelerating next year.
- Rishi Jaluria (RBC) questioned Akamai’s competitive positioning versus hyperscalers in edge inference; CEO Tom Leighton responded that Akamai’s unique distributed platform allows it to deliver lower latency and better performance than centralized cloud providers.
- James Fish (Piper Sandler) inquired about capital expenditure for the Inference Cloud and compute margins; McGowan explained CapEx will closely follow demand and expects compute gross margins to be stable or slightly improve as the business scales.
- Gabriela Borges (Goldman Sachs) sought clarity on the pipeline for large inference deals; McGowan noted that initial customer interest includes larger deal sizes than historically seen in compute, which could drive future growth.
- Jonathan Ho (William Blair & Company) asked about the reliability and penetration rates for CIS and security; Leighton emphasized Akamai’s investment in platform reliability and highlighted that there is still significant opportunity to grow security adoption within the customer base.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will be watching (1) the adoption rate and early customer wins of Akamai Inference Cloud, (2) progress in cross-selling high-growth security products to compute and delivery customers, and (3) the pace of international deal activity, particularly in Asia-Pacific. Execution on the ongoing salesforce transformation and realization of operating leverage from AI infrastructure investments will also serve as key signposts.
Akamai Technologies currently trades at $89.95, up from $73 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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