AKAM · Q3 2025 Earnings

Bullish

Akamai Technologies

Reported November 6, 2025

30-second summary

Akamai printed $1.055B revenue (+5% YoY) and non-GAAP EPS of $1.86, beating its own guide by $0.20 (12% upside) and lifting non-GAAP operating margin to 31% vs. a 28% guide. CIS revenue accelerated to 39% YoY from 30% last quarter, FY EPS guide raised $0.33 at the midpoint to $7.03, and management launched Akamai Inference Cloud with NVIDIA Blackwell integration — repositioning the company from "distributed cloud" to purpose-built edge AI infrastructure. The one quiet move: the prior ~10% constant-currency security revenue growth guide has been withdrawn, with management now anchoring the security narrative to high-growth ARR (30–35%) instead.

Headline numbers

EPS

Q3 FY2025

$1.86

Revenue

Q3 FY2025

$1.05B

+5.0% YoY

Gross margin

Q3 FY2025

59.3%

Operating margin

Q3 FY2025

15.7%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$1.05B	+5.0%	$1.04B	+1.2%
EPS	$1.86	—	$1.73	+7.5%
Gross margin	59.3%	—	59.1%	+20bps
Operating margin	15.7%	—	14.5%	+120bps

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	Q3 FY2025	$1,035–$1,050 million	$1,055 million	+5 million above high end	Beat
Non-GAAP EPS	Q3 FY2025	$1.62–$1.66	$1.86	+$0.20 above high end	Beat
Non-GAAP Operating Margin	Q3 FY2025	28%	31%	+300 basis points above guide	Beat

New guidance

Metric	Period	Guide	YoY
Non-GAAP Operating Margin	Q4 FY2025	28% to 30%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2025	$4,135–$4,205 million	$4,178–$4,198 million	$43M midpoint increase (from $4,170M to $4,188M)	Raised
Non-GAAP EPS	FY 2025	$6.60–$6.80	$6.93–$7.13	+$0.33 at midpoint (from $6.70 to $7.03)	Raised
Non-GAAP Operating Margin	FY 2025	29%	29% to 30%	+100 basis points at high end (range widened)	Raised
Security Revenue Growth	FY 2025	approximately 10% in constant currency	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Non-GAAP Tax Rate (19%), Capex as % of Revenue (20%), Cloud Infrastructure Services ARR Growth (40% to 45% in constant currency)

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Security	$0.568B	+10.0%
Delivery	$0.306B	-4.0%
Cloud Computing	$0.18B	+8.0%
Cloud Infrastructure Services	$0.081B	+39.0%
Security Revenue Growth YoY	10%	—
Cloud Infrastructure Services Growth YoY	39%	—

Profitability

Q3 FY2025

Segment	Q3 FY2025
Non-GAAP Operating Margin	31%
Adjusted EBITDA	$458 million
Adjusted EBITDA Margin	43%
Operating Cash Flow	$442 million (42% of revenue)
Capex as % of Revenue	21%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
U.S.	$0.53B	+1.0%
International	$0.525B	+9.0%
International Revenue Growth YoY	9%	—

Management tone

Narrative arc: Q2-2025 CIS inflection thesis with security bifurcation → Q3-2025 Akamai Inference Cloud launch as edge AI platform.

Two quarters ago Akamai was a CDN pioneer transitioning to security and compute. Last quarter management quietly walked back the FY compute growth target and acknowledged security bifurcation. This quarter the framing is categorically different: "We believe that AI inference, or the execution of queries against a trained model, is the new frontier, one that requires purpose-built infrastructure to enable distributed, low latency, globally scalable inference at the edge." The launch of Akamai Inference Cloud with NVIDIA Blackwell integration, anchored by a third-party Jensen Huang quote about inference being "the most compute-intensive phase of AI," is the most prescriptive forward-positioning the company has offered in years. This is no longer a transition story; management is asserting category leadership before the category is named.

CIS confidence hardened materially. Last quarter management hedged the FY compute target ("could be a little less than our goal of approximately 15%") and pivoted investors to a 40–45% ARR exit metric. This quarter the print backs the pivot: "CIS revenue was $81 million, accelerating to 39% growth year-over-year as reported and in constant currency, a nice step up from approximately 30% growth last quarter. As a result, we continue to expect CIS ARR year-over-year growth in the range of 40% to 45% in constant currency at year-end." The $16M and $28M contracts flagged in Q2 are ramping. That said, broader Cloud Computing decelerating to +8% suggests the non-CIS book is softer than the CIS headline implies.

The security framing got cleaner — and quieter. Last quarter management explicitly bifurcated security into 30%+ ARR growth products (API, micro-segmentation) and ~5–8% legacy WAF/DDoS/bot. This quarter the explicit ~10% FY security revenue guide has been withdrawn entirely, replaced by an ARR-only target of 30–35% growth on the high-growth bucket plus a new $100M API security exit run rate. The substantive change isn't bad — it's that management is steering investors away from the blended revenue number toward the cleaner ARR story. Worth flagging because it makes future security comparability harder.

Delivery framing softened the bear case. Last quarter management cautiously claimed stabilization. This quarter, the bullish twist: "as AI becomes more prevalent, that it will impact the traditional delivery business in a way that will be favorable to Akamai" — citing immersive video on commerce sites. The -4% Q3 print is worse than Q2's -3%, so the narrative is running ahead of the numbers, but the framing shift is notable.

Confidence level reads as a 4/5. Management is leaning into a thesis rather than executing a defense.

Recurring themes management leaned on this quarter:

Akamai Inference Cloud as transformational AI edge computing platformCIS acceleration driven by distributed compute and hyperscaler adoptionAPI security and Zero Trust as high-growth security enginesMulti-product cross-selling and land-and-expand motionDistributed platform differentiation vs. hyperscaler centralized modelsReliability and five-nines availability as competitive moat

Risks management surfaced:

Macroeconomic trends impact on customer spendingIntegration risks from acquisitionsGeopolitical developments affecting operationsDelivery revenue concentration with top 6 customers representing 1%+ of revenue eachCompetitive pressure from hyperscalers potentially bringing inference capabilities in-house

Answers to last quarter's watch list

Q3 compute revenue re-acceleration toward ~15% FY target — CIS accelerated to +39% YoY (from +30% in Q2), but total Cloud Computing decelerated to +8% (from +13% in Q2), implying the non-CIS compute book softened. The 40–45% CIS ARR exit target was reaffirmed. The bifurcation matters: the CIS narrative is intact, but aggregate compute growth is not re-accelerating in revenue terms.

Resolved positively

CIS ARR exit rate against 40–45% goal and contract ramp — Revenue print of $81M at +39% YoY is consistent with the trajectory; management reaffirmed the 40–45% exit target. The $16M and $28M contracts flagged in Q2 are evidently ramping on schedule.

Resolved positively

Security revenue holding at ~10% vs. legacy product decel — Reported security revenue was +10% YoY, matching Q2. However, management withdrew the explicit ~10% constant-currency FY guide and pivoted disclosure to ARR-only metrics. The API security exit run rate is now framed at ~$100M, and combined high-growth security ARR guide is 30–35% YoY constant currency. The number held; the disclosure changed.

Not resolved

Delivery decline narrowing from -3% — Delivery printed -4% YoY, modestly worse than Q2's -3%. Management offered new forward optimism around AI-driven video enrichment lifting delivery, but the print is the print.

Resolved negatively

H2 operating margin landing vs. 29% FY / 28% Q3 guide — Q3 non-GAAP operating margin came in at 31% — 300bps above the 28% guide. FY guide raised to 29–30% range, with Q4 now guided 28–30%. Margin discipline materially better than flagged.

Resolved positively

AI Gateway / Firewall for AI paying customers — No disclosure of paying customers or specific ARR contribution this quarter. Narrative shifted to the broader Akamai Inference Cloud platform launch instead.

Continue monitoring

What to watch into next quarter

Whether total Cloud Computing growth re-accelerates from +8%, or whether the non-CIS compute book continues to soften as a drag — CIS at 39% alone isn't enough if the legacy compute base is decaying.

Initial Akamai Inference Cloud customer commitments or ARR contribution disclosed on the Q4 call. Platform was launched at NVIDIA GTC in October; investors need at least one named anchor customer or a quantified pipeline signal to validate the positioning.

API security exit run rate against the ~$100M target — and whether management discloses the broader high-growth security ARR dollar base, not just the 30–35% growth rate.

Whether security blended revenue growth holds at +10% or decelerates now that the explicit FY guide has been withdrawn. Withdrawn guidance often precedes a deceleration the company didn't want to commit to.

Delivery YoY — does -4% mark the trough or continued erosion? Two consecutive quarters of widening decline would undercut last quarter's stabilization narrative.

Q4 operating margin landing within the 28–30% guide. After a 31% Q3 print, anything below 28% would suggest the cost leverage was a timing artifact rather than structural.

Sources

Akamai Q3 2025 Press Release / Form 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1086222/000108622225000252/exhibit991-q32025.htm
Akamai Q3 2025 earnings call prepared remarks (transcript excerpts as provided)
Akamai Q2 2025 Tapebrief coverage (prior-quarter guidance baseline)

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