Built by Claude FableAKAM | Financial Trends: 1/10
Deep dive pages: Overview | Business Model | Financial Trends | Thematic Exposure | Management Quality | Investor Sentiment | Concerns, Catalysts & Risks
Bottom line: Revenue growth is steady in the mid single digits, but almost everything under it is getting worse. Margins are compressing hard, operating income is falling, free cash flow is shrinking, the share count has started rising again, and convertible debt has more than doubled. Akamai is financing a GPU and Cloud Infrastructure Services (CIS) build ahead of revenue. The numbers do not yet show that build paying off, apart from CIS revenue growth.
Data: Daloopa (company_id 251), 14 quarters (2023Q1 to 2026Q2) and 6 fiscal years (FY2020 to FY2025), cited inline as daloopa.com/src/ID. Cross-checked against FMP: FY2026Q2 revenue of $1,099.7M matches FMP earnings data. FMP TTM P/FCF of 20.3x on a $12.77B market cap implies TTM FCF of about $629M, which matches the Daloopa TTM FCF of $629.9M (sum of the last 4 quarters below). Market data (FMP quote, 2026-10-19): market cap $12.77B, EV $20.63B (company_context.md). Fiscal year = calendar year.
Acceleration / deceleration test (YoY growth, last 8 comparable quarters)
| Metric | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 | Q1 26 | Q2 26 | Read |
|---|---|---|---|---|---|---|---|---|---|
| Revenue YoY | +4.1% | +2.5% | +2.9% | +6.5% | +5.0% | +7.4% | +5.8% | +5.4% | Rose from a +2.5% trough to +7.4%, then slowed 2 qtrs in a row |
| Security YoY | +13.8% | +13.5% | +8.2% | +10.7% | +9.6% | +10.8% | +11.1% | +9.5% | Flat around 10%, below the 13% to 14% of 2024 |
| CIS YoY | n/a | n/a | +30.4% | +29.6% | +39.2% | +44.8% | +40.0% | +39.0% | Accelerated, now steady near 40% |
| Delivery YoY | -15.9% | -18.3% | -9.3% | -2.8% | -4.0% | -2.1% | -7.8% | -6.1% | Declines got smaller in 2025, then widened again in 2026 |
| Non-GAAP op income YoY | -0.1% | -1.5% | +5.2% | +9.6% | +8.9% | +6.0% | -7.9% | -12.3% | Slowing, now negative |
| FCF YoY | +28.2% | -29.1% | -69.0% | -12.0% | +19.0% | -10.5% | +118.6% | -57.3% | Swings around, but the trend is down (TTM below) |
Like-for-like comparisons: Q1 24 to Q1 25 grew +2.9%, and Q1 25 to Q1 26 grew +5.8% (faster). Q2 grew +6.5% then +5.4% (slower). Q3 went from +4.1% to +5.0% (faster), and Q4 from +2.5% to +7.4% (faster). Comparing back to back quarters, growth has slowed from +7.4% (Q4 25) to +5.8% to +5.4%. Management guides FY2026 revenue to $4.445B to $4.530B, which is +6% to +8% as reported (FY2026Q2 call). FMP consensus has FY2026 at +6.7% and expects a jump to +16.0% in FY2027 (company_context.md). That FY2027 step-up depends entirely on CIS contracts that have not started earning revenue yet.
Trailing twelve months (sum of Daloopa quarterly values below):
| TTM ending | Q2 24 | Q4 24 | Q2 25 | Q4 25 | Q2 26 | Change from peak |
|---|---|---|---|---|---|---|
| TTM revenue ($M) | 3,927.1 | 3,991.2 | 4,083.3 | 4,208.2 | 4,322.8 | +10.1% vs Q2 24 |
| TTM non-GAAP op income ($M) | 1,172.0 | 1,167.2 | 1,209.5 | 1,253.6 | 1,191.5 | -5.0% vs Q4 25 peak |
| TTM GAAP op income ($M) | 675.6 | 533.4 | 524.7 | 566.9 | 455.7 | -32.6% vs Q2 24 |
| TTM FCF ($M) | 862.7 | 833.9 | 678.9 | 699.3 | 629.9 | -30.6% vs Q3 24 peak of 908.3 |
Quarterly metrics table (Daloopa, $M unless noted)
| Metric | 2024Q3 | 2024Q4 | 2025Q1 | 2025Q2 | 2025Q3 | 2025Q4 | 2026Q1 | 2026Q2 | Trend |
|---|---|---|---|---|---|---|---|---|---|
| Total revenue | $1,004.7M | $1,019.9M | $1,015.1M | $1,043.5M | $1,054.6M | $1,094.9M | $1,073.6M | $1,099.7M | |
| Total revenue YoY | +4.1% | +2.5% | +2.9% | +6.5% | +5.0% | +7.4% | +5.8% | +5.4% | Stable mid single digit; peaked +7.4% Q4 25, decelerating 2 qtrs |
| Security revenue | $518.7M | $534.6M | $530.7M | $551.9M | $568.4M | $592.4M | $589.8M | $604.4M | |
| Security revenue YoY | +13.8% | +13.5% | +8.2% | +10.7% | +9.6% | +10.8% | +11.1% | +9.5% | Decelerating from +13.5% to ~+10% |
| Delivery revenue | $319.1M | $317.8M | $319.0M | $320.1M | $306.5M | $311.1M | $294.2M | $300.6M | |
| Delivery revenue YoY | -15.9% | -18.3% | -9.3% | -2.8% | -4.0% | -2.1% | -7.8% | -6.1% | Declining; decline re-widened to -6% to -8% in 2026 |
| Cloud Infrastructure Services (CIS) | $58.3M | $64.7M | $67.6M | $71.5M | $81.2M | $93.7M | $94.6M | $99.3M | |
| Cloud Infrastructure Services (CIS) YoY | n/a | n/a | +30.4% | +29.6% | +39.2% | +44.8% | +40.0% | +39.0% | Accelerating (+30% to +39/45%) |
| Other cloud applications | $108.5M | $102.8M | $97.9M | $100.0M | $98.5M | $97.8M | $95.1M | $95.4M | |
| Other cloud applications YoY | n/a | n/a | +5.6% | +3.8% | -9.2% | -4.9% | -2.9% | -4.6% | Shrinking (-3% to -5%) |
| GAAP gross margin | 59.3% | 59.4% | 58.7% | 59.1% | 59.3% | 58.7% | 56.1% | 55.8% | Compressing: 59.3% (Q3 25) to 55.8%, -350 bps |
| Cash gross margin (non-GAAP) | 73.4% | 73.3% | 73.4% | 73.6% | 73.7% | 73.0% | 71.2% | 71.0% | Compressing: 73.7% peak to 71.0%, -270 bps |
| GAAP operating income | $70.6M | $148.1M | $154.6M | $151.5M | $166.0M | $94.9M | $114.5M | $80.3M | |
| GAAP operating margin | 7.0% | 14.5% | 15.2% | 14.5% | 15.7% | 8.7% | 10.7% | 7.3% | Compressing: 15.7% (Q3 25) to 7.3%, -840 bps |
| GAAP operating income YoY | -59.9% | -19.9% | -7.3% | +2.3% | +135.0% | -35.9% | -25.9% | -47.0% | Declining 3 straight qtrs |
| Non-GAAP operating income | $295.8M | $298.1M | $307.0M | $308.6M | $322.0M | $316.0M | $282.8M | $270.7M | |
| Non-GAAP operating margin | 29.4% | 29.2% | 30.2% | 29.6% | 30.5% | 28.9% | 26.3% | 24.6% | Compressing: 30.5% peak to 24.6%, -590 bps |
| Non-GAAP operating income YoY | -0.1% | -1.5% | +5.2% | +9.6% | +8.9% | +6.0% | -7.9% | -12.3% | Turned negative in 2026 |
| Adjusted EBITDA | $426.3M | $429.4M | $441.3M | $444.4M | $458.4M | $457.5M | $426.7M | $416.1M | |
| Adj. EBITDA margin | 42.4% | 42.1% | 43.5% | 42.6% | 43.5% | 41.8% | 39.7% | 37.8% | Compressing: 43.5% peak to 37.8%, -570 bps |
| Operating cash flow | $392.5M | $343.8M | $251.2M | $459.1M | $441.8M | $366.6M | $312.5M | $326.3M | |
| Total capex | $164.0M | $192.7M | $225.9M | $214.2M | $224.2M | $153.7M | $206.3M | $346.5M | Rising: 31.5% of rev in Q2 26 |
| Capex % of revenue | 16.3% | 18.9% | 22.3% | 20.5% | 21.3% | 14.0% | 19.2% | 31.5% | Guided ~40% for FY26 |
| Free cash flow | $207.4M | $180.9M | $55.2M | $235.4M | $246.8M | $161.9M | $120.7M | $100.5M | |
| FCF margin | 20.6% | 17.7% | 5.4% | 22.6% | 23.4% | 14.8% | 11.2% | 9.1% | Compressing: 23.4% to 9.1% |
| FCF YoY | +28.2% | -29.1% | -69.0% | -12.0% | +19.0% | -10.5% | +118.6% | -57.3% | Declining (volatile) |
| GAAP diluted EPS | $0.38 | $0.91 | $0.82 | $0.71 | $0.97 | $0.58 | $0.71 | $0.52 | |
| Non-GAAP diluted EPS | $1.59 | $1.66 | $1.70 | $1.73 | $1.86 | $1.84 | $1.61 | $1.59 | |
| Non-GAAP EPS YoY | -2.5% | -1.8% | +3.7% | +9.5% | +17.0% | +10.8% | -5.3% | -8.1% | Decelerated from +17% to -8% |
| Diluted shares (GAAP, M) | 153.2 | 153.1 | 151.1 | 145.2 | 144.8 | 147.0 | 150.0 | 153.7 | |
| Diluted shares YoY | -1.1% | -2.5% | -4.1% | -5.4% | -5.5% | -4.0% | -0.7% | +5.8% | Reversed: -5.5% to +5.8% |
| Non-GAAP diluted shares YoY | -1.0% | -1.6% | -2.8% | -5.3% | -5.3% | -3.8% | -1.6% | +2.1% | Reversed: -5.3% to +2.1% |
| Convertible notes (carrying, current+LT) | $3,543.9M | $3,545.8M | $3,547.7M | $4,101.0M | $4,103.1M | $4,105.4M | $4,107.6M | $7,562.8M | |
| Convertible debt YoY | +0.2% | +0.2% | +0.2% | +15.8% | +15.8% | +15.8% | +15.8% | +84.4% | Faster than revenue 5 straight qtrs |
Notes: GAAP gross margin = (revenue minus cost of revenue) / revenue. Akamai changed its segment reporting in 2026. "Delivery" for 2026Q1 to Q2 is the Daloopa Delivery series. CIS and Other cloud applications for 2024 to 2025 are the restated figures in the 8004923 / 8004922 series. The convertible notes row is the carrying value of current plus long-term convertible senior notes only. FMP's FY2025 total debt figure of $6.91B also includes leases.
Annual (5 year) table (Daloopa)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | 5yr trend |
|---|---|---|---|---|---|---|---|
| Revenue | $3,198.1M | $3,461.2M | $3,616.7M | $3,811.9M | $3,991.2M | $4,208.2M | |
| Revenue YoY | n/a | +8.2% | +4.5% | +5.4% | +4.7% | +5.4% | Stable 4% to 8%, never accelerated above 8% |
| Security | n/a | n/a | $1,541.9M | $1,765.3M | $2,042.7M | $2,243.4M | |
| Security YoY | n/a | n/a | n/a | +14.5% | +15.7% | +9.8% | Decelerating: +15.7% (FY24) to +9.8% |
| Delivery | n/a | n/a | $1,669.3M | $1,542.4M | $1,318.1M | $1,256.7M | |
| Delivery YoY | n/a | n/a | n/a | -7.6% | -14.5% | -4.7% | Declining every year |
| Compute (CIS + other cloud apps) | n/a | n/a | $405.5M | $504.2M | $630.4M | $708.0M | |
| Compute YoY | n/a | n/a | n/a | +24.4% | +25.0% | +12.3% | Decelerating: +25% to +12% |
| GAAP gross margin | 64.6% | 63.3% | 61.7% | 60.4% | 59.4% | 58.9% | -570 bps since FY2020 (64.6% to 58.9%) |
| GAAP operating income | $658.5M | $783.1M | $676.3M | $637.3M | $533.4M | $566.9M | |
| GAAP operating margin | 20.6% | 22.6% | 18.7% | 16.7% | 13.4% | 13.5% | Peak 22.6% (FY21) to 13.5%, -910 bps |
| Non-GAAP operating income | $994.3M | $1,093.9M | $1,032.8M | $1,135.5M | $1,167.2M | $1,253.6M | |
| Non-GAAP operating margin | 31.1% | 31.6% | 28.6% | 29.8% | 29.2% | 29.8% | Range bound 28.6% to 31.6% |
| Adjusted EBITDA | $1,397.5M | $1,560.9M | $1,529.7M | $1,607.6M | $1,681.7M | $1,801.6M | |
| Adj. EBITDA margin | 43.7% | 45.1% | 42.3% | 42.2% | 42.1% | 42.8% | Flat ~42% to 45% |
| Operating cash flow | $1,215.0M | $1,404.6M | $1,274.7M | $1,348.4M | $1,519.2M | $1,518.8M | |
| Total capex | $726.5M | $533.5M | $475.5M | $717.8M | $675.9M | $818.0M | |
| Capex % revenue | 22.7% | 15.4% | 13.1% | 18.8% | 16.9% | 19.4% | Rising again (19.4% FY25, ~78% FY26 after the 8-K) |
| Free cash flow | $483.1M | $859.3M | $816.4M | $618.4M | $833.9M | $699.3M | |
| FCF YoY | n/a | +77.9% | -5.0% | -24.3% | +34.8% | -16.1% | No growth since FY2021 |
| FCF margin | 15.1% | 24.8% | 22.6% | 16.2% | 20.9% | 16.6% | 24.8% (FY21) to 16.6% |
| GAAP diluted EPS | $3.37 | $3.93 | $3.26 | $3.52 | $3.27 | $3.07 | |
| Non-GAAP diluted EPS | $5.22 | $5.74 | $5.37 | $6.20 | $6.48 | $7.12 | |
| Non-GAAP EPS YoY | n/a | +10.0% | -6.4% | +15.5% | +4.5% | +9.9% | Buyback-aided growth |
| Diluted shares (M) | 165.2 | 165.8 | 160.5 | 155.4 | 154.3 | 147.0 | |
| Diluted shares YoY | n/a | +0.4% | -3.2% | -3.2% | -0.7% | -4.7% | -11% cumulative FY20 to FY25 |
| Share repurchases | $193.6M | $522.3M | $608.0M | $654.0M | $557.5M | $800.0M | |
| Convertible notes (carrying) | $1,906.7M | $1,976.2M | $2,285.3M | $3,538.2M | $3,545.8M | $4,105.4M | |
| Convertible debt YoY | n/a | +3.6% | +15.6% | +54.8% | +0.2% | +15.8% | Debt +115% vs revenue +32% FY20 to FY25 |
Why the trends are moving
- Margin compression comes from the CIS build-out. Management attributed the Q2 26 decline to "expanded colocation investments, higher depreciation and increased headcount costs ... to help fuel faster growth for our cloud infrastructure services." Non-GAAP operating margin fell to 25% and is guided at 24% to 26% for Q3 and 25% to 26% for FY2026 (FY2026Q2 call). That is about 500 bps below the 30.5% peak in Q3 25. Cash gross margin fell 270 bps (73.7% to 71.0%) and GAAP gross margin fell 350 bps in only 3 quarters. Rising stock-based compensation also adds to the GAAP pressure: $146.3M in Q2 26 vs $112.8M a year earlier, +30% YoY.
- Capex is jumping ahead of revenue. Q2 26 capex was $346.5M, 31.5% of revenue. Q3 is guided at $475M to $525M. Full-year FY2026 capex reconciles to about $3.5B, roughly 78% of revenue: the August guide of about 40% of revenue (about $1.8B) plus the ~$1.7B memory pre-buy that the 2026-09-24 8-K added to 2026 capex. That compares with 19.4% in FY2025. Part of this restocks GPU capacity that management says is "completely sold out," backed by a 4-year $600M robotics GPU deal (announced Q2 26), a 7-year $1.8B CIS commitment from "a leading frontier model company" (announced Q1 26; the 2026-09-24 8-K confirmed Anthropic as the counterparty under an MSA dated May 5, 2026, which then added about $11.6B in Project Plans 2 and 3), and a 4-year $200M deal (Q4 25). Management says major wins this year total more than $2.8B. Revenue from the $1.8B deal is expected to start at only $20M to $25M in Q4 26 (FY2026Q1 call). The mismatch is clear: CIS revenue was only $99.3M in Q2 26 (about 9% of revenue), but it is now driving FY2026 capex of roughly 78% of revenue.
- FCF is falling, and Q3 26 could be negative. FCF margin fell from 23.4% (Q3 25) to 9.1% (Q2 26), and TTM FCF is down 31% from its peak. Q2 26 operating cash flow was $326.3M. If Q3 operating cash flow is similar and capex lands in the guided $475M to $525M range, reported FCF would turn negative for the first time in this dataset. That is our inference, not a guided number. On the reconciled ~$3.5B of FY2026 capex, 2H26 capex is about $2.9B against 1H26 operating cash flow of about $639M ($312.5M + $326.3M), so FY2026 FCF is very likely negative (our arithmetic). Management's case is "you dip down a little bit here," with high FCF margins once the capital is deployed. That payoff is still to be proven.
- The share count trend reversed. Diluted shares fell 11% from FY2020 to FY2025 on heavy buybacks ($800.0M in FY2025, the largest in company history). Even so, GAAP diluted shares rose to 153.7M in Q2 26, +5.8% YoY, and non-GAAP diluted shares rose +2.1%. GAAP diluted shares now include more convertible-note shares. The pace of buybacks also slowed, from $500.0M in Q1 25 to $205.9M in Q1 26, and the share count stopped shrinking.
- Debt is funding the build. Convertible notes rose from $4,107.6M (long-term, Q1 26) to $5,857.3M long-term plus $1,705.6M current in Q2 26, after a new zero-coupon convertible issue in two tranches "to fund our growing CIS pipeline." Convertible debt has grown faster than revenue YoY for 5 straight quarters: +15.8% from Q2 25 through Q1 26, then +84.4% in Q2 26, against revenue growth of +5% to +7%. FMP shows net debt / GAAP EBITDA at about 6.1x (company_context.md).
- Bright spots. CIS growth accelerated from +30% to about +40% and is guided to grow at least 50% for FY2026. Security revenue is now $604.4M per quarter, 55% of revenue, still growing about 10% with high margins. Non-GAAP EPS reached $7.12 in FY2025 (+9.9%). These do not offset the deterioration in margins, FCF and the balance sheet that is already visible in the reported numbers.
Scoring
| Rubric component | Evidence | Position on rubric |
|---|---|---|
| Revenue YoY | +2.5% trough to +7.4% to +5.4%; slowed 2 qtrs in a row | Stable to slightly slowing (about 4 to 5) |
| Margins | Non-GAAP OM -590 bps, GAAP OM -840 bps, EBITDA margin -570 bps, GM -350 bps from Q3 25 peak | Compressing well over 100 bps (1) |
| Share count | GAAP diluted +5.8% YoY, non-GAAP +2.1% YoY (after years of declines) | Turned to dilution (about 3) |
| FCF | TTM -31% from peak; Q2 26 YoY -57%; FY26 capex ~$3.5B (~78% of revenue) | Declining (1 to 2) |
| Initial score | 3 | |
| Penalty: negative FCF | Reported FCF still positive ($100.5M in Q2 26) | 0 (at risk in Q3 26) |
| Penalty: dilution over 10% YoY | +5.8% | 0 |
| Penalty: revenue growing, operating income declining | Revenue +5.4% vs GAAP op income $80.3M, -47.0% YoY, and non-GAAP op income -12.3% YoY; TTM GAAP op income down 33% | -1 |
| Penalty: debt growing faster than revenue 3+ quarters in a row | 5 straight quarters (Q2 25 to Q2 26) | -1 |
| Final score | 3 - 2 = 1 | 1/10 |
Quality gate: is FCF positive and growing? No. FCF is still positive but falling: TTM is down from $908M to $630M, FY2025 was $699.3M (-16.1% YoY), and FY2026 capex of about $3.5B (the August guide plus the 8-K pre-buy) points to negative FCF for FY2026.
Assessment. On a reported basis, Akamai scores at the bottom of the Financial Trends rubric. Revenue holds at +5% to +7%, but that growth is not reaching profits. Non-GAAP operating margin has fallen about 590 bps in three quarters (30.5% to 24.6%), and GAAP operating margin has roughly halved. Operating income is shrinking while revenue grows. FCF margin has fallen from the low 20s to 9%, with FY2026 capex heading to about $3.5B (~78% of revenue). The share count is rising again after five years of buyback-driven declines, and convertible debt has jumped to about $7.6B carrying value to pay for GPUs. The bull case is that this is the trough of a deliberate investment cycle: CIS is growing about 40%, more than $2.8B of multi-year commitments have been signed, and management says large GPU contracts earn low 20s to low 30s non-GAAP operating margins once deployed. If so, the forward picture (consensus +16% revenue growth in FY2027) would look very different from the backward-looking one scored here. None of that is in the reported numbers yet. Until CIS revenue ramps enough to stabilize margins and FCF, financial trends are a clear negative for the thesis.
Data sourced from Daloopa. Market data and cross-checks from FMP.