Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 6 of last 6 quarters
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Akamai's accelerating CIS growth and $2.8B in multiyear commitments underscore the shift toward distributed AI inference infrastructure. The company's ability to secure large GPU deals and expand its edge footprint positions it as a key player in the AI infrastructure buildout, particularly for latency-sensitive workloads like robotics and agentic AI.
Akamai reported Q2 revenue of $1.1B, up 5% YoY, with CIS revenue of $99M up 39% YoY. Security revenue grew 10% YoY, driven by API security and Guardicore. Delivery revenue declined 6% YoY. Non-GAAP EPS was $1.59, down 8% YoY. The company announced a $600M, 4-year CIS deal with a US robotics company, bringing total multiyear commitments this year to over $2.8B. CapEx was $347M, below guidance due to GPU shipment timing. The company also completed the LayerX acquisition for $205M and raised $3.5B in convertible debt.
Management provided full-year 2026 revenue guidance of $4.445B-$4.530B (up 6-8% as reported, 5-7% constant currency) and expects CIS revenue to grow at least 50% in constant currency. They anticipate overall revenue growth to accelerate to low teens in 2027, driven by over $2.8B in multiyear CIS commitments signed this year, including a new $600M robotics deal. CIS revenue is expected to accelerate meaningfully in Q4 and further in 2027. Non-GAAP operating margin is expected to remain in the mid-20s for the remainder of 2026. CapEx is projected at ~40% of revenue for the full year, with Q3 CapEx stepping up significantly to $475M-$525M. Management is pausing share repurchases to reallocate capital to support CIS growth.
“We are very pleased to announce today that a US based technology company has committed more than $600 million over 4 years for our cloud infrastructure services to power their robotics development.”
on New CIS deal
“As a result of these commitments, and the exceptionally strong pipeline we are seeing, we now anticipate that Akamai's overall revenue growth will accelerate into the low teens in 2027.”
on 2027 growth outlook
“GPU demand remains exceptionally strong. As a result, all of our GPU capacity is completely sold out.”
on GPU capacity
Given the strong pipeline and being sold out, does that preclude signing more significant deals in the near future?
No, because we are ordering more hardware. Typically, there is a 6-9 month window for larger deals. We are placing another order with NVIDIA for additional GPUs, some to satisfy the new order and some based on strong pipeline demand. Customers are essentially preordering, like a reserve instance model.
Is the 6-9 month window from deal signing to revenue recognition? And has the margin profile of these deals remained consistent given component pricing fluctuations?
Yes, it is between signing and revenue recognition. For large deals, we may need additional data center space, which we have coming online. The margin profile is consistent; we have mechanisms to pass on price increases in hardware or memory costs. Pricing is collaborative, and we are able to mark up prices on follow-on orders.
Given the upfront costs, when do these deals achieve the stated profitability? Are they cost-plus contracts protected against inflation?
There may be a quarter of noise with costs ahead of revenue, but generally, revenue ramps quickly to full profitability within about a quarter. Contracts are structured with escalators to cover cost increases, and we negotiate fixed terms for data center and power costs. We have mechanisms to adjust pricing if there are variations in component costs.