Akamai posted a solid Q3 2025, delivering $1.055 billion in revenue driven by continued strength in its Security segment (up 10% YoY) and accelerating growth in Cloud/Compute, including a 39% surge in Cloud Infrastructure Services, while legacy Delivery declined 4% YoY. Profitability improved sharply, with GAAP EPS rising to $0.97 and non-GAAP EPS up 17% to $1.86, supported by stronger margins and lower restructuring charges. Cash flow remained robust at $442 million, and management emphasized strategic momentum with the launch of the Akamai Inference Cloud, positioning the company deeper into edge-AI and cloud infrastructure. Overall, the quarter underscores Akamai’s ongoing transition from a CDN-centric business toward higher-growth, higher-margin security, cloud, and AI-driven services.
Management has guided for Q4 revenue to fall in the range of $1.065–$1.085 billion and reaffirmed its full-year expectations of $4.178–$4.198 billion in sales. Profitability guidance also remains solid: the company projects non-GAAP EPS of $1.65–$1.85 for Q4 and $6.93–$7.13 for the full year, alongside a 29–30% non-GAAP operating margin target, which reflects confidence in a mix shift toward higher-margin security and cloud infrastructure offerings. Management noted that growth will be driven primarily by continued strength in security, expansion of cloud infrastructure services, and early traction from the new Akamai Inference Cloud, while acknowledging that legacy delivery revenue will continue to be a drag on growth.
In May 2024, Akamai acquired digital security company, Noname Security for about $450 million. Noname is one of the top Application Programming Interface security vendors. API security is a growing market, given that APIs - which are essentially software interfaces enabling communication between programs - handle crucial data and are attractive targets for attackers. Akamai has been seeing strong demand in this space, aided by its prior acquisition of Neosec another API security player. IDC Research predicts that the API security market will expand at an annual rate of 34% to nearly $1 billion by 2027.
Akamai has been increasingly doubling down on the cloud computing space in recent quarters, taking on the likes of Amazon, Alphabet, and Microsoft. Akamai could see an upside if it executes well in the computing market which is sizeable and lucrative. Akamai has a network of 350,000 edge servers, across 4,300 locations, which are located away from metropolitan centers, giving the company considerable geographic scale.
Akamai Technologies is a global content delivery network and cloud services provider, focused on improving the speed, reliability, and security of online content and applications. The company is estimated to deliver between 15-30% of the global web traffic. Many popular websites use Akamai for content delivery, which means that some of the content you view when visiting these sites is delivered from a nearby Akamai server, rather than the company's servers.
We believe the Security Division is the more valuable segment within Akamai, given its higher revenue base ($2.04 billion in 2024, compared to $1.32 billion for the Delivery business). Moreover, the division has also been growing faster, averaging a growth rate of about 15% over the last two years, compared to the delivery division, which is declining.
Akamai's value proposition has evolved beyond being the fastest content delivery network. As competitors grow increasingly capable of fast content delivery at similar prices, Akamai has positioned itself as a full-service provider -- touting its ability to offer multiple value-added services, such as the delivery of targeted advertising and cloud-based security for its customers.
Media content is rising at a significant pace as a greater amount of video moves online and video quality increases (for example, HD video). Some of the services that are stimulating this trend are Netflix, Hulu, and YouTube. Although growing media demand is an opportunity, it is also a source of gross margin pressure, since one of Akamai's largest costs is the cost of bandwidth to deliver data. Akamai passes on some of these costs to customers in the form of a bandwidth usage-based pricing structure; however, Akamai's pricing will be under pressure from volume discounts and competition from other content delivery networks.
Akamai has historically charged premium prices to its customers for fast and secure delivery of its web content. However, the company is increasingly competitive on pricing, particularly on video content, to attract more customers and traffic to its network. In several deals, it has even outbid its competitors on price. This is likely to win more customers for Akamai but may put pressure on margins.
