Akamai Technologies sells businesses protection from online attacks, faster delivery of internet content, and computing capacity for their applications. In the second quarter of 2026, revenue rose 5.4% to $1.10 billion, but the cost of expanding and running the business sharply reduced profit. Its September agreement with Anthropic makes the next challenge larger: Akamai must pay for substantial new infrastructure before the associated revenue builds. The business has stronger evidence of future demand, but turning that demand into cash now requires a much larger investment program.
Research cutoff: October 20, 2026, New York date. Financial results cover the quarter and first half ended June 30, 2026; the material subsequent contract and investment plans discussed below were announced on September 24.
Sources: Akamai’s second-quarter 2026 Form 10-Q, statements of income, p. 5; September 24 customer presentation, p. 4.
1. Security still supplies most of the growth while content delivery shrinks
Security contributed more additional second-quarter revenue than cloud infrastructure did. Customers bought more API security, web application protection and Guardicore segmentation. These products protect connections between applications, defend websites, and limit how far an intruder can move through a company’s systems.
Cloud infrastructure services grew faster, helped by sales to new and existing computing customers and by partners using Akamai’s platform. However, this business was still only 9.0% of quarterly sales. Security accounted for 55.0%, making its continued growth important to keeping consolidated sales rising during the transition.
| Revenue, US$ millions | Second quarter 2025 | Second quarter 2026 | Change |
|---|---|---|---|
| Security | 551.9 | 604.4 | 9.5% |
| Delivery and other cloud applications | 420.1 | 395.9 | −5.8% |
| Cloud infrastructure services | 71.5 | 99.3 | 39.0% |
| Consolidated revenue | 1,043.5 | 1,099.7 | 5.4% |
Reporting basis: These are revenue categories within one consolidated operating segment. Akamai introduced this presentation in 2026 and restated the 2025 comparisons to match. It does not disclose a separate operating profit for each category.
Source: Second-quarter 2026 Form 10-Q, Notes 11 and 14, pp. 23–26; management discussion, pp. 30–31. Growth rates above are calculated from unrounded amounts.
The weakness in delivery has a specific commercial cause. Customers renewed contracts at lower prices. Management also believes some customers reduced traffic carried by Akamai as they sought to lower their own costs. A customer can move traffic to another provider or build more of its own delivery system, so growth in internet activity does not automatically create growth for Akamai.
This was already a repeated pattern. On the company’s restated presentation, delivery and other cloud applications revenue fell from a year earlier in every quarter of 2025, and again in both quarters of 2026. Security grew throughout that period. Akamai’s newer businesses must therefore replace lost delivery revenue as well as add to total sales.
The change was also broader than currency movements. Second-quarter revenue growth remained approximately 5% using the previous year’s exchange rates. U.S. sales rose 4.3% and international sales rose 6.5%. For the first half, currency added $17.5 million to reported revenue, explaining part of the difference between reported growth of 5.6% and management’s rounded 5% growth at constant exchange rates.
Sources: Second-quarter 2026 Form 10-Q, management discussion, pp. 30–31 and delivery risks, p. 47; second-quarter supplemental financial information, p. 3, restated quarterly revenue history.
Management is also adding security products to sell through its existing customer relationships. In July, Akamai acquired LayerX for approximately $205 million in cash. Its technology helps companies control employees’ use of browsers and AI applications, including the transfer of sensitive information. Akamai announced the resulting Workforce Protector offering in August. The purchase expands what its sales team can offer, although it did not contribute to the June-quarter results.
Competition remains substantial. Cloudflare, whose products overlap with Akamai in network security, application delivery and developer services, reported second-quarter revenue of $696.1 million, up 35.9% from $512.3 million. That company-wide comparison covers a different mix of products and cannot measure Akamai’s security market share. It does establish that an overlapping competitor is expanding quickly. Akamai’s product additions must win customer spending, as well as broaden the catalog.
Sources: Second-quarter 2026 Form 10-Q, Note 6, p. 17; LayerX acquisition completion, July 2, 2026; Workforce Protector announcement, August 5, 2026; Cloudflare’s second-quarter 2026 earnings release, financial highlights and consolidated statements of operations.
2. Expansion costs absorbed the additional sales and more
Akamai’s operating profit fell because costs rose faster than revenue, even after management’s adjustments. The purpose of the spending is to support more computing workloads and sell more security and cloud services. The immediate result is a larger cost base before those investments produce their intended sales.
Quarterly revenue increased by $56.2 million. The cost of providing services increased by $59.4 million by itself. Research, selling, administration and the remaining operating expense lines added another $68.0 million in net cost. Together, those changes explain the $71.2 million fall in operating profit.
| Consolidated results, US$ millions except percentages and EPS | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Revenue | 1,043.5 | 1,099.7 | 2,058.6 | 2,173.3 |
| Operating profit, GAAP | 151.5 | 80.3 | 306.0 | 194.8 |
| Operating margin, calculated | 14.5% | 7.3% | 14.9% | 9.0% |
| Net income, GAAP | 103.6 | 79.4 | 226.8 | 185.7 |
| Net margin, calculated | 9.9% | 7.2% | 11.0% | 8.5% |
| Diluted EPS, US$ | 0.71 | 0.52 | 1.53 | 1.22 |
Reporting basis: GAAP means standard U.S. accounting rules. Adjusted results discussed below use management’s selected exclusions.
Source: Second-quarter 2026 Form 10-Q, statement of income, p. 5. Margins use unrounded reported profit and revenue.
Several costs show how expansion reaches the income statement. Akamai incurred higher costs for space in other companies’ data centers, network capacity and services supporting its computing partners. Second-quarter data-center space costs rose to $99.5 million from $87.2 million. Network build-out and supporting services rose to $74.4 million from $58.2 million, particularly because of computing partner costs. Headcount growth and annual pay increases also lifted expenses.
Management expects further increases in server, memory and data-center costs. It attributes some of that pressure to purchasing demand from the largest cloud providers. That matters twice: Akamai needs equipment to deliver new contracts, and a higher purchase price also increases the expense recorded as that equipment is used over time.
Stock compensation added to the increase. The expense recognized directly in earnings rose to $146.3 million from $112.8 million in the quarter. A new benefit lets eligible retiring employees continue to earn unvested awards after leaving, subject to conditions. Because employees need to work for a shorter period to qualify, Akamai recognizes some compensation expense sooner. Performance awards also contributed. The filing does not isolate a dollar amount for the retirement-policy effect, and management expects it to continue affecting 2026 expenses.
Source: Second-quarter 2026 Form 10-Q, Note 9, p. 22, and expense explanations, pp. 32–34.
Removing selected costs makes the profit decline smaller, but leaves it intact. Management’s adjusted operating profit fell 12.3% to $270.7 million, and its adjusted operating margin fell to 24.6% from 29.6%. The adjustments mainly remove stock compensation and acquisition-related amortization. Those exclusions help identify the source of the reported decline, but employee awards remain part of how Akamai pays its workforce. The complete quarterly reconciliation appears in the calculation notes.
Net income fell less sharply than operating profit because other items helped. Interest and investment income increased by $17.5 million, largely from investing the new bond proceeds. The quarterly effective tax rate fell to 20.6% from 31.8%, helped by stock-award tax benefits and changes in state tax-credit allowances and tax reserves. These benefits soften the reported earnings decline without demonstrating improved profitability from selling services. As financing proceeds are spent, the associated interest income will depend on how much cash remains invested and the yields available.
Source: Second-quarter 2026 Form 10-Q, non-operating income and taxes, pp. 35–36; GAAP-to-non-GAAP reconciliations, p. 38.
3. Customers’ payment timing reduced the cash available for investment
First-half operating cash flow declined even though noncash expenses increased. Akamai generated $638.8 million from operations, down 10.1%. The company attributes the decline to collection timing, higher payroll and larger data-center lease payments.
The clearest collection evidence is in customer invoices. Billed receivables rose to $741.8 million at June 30 from $577.9 million at December 31. Sales earned but not yet billed actually declined slightly. The increase therefore sits mainly in bills already issued to customers. In the cash-flow statement, changes in receivables used $171.8 million during the first half, compared with $33.1 million a year earlier.
The allowance for credit losses and other reserves rose only slightly, from $7.7 million to $7.8 million. The filing identifies collection timing as a cause of the cash-flow decline; it does not identify a comparable surge in expected credit losses. The immediate business effect is that recorded sales had not yet supplied the cash Akamai could use for equipment or other payments.
Customer payments ahead of service delivery helped offset part of that effect. The cash-flow contribution from deferred revenue increased to $54.0 million from $23.1 million. Changes in supplier bills and accrued operating expenses used $15.1 million, less than the $84.5 million used a year earlier.
| First-half cash generation, US$ millions | 2025 | 2026 |
|---|---|---|
| Net income | 226.789 | 185.723 |
| Depreciation and amortization added back | 349.483 | 369.288 |
| Stock compensation added back | 224.754 | 274.971 |
| Other noncash adjustments, net | 41.982 | 7.124 |
| Changes in customer, supplier and other operating balances | −132.659 | −198.332 |
| Operating cash flow | 710.349 | 638.774 |
Reporting basis: The table explains why profit differs from cash generated by operations. Depreciation spreads past asset spending over time; stock compensation records employee pay that is largely delivered in shares. Neither addition means that the underlying cost disappears. Amounts retain the filing’s precision to make the sums reproducible.
Source: Second-quarter 2026 Form 10-Q, cash-flow statements, pp. 7–8; receivables, pp. 15–16; liquidity discussion, p. 41.
For a useful spending comparison, free cash flow here means operating cash flow less cash purchases of property and equipment and cash spent developing internal-use software. Both are necessary parts of Akamai’s disclosed investment spending. This measure does not attempt to divide investment into maintenance and expansion, because the filing does not provide that split.
| First-half cash allocation, US$ millions | 2025 | 2026 |
|---|---|---|
| Operating cash flow | 710.349 | 638.774 |
| Cash purchases of property and equipment | 263.312 | 246.613 |
| Cash spending on internal-use software | 156.477 | 170.987 |
| Total cash capital spending | 419.789 | 417.600 |
| Free cash flow, calculated | 290.560 | 221.174 |
| Cash paid for share repurchases | 799.963 | 615.744 |
| Cash remaining after capital spending and repurchases, calculated | −509.403 | −394.570 |
Source: Second-quarter 2026 Form 10-Q, cash-flow statements, pp. 7–8. Capital-spending rows are positive cash outlays, subtracted in calculating the remainder.
Cash purchases do not capture all investment activity. The supplemental cash disclosures list $191.2 million of equipment and software spending included in unpaid supplier balances, versus $75.6 million at the previous June. They also disclose $75.8 million of stock compensation capitalized into assets, which is not cash investment. This helps explain why cash purchases alone do not measure all investment activity or the future expense from using those assets.
The $615.7 million spent buying shares exceeded the cash left after capital investment by $394.6 million. Separately, Akamai paid $150.1 million of employee taxes associated with share awards and received $36.0 million from employee stock plans; both appear in financing cash flows. No cash dividend payment appears in the period’s statement. These uses of cash make the source of the larger June liquidity balance particularly important.
Source: Second-quarter 2026 Form 10-Q, cash-flow statement and supplemental noncash disclosures, p. 8.
4. New debt built the cash reserve, while repayment and lease obligations grew
Akamai’s larger cash reserve came principally from borrowing. Cash and tradable investments, called marketable securities, reached $4.62 billion, but convertible-note principal rose to $7.64 billion. Subtracting that liquidity from note principal leaves $3.02 billion of debt, up from $2.22 billion at year-end. This calculation excludes operating leases and is not the bank agreement’s leverage measure.
In May, Akamai issued $3.5 billion of convertible notes carrying no regular interest payments. Management intends the proceeds to accelerate cloud infrastructure investment and support general corporate purposes. It also used some proceeds for share repurchases. After issuance costs and contracts intended to limit conversion-related dilution, the financing supplied $3.22 billion. Dilution means that additional shares spread ownership and earnings across a larger share count. Much of the money was initially invested in securities, explaining both the large investing cash outflow and higher interest income.
| Selected consolidated balances, US$ millions | December 31, 2025 | June 30, 2026 |
|---|---|---|
| Cash and cash equivalents | 930.2 | 1,480.3 |
| Short- and long-term marketable securities | 989.5 | 3,136.0 |
| Property, equipment and internal-use software, net | 2,333.5 | 2,636.0 |
| Rights to use leased property and equipment | 1,469.7 | 1,689.0 |
| Convertible-note principal | 4,140.0 | 7,640.0 |
| Operating lease liabilities | 1,570.0 | 1,776.2 |
| Total assets | 11,479.6 | 15,073.4 |
| Total liabilities | 6,502.3 | 10,324.9 |
| Stockholders’ equity | 4,977.4 | 4,748.5 |
Reporting basis: Note principal is the contractual repayment amount. The balance sheet deducts unamortized issuance costs and records the notes at $7,562.8 million at June 30 and $4,105.4 million at December 31. Operating leases are shown separately from financing debt.
Source: Second-quarter 2026 Form 10-Q, balance sheets, pp. 3–4; debt, pp. 17–21; financing discussion, pp. 41–42.
The operating assets also expanded. Net property, equipment and software increased by $302.6 million as the company invested in its platform. Software development spending is partly recorded as an asset and then charged to earnings over its useful life, rather than expensed immediately. Akamai’s research expense therefore does not include all current development spending. Cash-flow analysis must capture the capitalized portion too.
Acquisition-related intangible assets fell to $564.3 million from $614.5 million, largely through amortization, the gradual recognition of their cost. Goodwill, the acquisition price left after assigning value to identifiable net assets, stayed near $3.20 billion; its small decline was principally currency-related. No goodwill impairment trigger was identified through the filing date. The July LayerX acquisition is outside these June balances.
Deferred tax assets increased by $229.6 million. A $215.7 million deferred tax amount associated with the new convertible-note hedges explains most of that movement and was recorded through equity. These assets represent potential future tax benefits; they are not cash available for today’s construction bills.
Sources: Second-quarter 2026 Form 10-Q, pp. 3, 11, 16–17 and 33; 2025 Form 10-K, software accounting policy, Note 2, and property and equipment, Note 6.
The new notes have no scheduled interest payments, but the principal must eventually be repaid. Existing notes bring total annual contractual interest payments to approximately $22.9 million. That is a modest current interest requirement relative to the size of the debt; the larger funding issue is principal repayment alongside investment.
| Notes outstanding at June 30, 2026 | Principal, US$ millions | Annual interest rate | Scheduled maturity |
|---|---|---|---|
| 2027 notes | 1,150.0 | 0.375% | September 1, 2027 |
| 2029 notes | 1,265.0 | 1.125% | February 15, 2029 |
| 2030 notes | 1,750.0 | 0.000% | May 15, 2030 |
| 2032 notes | 1,750.0 | 0.000% | May 15, 2032 |
| 2033 notes | 1,725.0 | 0.250% | May 15, 2033 |
The maturity dates do not capture every potential cash demand. Holders could elect to convert the 2033 notes during the third quarter because a contractual share-price condition had been met. Akamai accordingly classified their $1,705.6 million carrying amount as a current liability. Conversion requires the principal to be settled in cash; the excess can be settled in cash, shares or both. No conversion had occurred through the August 7 filing date. Holders can also demand repayment in May 2031 if the share price is below the contract’s conversion price at the specified testing date.
The $1.48 billion cash balance alone was below the $1.725 billion principal of those convertible notes, although securities added substantial liquidity. Of the securities classified as available for sale, $1.87 billion were due within a year and $1.23 billion within one to five years. Some investment proceeds would therefore depend on selling securities before their scheduled maturity if cash were needed sooner.
Source: Second-quarter 2026 Form 10-Q, investment maturities, p. 14; convertible-note terms, pp. 17–21. The conversion-status statement is limited to the filing date.
Akamai also had an undrawn $1 billion committed bank facility expiring in November 2028, subject to conditions and covenants, and reported compliance at June 30. A separate $150 million facility is uncommitted and cancellable, so it provides less dependable backup. The calculation notes explain the bank leverage restriction without treating the full undrawn amount as unrestricted cash.
Lease obligations are another continuing claim on cash. First-half payments for operating lease liabilities increased to $225.1 million from $156.0 million. Part of the balance-sheet increase relates to Virginia data-center space leased onward to a social-media customer’s affiliate. The last portion commenced in January, and management expects the lease payments and associated sublease income to substantially offset. Consequently, the gross lease increase cannot all be attributed to Akamai’s own cloud expansion. The business still carries the underlying lease obligation, making payment by the subtenant relevant to cash management.
Sources: Second-quarter 2026 Form 10-Q, p. 8 and credit facilities and leases, pp. 20 and 42; 2025 Form 10-K, Note 12, pp. 79–81.
5. The Anthropic agreement requires a much larger investment program
The September contract provides a much larger sales opportunity, with spending scheduled before substantial new revenue. Akamai announced $11.6 billion of additional Anthropic commitments over seven years for CPU computing workloads. These are workloads using general-purpose processors. The agreement adds to more than $2.8 billion of previously announced cloud infrastructure commitments across customers.
The June order book already showed a longer delivery horizon. Remaining performance obligations—contracted services still to be provided—were $7.6 billion, versus $5.2 billion at December 31. Akamai expected to recognize about 40% within the following twelve months, compared with 55% at year-end. Thus, the larger total increasingly concerns later service periods. It is not yet recognized revenue, but includes deferred revenue that primarily represents payments already received. It excludes uncommitted usage and anticipated renewals.
Sources: September 24 Anthropic announcement; second-quarter 2026 Form 10-Q, Note 11, pp. 23–24; 2025 Form 10-K, Note 16, p. 83.
Management estimates $5.5 billion of capital expenditure for the new Anthropic commitment. The September announcement left 2026 revenue guidance unchanged while adding approximately $1.7 billion to expected 2026 capital spending. The timing is central to the business assessment:
| Management’s September 24 plan for the new agreement | Capital outlay, US$ billions | Associated revenue, US$ billions |
|---|---|---|
| Fourth quarter 2026 | 1.7 | 0.0 |
| Full year 2027 | 3.1 | 0.15–0.30 |
| Full year 2028 | 0.7 | Builds toward full annual pace by year-end |
| Thereafter | 0.0 | Approximately 1.7 annually over the remaining term |
| Entire agreement | 5.5 | Approximately 11.6 in total |
Reporting basis: These are management estimates for this agreement, not consolidated company forecasts or completed spending. Service is expected to begin in late second-quarter 2027. Operating costs continue after the construction program.
Source: September 24 customer presentation, p. 4; September 24 announcement, capital-spending and 2026 guidance paragraphs.
The pre-purchase of components is a practical response to supply risk. Akamai authorized Jabil to buy approximately $1.7 billion of memory, with Akamai paying the supplier invoice amounts when Jabil receives the components. Jabil holds them for Akamai and repurchases them at cost as they are used. This arrangement secures components earlier while putting cash into parts before the finished capacity earns service revenue. June’s balance sheet did not separately present inventory; the September arrangement creates a new exposure to components awaiting use.
Anthropic’s commitment is conditional on delivery and service availability. Serious contract breaches that remain uncorrected and certain major outages can permit termination. This makes reliable deployment a financial requirement: equipment can be paid for before Akamai has satisfied the conditions for earning the planned revenue.
Source: September 24 Form 8-K, Item 1.01, Anthropic Master Services Agreement and Jabil Agreement.
The strongest evidence in favor of the expansion is the signed customer commitment. It gives Akamai a clearer use for the capacity than building solely in anticipation of demand. The difficult part is funding and executing that use. New-contract capital outlays planned for late 2026 and 2027 total $4.8 billion, already above June’s $4.62 billion of cash and securities before considering future operating cash inflows, the July acquisition, other investment, or debt payments.
That comparison is a scale test, not a forecast of a cash shortfall. Future operations can contribute cash, spending and collections occur over time, and financing may be available. But the June balance does not by itself fund the entire expansion while preserving cash for other obligations. Management’s August statement that resources covered at least twelve months of foreseeable needs preceded the much larger September commitment. The required funding plan now needs to cover the later spending schedule as well.
The revenue total also does not disclose the agreement’s profit. Running the servers requires electricity, data-center space, support and other operating costs. The documents reviewed do not provide a complete contract-level cost and cash-collection schedule. Those terms, deployment progress and actual customer receipts will determine how quickly the commitment improves consolidated cash generation.
Sources: September 24 customer presentation, p. 4; second-quarter 2026 Form 10-Q, liquidity outlook, p. 43, and infrastructure risks, pp. 48–49. Funding implications are this report’s assessment of the disclosed amounts and timing.
6. Pausing repurchases preserves cash, but dilution remains part of the cost
Management’s planned pause in repurchases directs more cash toward the infrastructure build. Akamai said it did not expect further share repurchases during the remainder of 2026, even though $564.8 million remained authorized at June 30. Management described the program’s purposes as offsetting employee-share dilution and allowing capital returns while preserving strategic flexibility.
The first-half share movement shows why the repurchase total overstates the reduction in shares outstanding. Akamai bought approximately 5.0 million shares, but issued approximately 3.7 million net new shares through employee awards and its purchase plan. It also reissued approximately 0.2 million treasury shares for retirement-plan contributions. Shares outstanding therefore fell by only 1.1 million, from 144.7 million to 143.6 million. The repurchased shares remained in treasury stock, meaning shares held by Akamai itself; they were not retired.
The diluted earnings calculation moved in the opposite direction. Second-quarter average diluted shares rose to 153.7 million from 145.2 million, despite almost unchanged average basic shares. The calculation included 5.4 million additional shares associated with convertible notes and a larger contribution from stock awards. As a result, reported diluted EPS fell 26.8%, faster than the 23.4% decline in net income.
Akamai purchased separate note hedges to offset some potential conversion dilution. Accounting rules do not count their offsetting shares in diluted EPS before delivery. This helps explain the difference between reported and adjusted share counts, but it does not remove the cash requirement to repay note principal.
Source: Second-quarter 2026 Form 10-Q, equity statement, p. 11; Notes 7, 9 and 13, pp. 18–22 and 24–25; adjusted share-count explanation, p. 39; repurchase outlook, p. 42.
The Anthropic arrangement adds another potential source of shares. Its warrant, a right to buy shares at an agreed price, represents up to 7,741,020 common shares through convertible preferred stock. The first 40% depends on the first payment under Project Plan 3; the remainder depends on further commercial commitments. These are conditional rights, not shares already outstanding at June 30.
Source: September 24 Form 8-K, Item 1.01, Warrant Agreement and Series B Preferred Stock.
Management says the accounting value of the initial warrant portion reduces revenue and is already reflected in the $11.6 billion commitment figure. It should not be deducted again from that figure. The commercial benefit is a larger customer relationship; the economic cost includes potential dilution as well as construction and operating spending.
Source: September 24 customer presentation, p. 7, warrant accounting considerations.
7. Akamai has secured demand that still needs to become profit and cash
The business opportunity is stronger, but the spending cycle is advancing faster than the earnings benefit. Security continues to generate most current sales growth, while delivery pricing remains a drag. Cloud contracts give management a concrete reason to expand capacity, yet the second-quarter results show that staffing, partner payments and infrastructure costs are already weighing on consolidated profit.
The debt financing and planned repurchase pause give Akamai resources and flexibility to carry out the next stage. The September agreement also raises the scale of what must be delivered and funded. The decisive business test is whether Akamai installs capacity on schedule, meets service conditions and collects customer payments while controlling the cost of operating that capacity.
Successful execution would turn a larger base of contracted work into recurring service revenue and eventually a larger source of cash. Delayed deployment, slower collections or further increases in equipment and data-center costs would lengthen the period during which the business needs funding ahead of the benefit. The current evidence supports a substantial expansion opportunity, with cash management and execution now as important as signing additional customers.
Sources: Second-quarter 2026 Form 10-Q, operating costs, pp. 32–34, and liquidity, pp. 41–43; September 24 Form 8-K, Item 1.01. The conclusion is an assessment of the reported results and disclosed plans.
Reporting basis and calculation notes
Filing identity, periods and sources
Reporting basis: Akamai Technologies, Inc., ticker AKAM, CIK 0001086222; Form 10-Q, accession 0001086222-26-000086, filed August 7, 2026, for the period ended June 30, 2026. The accounts consolidate Akamai and its wholly owned subsidiaries and eliminate transactions between them. They are unaudited U.S. GAAP interim accounts. Second-quarter comparisons cover April–June; first-half comparisons cover January–June. Balance-sheet comparisons use December 31, 2025 and June 30, 2026.
The supplied complete filing text was the foundation. SEC XBRL facts were checked against the selected accession, exact start/end dates and USD or share units. In particular, the revenue fact uses the taxonomy’s revenue-including-assessed-tax label; the amount was matched to the filing rather than inferred from the tag name. The company’s restated solution categories were used consistently. Tables may not sum exactly because of rounding.
The latest material transaction documents used are dated September 24, 2026. They provide plans and contract terms, not third-quarter financial results.
Sources: SEC filing index; SEC company facts; 2025 Form 10-K, accession 0001086222-26-000022, filed February 20, 2026.
How reported and adjusted quarterly earnings connect
Calculation notes: All amounts below are US$ millions. Positive adjustments are expenses management removes. Operating-profit adjustments are pretax; the net-income reconciliation includes the company’s disclosed combined tax adjustment. The tax row includes specific tax benefits and charges; it is not simply a standard tax rate applied to the rows above it.
| Second-quarter reconciliation | 2025 | 2026 |
|---|---|---|
| Reported operating profit | 151.461 | 80.284 |
| Add: amortization of acquired intangibles | 27.721 | 25.089 |
| Add: stock compensation | 112.776 | 146.290 |
| Add: previously capitalized stock compensation and interest charged this quarter | 12.288 | 15.434 |
| Add: restructuring charge | 3.103 | 1.825 |
| Add: acquisition-related costs | 1.274 | 1.788 |
| Adjusted operating profit | 308.623 | 270.710 |
| Reported net income | 103.618 | 79.404 |
| Add: the five operating adjustments above, combined | 157.162 | 190.426 |
| Add: bond-issuance fees charged this quarter | 1.645 | 3.032 |
| Deduct: tax effect of adjustments and specific tax items | −11.069 | −37.039 |
| Adjusted net income | 251.356 | 235.823 |
Capitalized costs are initially recorded in assets and then charged to profit over time. Bond-issuance fees are also spread over time. The adjusted results retain costs such as network-equipment depreciation, ordinary payroll, data-center space and partner services. They are not estimates of recurring cash profit. Growth equals the current amount divided by the same-period prior amount, minus one. A margin equals the relevant profit divided by consolidated revenue. The operating-margin decline is 7.21 percentage points on a reported basis and 4.96 percentage points on management’s adjusted basis.
Source: Second-quarter 2026 Form 10-Q, pp. 36–39.
Cash, collections and funding checks
Calculation notes: Dollar amounts in these checks are US$ millions. The operating-cash table’s other noncash adjustments include deferred taxes, debt-cost amortization, investment gains where applicable, and the filing’s other adjustments. Free cash flow excludes acquisitions, investment-security purchases, share-award tax payments and financing proceeds.
The cash statement includes restricted cash. The table below reconciles the opening and closing balances for both first-half periods. Closing restricted cash is 1.482, leaving balance-sheet cash of 1,480.257. Opening restricted cash is 1.077.
| First-half cash and restricted cash, US$ millions | 2025 | 2026 |
|---|---|---|
| Opening balance | 519.084 | 931.308 |
| Operating cash flow | 710.349 | 638.774 |
| Investing cash flow | 193.980 | −2,573.759 |
| Financing cash flow | −593.455 | 2,484.837 |
| Exchange-rate effect | 21.501 | 0.579 |
| Closing balance | 851.459 | 1,481.739 |
Financing cash flow also reflects a timing difference in debt repayments: Akamai repaid $1,150.0 million of maturing notes in the first half of 2025, with no note repayment in the first half of 2026.
Net cash from the new notes and associated equity contracts is 3,452.749 after issuance costs + 657.125 from warrants sold − 893.725 for note hedges purchased = 3,216.149. The net hedge-and-warrant cash cost is 236.600. Purchases of marketable securities less sale and maturity proceeds used 2,153.020 of cash; buying these investments changes the form in which liquidity is held.
The receivable reserve check is opening reserves of 7.706 + charges of 7.192 − collections from previously reserved customers and other movements of 7.095 = closing reserves of 7.803. The filing combines collections and other movements; that last line should not be described entirely as write-offs or a reserve release. The balance-sheet increase in accounts payable also includes investment-related amounts, so it is not interchangeable with the operating cash-flow movement in supplier bills.
Source: Second-quarter 2026 Form 10-Q, pp. 7–8, 15–16 and 41.
Equity and balance-sheet checks
Calculation notes: All dollar amounts here are US$ millions. Equity is the recorded value left after liabilities are subtracted from assets. June assets of 15,073.420 equal liabilities of 10,324.903 plus equity of 4,748.517. December assets of 11,479.643 equal liabilities of 6,502.272 plus equity of 4,977.371.
| Change in first-half 2026 equity | US$ millions |
|---|---|
| Opening equity | 4,977.371 |
| Increase in common-stock account | 0.037 |
| Increase in additional paid-in capital | 208.551 |
| Net increase in treasury-stock cost | −601.027 |
| Net income added to retained earnings | 185.723 |
| Currency translation loss | −13.616 |
| Unrealized investment loss after tax | −8.522 |
| Closing equity | 4,748.517 |
Additional paid-in capital records equity contributions and related share transactions beyond the shares’ nominal value. It rose from 2,080.487 to 2,289.038. Additions comprised 348.113 of stock compensation, 657.125 of warrant proceeds and 35.247 from employee share purchases. These were partly offset by 153.943 for net award settlements and 677.991 for note hedges after deferred tax. The stock-compensation entry here covers equity accounting; the earnings and cash-flow statements separately show amounts expensed and capitalized.
Treasury-stock cost rose by repurchases recorded in equity of 617.557, less 16.530 of shares reissued for retirement-plan matching. The 617.557 equity entry differs from 615.744 of paid cash repurchases; this report uses the cash-flow amount for spending comparisons. Retained earnings rose solely by net income, from 3,424.929 to 3,610.652. Accumulated other comprehensive loss increased from 94.756 to 116.894 through the two losses shown above. These are changes recorded outside net income.
The exact outstanding-share check is 144,711,094 opening shares + 3,229,413 net award shares + 463,290 employee-purchase shares − 4,998,432 repurchased shares + 186,085 reissued treasury shares = 143,591,450. Issued shares and outstanding shares differ because the company holds treasury shares.
Source: Second-quarter 2026 Form 10-Q, pp. 3–4 and 11; Note 10, p. 23.
Debt, leases and contingent obligations
Calculation notes: Annual scheduled note interest in US$ millions is 1,725 × 0.250% + 1,265 × 1.125% + 1,150 × 0.375% = 22.856. The two new issues carry no scheduled interest payments. Accounting interest expense also includes issuance-cost amortization and bank fees, net of capitalized interest, so scheduled cash interest is not identical to reported interest expense.
The committed bank facility limits debt relative to a specifically adjusted measure of earnings. Section 6.04, as revised by the May 18, 2026 amendment, sets the maximum at 4.75 times for the quarters ending June 30 and September 30, 2026, returning to 3.50 times from December 31, 2026. A qualifying-acquisition provision permits 4.00 times for four consecutive quarters ending on or after December 31, 2026, under stated conditions. The reviewed 2025 amendments changed rates, capacity and maturity without changing that covenant section. The May 2026 amendment also makes failure to execute and bring into effect a further amendment by December 31, 2026 an event of default. That further amendment must address pricing, credit support, covenants and related provisions to the extent reasonably requested and approved by the administrative agent and required lenders. Akamai reported compliance at June 30. The filing does not supply the complete lender calculation, so this report does not estimate remaining borrowing capacity from a simple ratio of reported debt to profit.
Sources: Second-quarter 2026 Form 10-Q, Note 7, pp. 17–21; November 22, 2022 credit agreement, definitions and Section 6.04; April 17, 2025 amendment, Section 1; May 12, 2025 amendment, Section 1.
The latest detailed lease schedule in the reviewed accounts is dated December 31, 2025. It shows future cash payments before discounting them to a present balance-sheet value:
| Lease payment year, as scheduled at December 31, 2025 | US$ millions |
|---|---|
| 2026 | 342.473 |
| 2027 | 269.512 |
| 2028 | 228.628 |
| 2029 | 205.845 |
| 2030 | 167.658 |
| Thereafter | 651.810 |
| Total | 1,865.926 |
These historical amounts exclude leases not yet commenced and sublease receipts. They are not June’s remaining payments. The total includes 560.262 for the Virginia data center, against separately disclosed expected sublease income of 566.5. Another 187.1 portion commenced in January 2026. All amounts are US$ millions.
Akamai reported routine legal and regulatory matters and did not expect them to materially affect its business or finances at the August filing date. The reviewed disclosures give no quantified reasonably possible loss range for those matters. Akamai also promises to reimburse certain third-party losses, including intellectual-property claims. The annual filing described potentially unlimited aggregate payments under these indemnities, with no liability accrued or history of material related costs.
Tax uncertainty also remains distinct from the lower current tax rate. At December 31, 2025, gross unrecognized tax benefits were $85.6 million, with $25.8 million of related accrued interest and penalties. Certain returns for 2015–2024 were under audit. These are the annual filing’s dated amounts; the June tax note does not provide an updated roll-forward. The quarterly filing also identifies data-transfer rules, content restrictions and evolving AI regulation as potential operating costs and sources of liability. No additional loss estimate is assumed here.
Sources: 2025 Form 10-K, Notes 12–13, pp. 79–81, and Note 19, p. 91; second-quarter 2026 Form 10-Q, Note 12, p. 24; legal proceedings, p. 45, and regulatory risks, pp. 56–59.
This report is for informational purposes and is not investment advice.