Key financial results
- Revenue: Total revenue in the third quarter was $1.122 billion, up 6% year-over-year as reported and up 7% in constant currency.
Total revenue in the third quarter was $1.122 billion, up 6% year-over-year as reported and up 7% in constant currency.
- Earnings: Non-GAAP net income was $262 million, yielding $1.77 of earnings per diluted share, down 5% year-over-year as reported and down 2% in constant currency.
In Q3, we generated non-GAAP net income of $262 million from $1.77 of earnings per diluted share, down 5% year-over-year as reported and down 2% in constant currency.
- Margins and CapEx: Non-GAAP operating margin for the third quarter was 25%, and capital expenditures were $464 million, or 41% of revenue.
Non-GAAP operating margin for Q3 was 25%, in line with our expectations. And Q3 CapEx was $464 million or 41% of revenue.
Business segment results
- Cloud Infrastructure Services: Cloud Infrastructure Services revenue reached $109 million, representing 34% year-over-year growth as reported and 35% in constant currency.
Cloud Infrastructure Services or CIS revenue was $109 million, representing 34% year-over-year growth as reported and 35% in constant currency.
- Security: Security revenue grew to $622 million, up 9% year-over-year as reported and 10% in constant currency, driven by API security and Guardicore segmentation solutions.
Security revenue maintained strong momentum with revenue of $622 million, up 9% year-over-year as reported and 10% in constant currency.
- Delivery and other cloud applications: Delivery and other cloud applications revenue was $391 million, down 3% year-over-year as reported and in constant currency.
Revenue was $391 million, down 3% year-over-year as reported and in constant currency.
- International: International revenue was $563 million, up 7% year-over-year or 9% in constant currency, accounting for approximately 50% of total revenue.
International revenue was $563 million, up 7% year-over-year or up 9% in constant currency, representing approximately 50% of total revenue in Q3.
Capital allocation
- Share buybacks: The company did not repurchase any stock during the third quarter, leaving approximately $565 million remaining on its current authorization.
In Q3, we did not repurchase any stock. Year-to-date, we have repurchased roughly 5 million shares for a total of approximately $616 million.
- Balance sheet: Cash, cash equivalents, and marketable securities totaled approximately $4.2 billion as of September 30, 2026.
As of September 30, we had approximately $4.2 billion of cash, cash equivalents and marketable securities.
Industry trends and dynamics
- AI demand: Management noted that AI continues to act as a tailwind for security solutions and cloud infrastructure, with CPU servers playing a primary role due to efficiency and versatility.
AI continues to be a tailwind for our security solutions as more AI agents act on behalf of users and enterprises
- Infrastructure access: The company secured all necessary space, power, and colocation for its large contracts, insulating itself against broader market power constraints.
We have secured and contracted for all the necessary space and power or colo required to deliver the full contract value
Competitive landscape
- Global footprint: Akamai highlights its distributed platform with over 4,000 points of presence across 130 countries, providing lower latency and higher throughput for latency-sensitive applications.
With more than 4,000 points of presence in 130 countries, we can get our customers' compute workloads closer to users and devices wherever they are in the world.
- Analyst recognition: Industry analysts at IDC and Forrester recognized Akamai as a leader in web app firewall, API security, and Guardicore segmentation solutions.
We were especially pleased to see Akamai recognized as a leader in each of these 3 product areas and reports last quarter from industry analysts at IDC and Forrester.
Macroeconomic environment
- Foreign exchange: Foreign exchange fluctuations had a negative impact on revenue of $1 million sequentially and $7 million year-over-year in the third quarter.
U.S. foreign exchange fluctuations had a negative impact on revenue of $1 million on a sequential basis and negative $7 million on a year-over-year basis.
Growth opportunities and strategies
- Product expansion: Akamai expanded its cloud portfolio with the launch of Akamai Inference and Akamai agent sandbox to support model training and agent execution.
Just last week, we expanded our cloud portfolio with the launch of Akamai Inference and Akamai agent sandbox.
- Anthropic partnership: The company signed an $11.6 billion commitment over 7 years with Anthropic, bringing total multiyear cloud commitments signed in the year to over $14 billion.
Most notably, we signed an $11.6 billion commitment over 7 years with Anthropic to support their CPU workloads with our distributed infrastructure and software.
Financial guidance and outlook
- Q4 2026 guidance: For the fourth quarter of 2026, Akamai expects revenue of $1.145 billion to $1.170 billion and non-GAAP EPS of $1.50 to $1.70.
- Full year 2026 guidance: For full year 2026, the company expects revenue of $4.40 billion to $4.465 billion and non-GAAP EPS of $6.47 to $6.68.
- 2027 outlook: Management anticipates 2027 cloud infrastructure services revenue of $1.1 billion to $1.3 billion, driving total revenue growth of 17% to 22% in constant currency.
- 2028 outlook: Total company revenue is expected to surpass $7 billion in 2028.
We expect further acceleration in 2028 with our overall revenue growing beyond $7 billion.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total revenue | $1.122 billion | Up 6% year-over-year as reported |
| Cloud Infrastructure Services revenue | $109 million | Up 34% year-over-year as reported |
| Security revenue | $622 million | Up 9% year-over-year as reported |
| Delivery and other cloud applications revenue | $391 million | Down 3% year-over-year as reported |
| Non-GAAP earnings per diluted share | $1.77 | Down 5% year-over-year as reported |
| CapEx | $464 million | Not stated |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management expressed strong confidence in multiyear CIS commitments and accelerating 2027 growth despite temporary near-term supply chain delays. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The revenue ramp and execution of the major Cloud Infrastructure Services contracts through 2027 and 2028.
- The pacing of supply chain deliveries and colocation availability for large customer deployments.
- Securing capital and managing leverage for upcoming convertible note maturities and CapEx spend.
Earlier calls
- Q2 2026 (Aug 6, 2026), tone Balanced: Akamai reported Q2 2026 revenue of $1.1 billion, up 5% year-over-year, driven by strong growth in cloud infrastructure services and security solutions.
