AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · The installed global footprint and reported shared-infrastructure savings are tangible strengths. Relative cost superiority and protected economics remain unverified, while actual renewal concessions demonstrate competitive weakness.
durability · 1/4 · Infrastructure remains useful, but recurring renewal price declines and continuing delivery contraction weaken evidence of durable value capture. Cloud infrastructure requires further development and adoption.
customer dependency · 1/4 · Existing-customer upselling demonstrates some relationship value, but realized traffic reductions and customers' ability to redistribute workloads or use DIY alternatives indicate limited dependency. Migration costs are not quantified.
erosion resilience · 1/4 · Security and compute growth provide offsets, but delivery erosion persists and first-half profitability weakened. These are realized outcomes, rather than hypothetical risk factors alone.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Some delivery and security customers obtained lower prices at renewal in recent years. Upselling partly mitigated the revenue effect but does not demonstrate higher like-for-like pricing; the repricing initiative has no supplied achieved outcome.
retention · 2/4 · Incremental sales to existing customers demonstrate repeat demand, while traffic losses and alternative sourcing show leakage. This is an indirect operating assessment; no renewal or churn rate is supplied.
margin resilience · 1/4 · Shared-infrastructure savings provide an offset, but first-half net income margin fell from 11% to 9% and Adjusted EBITDA margin from 43% to 39%. Investment and compensation costs also affect these outcomes, so the decline cannot be attributed entirely to pricing.
contractual freedom · 2/4 · The renewal initiative shows scope to negotiate unit prices and multi-year terms. Actual competitive concessions demonstrate constrained bargaining power. Detailed escalation, termination and minimum-purchase provisions are unavailable.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 0.42
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.93
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Interest coverage (x)
- 18.43
- Current ratio (x)
- 2.36
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -2.94
- 3-year average SBC / revenue (%)
- 9.80
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Strong 2025 operating cash generation and a long-term reduction in outstanding shares support discipline. First-half 2026 repurchases, substantial new convertible financing and reduced cash flow from investment and debt obligations make the record mixed. The announced repurchase pause is a prospective allocation decision, not a completed investment return.
incentive alignment · 2/4 · Half of executive annual equity awards are performance-based with forfeiture, and recoupment provisions exist. Annual performance periods and compensation metrics excluding stock compensation and other costs weaken alignment with long-term economic returns. Personal ownership exposure is not established.
execution · 2/4 · Reported 2025 total, security and compute revenue growth demonstrate operating progress. Continuing delivery declines and weaker first-half 2026 earnings offset that achievement. Customer adoption is assessed indirectly from revenue and upselling; AI investment success remains unproven.
governance · 2/4 · Independent director sessions, independent compensation-plan administration and recoupment provisions are actual disclosed safeguards. Board vacancy-filling powers, nomination requirements and authority to issue undesignated preferred stock constrain shareholder influence. Proposed governance changes are not counted as adopted.
Evidence
As of December 31, 2025, our massively distributed global infrastructure was comprised of core and distributed compute sites, more than 4,300 edge points-of-presence in over 130 countries and approximately 700 cities, and our underlying global network integrated with roughly 1,200 network partners.
Item 1, Business overview; infrastructure as of December 31, 2025 · Filed 20/02/2026
With this scale and distribution, Akamai has visibility and insight into traffic volumes, congestion, attack patterns, vulnerabilities and other activities across the internet's complex intersections of networks and systems.
Item 1, Business overview; management description of infrastructure visibility · Filed 20/02/2026
Importantly, delivering key parts of these solutions on our own shared infrastructure has allowed us to significantly reduce third-party cloud spend.
Stockholder letter; reported reduction in third-party cloud spending · Filed 31/03/2026
•The prices paid by some of our delivery and security customers have declined in recent years at contract renewal due to competition, which negatively impacts our revenue growth rates.
MD&A; realized delivery and security renewal price declines · Filed 07/08/2026
We have been able to mitigate some of the negative impacts to our revenue growth rates by upselling incremental solutions to our existing customers.
MD&A; incremental sales to existing customers · Filed 07/08/2026
We are taking steps upon contract renewals to sign customers to multi-year contracts that reflect the significant cost increases we have experienced from hyperscaler market dynamics and their traffic volumes to better align unit pricing.
MD&A; steps toward multi-year renewal contracts and unit pricing changes · Filed 07/08/2026
Revenue from our delivery and other cloud applications solutions is impacted by pricing pressure due to competition and fluctuations in content traffic as a result of, among other factors, changes in the popularity of our customers' content including video delivery and gaming, and economic pressures on our customers that can cause them to take steps to optimize their platforms, including through "do-it-yourself" ("DIY") initiatives or redistributing traffic among multiple providers.
Risk factors; pricing pressure, DIY initiatives and traffic redistribution · Filed 07/08/2026
Such steps by our customers have in the past and may in the future reduce traffic on our network, negatively impacting revenue.
Risk factors; realized customer traffic reductions and revenue effects · Filed 07/08/2026
Although the rate of decline has diminished in recent periods, we have continued to experience revenue declines in our delivery and other cloud applications solutions, and ongoing competition, pricing pressure, and potential further shifts toward DIY or alternative sourcing strategies may continue to impact our delivery revenue.
Risk factors; continuing delivery and other cloud applications revenue declines · Filed 07/08/2026
Closing the year with strong momentum, we delivered $4,208 million in total revenue, a 5% year-over-year increase, and outperformed expectations across key financial metrics.
Stockholder letter; 2025 total revenue and growth · Filed 31/03/2026
Security remained our primary revenue driver, with our portfolio growing 10% to $2.24 billion.
Stockholder letter; 2025 security revenue and growth · Filed 31/03/2026
Simultaneously, we significantly expanded our cloud computing footprint; our compute portfolio generated $708 million in revenue, growing 12% year-over-year.
Stockholder letter; 2025 compute revenue and growth · Filed 31/03/2026
39 Table of Contents The following table reconciles GAAP net income to Adjusted EBITDA and Adjusted EBITDA margin for the periods presented (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 79,404 $ 103,618 $ 185,723 $ 226,789 Interest and marketable securities income, net (31,672) (14,129) (49,219) (33,659) Provision for income taxes 20,623 48,320 36,302 98,532 Depreciation and amortization 145,356 135,757 289,223 270,061 Amortization of capitalized stock-based compensation and capitalized interest expense 15,434 12,288 30,450 24,647 Amortization of acquired intangible assets 25,089 27,721 50,276 55,358 Stock-based compensation 146,290 112,776 274,971 224,754 Restructuring charge 1,825 3,103 2,008 3,464 Acquisition-related costs 1,788 1,274 1,029 1,369 Interest expense 9,078 8,201 17,335 14,951 Gain on cost method investments, net — — — (9,313) Other expense, net 2,851 5,451 4,637 8,744 Adjusted EBITDA $ 416,066 $ 444,380 $ 842,735 $ 885,697 Net income margin 7 % 10 % 9 % 11 % Adjusted EBITDA margin 38 % 43 % 39 % 43 % Impact of Foreign Currency Exchange Rates Revenue and earnings from our international operations have historically been an important contributor to our financial results.
MD&A; quarterly and first-half net income and Adjusted EBITDA reconciliation · Filed 07/08/2026
In 2025, we delivered strong operating cash flow of $1.52 billion, or 36% of revenue.
Stockholder letter; 2025 operating cash flow · Filed 31/03/2026
Since January 1, 2015, Akamai has reduced the number of shares of common stock outstanding by approximately 18%.
Stockholder letter; reduction in outstanding shares since January 1, 2015 · Filed 31/03/2026
These growing capital expenditures, together with ongoing operating expenses and our obligations to service our substantial indebtedness, have reduced and may continue to reduce our cash flow.
Risk factors; realized cash-flow effects of investment and debt obligations · Filed 07/08/2026
During the six months ended June 30, 2026, we repurchased 5.0 million shares of common stock at a weighted average price of $123.19 per share for an aggregate of $615.7 million.
Liquidity and capital resources; first-half 2026 share repurchases · Filed 07/08/2026
We do not expect any share repurchases for the remainder of 2026 as we continue to invest in our platform to support cloud infrastructure services.
Liquidity and capital resources; expected cessation of repurchases for remainder of 2026 · Filed 07/08/2026
Convertible Senior Notes In May 2026, we issued $1,750.0 million in principal amount of convertible senior notes due 2030 ("2030 Notes") and $1,750.0 million in principal amount of convertible senior notes due 2032 ("2032 Notes") and entered into related convertible note hedge and warrant transactions.
Liquidity and capital resources; May 2026 convertible note issuance · Filed 07/08/2026
Stock-Based Compensation Components of total stock-based compensation included in the Company’s interim condensed consolidated statements of income for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 24,659 $ 19,314 $ 46,336 $ 38,242 Research and development 53,997 39,803 102,854 82,071 Sales and marketing 26,456 22,263 51,437 44,703 General and administrative 41,178 31,396 74,344 59,738 Total stock-based compensation 146,290 112,776 274,971 224,754 Provision for income taxes (39,236) (20,465) (74,457) (35,262) Total stock-based compensation, net of income taxes $ 107,054 $ 92,311 $ 200,514 $ 189,492 In addition to the amounts of stock-based compensation reported in the table above, the Company’s interim condensed consolidated statements of income also include stock-based compensation reflected as a component of amortization primarily consisting of capitalized internal-use software; the additional stock-based compensation was $15.2 million and $30.1 million for the three and six months ended June 30, 2026, respectively, before taxes, and $12.2 million and $24.4 million for the three and six months ended June 30, 2025, respectively, before taxes.
Stockholders' equity note; first-half stock-based compensation · Filed 07/08/2026
Annual equity awards to our executive team, including our executive officers, are 50% service-based and 50% performance-based, with shares not earned for a period being forfeited.
Equity plan discussion; existing executive award composition and forfeiture · Filed 31/03/2026
The TL&C Committee also carefully considered the implications of using one-year performance periods, as opposed to a single three-year period, and determined that the current approach was best aligned with our business realities and is supported by our peer group practice.
Executive compensation; annual performance periods · Filed 31/03/2026
“Non-GAAP Operating Income” means our annual GAAP operating income adjusted for the following items: amortization of acquired intangible assets, stock-based compensation, amortization of capitalized stock-based compensation, amortization of capitalized interest expense, restructuring charges, acquisition-related costs, legal settlements, the impact of fluctuations in foreign currency exchange rates and other non-recurring or unusual items that may arise from time to time.
Financial metrics definitions; compensation metric exclusions · Filed 31/03/2026
Our independent directors meet separately as part of each Board meeting and at other times as appropriate.
Corporate governance; independent director sessions · Filed 31/03/2026
/81/ Table of Contents Administered by an independent committee The 2013 Plan, as amended, is administered by the TL&C Committee, which is made up entirely of independent directors.
Equity plan discussion; independent committee administration · Filed 31/03/2026
Awards subject to forfeiture/clawback Awards under the 2013 Plan, as amended, are subject to recoupment under certain circumstances.
Equity plan discussion; award recoupment provisions · Filed 31/03/2026
For example, our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director; stockholders must provide advance notice, additional disclosures and representations and warranties to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders' meeting; and our board of directors can issue, without stockholder approval, shares of undesignated preferred stock.
Risk factors; board powers and shareholder nomination requirements · Filed 07/08/2026
Our ability to generate revenue in our cloud infrastructure services solutions depends on our ability to successfully continue building our platform, developing AI capabilities, attract a customer base that has traditionally partnered with more established companies in the cloud computing industry, develop effective, price competitive and attractive solutions and increase prices without reducing customer adoption, usage or retention.
Risk factors; cloud infrastructure adoption, platform development and pricing dependencies · Filed 07/08/2026
