AKAMAI TECHNOLOGIES INC (AKAM)

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AI: Fair-priced

Price checkThe shares look fairly priced because cash value is offset by heavy growth spending.

At $124.99, 143.6 million shares imply a market value near $17.95 billion. Last-four-quarter operating cash of $1.45 billion less $491 million of cash capital spending gives roughly $956 million of free cash flow, meaning cash left after operating and investing in the business. That equals a 5.3% yield, or 18.8 times the price. The price is also 18.6 times midpoint 2026 company-adjusted earnings, but 45 times $2.77 of accounting earnings. These balanced signals support a fair-priced verdict.

Big pictureSecurity and cloud growth remain durable, but older delivery services and profits are shrinking.

Revenue increased from $3.20 billion in 2020 to $4.21 billion in 2025, about 5.6% annually. Operating cash held near $1.52 billion in both 2024 and 2025, showing resilience, yet net income fell from $652 million in 2021 to $452 million in 2025. Second-quarter 2026 security and cloud-infrastructure revenue grew 10% and 39%, respectively, while delivery and other cloud applications declined 6%. That older business faces renewal-price pressure, and increased infrastructure spending reduced the accounting operating margin from 15% to 7% year over year.

Business strengthStrong liquidity and buybacks help shareholders, although debt and employee share awards have climbed.

June liquidity was substantial: $4.62 billion of cash and marketable securities, versus $2.84 billion of current liabilities. However, convertible borrowings totaled $7.56 billion, leaving roughly $2.95 billion of net debt before leases. Shares outstanding declined 11.7%, from 162.7 million in 2020 to 143.6 million, after roughly $3.95 billion of cash buybacks through June 2026. The offset is rising employee share compensation: $459 million in 2025 and $275 million during 2026’s first half. Second-quarter repurchases averaged $134.54, above the observed price, while full-year guidance assumes 150 million diluted shares.

What could change the storyContract execution could unlock faster growth, while weak returns on new equipment would expose leverage.

The bull case rests on more than $2.8 billion of signed multi-year cloud commitments and management’s expectation that total revenue growth reaches the low teens in 2027. The current price requires those contracts to produce cash while security growth offsets declining delivery revenue. The bear case is visible in second-quarter capital spending equal to 32% of revenue and a 7% accounting operating margin. Confirmation would be sustained security and cloud growth, mid-20% adjusted margins and recovering free cash flow. Delayed deployments or weak equipment use would make the debt-funded expansion and customer concentration much riskier.

$124.99 price considered

AI: News

Mixed second-quarter updateGrowth beat expectations, but falling profits and higher spending exposed the cost of the cloud shift.

On August 6, revenue reached $1.10 billion, 5% above last year and about $8 million above expectations. Adjusted earnings were $1.59 per share versus $1.57 expected, but accounting earnings fell 27% to $0.52 and the operating margin dropped to 7%. The upper end of full-year adjusted earnings guidance declined from $7.15 to $7.05. Shares closed 6.8% lower on August 7; the timing suggests a reaction to the update, although it does not prove sole causation.

Large cloud commitmentsTwo major customer commitments improved future sales visibility but require substantial equipment spending first.

Akamai announced a seven-year, $1.8 billion cloud commitment on May 7, followed by a new four-year commitment exceeding $600 million on August 6. Total multi-year cloud commitments signed during 2026 consequently surpassed $2.8 billion. Shares rose about 28% on May 8 after the first announcement, a reaction reported alongside the earnings release. These contracts support faster growth, but revenue arrives over several years while Akamai must purchase graphics processors and expand data centers beforehand, creating execution and customer-concentration risk.

Debt-funded cloud expansionA large zero-interest note sale funded cloud equipment while increasing repayment and possible dilution risks.

On May 22, Akamai completed $3.5 billion of convertible notes that pay no regular interest and mature in 2030 and 2032. About $350 million funded an immediate share repurchase and $236.6 million covered the net cost of transactions designed to reduce dilution; remaining proceeds primarily support accelerated cloud expansion. Initial conversion prices were $201.41 and $190.81, well above the observed share price. The financing lowers near-term interest expense, but total convertible borrowings reached $7.56 billion by June, making returns on the new infrastructure increasingly important.

LayerX acquisitionThe browser-security purchase expands artificial-intelligence protection, though its near-term revenue contribution is small.

On May 14, Akamai agreed to acquire LayerX for approximately $205 million. LayerX supplies browser-based controls that monitor employee interactions with websites, software services and artificial-intelligence tools. Management expected only about $10 million of annual recurring revenue by year-end and roughly $0.12 of 2026 adjusted earnings dilution. The strategic opportunity is cross-selling workforce protection to Akamai’s enterprise security customers. The bear case is straightforward: the purchase price is large relative to current revenue, so meaningful value depends on integration and future sales growth.

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Free cash flow

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007
Revenue	$4.21B	$3.99B	$3.81B	$3.62B	$3.46B	$3.20B	$2.89B	$2.71B	$2.49B	$2.35B	$2.20B	$1.96B	$1.58B	$1.37B	$1.16B	$1.02B	$859.8M	$790.9M	$636.4M
Research & development	$513.6M	$470.9M	$406.0M	$391.4M	$335.4M	$269.3M	$261.4M	$246.2M	$222.4M	$167.6M	$148.6M	$125.3M	$93.9M	$74.7M	$52.3M	$54.8M	$43.7M	$39.2M	$44.1M
Operating income	$566.9M	$533.4M	$637.3M	$676.3M	$783.1M	$658.5M	$548.9M	$362.5M	$314.3M	$466.5M	$466.1M	$489.5M	$414.0M	$314.5M	$290.6M	$254.3M	$223.5M	$212.3M	$144.9M
EBITDAderived	$1.28B	$1.18B	$1.21B	$1.27B	$1.33B	$1.14B	$989.6M	$797.0M	$686.6M	$800.8M	$765.7M	$736.9M	$598.4M	$518.6M	$458.5M	$397.5M	$346.0M	$310.3M	$216.8M
Net income	$452.0M	$504.9M	$547.6M	$523.7M	$651.6M	$557.1M	$478.0M	$298.4M	$222.8M	$320.7M	$321.4M	$333.9M	$293.5M	$204.0M	$200.9M	$171.2M	$145.9M	$145.1M	$101.0M
Basic EPSper diluted share	$3.11	$3.34	$3.59	$3.29	$4.01	$3.43	$2.94	$1.78	$1.30	$1.83	$1.80	$1.87	$1.65	$1.15	$1.09	$0.97	$0.85	$0.87	$0.62
Diluted EPSper diluted share	$3.07	$3.27	$3.52	$3.26	$3.93	$3.37	$2.90	$1.76	$1.29	$1.82	$1.78	$1.84	$1.61	$1.12	$1.07	$0.90	$0.78	$0.79	$0.56

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys5$6.83M disclosed value

Sells (SEC code S)61$26.89M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 18, 2026Form 4 · 10b5-1	Blumofe RobertChief Technology Officer	SellCommon Stock	243	$129.41	$31.4K	31.0K
Jun 10, 2026Form 4 · 10b5-1	Salem-Jackson KimEVP, Chief Marketing Officer	SellCommon Stock	2.3K	$135.57	$311.8K	59.2K
Mar 16, 2026Form 4 · 10b5-1	Joseph Paul CEVP - Global Sales	SellCommon Stock	83	$108.00	$9.0K	34.5K
Mar 16, 2026Form 4 · 10b5-1	Joseph Paul CEVP - Global Sales	SellCommon Stock	1.9K	$106.73	$208.1K	34.6K
Mar 16, 2026Form 4 · 10b5-1	Joseph Paul CEVP - Global Sales	SellCommon Stock	3.0K	$105.89	$314.2K	36.6K

Review ownership filings at SEC.gov ↗

AKAMAI TECHNOLOGIES INC (AKAM)

Financial charts

Financial statements

Insider buys & sells