Akamai Q1 Earnings Meet Estimates, Revenues Up Y/Y on Solid Demand

Akamai Technologies, Inc. AKAM reported relatively modest first-quarter 2026 results, with revenues beating the Zacks Consensus Estimate and adjusted earnings meeting the same. The company reported 6% year-over-year revenue growth, supported by strong demand for Guardicore Segmentation and API security, with solid momentum in cloud infrastructure services. However, huge investments in GPUs, colocation and cloud infrastructure are pressuring the bottom line.Net IncomeGAAP net income declined to $106.3 million or 71 cents per share from $123.2 million or 82 cents per share in the year-ago quarter. Despite top-line growth, higher costs and operating expenses impacted the bottom line.Non-GAAP net income was $239.3 million or $1.61 per share compared with $256.1 million or $1.70 per share a year ago. The adjusted earnings were in line with the Zacks Consensus Estimate.Akamai Technologies, Inc. Price, Consensus and EPS Surprise Akamai Technologies, Inc. price-consensus-eps-surprise-chart | Akamai Technologies, Inc. QuoteRevenuesQuarterly net sales were $1.07 billion compared with $1.02 billion reported in the year-ago quarter, driven by solid growth in the Security and Cloud Infrastructure Services segments. Revenues surpassed the Zacks Consensus Estimate by 0.04%.By solution, revenues from the Security Technology Group were $589.8 million compared with $530.7 million in the year-ago quarter. The growth was primarily driven by strong demand for Web Application Firewall, API security and Guardicore solutions. Segment revenues beat our estimate of $578.2 million.The Delivery and other cloud applications segment contributed $389.2 million, down from $416.8 million in the year-ago quarter. The Cloud Infrastructure Services segment registered $94.6 million in revenues, up from $67.6 million in the prior-year quarter. The 40% year-over-year growth was driven by strong demand for artificial intelligence (AI) related GPU and cloud computing services.Region-wise, net sales from the United States were $543.1 million, up 3% year over year. International revenues totaled $530.5 million, up from $486.4 million in the year-earlier quarter.Other DetailsIn the March quarter, total operating expenses increased to $959.1 million from $860.6 million reported in the prior-year period. Non-GAAP income from operations decreased to $282.8 million compared with $307 million in the year-ago period. Adjusted EBITDA was $426.7 million, down from $441.3 million in the year-ago quarter.Cash Flow & LiquidityIn the first quarter, Akamai generated $312.5 million in cash from operations compared with $251.2 million in the year-earlier quarter. As of March 31, 2026, it had $622.4 million in cash and cash equivalents with $1.39 billion of operating lease liabilities.OutlookFor the second quarter of 2026, Akamai expects revenues in the range of $1.075 billion to $1.1 billion. Non-GAAP operating margin is projected to be in the band of 25-26%. Non-GAAP earnings are forecasted to be in the range of $1.45-$1.65 per share. For 2026, Akamai expects revenues to be between of $4.44 billion and $4.55 billion. It expects a non-GAAP operating margin of 26%. Non-GAAP earnings are projected to be in the range of $6.40-$7.15 per share.Zacks RankAkamai currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesKeysight Technologies, Inc. KEYS is scheduled to release second-quarter fiscal 2026 earnings on May 19. The Zacks Consensus Estimate for earnings is pegged at $2.33 per share, suggesting growth of 37.06% from the year-ago reported figure.Keysight has a long-term earnings growth expectation of 17.45%. The company delivered an average earnings surprise of 4.58% in the last four reported quarters.Workday, Inc. WDAY is set to release first-quarter fiscal 2027 earnings on May 21. The Zacks Consensus Estimate for earnings is pegged at $2.49 per share, implying growth of 11.7% from the year-ago reported figure.Workday has a long-term earnings growth expectation of 20.16%. The company delivered an average earnings surprise of 8.53% in the last four reported quarters.Analog Devices, Inc. ADI is set to release second-quarter fiscal 2026 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $2.88 per share, implying growth of 55.7% from the year-ago reported figure.Analog Devices has a long-term earnings growth expectation of 21.89%. 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