- Revenue Growth: Q2 2025 revenue rose 7% YoY to $1.043 billion, with FY2025 revenue guidance set at $4.135–$4.205 billion (4–5% growth).
- Non-GAAP Earnings: Non-GAAP EPS increased 9% YoY to $1.73, with full-year guidance of $6.60–$6.80, and Q3 EBITDA margin projected at ~41%.
- CIS Expansion: Cloud Infrastructure Services revenue surged 30% YoY to $71 million, driven by large deals, with growth expected to accelerate into 2026.
- Security Segment: Security revenue grew 11% YoY to $552 million, fueled by API security and Guardicore Segmentation, with AI firewall solutions in development.
- Compute Business Surge: Compute revenue growth exceeded expectations at 40–45% YoY, driven by large contracts and strong demand for AI infrastructure solutions.
Security Business Strength and New AI Gateway Solution
In security, revenue grew 11% year-over-year to $552 million, driven by strong demand for Guardicore Segmentation solution and API security solutions. Akamai introduced its new AI gateway solution, which addresses the challenges of deploying large language models, and its firewall for AI, which fights prompt abuse and model compromise. F. Thomson Leighton highlighted Akamai's leading capability in AI firewall, which protects customer-facing AI applications from prompt injection attacks.
Compute Business Exceeds Expectations and Guidance
The company's compute business is exceeding expectations, with a growth rate of 40% to 45% expected for the full year. The company has signed several large contracts, including one with minimum commitments, which will contribute to the growth. The company's delivery business is also performing well, with an improvement in trends due to the exit of some competitors and the company's ability to upsell and cross-sell to customers. Edward J. McGowan attributed the growth to a healthier market, with higher traffic growth and moderating pricing declines.
Valuation and Guidance
Akamai's guidance for Q3 and full-year 2025 includes revenue growth of 3% to 4% year-over-year and 4% to 5% year-over-year, respectively. The company expects non-GAAP operating margin to be around 29% and non-GAAP EPS to be $6.60 to $6.80 for the full year. With a P/E Ratio of 23.22 and a P/S Ratio of 2.57, Akamai's valuation seems to be pricing in its strong growth prospects. The company's ROIC and ROE are also healthy, at 4.4% and 9.52%, respectively.