Akamai Technologies, Inc.

Good day and welcome to the third quarter 2025 Akamai Technologies, Inc. Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Mark Stoutenberg, Head of Investment Relations. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining Akamai's third quarter 2025 earnings call. Speaking today will be Tom Layton, Akamai's Chief Executive Officer, and Ed McGowan, Akamai's Chief Financial Officer. Please note that today's comments include forward-looking statements, including those regarding revenue and earnings guidance. These forward-looking statements are based on current expectations and assumptions that are subject to certain risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied. The factors include, but are not limited to, any impact from macroeconomic trends, the integration of any acquisition, geopolitical developments, and other risk factors identified in our filings with the SEC. The statements included on today's call represent the company's views on November 6, 2025, and we assume no obligation to update any of these forward-looking statements. As a reminder, we'll be referring to certain non-GAAP financial metrics during today's call. A detailed reconciliation of GAAP to non-GAAP metrics can be found under the financial portion of the investor relations section of Akamai.com. With that, I'll now hand the call off to our CEO, Dr. Tom Leon.

Thanks, Mark. I'm pleased to report that Akamai had a strong third quarter, with results coming in above expectations for revenue, margin, and earnings per share. Revenue grew to $1.055 billion, up 5% year-over-year as reported, and up 4% in constant currency. Non-GAAP operating margins improved to 31%. And non-GAAP earnings per share was $1.86, up 17% year-over-year as reported and in constant currency. Our business performed well across the spectrum of our portfolio with accelerating momentum for our cloud infrastructure services, or CIS, continued strong demand for our high-growth security products, and continued stabilization of our delivery revenue. We're especially pleased with the greater recognition of the strength of our distributed platform and differentiated strategy among customers and industry analysts. For investors who may be less familiar with how we have transformed Akamai's business model from the CDN pioneer to a leader in cloud security and distributed cloud computing, I encourage you to read the new report on Akamai from IDC, titled Akamai, Navigating the Cloud Frontier, a Transformation from CDN to to distributed cloud provider. It offers an objective third-party perspective of how Akamai has evolved, our strategy, and our key differentiators in security and distributed cloud computing for AI inferencing at the edge. You can find the report on our website. As a great proof point for the advantages offered by Akamai's uniquely distributed compute capabilities, the top three cloud providers in the U.S. are all now using Akamai Cloud Infrastructure Services. And in Q3, one of them signed an expanded multi-year renewal that solidifies Akamai's position to be their premier distributed cloud computing provider. This customer has a dominant position at the core of the Internet and uses our widely distributed managed container service to get their business logic closer to end users for superior performance. Our revenue for cloud infrastructure services in Q3 was $81 million. up 39% year-over-year as reported and in constant currency. That's an acceleration from the 30% growth rate we had in Q2. We signed many new and expanded contracts for our cloud infrastructure services in Q3, including with a major global appliance and consumer electronics manufacturer in South Korea, a multinational financial services company in Singapore, a leading US developer of analytics software, a US-based supply chain planning software vendor, a European cybersecurity provider, a major US airline, a leading American video game company, a leading media and entertainment company in India, and one of the largest media companies in the world. Also, a multinational gaming company in Japan contracted for our cloud infrastructure services as part of a larger $37 million two-year renewal, for an array of Akamai products and services. Last week, I was with our team at the AI Industry Conference NVIDIA GTC, where Akamai took a major step toward the future with the launch of Akamai Inference Cloud, our platform to support the growing demand to scale AI inference on the Internet. With the rise of AI, the Internet is undergoing a fundamental shift in architecture. The Internet we're building today is driven by AI. where human intelligence is supported and augmented by intelligent systems powered by AI inference. Akamai is positioned to power inference the way we power the web, by bringing inference physically close to users. This will enable faster performance and global scale to support intelligent applications worldwide. When the web was first taking hold, the need for performance and scale is what catalyzed Akamai's founding. Akamai helped to end what was known as the worldwide wait, enabling the internet to scale to provide real-time services to billions of people around the world. Subsequently, we introduced web security as a cloud service, enabling the web to be used safely for myriad critical applications, such as banking and commerce. We see the same need for performance, scale, and security playing out again with AI inference today. By combining highly scaled GPU and compute capacity with Akamai's unparalleled global reach and security at the edge, Akamai Inference Cloud enables intelligence to run instantly, securely, and exactly where it's needed, right next to the user, agent, or device. This is how Akamai can power the new generation of AI applications, conversational, personalized, and agentic. all designed to scale in real time to meet unprecedented demand. As we look at AI investment cycles, we see the market at a transition point. Until now, the AI story has largely focused on training, the initial creation of AI models from massive amounts of underlying data. To train foundation models, AI pioneers have relied on hyperscale clouds and their centralized data centers. with their enormous concentrations of compute, power, and capital. We believe that AI inference, or the execution of queries against a trained model, is the new frontier, one that requires purpose-built infrastructure to enable distributed, low latency, globally scalable inference at the edge, with response times measured in a few tens of milliseconds. As AI systems are adopted at scale, we expect the growth of inference will drive enormous demand to this new intelligent layer of the Internet. And we're not the only ones who see it coming. Fortune Business Insights noted in a report on the rising global AI inference market that due to rising demand for real-time, low-latency AI processing near data sources, edge inference leads the market and is projected to grow at the highest CAGR of all AI inference models. And as NVIDIA's founder and CEO, Jensen Wong, said when we launched Akamai Inference Cloud at GTC, quote, inference has become the most compute-intensive phase of AI, demanding real-time reasoning at planetary scale. Together, NVIDIA and Akamai are moving inference closer to users everywhere, delivering faster, more scalable generative AI, and unlocking the next generation of intelligent applications, end quote. Akamai Inference Cloud brings together Akamai's globally distributed architecture and expertise with NVIDIA's Blackwell AI infrastructure to provide the computing needed to unlock AI's true potential. The service is available today with 17 locations around the world, and we're building out more points of presence as customer demand grows. One of our initial customers, Monk's, The European digital first marketing technology services and consulting company said, quote, with Akamai Inference Cloud, we will accelerate the delivery of key capabilities, including identifying players and plays and delivering tactical insights to coaches while the game is still happening. That's only possible by distributing advanced GPUs to the edge. And we believe it will transform how we approach sports broadcasting and and immersive fan experiences, end quote. Another customer, Harmonic, whose technology helps to distribute video content for television and the Internet, said, quote, Akamai Inference Cloud will allow us to run larger parameter, more capable models locally, expanding the number of functions we can deliver cost-effectively within the same compute instance to deliver fast response times, sophisticated personalization, and more enriching video content, end quote. At Akamai, we believe the technology ecosystem that enables the AI revolution will require multiple providers of AI infrastructure, the hyperscalers, NVIDIA, and also Akamai, with our unique distributed capabilities and our unparalleled expertise at the edge. We are very excited about what lies ahead. The edge, of course, is also where Akamai deploys our security solutions. And as customers speak with us about their plans for AI inferencing, they tell us they see valuable synergy between Akamai security and delivery product lines and our cloud computing capabilities. And how they trust Akamai to help make the internet faster, more reliable, and secure for their businesses. Akamai security growth in Q3 continued to be driven by strong demand for our market-leading segmentation solution and by rapidly growing customer adoption of our API security solution. Combined, these high-growth security products grew revenue 35% year-over-year as reported and 34% in constant currency. Our segmentation wins in Q3 included a $3 million expansion contract, to give one of North America's largest healthcare technology companies the visibility and control they didn't have before. A $1 million contract with the European Insurance Group that is also a net new Akamai customer. A multi-year contract with a large insurance company in Korea. And an expansion contract with a large bank in Mexico to extend their initial deployment across their operations in Latin America. In Q3, we also continue to see growing interest in our market-leading API security solution as organizations shift towards an API-first strategy and expand their use of AI applications that rely on APIs in a fundamental way. Adopt tools that enable them to discover and monitor deployed APIs and to manage risk. Comply with stricter data protection regulations, especially in Europe. and respond to public reports of API-related breaches that have raised awareness and increased the stakes for financial and reputational loss. Akamai API security wins in Q3 included a $7 million contract for API security with one of Europe's most important banks as part of a $31 million multi-year commitment for security and compute. Adoption of API security as part of a $20 million expansion contract with one of the world's largest airlines. An expansion of API security as part of a $42 million contract across the breadth of our portfolio with one of the world's largest software companies. A $2.6 million contract with one of the largest life insurance groups in Asia. The displacement of a competitor at a FinTech payments provider in Brazil. And we also signed seven-figure contracts for API security with two of the ten largest financial institutions in the U.S. and one of the largest banks in Canada. We're also pleased to note that for the sixth straight year, Akamai has been named Customer's Choice in Gartner's latest Voice of the Customer report for cloud web application and API protection. Akamai was also recognized as Customer Choice in Gartner's Voice of the Customer report on online fraud detection. Before I turn the call over to Ed, I'd like to express my gratitude to our employees for their great work in Q3 and for making Akamai a great place to work. In recognition of your efforts, Glassdoor named Akamai as one of their top 50 best-led companies of 2025. Now I'll turn the call over to Ed to say more on our Q3 results and our outlook for Q4 and the year. Ed?