Akamai Technologies, Inc.

Good day, everyone, and welcome to the Q2 2026 Akamai Technologies, Inc. earnings conference call. All participants will be in a 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 questions. To ask a question, you may press star and then one using a touchtone telephone. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Mark Stoutenberg, head of IR. Sir, please go ahead.

Good afternoon, everyone, and thank you for joining Akamai's second quarter 2026 earnings call. Speaking today will be Tom Leighton, Akamai's chief executive officer, and Ed McGowan, Akamai's chief financial officer. Please note that today's comments include forward-looking statements that include 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 with our filings with the SEC. The statements included on today's call represent the company's views on August 6th, 2026, and we assume no obligation to update any forward-looking statements. As a reminder, we will be referring to certain non-GAAP financial metrics during today's call. A detailed gap to non-gap reconciliation is available in the investor relations section of Akamai.com under financials. With that, I'll now hand the call off to our CEO, Dr. Tom Leighton.

Thanks, Mark. I'm very pleased to report that Akamai continues to build momentum and gain wide industry recognition as a key infrastructure provider for the AI-driven economy. Akamai has long been known for operating the world's most distributed platform for content delivery and cybersecurity at global scale and with a reputation for reliability, quality, and trust. And now we're leveraging our global footprint and years of experience serving the world's largest enterprises to do for the AI-driven economy what we've done for cybersecurity and content delivery. The response from industry leaders and major enterprises has been very strong. In fact, we were very pleased to announce today that a US-based technology company has committed more than $600 million over four years for our cloud infrastructure services to power their robotics development. The addition of this new customer brings the total volume of the multi-year commitment signed so far this year for our cloud infrastructure services to more than $2.8 billion. As a result of these commitments and the exceptionally strong pipeline we're seeing, we now anticipate that Akamai's overall revenue growth will accelerate into the low teens in 2027. For investors who want to understand how the AI market is evolving and why Akamai is such a unique and vital player in this new ecosystem, We encourage you to read the July 23rd article in Fast Company by Victor Day. In the article, Day explains the role played by Akamai's distributed platform in transforming the content delivery and cybersecurity marketplaces and how a similar approach can benefit the AI ecosystem, with many agentic workloads being processed at the edge, close to users, instead of in massive centralized data centers. In a related blog, IDC analyst Dave McCarthy considers a world transformed by AI agents and the practical challenges of automated execution of queries against a trained model. Whereas training frontier models requires massive data centers and energy consumption, the next challenge for AI is what it will take to run those models everywhere at low latency and with affordable cost. It's also helpful to read a recent blog by Akamai's CTO, Bobby Blumofe, on how AI inference is reshaping the cloud. Bobby's post explains why the infrastructure needed for AI agents will ultimately be a flexible continuum, stretching from the core to the edge. As the market for AI moves beyond centralized AI factories, Akamai's strategy is to provide a unified distributed grid for AI inference. By pushing AI inference to the edge and combining it with our massive deployment of CPUs for delivery, security, and functions as a service, our platform will enable customers to run agents and models within milliseconds of their end users with the responsiveness of local compute and the scale of the global web, optimizing performance while reducing latency and cost. Customers are already leveraging our cloud infrastructure services for a wide variety of repeatable use cases. For example, an AI patent intelligence platform in Singapore shifted its inference workloads from a hyperscaler to Akamai, boosting performance by 30% and cutting infrastructure costs by 20%. An AI-powered decision intelligence platform in Poland chose us to run low latency game theory simulations globally, and with predictable costs. An enterprise data storage provider in the US chose us to run their high throughput storage observability and analytics platform. A global AI software company in India chose us to run their GenAI image creation in a $12 million win over a hyperscaler. An AI powered communications provider in India chose us to eliminate unpredictable hyperscaler billing and accelerate their customer engagement. And a SaaS media workflow platform in the US chose us for high throughput live media encoding. Looking across our business as a whole, AI is not only driving adoption and revenue growth for Akamai Cloud, AI has also been a tailwind for our security solutions. In Q2, Akamai security revenue grew 10% year over year as reported and 9% in constant currency. Security growth was led once again by strong demand for our market-leading web app firewall, API security, and GuardaCore segmentation solutions. Our WAF continued to see strong demand in Q2 from customers eager to protect against vulnerabilities that could be exposed by frontier models like Mythos or GPT 5.5. Customers that added or significantly expanded their WAF usage in Q2 included one of the world's leading commerce sites, One of the world's leading automakers and one of the world's largest banks in a $14 million upgrade to have Akamai secure all of their applications. We also signed renewal upgrades for security and CIS products with one of the world's largest telcos in a contract worth more than $20 million over two years. And today, we're also very pleased to announce that CrowdStrike, a leading AI-native cybersecurity platform, has switched to Akamai, for its web security and content delivery needs. CrowdStrike told us they were dissatisfied with the inconsistent service they received from one of our SMB-focused competitors. We see this validation from another security leader as a strong endorsement of Akamai's enterprise security capabilities and our hard-won reputation for trust, reliability, and dedicated customer support. On the go-to-market front, we recently announced that Akamai has been selected as a strategic partner for WWT's AI Readiness Model for Operational Resilience, or ARMR for short. This is the industry's first holistic, vendor-agnostic AI security framework, and our inclusion positions Akamai as a foundational security architecture for the AI factories being built by WWT and accelerated by NVIDIA. Without this collaborative security framework for AI, organizations are often forced to piece together fragmented security strategies. By aligning the Akamai security portfolio with Armour, we provide a methodology to protect large-scale AI clusters proactively by preventing the lateral movement of threats. As WWT's Chris Conrad said, no single vendor can secure the AI frontier alone. Through our close partnership with Akamai, we're turning the hype of secure enterprise AI into a tangible, scalable reality for customers. Akamai is also proud to be one of the industry's must-have security providers, partnering with Anthropic and OpenAI to help ensure the safe and rapid deployment of AI-enhanced defenses. With our access to programs like GlassWing and Daybreak and our participation in programs like the Open Secure AI Alliance, We're applying our expertise to help keep major enterprises and critical infrastructure secure. As employees across all industries use AI tools more frequently, enterprises need more help to secure their workforce and prevent sensitive data from being leaked. That's why we acquired LayerX, a leading provider of secure enterprise browser and AI usage control. With LayerX, now rebranded as Akamai Workforce Protector, we're able to give security teams the deep visibility they need to see exactly how users are interacting with web content, SaaS applications, file uploads, and even raw AI prompts. By adding this browser security platform to our portfolio, Akamai is now uniquely positioned to protect enterprises from unauthorized AI agents. whether they're operating on a user's laptop or living inside internal applications that talk to external LLMs. What makes the combination particularly exciting is how nicely Workforce Protector aligns with Akamai's existing Zero Trust portfolio, including our GuardaCore micro-segmentation, Zero Trust network access, and DNS security solutions that thousands of enterprises rely on today. Ultimately, we believe these combined capabilities will deliver a powerful, unified workforce security solution that directly addresses one of the industry's most urgent challenges, securing and governing how employees, partners, and supply chain ecosystems interact with AI. LayerX is the latest in a series of acquisitions we've made to build out our security portfolio and make it easier for enterprises to obtain more comprehensive solutions from Akamai, as their strategic security partner. Overall, we expect our security portfolio to generate more than $2.4 billion in revenue this year, making Akamai one of the largest security providers in the market. In summary, we're excited to see AI driving demand for our cloud and security portfolios, and we're grateful for our talented team here at Akamai, who continue to perform extraordinary work Thanks, Tom.