Akamai reported a strong Q1 and announced a record $1.8 billion, 7-year cloud infrastructure deal with a leading frontier AI model company, signaling a major acceleration in its AI cloud business. Management raised the CIS growth outlook and guided to double-digit total revenue growth in 2027, backed by substantial capex investments. Signed a landmark 7-year, $1.8 billion cloud infrastructure commitment with a leading frontier model company, the largest deal in Akamai's history, set to ramp in Q4.
Akamai reported a strong Q1 and announced a record $1.8 billion, 7-year cloud infrastructure deal with a leading frontier AI model company, signaling a major acceleration in its AI cloud business. Management raised the CIS growth outlook and guided to double-digit total revenue growth in 2027, backed by substantial capex investments. Signed a landmark 7-year, $1.8 billion cloud infrastructure commitment with a leading frontier model company, the largest deal in Akamai's history, set to ramp in Q4.
Akamai reported a strong Q1 and announced a record $1.8 billion, 7-year cloud infrastructure deal with a leading frontier AI model company, signaling a major acceleration in its AI cloud business. Management raised the CIS growth outlook and guided to double-digit total revenue…
Guidance · revenue to $4.4975B
CIS revenue grew 40% YoY to $95 million, and the full-year growth outlook was raised to at least 50% in constant currency.
Full-year 2026 revenue guidance is maintained at $4.445-$4.55 billion, but management expects 2027 total growth to reach double digits.
Management is positioning Akamai as a key infrastructure provider for AI, with a landmark $1.8 billion commitment from a frontier model company and a rapidly building pipeline for AI workloads. They emphasize their distributed edge for AI inference, competing with hyperscalers and neoclouds, and see AI as a significant tailwind for both cloud and security demand.
Management is highly bullish, citing a record $1.8 billion customer commitment that accelerates growth and justifies significant capital expenditure investments, guiding to double-digit revenue growth in 2027.
Capital expenditures are set to jump significantly, with Q2 guidance of 40-41% of revenue and full-year 40-42%, driven by GPU deliveries and the new $1.8 billion deal. Management expects to spend $800-825 million over the next 12 months for this deal and may place additional GPU orders in H2 to meet strong demand, which is not yet reflected in guidance.
Management expresses strong confidence in the growth strategy, highlighting a landmark customer win, accelerating pipeline, and positive market reaction, while announcing plans for significant investment to capitalize on opportunities.
“Finally, regarding CapEx for this win, we expect to spend a total of approximately $800 to $825 million over the next 12 months to support this customer.”
“Our current pipeline for GPUs significantly exceeds our existing and projected inventory, meaning we may place additional GPU orders in the second half of the year to meet this demand.”
“we have mechanisms in our contracts to deal with. if, in fact, say six months from now prices were to go up. So we've taken that into consideration.”
“Our WAF runs in 4,300 locations across 700 cities to intercept the attack traffic right where it enters the internet and well before it can coalesce onto the target.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Capex | FY2026 | 40%–42% | 41% | RAISED |
| EPS | FY2026 | $6.40–$7.15inline 컨센서스 대비 | $6.78 | MAINTAINED |
| Op margin | FY2026 | 26%inline 컨센서스 대비 | 26% | MAINTAINED |
| Revenue | FY2026 | $4.445B–$4.55Binline 컨센서스 대비 | $4.4975B | MAINTAINED |
| RevenueCIS | FY2026 | 50% | 50% | RAISED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2025 Q3 | EPS | FY2025 Q4 | $1.65–$1.85 | $1.84 | Met / beat |
| FY2025 Q3 | Op margin | FY2025 Q4 | 28%–30% | 13.82% | Missed |
| FY2025 Q3 | Revenue | FY2025 Q4 | $1.065B–$1.085B | $1.0949B | Met / beat |
Akamai collaborates with OpenAI on security/threat intelligence but does not count OpenAI as a revenue-generating customer.
“We partner with OpenAI on security vulnerabilities, helping define them and protecting our customers for the associated attacks. But OpenAI is not and has not been a customer of Akamai.”
Awesome. Okay, great. Thank you. And Dr. Tom, a component of your delivery business is video streaming. And in March, we saw OpenAI, they confirmed they shut down their AI video generation system, Sora. I'm just curious, do you expect that to have any effect on your delivery or compute business forecasts?
No. No. We partner with OpenAI on security vulnerabilities, helping define them and protecting our customers for the associated attacks. But OpenAI is not and has not been a customer of Akamai. So, yeah, no impact on us at all.
As a frontier model company, Anthropic is a potential security partner; signal is generic.
“We're proud to be one of the industry's must-have security providers partnering with the frontier model companies to help ensure the safe and rapid deployment of AI-enhanced defenses.”
… constant currency. Our security growth was led by strong demand for our market-leading web app firewall, API security, and GuardaCore segmentation solutions. Our WAF in particular is seeing growing interest from customers eager to deploy the latest defenses for vulnerabilities that could be exposed by the ever-strengthening frontier models and AI-powered attacks. Frontier models are changing vulnerability management, and we're proud to be one of the industry's must-have security providers partnering with the frontier model companies to help ensure the safe and rapid deployment of AI-enhanced defenses. With our early access to their vulnerability detection programs, we're applying our expertise to help keep major enterprises and critical infrastructure safe. Of course, and this is important to understand, attackers will also be using more advanced AI technology to develop even more potent ways to cause harm. This means that major enterprises will need Akamai security solutions even more than before. For example, there are many legacy systems and billions of deployed devices that can't be patched. They'll become a lot more vulnerable with the advances in AI, and they'll need our …
Akamai's GPU pipeline exceeds existing inventory, potentially leading to additional GPU orders in H2 2026, which are not included in the current annual CapEx guide. — Indicates stronger-than-expected demand for AI inference compute, which could drive further orders for NVIDIA hardware.
“At GTC in March, we unveiled the industry's first global-scale implementation of NVIDIA's AI grid, and we announced the rollout of thousands of NVIDIA RTX Pro 6000 GPUs.”
… point in the growth and evolution of our business. Akamai has long been known for operating the world's largest distributed platform for delivery and security solutions at global scale and with a reputation for reliability, quality, and trust. Now we're leveraging our global footprint and years of experience supporting the world's largest enterprises to become an indispensable infrastructure provider for the AI-driven economy. At GTC in March, we unveiled the industry's first global-scale implementation of NVIDIA's AI grid, and we announced the rollout of thousands of NVIDIA RTX Pro 6000 GPUs. By integrating NVIDIA AI infrastructure into Akamai's massive distributed platform, and by leveraging intelligent workload orchestration across our network, We intend to move the market for AI beyond isolated AI factories toward 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, we're enabling customers to run complex models within milliseconds of their end users with the responsiveness of local compute and the scale of the global web. optimizing …
Mentions OpenAI's Sora shutdown; not directly about ByteDance but Sora is a competitor to ByteDance's Doubao video model. Signal is indirect and weak.
Awesome. Okay, great. Thank you. And Dr. Tom, a component of your delivery business is video streaming. And in March, we saw OpenAI, they confirmed they shut down their AI video generation system, Sora. I'm just curious, do you expect that to have any effect on your delivery or compute business forecasts?
General statement about frontier model companies; hard to link to Anduril specifically, though Anduril is a frontier AI/defense company.
… constant currency. Our security growth was led by strong demand for our market-leading web app firewall, API security, and GuardaCore segmentation solutions. Our WAF in particular is seeing growing interest from customers eager to deploy the latest defenses for vulnerabilities that could be exposed by the ever-strengthening frontier models and AI-powered attacks. Frontier models are changing vulnerability management, and we're proud to be one of the industry's must-have security providers partnering with the frontier model companies to help ensure the safe and rapid deployment of AI-enhanced defenses. With our early access to their vulnerability detection programs, we're applying our expertise to help keep major enterprises and critical infrastructure safe. Of course, and this is important to understand, attackers will also be using more advanced AI technology to develop even more potent ways to cause harm. This means that major enterprises will need Akamai security solutions even more than before. For example, there are many legacy systems and billions of deployed devices that can't be patched. They'll become a lot more vulnerable with the advances in AI, and they'll need our …
Akamai is spending ~$800-825 million in capex over the next 12 months to support the new $1.8 billion CIS deal, with ~$700 million deployed in H2 2026.
… that pushed from Q1 into Q2. Second, we expect to see an increase in operating expenses in the second quarter, due primarily to continued investments in go-to-market and the impact of our annual employee merit cycle that went into effect on April 1st. Third, we anticipate revenue from the $1.8 billion customer win to start to ramp in Q4, and we expect to generate approximately $20 to $25 million of revenue in the fourth quarter. Finally, regarding CapEx for this win, we expect to spend a total of approximately $800 to $825 million over the next 12 months to support this customer. We expect to deploy roughly $700 million of that total in the second half of 2026, with the remaining balance falling into the first half of 2027. Moving now to guidance. For the second quarter, we are projecting revenue in the range of $1.075 to $1.1 billion, up 3% to 5% as reported, and in constant currency over Q2 2025. At current spot rates, foreign exchange fluctuations are expected to have no material impact on Q2 revenue compared to Q1 levels, and a positive $2 million impact year-over-year. At these revenue levels, we expect cash gross margins of approximately 70% to 71%. Gross margin is …