AKAMAI REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS

Second quarter revenue of $1.043 billion, up 7% year-over-year and up 6% when adjusted for foreign exchange* Cloud Infrastructure Services** revenue of $71 million, up 30% year-over-year and up 29% when adjusted for foreign exchange* GAAP net income per diluted share of $0.71, down 17% year-over-year and down 18% when adjusted for foreign exchange*, and non-GAAP net income per diluted share* of $1.73, up 9% year-over-year and when adjusted for foreign exchange* , /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cybersecurity and cloud computing company that powers and protects business online, today reported financial results for the second quarter ended June 30, 2025. "Akamai reported excellent results in the second quarter, highlighted by outperformance in both revenue and profitability. Building on our solid momentum from the first two quarters, we are increasing our guidance for revenue and earnings for the remainder of the year, while continuing to invest in key growth areas of security and cloud computing. These investments are paying off — our Cloud Infrastructure Services grew 30% year-over-year — and we expect that rate to accelerate through the remainder of the year," said Dr. Tom Leighton, Akamai's Chief Executive Officer. "Looking ahead, we are entering an era where AI is driving decisions, shaping experiences and powering operations, providing a strong tailwind for Akamai as we help businesses maximize their AI investments by ensuring every AI interaction is intuitive, instant and secure." Akamai delivered the following results for the second quarter ended June 30, 2025: Revenue: Revenue was $1.043 billion, a 7% increase over second quarter 2024 revenue of $980 million and a 6% increase when adjusted for foreign exchange.* Revenue by solution: Security revenue was $552 million, up 11% year-over-year and up 10% when adjusted for foreign exchange* Delivery revenue was $320 million, down 3% year-over-year and down 4% when adjusted for foreign exchange* Cloud computing revenue was $171 million, up 13% year-over-year and up 13% when adjusted for foreign exchange* Cloud Infrastructure Services** revenue of $71 million, up 30% year-over-year and up 29% when adjusted for foreign exchange* Revenue by geography: U.S. revenue was $528 million, up 4% year-over-year International revenue was $516 million, up 10% year-over-year and up 8% when adjusted for foreign exchange* Income from operations: GAAP income from operations was $151 million, a 2% increase from second quarter 2024. GAAP operating margin for the second quarter was 15%, flat from the same period last year. Non-GAAP income from operations* was $309 million, a 10% increase from second quarter 2024. Non-GAAP operating margin* for the second quarter was 30%, up 1 percentage point from the same period last year. Net income: GAAP net income was $104 million, a 21% decrease from second quarter 2024. Non-GAAP net income* was $251 million, up 4% from second quarter 2024. EPS: GAAP net income per diluted share was $0.71, a 17% decrease from second quarter 2024 and an 18% decrease when adjusted for foreign exchange.* Non-GAAP net income per diluted share* was $1.73, a 9% increase from second quarter 2024 and when adjusted for foreign exchange.* Adjusted EBITDA*: Adjusted EBITDA* was $444 million, a 9% increase from second quarter 2024. Supplemental cash information: Cash from operations for the second quarter of 2025 was $459 million, or 44% of revenue. Cash, cash equivalents and marketable securities was $1.558 billion as of June 30, 2025. Share repurchases: The Company spent $300 million in the second quarter of 2025 to repurchase 3.9 million shares of its common stock at an average price of $77.51 per share. The Company had 143 million shares of common stock outstanding as of June 30, 2025. Financial guidance: The Company reports the following financial guidance for the third quarter and full year 2025: Three Months Ending September 30, 2025 Year Ending December 31, 2025 Low End High End Low End High End Revenue (in millions) $ 1,035 $ 1,050 $ 4,135 $ 4,205 Non-GAAP operating margin * 28 % 28 % 29 % 29 % Non-GAAP net income per diluted share * $ 1.62 $ 1.66 $ 6.60 $ 6.80 Non-GAAP tax rate* 19 % 19 % 19 % 19 % Shares used in non-GAAP per diluted share calculations * (in millions) 145 145 147 147 Capex as a percentage of revenue * 22 % 22 % 20 % 20 % The guidance that is provided on a non-GAAP basis cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items Akamai excludes from non-GAAP measures. For example, stock-based compensation is unpredictable for Akamai's performance-based awards, which can fluctuate significantly based on current expectations of the future achievement of performance-based targets. Amortization of intangible assets, acquisition-related costs and restructuring costs are all impacted by the timing and size of potential future actions, which are difficult to predict. In addition, from time to time, Akamai excludes certain items that occur infrequently, which are also inherently difficult to predict and estimate. It is also difficult to predict the tax effect of the items Akamai excludes and to estimate certain discrete tax items, such as the resolution of tax audits or changes to tax laws. As such, the costs that are being excluded from non-GAAP guidance are difficult to predict and a reconciliation or a range of results could lead to disclosure that would be imprecise or potentially misleading. Material changes to any one of the exclusions could have a significant effect on our guidance and future GAAP results. * See Use of Non-GAAP Financial Measures below for definitions ** Cloud Infrastructure Services consist of the compute and storage solutions based on Linode, along with our EdgeWorkers product and the partner solutions running on our cloud platform Quarterly Conference CallAkamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-833-634-5020 (or 1-412-902-4238 for international calls) and using passcode Akamai Technologies call. A live webcast of the call may be accessed at www.akamai.com in the Investor Relations section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-877-344-7529 (or 1-412-317-0088 for international calls) and using passcode 6719927. The archived webcast of this event may be accessed through the Akamai website. About Akamai Akamai is the cybersecurity and cloud computing company that powers and protects business online. Our market-leading security solutions, superior threat intelligence and global operations team provide defense in depth to safeguard enterprise data and applications everywhere. Akamai's full-stack cloud computing solutions deliver performance and affordability on the world's most distributed platform. Global enterprises trust Akamai to provide the industry-leading reliability, scale and expertise they need to grow their business with confidence. Learn more at akamai.com and akamai.com/blog, or follow Akamai Technologies on X and LinkedIn. AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 30,2025 December 31,2024 ASSETS Current assets: Cash and cash equivalents $ 850,302 $ 517,707 Marketable securities 116,322 1,078,876 Accounts receivable, net 779,165 727,687 Prepaid expenses and other current assets 288,038 253,827 Total current assets 2,033,827 2,578,097 Marketable securities 591,249 275,592 Property and equipment, net 2,213,629 1,995,071 Operating lease right-of-use assets 1,063,348 1,006,738 Acquired intangible assets, net 675,217 727,585 Goodwill 3,170,024 3,151,077 Deferred income tax assets 597,015 483,249 Other assets 191,826 151,376 Total assets $ 10,536,135 $ 10,368,785 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 146,617 $ 130,447 Accrued expenses 272,144 370,888 Deferred revenue 179,761 149,222 Convertible senior notes — 1,149,116 Operating lease liabilities 271,500 259,134 Other current liabilities 10,497 32,516 Total current liabilities 880,519 2,091,323 Deferred revenue 25,301 26,314 Deferred income tax liabilities 23,378 16,066 Convertible senior notes 4,100,977 2,396,695 Operating lease liabilities 898,638 829,660 Other liabilities 139,814 130,370 Total liabilities 6,068,627 5,490,428 Total stockholders' equity 4,467,508 4,878,357 Total liabilities and stockholders' equity $ 10,536,135 $ 10,368,785 AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended (in thousands, except per share data) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Revenue $ 1,043,494 $ 1,015,139 $ 979,580 $ 2,058,633 $ 1,966,550 Costs and operating expenses: Cost of revenue (1) (2) 426,535 418,945 402,888 845,480 797,631 Research and development (1) 125,838 123,549 113,352 249,387 230,284 Sales and marketing (1) 146,239 134,131 139,039 280,370 273,609 General and administrative (1) (2) 162,597 155,933 153,854 318,530 306,284 Amortization of acquired intangible assets 27,721 27,637 21,076 55,358 42,099 Restructuring charge 3,103 361 1,385 3,464 1,929 Total costs and operating expenses 892,033 860,556 831,594 1,752,589 1,651,836 Income from operations 151,461 154,583 147,986 306,044 314,714 Interest and marketable securities income, net 14,129 19,530 26,628 33,659 54,469 Interest expense (8,201) (6,750) (6,829) (14,951) (13,647) Other (expense) income, net (5,451) 6,020 (949) 569 (438) Income before provision for income taxes 151,938 173,383 166,836 325,321 355,098 Provision for income taxes (48,320) (50,212) (35,148) (98,532) (47,992) Net income $ 103,618 $ 123,171 $ 131,688 $ 226,789 $ 307,106 Net income per share: Basic $ 0.72 $ 0.83 $ 0.86 $ 1.54 $ 2.02 Diluted $ 0.71 $ 0.82 $ 0.86 $ 1.53 $ 1.97 Shares used in per share calculations: Basic 144,757 149,052 152,265 146,905 151,946 Diluted 145,249 151,064 153,588 148,156 155,527 (1) Includes stock-based compensation (see supplemental table for figures) (2) Includes depreciation and amortization (see supplemental table for figures) AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Cash flows from operating activities: Net income $ 103,618 $ 123,171 $ 131,688 $ 226,789 $ 307,106 Adjustments to reconcile net income tonet cash provided by operating activities: Depreciation and amortization 175,461 174,022 158,549 349,483 314,732 Stock-based compensation 112,776 111,978 98,466 224,754 191,726 Provision for deferred income taxes 12,680 31,383 13,946 44,063 3,479 Amortization of debt issuance costs 1,645 1,605 1,660 3,250 3,342 (Gain) loss on investments — (9,313) 66 (9,313) 66 Other non-cash reconciling items, net 1,840 2,142 1,896 3,982 3,958 Changes in operating assets andliabilities, net of effects of acquisitions: Accounts receivable (7,440) (25,677) 17,538 (33,117) 16,802 Prepaid expenses and other currentassets 7,430 (37,129) 1,253 (29,699) (24,763) Accounts payable and accruedexpenses 25,365 (109,906) 19,523 (84,541) (47,426) Deferred revenue 8,169 14,948 (11,619) 23,117 22,697 Other current liabilities (2,181) (20,276) 624 (22,457) 980 Other non-current assets andliabilities 19,786 (5,748) (2,627) 14,038 (9,858) Net cash provided by operatingactivities 459,149 251,200 430,963 710,349 782,841 Cash flows from investing activities: Cash received (paid) for businessacquisitions, net of cash acquired 790 — (434,066) 790 (434,066) Cash paid for asset acquisitions — (29,930) (4,796) (29,930) (4,796) Purchases of property and equipmentand capitalization of internal-usesoftware development costs (223,781) (196,008) (163,537) (419,789) (337,291) Purchases of short- and long-termmarketable securities (662,715) (7,080) (16,103) (669,795) (186,122) Proceeds from sales, maturities andredemptions of short- and long-termmarketable securities 206,270 1,112,955 337,220 1,319,225 519,475 Other, net (3,430) (3,091) (5,400) (6,521) 4,535 Net cash (used in) provided byinvesting activities (682,866) 876,846 (286,682) 193,980 (438,265) AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Cash flows from financing activities: Proceeds from borrowings underrevolving credit facility 250,000 — — 250,000 — Repayment of borrowings underrevolving credit facility (250,000) — — (250,000) — Proceeds from the issuance ofconvertible senior notes, net of issuancecosts 1,702,188 — — 1,702,188 — Proceeds from the issuance of warrantsrelated to convertible senior notes 330,855 — — 330,855 — Purchases of note hedges related toconvertible senior notes (605,820) — — (605,820) — Repayment of convertible senior notes (1,149,992) — — (1,149,992) — Proceeds related to the issuance ofcommon stock under stock plans 9,059 20,182 7,956 29,241 28,266 Employee taxes paid related to net sharesettlement of stock-based awards (25,866) (72,063) (31,914) (97,929) (141,247) Repurchases of common stock (300,000) (499,963) (127,809) (799,963) (253,258) Other, net (1,629) (406) (8,678) (2,035) (10,187) Net cash used in financingactivities (41,205) (552,250) (160,445) (593,455) (376,426) Effects of exchange rate changes on cash,cash equivalents and restricted cash 16,070 5,431 (5,293) 21,501 (9,306) Net (decrease) increase in cash, cashequivalents and restricted cash (248,852) 581,227 (21,457) 332,375 (41,156) Cash, cash equivalents and restricted cashat beginning of period 1,100,311 519,084 470,771 519,084 490,470 Cash, cash equivalents and restricted cashat end of period $ 851,459 $ 1,100,311 $ 449,314 $ 851,459 $ 449,314 AKAMAI TECHNOLOGIES, INC. SUPPLEMENTAL REVENUE DATA – REVENUE BY SOLUTION Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Security $ 551,914 $ 530,695 $ 498,708 $ 1,082,609 $ 989,389 Delivery 320,125 318,988 329,399 639,113 681,157 Cloud computing 171,455 165,456 151,473 336,911 296,004 Total revenue $ 1,043,494 $ 1,015,139 $ 979,580 $ 2,058,633 $ 1,966,550 Revenue growth rates year-over-year: Security 11 % 8 % 15 % 9 % 18 % Delivery (3) (9) (13) (6) (12) Cloud computing 13 14 23 14 24 Total revenue 7 % 3 % 5 % 5 % 6 % Revenue growth rates year-over-year,adjusted for the impact of foreignexchange rates (1): Security 10 % 10 % 16 % 10 % 19 % Delivery (4) (8) (12) (6) (11) Cloud computing 13 15 24 14 24 Total revenue 6 % 4 % 6 % 5 % 7 % AKAMAI TECHNOLOGIES, INC. SUPPLEMENTAL REVENUE DATA – REVENUE BY GEOGRAPHY Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 U.S. $ 527,607 $ 528,739 $ 508,696 $ 1,056,346 $ 1,021,043 International 515,887 486,400 470,884 1,002,287 945,507 Total revenue $ 1,043,494 $ 1,015,139 $ 979,580 $ 2,058,633 $ 1,966,550 Revenue growth rates year-over-year: U.S. 4 % 3 % 6 % 3 % 7 % International 10 2 3 6 5 Total revenue 7 % 3 % 5 % 5 % 6 % Revenue growth rates year-over-year,adjusted for the impact of foreignexchange rates (1): U.S. 4 % 3 % 6 % 3 % 7 % International 8 5 5 7 7 Total revenue 6 % 4 % 6 % 5 % 7 % (1) See Use of Non-GAAP Financial Measures below for a definition AKAMAI TECHNOLOGIES, INC. OTHER SUPPLEMENTAL DATA Three Months Ended Six Months Ended (in thousands, except end of period statistics) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Stock-based compensation: Cost of revenue $ 19,314 $ 18,928 $ 15,864 $ 38,242 $ 28,482 Research and development 39,803 42,268 36,951 82,071 74,996 Sales and marketing 22,263 22,440 18,976 44,703 37,787 General and administrative 31,396 28,342 26,675 59,738 50,461 Total stock-based compensation $ 112,776 $ 111,978 $ 98,466 $ 224,754 $ 191,726 Depreciation and amortization: Network-related depreciation $ 81,824 $ 78,325 $ 68,936 $ 160,149 $ 134,611 Capitalized internal-use softwaredevelopment amortization 38,059 40,095 42,407 78,154 86,039 Other depreciation and amortization 15,874 15,884 15,983 31,758 32,013 Non-GAAP depreciation andamortization (1) 135,757 134,304 127,326 270,061 252,663 Capitalized stock-based compensationamortization (2) 11,864 11,963 10,048 23,827 19,760 Capitalized interest expense amortization (2) 119 118 99 237 210 Amortization of acquired intangible assets 27,721 27,637 21,076 55,358 42,099 Total depreciation and amortization $ 175,461 $ 174,022 $ 158,549 $ 349,483 $ 314,732 Capital expenditures (1) (3): Purchases of property and equipment $ 135,597 $ 147,990 $ 94,463 $ 283,587 $ 169,098 Capitalized internal-use softwaredevelopment costs 78,584 77,910 72,653 156,494 150,144 Total capital expenditures $ 214,181 $ 225,900 $ 167,116 $ 440,081 $ 319,242 Capex as a percentage of revenue (1) 21 % 22 % 17 % 21 % 16 % End of period statistics: Number of employees 10,944 10,811 10,920 (1) See Use of Non-GAAP Financial Measures below for a definition (2) Amortization of capitalized stock-based compensation and interest expense in this table excludes amortization of capitalized stock-based compensation and interest expense related to cloud-computing arrangements and contract fulfillment costs. However, the amounts are included in our total amortization of capitalized stock-based compensation and interest expense that is excluded from our non-GAAP measures (see reconciliations of GAAP to non-GAAP measures). (3) Capital expenditures presented in this table are reported on an accrual basis, which differs from the cash-basis presentation in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods. AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND TAX RATE Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Income from operations $ 151,461 $ 154,583 $ 147,986 $ 306,044 $ 314,714 GAAP operating margin 15 % 15 % 15 % 15 % 16 % Amortization of acquired intangibleassets 27,721 27,637 21,076 55,358 42,099 Stock-based compensation 112,776 111,978 98,466 224,754 191,726 Amortization of capitalized stock-basedcompensation and capitalized interestexpense 12,288 12,359 10,434 24,647 20,557 Restructuring charge 3,103 361 1,385 3,464 1,929 Acquisition-related costs 1,274 95 2,179 1,369 2,351 Operating adjustments 157,162 152,430 133,540 309,592 258,662 Non-GAAP income from operations $ 308,623 $ 307,013 $ 281,526 $ 615,636 $ 573,376 Non-GAAP operating margin 30 % 30 % 29 % 30 % 29 % Net income $ 103,618 $ 123,171 $ 131,688 $ 226,789 $ 307,106 Operating adjustments (from above) 157,162 152,430 133,540 309,592 258,662 Amortization of debt issuance costs 1,645 1,605 1,660 3,250 3,342 (Gain) loss on cost method investments,net — (9,313) 66 (9,313) 66 Income tax effect of above non-GAAPadjustments and certain discrete taxitems (11,069) (11,797) (24,306) (22,866) (71,033) Non-GAAP net income $ 251,356 $ 256,096 $ 242,648 $ 507,452 $ 498,143 GAAP tax rate 32 % 29 % 21 % 30 % 14 % Income tax effect of non-GAAPadjustments and certain discrete taxitems (13) (10) (1) (11) 5 Non-GAAP tax rate 19 % 19 % 20 % 19 % 19 % AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED SHARE Three Months Ended Six Months Ended (in thousands, except per share data) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 GAAP net income per diluted share $ 0.71 $ 0.82 $ 0.86 $ 1.53 $ 1.97 Adjustments to net income: Amortization of acquired intangibleassets 0.19 0.18 0.14 0.37 0.27 Stock-based compensation 0.78 0.74 0.64 1.52 1.23 Amortization of capitalized stock-basedcompensation and capitalized interest expense 0.08 0.08 0.07 0.17 0.13 Restructuring charge 0.02 — 0.01 0.02 0.01 Acquisition-related costs 0.01 — 0.01 0.01 0.02 Amortization of debt issuance costs 0.01 0.01 0.01 0.02 0.02 (Gain) loss on cost method investments,net — (0.06) — (0.06) — Income tax effect of above non-GAAPadjustments and certain discrete taxitems (0.08) (0.08) (0.16) (0.15) (0.46) Adjustment for shares (1) — — — — 0.03 Non-GAAP net income per diluted share $ 1.73 $ 1.70 $ 1.58 $ 3.43 $ 3.23 Shares used in GAAP per diluted sharecalculations 145,249 151,064 153,588 148,156 155,527 Impact of benefit from note hedgetransactions (1) — — (199) — (1,157) Shares used in non-GAAP per diluted sharecalculations (1) 145,249 151,064 153,389 148,156 154,370 (1) Shares used in non-GAAP per diluted share calculations have been adjusted for the three and six months ended June 30, 2024 for the benefit of Akamai's note hedge transactions. During these periods, Akamai's average stock price was in excess of $95.10, which is the initial conversion price of Akamai's convertible senior notes which matured in May 2025. See Use of Non-GAAP Financial Measures below for further definition. AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA Three Months Ended Six Months Ended (in thousands) June 30,2025 March 31,2025 June 30,2024 June 30,2025 June 30,2024 Net income $ 103,618 $ 123,171 $ 131,688 $ 226,789 $ 307,106 Net income margin 10 % 12 % 13 % 11 % 16 % Interest and marketable securitiesincome, net (14,129) (19,530) (26,628) (33,659) (54,469) Provision for income taxes 48,320 50,212 35,148 98,532 47,992 Depreciation and amortization 135,757 134,304 127,326 270,061 252,663 Amortization of capitalized stock-basedcompensation and capitalized interest expense 12,288 12,359 10,434 24,647 20,557 Amortization of acquired intangibleassets 27,721 27,637 21,076 55,358 42,099 Stock-based compensation 112,776 111,978 98,466 224,754 191,726 Restructuring charge 3,103 361 1,385 3,464 1,929 Acquisition-related costs 1,274 95 2,179 1,369 2,351 Interest expense 8,201 6,750 6,829 14,951 13,647 (Gain) loss on cost method investments,net — (9,313) 66 (9,313) 66 Other expense, net 5,451 3,293 883 8,744 372 Adjusted EBITDA $ 444,380 $ 441,317 $ 408,852 $ 885,697 $ 826,039 Adjusted EBITDA margin 43 % 43 % 42 % 43 % 42 % Use of Non-GAAP Financial Measures In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP financial measures). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate Akamai's financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP tax rate, capital expenditures, non-GAAP depreciation and amortization, capex as a percentage of revenue and impact of foreign currency exchange rates, as discussed below. Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparison of financial results across accounting periods and may be comparable to those of our peer companies. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may exclude expenses and gains that may be unusual in nature, infrequent or not reflective of Akamai's ongoing operating results. The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial measures and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP. Akamai has provided a reconciliation of non-GAAP financial measures used in its financial reporting and investor presentations to the most directly comparable GAAP financial measures. This reconciliation can be found in the "Supplemental Financial Information" on the Investor Relations section of Akamai's website. The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below: Amortization of acquired intangible assets – Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions Akamai has made. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and is unique to each acquisition; therefore, Akamai excludes amortization of acquired intangible assets from its non-GAAP financial measures to provide investors with a consistent basis for comparing pre- and post-acquisition operating results. Stock-based compensation and amortization of capitalized stock-based compensation – Stock-based compensation is an important aspect of the compensation paid to Akamai's employees which includes long-term incentive plans to encourage retention, performance-based plans to encourage achievement of specified financial targets, short-term incentive awards with a one year vest and shares issued as part of a retirement savings program. The grant date fair value of the stock-based compensation awards varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of Akamai's current financial results to previous and future periods difficult to interpret; therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from its non-GAAP financial measures in order to highlight the performance of Akamai's core business and to be consistent with the way many investors evaluate its performance and compare its operating results to peer companies. Acquisition-related costs – Acquisition-related costs include transaction fees, advisory fees, due diligence costs and other direct costs associated with strategic activities, as well as certain additional compensation costs payable to employees acquired from the Linode Limited Liability Company acquisition if employed for a certain period of time. The additional compensation cost was initiated by and determined by the seller, and is in addition to normal levels of compensation, including retention programs, offered by Akamai. Acquisition-related costs are impacted by the timing and size of the acquisitions, and Akamai excludes acquisition-related costs from its non-GAAP financial measures to provide a useful comparison of operating results to prior periods and to peer companies because such amounts vary significantly based on the magnitude of the acquisition transactions and do not reflect Akamai's core operations. Restructuring charge – Akamai has incurred restructuring charges from programs that have significantly changed either the scope of the business undertaken by the Company or the manner in which that business is conducted. These charges include severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including acquired intangible assets, right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. Akamai excludes these items from its non-GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business. Amortization of debt issuance costs and capitalized interest expense – The issuance costs of Akamai's convertible senior notes are amortized to interest expense and are excluded from Akamai's non-GAAP results because management believes the non-cash amortization expense is not representative of ongoing operating performance. Gains and losses on cost method investments – Akamai has recorded gains and losses from the disposition, changes to fair value and impairment of cost method investments. Akamai believes excluding these amounts from its non-GAAP financial measures is useful to investors as the types of events giving rise to these gains and losses are not representative of Akamai's core business operations and ongoing operating performance. Income tax effect of non-GAAP adjustments and certain discrete tax items – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as the impact of intercompany sales of intellectual property related to acquisitions), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows Akamai to highlight income attributable to its core operations. Akamai's definitions of its non-GAAP financial measures are outlined below: Non-GAAP income from operations – GAAP income from operations adjusted for the following items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; amortization of capitalized interest expense; acquisition-related costs; restructuring charges; legal settlements; and other non-recurring or unusual items that may arise from time to time. Non-GAAP operating margin – Non-GAAP income from operations stated as a percentage of revenue. Non-GAAP net income – GAAP net income adjusted for the following tax-affected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; amortization of debt issuance costs; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share, or EPS – Non-GAAP net income divided by weighted average diluted common shares outstanding. Diluted weighted average common shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to Akamai pursuant to the note hedge transactions entered into in connection with the issuances of Akamai's convertible senior notes. Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully-diluted share calculation until they are delivered. However, Akamai would receive a benefit from the note hedge transactions and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of operating performance. With respect to the convertible senior notes due in each of 2033, 2029 and 2027, and those that matured in 2025, unless Akamai's weighted average stock price is greater than $93.01, $126.31, $116.18 and $95.10, respectively, the initial conversion prices, there will be no difference between GAAP and non-GAAP diluted weighted average common shares outstanding. Adjusted EBITDA – GAAP net income excluding the following items: interest and marketable securities income and losses; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; foreign exchange gains and losses; interest expense; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time. Adjusted EBITDA margin – Adjusted EBITDA stated as a percentage of revenue. Non-GAAP tax rate – GAAP tax rate excluding the tax effect of non-GAAP adjustments and certain discrete tax items. Capital expenditures, or capex – Purchases of property and equipment and capitalization of internal-use software development costs presented on an accrual basis, which differs from the cash-basis presentation included in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods. Capex as a percentage of revenue – Capital expenditures, or capex, stated as a percentage of revenue. Non-GAAP depreciation and amortization – GAAP depreciation and amortization (which consists of depreciation and amortization of property and equipment, capitalized stock-based compensation, capitalized interest expense and acquired intangible assets), less depreciation and amortization excluded from non-GAAP results (which consists of depreciation and amortization of capitalized stock-based compensation, capitalized interest expense and acquired intangible assets). Impact of foreign currency exchange rate – Revenue and earnings from international operations have historically been important contributors to Akamai's financial results. Consequently, Akamai's financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, when the local currencies of our international subsidiaries weaken, our consolidated results stated in U.S. dollars are negatively impacted. Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. The dollar impact of changes in foreign currency exchange rates presented is calculated by translating current period results using monthly average foreign currency exchange rates from the comparative period and comparing them to the reported amount. The percentage growth rate impacted by foreign currency exchange rates, sometimes referred to as constant currency, is calculated by comparing the prior period amounts as reported and the current period amounts translated using the same monthly average foreign currency exchange rates from the comparative period. Akamai Statement Under the Private Securities Litigation Reform ActThis release and related management commentary on our quarterly earnings conference call scheduled for later today contain statements that are not statements of historical fact and constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about expected future financial performance, expectations, plans and prospects of Akamai, including our outlook, guidance and growth objectives. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, inability to continue to generate cash at the same level as prior years; failure of our investments in innovation to generate solutions that are accepted in the market; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; effects of competition, including pricing pressure and changing business models; impact of macroeconomic trends, including economic uncertainty, turmoil in the financial services industry, the effects of inflation, rising and fluctuating interest rates, foreign currency exchange rate and monetary supply fluctuations, international tensions and volatility in capital markets; conditions and uncertainties in the geopolitical environment, including sanctions and disruptions resulting from the ongoing war in Ukraine and the Israel-Hamas war; continuing supply chain and logistics costs, constraints, changes or disruptions; defects or disruptions in our products or IT systems, including outages, cyber-attacks, data breaches or malware; difficulties in integrating our acquisitions and investments; failure to realize the expected benefits of any of our acquisitions, reorganizations or investments; changes to economic, political and regulatory conditions in the United States and internationally, including changes in government policies, regulations and resources; our ability to attract and retain key personnel; delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities or failure of such solutions to operate as expected, and other factors that are discussed in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents filed with the SEC. In addition, the statements in this press release and on our quarterly earnings conference call represent Akamai's expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai's expectations or beliefs as of any date subsequent to the date of this press release. Contacts: Johanna SchmittMedia RelationsAkamai Technologies[email protected] Mark StoutenbergInvestor RelationsAkamai Technologies[email protected] SOURCE Akamai Technologies, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

AKAMAI REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS

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