AKAM · Earnings call · 2026Q2T · Full report

Operating Margin Drivers

AKAMAI TECHNOLOGIES INC · 2026-08-06 · Importance 49 · Surprise 32 · In source text

Second-quarter non-GAAP operating margin was 25%, in line with expectations. Non-GAAP net income declined 8% year over year as reported to $236 million, or $1.59 per diluted share, partly because of expanded colocation investments, higher depreciation, and increased headcount costs supporting Cloud Infrastructure Services growth. Management expects operating margin to remain in the mid-20s for the rest of 2026 while investing in CIS. Large-scale CIS contracts are expected to generate non-GAAP operating margins ranging from the low- to mid-20s up to the low-30s after depreciation and operating expenses.

Key facts

Q3 non-GAAP operating expenses are projected to be $347 million to $359 million.
At the projected Q3 revenue levels, Akamai expects cash gross margin of approximately 70%.
Akamai anticipates Q3 EBITDA margin of approximately 38% to 40%.
Akamai expects Q3 non-GAAP depreciation expense to be $153 million to $155 million.
Akamai expects Q3 non-GAAP operating margin of approximately 24% to 26%.
For 2026, Akamai is estimating a non-GAAP operating margin of approximately 25% to 26% as measured in today's FX rates.
Akamai expects operating margin to remain in the mid-20s for the remainder of 2026 as they continue to invest to capture growth opportunities in CIS.
Q2 results included expanded colocation investments, higher depreciation, and increased headcount costs to help fuel faster growth for cloud infrastructure services.

Impact estimates

metric	direction	stage	expected	basis
operating_income	negative	committed	-11.9%	Akamai expects Q3 non-GAAP depreciation expense to be $153 million to $155 million.
operating_income	negative	committed	—	Q3 non-GAAP operating expenses are projected to be $347 million to $359 million.
margin	unclear	committed	—	At the projected Q3 revenue levels, Akamai expects cash gross margin of approximately 70%.
margin	unclear	committed	—	Akamai anticipates Q3 EBITDA margin of approximately 38% to 40%.
margin	unclear	committed	—	Akamai expects Q3 non-GAAP operating margin of approximately 24% to 26%.
margin	unclear	committed	—	For 2026, Akamai is estimating a non-GAAP operating margin of approximately 25% to 26% as measured in today's FX rates.
margin	unclear	committed	—	Akamai expects operating margin to remain in the mid-20s for the remainder of 2026 as they continue to invest to capture growth…