AKAM · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

AKAMAI TECHNOLOGIES INC · 2026-08-07 · Importance 41 · Surprise 22

Second-quarter cost of revenue increased 14% year over year to $485.9 million, and first-half cost of revenue increased 13% to $957.2 million. Second-quarter co-location costs increased to $99.5 million from $87.2 million, network build-out and supporting services increased to $74.4 million from $58.2 million, and bandwidth fees increased to $53.5 million from $45.6 million. The increases reflected platform investment for cloud infrastructure services and AI applications, compute partner program expansion, higher headcount and stock-based compensation, while hyperscaler-driven price increases are expected to raise future co-location, server, memory and depreciation costs.

Key facts

• Six months ended June 30, 2026 Total cost of revenue: $957,231 (in thousands) source
• Six months ended June 30, 2025 Total cost of revenue: $845,480 (in thousands) source
• Three months ended June 30, 2026 Total cost of revenue: $485,932 (in thousands) source
• Three months ended June 30, 2025 Total cost of revenue: $426,535 (in thousands) source
• Company attributes increase in cost of revenue to network build-out and supporting services, co-location costs, depreciation of network equipment, bandwidth fees, stock-based compensation and payroll as they invest in platform to support cloud infrastructure services and AI source