AKAM · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

AKAMAI TECHNOLOGIES INC · 2026-11-06 · Importance 61 · Surprise 64

The third-quarter 2026 income-tax provision declined 35% year over year to $21.3 million, while the nine-month provision declined 56% to $57.6 million. Akamai attributed the decreases to lower profitability, increased U.S. federal, state, and foreign R&D credits, and greater excess tax benefits from stock-based compensation; the nine-month comparison also reflected a change in the valuation allowance against state credits. The 2026 effective tax rate was below the federal statutory rate in both the three- and nine-month periods, with R&D credits and lower-taxed foreign income contributing to the reduction. The OBBBA, enacted in July 2025, had no material impact on the interim financial statements.

Key facts

• Akamai's provision for income taxes was $21.330 million for the three months ended September 30, 2026, down from $32.995 million in 2025, and $57.632 million for the nine months, down from $131.527 million in 2025. source
• The One Big Beautiful Bill Act was enacted in July 2025, includes provisions with some effective in 2026, and did not have a material impact on Akamai's interim condensed consolidated financial statements. source
• Akamai's lower income tax provision for the three months ended September 30, 2026 reflected lower profitability, greater R&D credit benefits and excess tax benefits related to stock-based compensation, partly offset by decreased foreign income taxed at lower rates. source
• Akamai's lower income tax provision for the nine months ended September 30, 2026 reflected greater excess tax benefits related to stock-based compensation, lower profitability, increased R&D credit benefits and a change in the state-credit valuation allowance, partly offset by decreased foreign income taxed at lower rates. source