Akamai shares surge 26% on $1.8B AI infrastructure deal as earnings meet estimates

Shares in Akamai Technologies Inc. surged more than 26% in late trading today after the cybersecurity and cloud computing company reported in-line first-quarter results and disclosed a $1.8 billion, seven-year commitment from a leading U.S.-based frontier model provider for its cloud infrastructure services.

For its fiscal 2026 first quarter that ended on March 31, Akamai reported adjusted earnings per share of $1.61, down from $1.70 in the same quarter of last year, on revenue of $1.07 billion, up 6% year-over-year. The results were precisely what analysts were expecting — $1.61 per share on revenue of $1.07 billion.

The undisclosed frontier model customer was the standout news. Akamai said the seven-year deal validates its position as a key infrastructure provider in the artificial intelligence economy. Revenue from the commitment is expected to begin gearing up in the fourth quarter, contributing about $20 million to $25 million to fourth-quarter revenue.

Cloud Infrastructure Services revenue, the segment that benefits most directly from the new commitment, rose 40% year-over-year to $95 million. The company in the quarter began breaking out the unit as a separate reporting category, splitting it from what it previously reported as compute revenue, citing it as a primary growth area and a focus of investment.

Security revenue rose 11% year-over-year, to $590 million, while delivery and other cloud applications revenue, which covers Akamai’s content delivery network, fell 7%, to $389 million, part of a multiyear decline in the legacy business.

Net income came in at $106 million, down 14% year-over-year, with net earnings of 71 cents per diluted share. Adjusted earnings were $427 million, down 3% from the same quarter last year. Cash from operations was $313 million, or 29% of revenue.

International revenue rose 9%, to $530 million, outpacing U.S. revenue, which rose 3%, to $543 million. Akamai spent $206 million in the quarter to repurchase 2 million shares at a weighted average price of $105.47.

“Akamai delivered a strong start to 2026, highlighted by a 40% year-over-year increase in Cloud Infrastructure Services revenue and security growth of 11%,” Chief Executive Tom Leighton said in the company’s earnings release. “Our security portfolio is also uniquely positioned to benefit from the rapid evolution of AI, with our enterprise customers needing our security products and expertise more than ever before.”

For its fiscal 2026 second quarter, Akamai expects adjusted earnings of $1.45 to $1.65 per share on revenue of $1.075 billion to $1.1 billion. The midpoint of both was roughly in line with analysts’ expectations.

For the full year, the company is forecasting adjusted earnings of $6.40 to $7.15 per share on revenue of $4.45 billion to $4.55 billion. The revenue midpoint of $4.5 billion is slightly above the $4.48 billion expected by analysts.

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