Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q, particularly Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth below, and notes to our unaudited interim condensed consolidated financial statements included herein contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Akamai Technologies, Inc., which we refer to as “we,” “us,” or the “Company.” All statements other than statements of historical facts are statements that could be deemed forward-looking statements. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of our management as of the date hereof based on information currently available to our management. Use of words such as “believes,” “could,” “expects,” “anticipates,” “intends,” “plans,” “seeks,” “projects,” “estimates,” “should,” “would,” “forecasts,” “if,” “continues,” “goal,” “likely,” “may,” “will,” variations of such words or similar expressions are intended to identify a forward-looking statement. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions. Actual results may differ materially from the forward-looking statements we make as a result of various factors, including, but not limited to: potential slowing revenue growth, global economic and geopolitical conditions, including changes in customer spending and inflation, tariffs, trade restrictions, export controls and retaliatory measures, our ability to acquire or develop new solutions, our ability to compete effectively, including our ability to continue to grow our artificial intelligence ("AI") infrastructure, compute services and solutions, including risks that our AI initiatives may not be successful or may introduce operational, security or regulatory risks, security risks stemming from ineffective information technology systems or cybersecurity breaches, risks of maintaining global operations, including physical attacks on or destruction of data centers and critical infrastructure in regions affected by armed conflict, regulatory developments, supply chain disruptions, significant increases in server, memory and co-location costs due to market dynamics, intellectual property claims or disputes, investment related risks and maintaining an effective system of internal controls. See “Risk Factors” elsewhere in this quarterly report on Form 10-Q and in our other reports filed with the Securities and Exchange Commission for a discussion of certain risks associated with our business. We disclaim any obligation to update any forward-looking statements as a result of new information, future events or otherwise, including the potential impact of any mergers, acquisitions, divestitures or other events that may be announced after the date hereof.

Our management’s discussion and analysis of our financial condition and results of operations is based upon our unaudited interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q, which we have prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), for interim periods and with Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The preparation of these unaudited interim condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related items, including, but not limited to, revenue recognition, accounts receivable and related reserves, valuation and impairment of marketable securities, goodwill and acquired intangible assets, capitalized internal-use software development costs, impairment and useful lives of long-lived assets, income taxes and stock-based compensation. We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances at the time they are made. Actual results may differ from our estimates. See the section entitled “Application of Critical Accounting Policies and Estimates” in our annual report on Form 10-K for the year ended December 31, 2025 for further discussion of our critical accounting policies and estimates.

Overview

We develop and provide solutions for global enterprises to build, secure and accelerate their applications and digital experiences through our massively distributed global infrastructure, which underpins our security, delivery and other cloud applications and cloud infrastructure services solutions, and is central to our financial success. Together, these solutions are positioned to benefit from the rapid evolution of AI. The key factors that influence our financial success are our ability to build on recurring revenue commitments across our product portfolios, increase traffic on our network, continue to develop, scale and successfully bring to market our cloud infrastructure services, including Akamai Inference Cloud ("AIC") and compute-to-edge solutions, that meet the needs of professional users and enterprises, including with respect to reliability, effectively manage the prices we charge for our solutions considering the market dynamics on our cost structure driven by hyperscalers, continuously develop new and existing products and appropriately manage our capital spending and other operational expenses. The purpose of this discussion and analysis section is to provide material information relevant to an assessment of our financial condition and results of operations from management’s perspective, including to describe and explain key trends, events and other factors that impacted our reported results and that are likely to impact our future performance.

Revenue

We primarily derive revenue from the sale of services to customers pursuant to contracts having terms of one year or longer, which allows us to have a consistent and predictable base level of revenue. Services included in our contracts consist of security solutions, the delivery of content, applications and software over the internet, cloud infrastructure solutions and professional services. In addition to a base level of revenue, we are also dependent on our ability to increase our product offerings and to cross-sell additional services to our new and existing customers, particularly for our security and cloud infrastructure services portfolios. Our revenue is also impacted by customer renewals and the pricing for such renewals, the rate of adoption and timing of customer offerings, variability of one-time events, usage of cloud computing services and the amount of traffic we serve on our network. Geopolitical, economic and other developments that impact our customers' businesses can also impact our ability to attract new customers or continue to cross-sell additional services to existing customers and traffic levels for customers with variable usage. Over the longer term, our ability to continually develop and expand our product portfolio, to successfully bring those products to market and to effectively manage the prices we charge for our solutions considering the market dynamics on our cost structure driven by hyperscalers, are key factors impacting our revenue growth.

We have observed the following trends related to our revenue in recent years:

• Increased sales of our security solutions, led by application security solutions and microsegmentation solutions, and increased sales of our cloud infrastructure services solutions, attributable to enhanced services on our platform, have made a significant contribution to revenue growth. Our security and cloud infrastructure services solutions continue to contribute to a large portion of our revenue. We plan to continue to invest in these areas with a focus on AI applications for our security products and cloud infrastructure services, including expanding our platform, to further advance our product portfolios and sales capabilities.

• Traffic growth on our network has improved, but remains moderated as compared to prior years. We, and the industry more broadly, are seeing growth at a slower pace than we have experienced in the past. In particular, customers in verticals such as media and gaming have optimized their traffic to manage through underlying business challenges at a time of global macroeconomic and geopolitical headwinds. Some of our customers' businesses have been impacted by these headwinds, and as a result, they may continue to reduce their spending or optimize their traffic, which would reduce traffic on our network and revenue. In prior years we also experienced incremental traffic growth from past asset acquisitions. We expect the moderation of traffic growth trends to continue for the remainder of 2026.

• The prices paid by some of our delivery and security customers have declined in recent years at contract renewal due to competition, which negatively impacts our revenue growth rates. We have been able to mitigate some of the negative impacts to our revenue growth rates by upselling incremental solutions to our existing customers. We are taking steps upon contract renewals to sign customers to multi-year contracts that reflect the significant cost increases we have experienced from hyperscaler market dynamics and their traffic volumes to better align unit pricing.

• Revenue from our international operations continues to grow, particularly from new customer acquisition and cross-selling of incremental solutions. Because we publicly report in U.S. dollars, our reported revenue results are negatively impacted when the U.S. dollar strengthens and benefit when the U.S. dollar weakens.

• We have experienced variations in certain types of revenue from quarter-to-quarter. These quarterly variations in revenue are attributable to, among other things, the timing of large customer contract signings and renewals; the frequency and timing of purchases of custom solutions or licensed software; the nature and timing of software and gaming releases by our customers; holiday season activity; and whether there are large live sporting or other events or situations that impact the amount of media traffic on our network.

Expenses

Our level of profitability is impacted by our expenses, including direct costs to support our revenue such as bandwidth and co-location costs, which includes energy to power our network. We have observed the following trends related to our profitability in recent years:

• Co-location costs are a significant portion of our cost of revenue. As we continue to scale our cloud infrastructure services, including our platform to support AI applications, we have experienced a significant increase in our co-location costs, particularly as competition for data center space has continued to increase, including from hyperscalers. We have entered into, and expect to continue to enter into, longer term leases that include certain financial

commitments. The costs of the financial commitments are expensed ratably over the lease term, and, as a result, in some cases, we are incurring costs in advance of these locations being fully utilized. We continue to improve our internal-use software and remain disciplined in managing our hardware deployments, which enables us to use servers more efficiently. We will need to continue to effectively manage our co-location costs to maintain or improve current levels of profitability.

• Network bandwidth costs are also a significant portion of our cost of revenue. We have been able to manage these costs through investment in internal-use software development to improve the performance and efficiency of our network and, more recently, improved pricing on contract renewals with our bandwidth providers. We will need to continue to focus on effectively managing our bandwidth costs to maintain or improve current levels of profitability.

• Network build-out and supporting service costs represent another significant portion of our cost of revenue. These costs include maintenance and supporting services incurred as we continue to operate our growing network, compute partner program costs incurred as we expand our use of partners and costs of third-party cloud providers used for some of our operations. We have seen some of these costs increase in recent years as a result of our network expansion, and particularly the build out of our platform to support our cloud infrastructure services. We will need to continue to effectively manage our network build-out and supporting service costs in an effort to control costs.

• Our employees are core to the operations of our business, and payroll and related costs, including stock-based compensation, is our largest expense. It is important to the success of our operations that we offer competitive compensation packages. However, we are focused on remaining disciplined in allocating our resources to support our faster growing security and cloud infrastructure services solutions, including maintaining operational efficiencies to mitigate the rising cost of talent. Over the past few years, we redesigned some of our compensation programs by shifting certain plans from a cash-based to stock-based program, such as our 401(k) match program in 2025. Additionally, in 2026, we introduced a new retirement benefit to our existing compensation programs. These programs are designed to better align employee incentives with the interests of our stockholders, which has increased our stock-based compensation.

• Depreciation expense related to our network equipment also contributes to our overall expense levels. In recent years, we have invested in our network, particularly as part of building out our platform to support our cloud infrastructure services, which increased our capital expenditures and resulting depreciation expense. We plan to continue investing in our platform to support our faster growing cloud infrastructure services, including support for new enterprise customers, all to support future revenue growth from AI applications. We are experiencing a significant increase in server and memory costs due to market dynamics driven by hyperscalers, which will increase our future capital expenditures and resulting depreciation expense.

• Growth in our international operations incrementally increases our exposure to foreign currency fluctuations. Because we publicly report in U.S. dollars, our expenses are positively impacted when the U.S. dollar strengthens and are negatively impacted when the U.S. dollar weakens.

Global Economic Conditions

Global macroeconomic and geopolitical conditions continue to impact our customers, as well as our business and revenue growth rates. We, along with our customers, continue to manage through an uncertain period of fluctuating inflation, regulatory policies and resources that may negatively impact business, economic and political uncertainty, decreased consumer confidence and pressure on prices during contract renewals, uncertain energy supplies, heightened geopolitical tensions and conflict, potential for supply chain disruptions, changes in legislation and regulations, including U.S. and international tax laws, volatility and increasing tensions related to changing trade policies, including announced or expected tariffs, fluctuations in foreign exchange rates and elevated interest rates. To the extent these macroeconomic conditions continue, the impact may adversely affect our business, operations and financial results.

Results of Operations

The following sets forth, as a percentage of revenue, interim condensed consolidated statements of income data for the periods indicated:

			For the Three Months Ended March 31,
			2026						2025
Revenue			100		%				100		%
Costs and operating expenses:
Cost of revenue (exclusive of amortization of acquired intangible assets shown below)			44						41
Research and development			13						12
Sales and marketing			15						13
General and administrative			15						15
Amortization of acquired intangible assets			2						3
Restructuring charge			—						—
Total costs and operating expenses (1)			89						85
Income from operations (1)			11						15
Interest and marketable securities income, net			2						2
Interest expense			(1)						(1)
Other (expense) income, net			—						1
Income before provision for income taxes (1)			11						17
Provision for income taxes			1						5
Net income (1)			10		%				12		%

(1) Amounts may not foot due to rounding.

Revenue

Beginning in the first quarter of 2026, revenue by solution was reported as security, delivery and other cloud applications and cloud infrastructure services. Recognizing cloud infrastructure services as a primary growth area and a significant focus of investment in our cloud computing portfolio, we began reporting its revenue separately. Prior period amounts reported in the table below for revenue by solution category have been recast to reflect this change. Revenue by solution category during the periods presented was as follows (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change						% Change at Constant Currency
Security			$	589,790					$	530,695					11		%				9		%
Delivery and other cloud applications			389,208						416,843						(7)						(8)
Cloud infrastructure services			94,612						67,601						40						39
Total revenue			$	1,073,610					$	1,015,139					6		%				4		%

During the three months ended March 31, 2026, the increase in our revenue, as compared to the same period in 2025, was primarily the result of continued growth in sales of our security and cloud infrastructure services solutions, partially offset by a decline in revenue from our delivery and other cloud applications solutions due to downward pricing of contract renewals.

The increase in security solutions revenue for the three months ended March 31, 2026, as compared to the same period in 2025, was due to growth in sales of key products in our security solutions portfolio, including our API security, web application and Guardicore segmentation solutions.

The decrease in delivery and other cloud applications solutions revenue for the three months ended March 31, 2026, as compared to the same period in 2025, was driven by a decrease in delivery revenue due to downward pricing of contract renewals. Additionally, we believe macroeconomic headwinds are causing some delivery and other cloud applications customers to increase their focus on cost optimization, which negatively impacted traffic on our network and had a negative impact on delivery and other cloud applications revenue.

The increase in cloud infrastructure services solutions revenue for the three months ended March 31, 2026, as compared to the same period in 2025, was due to growth in sales to new and existing customers of our compute solutions, as well as the compute partner solutions running on our platform.

Revenue derived in the U.S. and internationally during the periods presented was as follows (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change						% Change at Constant Currency
U.S.			$	543,147					$	528,739					3		%				3		%
As a percentage of revenue			51		%				52		%
International			530,463						486,400						9						5
As a percentage of revenue			49		%				48		%
Total revenue			$	1,073,610					$	1,015,139					6		%				4		%

For the three months ended March 31, 2026 and 2025, no single country outside the U.S. accounted for 10% or more of revenue during these periods. Changes in foreign currency exchange rates positively impacted our revenue by $18.5 million during the three months ended March 31, 2026 as compared to the same period in 2025.

Cost of Revenue

Cost of revenue consisted of the following for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change
Co-location costs			$	98,870					$	83,761					18		%
Bandwidth fees			52,809						47,823						10
Network build-out and supporting services			67,383						54,074						25
Payroll and related costs			90,133						84,460						7
Stock-based compensation, including amortization of prior capitalized amounts			35,336						30,297						17
Depreciation of network equipment			84,048						78,325						7
Amortization of internal-use software			42,720						40,205						6
Total cost of revenue			$	471,299					$	418,945					12		%
As a percentage of revenue			44		%				41		%

The increase in cost of revenue during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to:

• co-location costs and depreciation of network equipment as a result of investment in our network, particularly as we build out our platform, including to support cloud infrastructure services and AI applications, to support future growth and scalability;

• network build-out and supporting services, particularly due to partner costs as we expand our compute partner program;

• payroll and related costs as a result of headcount growth to support our operations and the impact of the prior year

annual merit increases; and

• stock-based compensation as a result of a new benefit that reduced the service period for retirement eligible employees effective in 2026.

During the remainder of 2026, we expect our cost of revenue to increase as compared to 2025, in particular our co-location costs, bandwidth fees, depreciation of network equipment and amortization of internal-use software as we continue to invest in our platform to support cloud infrastructure services to provide us the ability to scale. Due to the market dynamics driven by the hyperscalers, we are also experiencing price increases for co-location, server and memory costs, which will increase our co-location costs and depreciation of network equipment. Additionally, we expect network build-out and supporting services to increase due to our compute partner programs to support the growth of our cloud infrastructure services solutions and stock-based compensation to increase as a result of a new benefit that reduced the service period for retirement eligible employees.

Research and Development Expenses

Research and development expenses consisted of the following for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change
Payroll and related costs			$	165,044					$	146,592					13		%
Stock-based compensation			48,857						42,268						16
Capitalized salaries and related costs			(80,748)						(72,078)						12
Other expenses			8,423						6,767						24
Total research and development			$	141,576					$	123,549					15		%
As a percentage of revenue			13		%				12		%

The increase in research and development expenses during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to higher payroll and related costs and stock-based compensation as a result of headcount growth from our strategic initiatives and the impact of prior year annual merit increases. Additionally, stock-based compensation increased as a result of a new benefit that reduced the service period for retirement eligible employees effective in 2026.

Research and development costs are expensed as incurred, other than certain internal-use software development costs eligible for capitalization. Capitalized development costs consist of payroll and related costs for personnel and external consulting expenses involved in the development of internal-use software used to deliver our services and operate our network. During the three months ended March 31, 2026 and 2025, we capitalized $31.9 million and $29.4 million, respectively, of stock-based compensation. These capitalized internal-use software development costs are amortized to cost of revenue over their estimated useful lives, ranging from two to ten years based on the software developed and its expected useful life.

During the remainder of 2026, we expect our research and development costs to increase as compared to 2025, in particular payroll and related costs, including stock-based compensation, in support of our faster growing security and cloud infrastructure services solutions. We also expect stock-based compensation to increase during the remainder of 2026 as a result of a new benefit that reduced the service period for retirement eligible employees. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

Sales and Marketing Expenses

Sales and marketing expenses consisted of the following for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change
Payroll and related costs			$	108,523					$	92,364					17		%
Stock-based compensation			24,981						22,440						11
Marketing programs and related costs			16,123						11,215						44
Other expenses			7,435						8,112						(8)
Total sales and marketing			$	157,062					$	134,131					17		%
As a percentage of revenue			15		%				13		%

The increase in sales and marketing expenses during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to:

• payroll and related costs as a result of headcount growth as part of our reinvestment in our go-to-market strategy;

• stock-based compensation as a result of a new benefit that reduced the service period for retirement eligible employees effective in 2026; and

• marketing programs and related costs from the timing of events and increased campaigns.

During the remainder of 2026, we expect our sales and marketing expenses to increase as compared to 2025, in particular payroll and related costs primarily due to our reinvestment in headcount as part of our go-to-market strategy to drive acquisition of new customers for our faster growing security and cloud infrastructure services solutions, and from stock-based compensation as a result of a new benefit that reduced the service period for retirement eligible employees. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

General and Administrative Expenses

General and administrative expenses consisted of the following for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025						% Change
Payroll and related costs			$	62,870					$	56,492					11		%
Stock-based compensation			33,166						28,342						17
Depreciation and amortization			18,138						16,486						10
Facilities-related costs			20,775						21,869						(5)
Provision for doubtful accounts			1,117						1,155						(3)
Acquisition-related costs			(759)						95						(899)
Software and related service costs			16,309						16,746						(3)
Other expenses			12,193						14,748						(17)
Total general and administrative			$	163,809					$	155,933					5		%
As a percentage of revenue			15		%				15		%

The increase in general and administrative expenses during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to higher payroll and related costs and stock-based compensation as a result of headcount growth to support our operations and the impact of the prior year annual merit increases. Additionally, stock-based compensation increased as a result of a new benefit that reduced the service period for retirement eligible employees effective in 2026.

During the remainder of 2026, we expect our general and administrative expenses to increase as compared to 2025, to

support the operations of the business. In particular, we expect stock-based compensation to increase as a result of a new benefit that reduced the service period for retirement eligible employees. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

Amortization of Acquired Intangible Assets

			For the Three Months Ended March 31,
(in thousands)			2026						2025						% Change
Amortization of acquired intangible assets			$	25,187					$	27,637					(9)		%
As a percentage of revenue			2		%				3		%

The decrease in amortization of acquired intangible assets for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a decrease in the value of acquired intangible assets as a result of impairments of certain completed technologies recognized in the fourth quarter of 2025. Based on acquired intangible assets at March 31, 2026, we expect amortization of acquired intangible assets to be approximately $75.0 million for the remainder of 2026, and $85.6 million, $79.0 million, $74.0 million and $66.7 million for 2027, 2028, 2029 and 2030, respectively.

Restructuring Charge

			For the Three Months Ended March 31,
(in thousands)			2026						2025						% Change
Restructuring charge			$	183					$	361					(49)		%
As a percentage of revenue			—		%				—		%

The restructuring charge for the three months ended March 31, 2026 was primarily driven by management's commitment to an action initiated during the fourth quarter of 2025 to restructure certain parts of the company to align investments and simplify organizational structure to long-term growth priorities. We do not expect to incur material additional charges related to this action.

The restructuring charge for the three months ended March 31, 2025 was primarily driven by management's commitment to an action initiated during the third quarter of 2024 with the primary intent to redeploy headcount and resources to support our faster growing security and cloud infrastructure services solutions. We do not expect to incur material additional charges related to this action.

Non-Operating Income

			For the Three Months Ended March 31,
(in thousands)			2026						2025						% Change
Interest and marketable securities income, net			$	17,547					$	19,530					(10)		%
As a percentage of revenue			2		%				2		%
Interest expense			$	(8,257)					$	(6,750)					22		%
As a percentage of revenue			(1)		%				(1)		%
Other (expense) income, net			$	(1,786)					$	6,020					(130)		%
As a percentage of revenue			—		%				1		%

Interest and marketable securities income, net consists of interest earned on invested cash and marketable securities balances and income and losses on mutual funds that are associated with our employee non-qualified deferred compensation plan. The decrease for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily the result of investing in marketable securities at lower rates of return due to lower interest rates in 2026 as compared to the same period in 2025.

Interest expense is related to our debt transactions, which are described in Note 6 to the interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Other (expense) income, net primarily represents net foreign exchange gains and losses due to foreign exchange rate fluctuations on the remeasurement of monetary assets and liabilities that are not denominated in the functional currency and gains and losses on cost method investments, as well as other non-operating expense and income items. Other (expense) income, net may fluctuate in the future based on changes in foreign currency exchange rates or other events.

Provision for Income Taxes

			For the Three Months Ended March 31,
(in thousands)			2026						2025						% Change
Provision for income taxes			$	15,679					$	50,212					(69)		%
As a percentage of revenue			1		%				5		%
Effective income tax rate			13		%				29		%

For the three months ended March 31, 2026, as compared to the same period in 2025, our provision for income taxes decreased due to an increase in the excess tax benefit related to stock-based compensation, a decrease in profitability and a decrease in net controlled foreign corporation tested income (formerly global intangible low-taxed income). These amounts were partially offset by an increase in certain tax reserves.

For the three months ended March 31, 2026, our effective income tax rate was lower than the federal statutory tax rate due to the excess tax benefit related to stock-based compensation, the benefit of U.S. federal, state and foreign research and development credits and foreign income taxed at lower rates. These amounts were partially offset by non-deductible transfer pricing and non-deductible stock-based compensation.

For the three months ended March 31, 2025, our effective income tax rate was higher than the federal statutory tax rate due to a shortfall in the tax benefit related to stock-based compensation, non-deductible stock-based compensation and non-deductible transfer pricing. These amounts were partially offset by the benefit of U.S. federal, state and foreign research and development credits and foreign income taxed at lower rates.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2026. The OBBBA did not have a material impact on our condensed consolidated financial statements.

In determining our net deferred tax assets and valuation allowances, annualized effective income tax rates and cash paid for income taxes, management is required to make judgments and estimates about domestic and foreign profitability, the timing and extent of the utilization of net operating loss carryforwards, applicable tax rates, transfer pricing methodologies and tax planning strategies. Judgments and estimates related to our projections and assumptions are inherently uncertain; therefore, actual results could differ materially from our projections.

Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on GAAP, we provide 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 our 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 and impact of foreign currency exchange rates, as discussed below.

Management believes that these non-GAAP financial measures reflect our 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 to those of our peer companies. Management also believes that these non-GAAP financial measures

enable investors to evaluate our 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 our ongoing operating results.

The non-GAAP financial measures do not replace the presentation of our GAAP financial measures and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

The non-GAAP adjustments, and our basis for excluding them from non-GAAP financial measures, are outlined below:

• Amortization of acquired intangible assets** – We have incurred amortization of intangible assets, included in our GAAP financial statements, related to various acquisitions we have 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, we exclude amortization of acquired intangible assets from our 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 our 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 our current financial results to previous and future periods difficult to interpret; therefore, we believe it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from our non-GAAP financial measures in order to highlight the performance of our core business and to be consistent with the way many investors evaluate our performance and compare our 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. Acquisition-related costs are impacted by the timing and size of the acquisitions, and we exclude acquisition-related costs from our 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 our acquisition transactions and do not reflect our core operations.

• Restructuring charge** – We have incurred restructuring charges from programs that have significantly changed either the scope of the business undertaken by us 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. We exclude these items from our non-GAAP financial measures when evaluating our 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 our business.

• Amortization of debt issuance costs and capitalized interest expense** – The issuance costs of our convertible senior notes are amortized to interest expense and are excluded from our 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** – We have recorded gains and losses from the disposition, changes to fair value and impairment of cost method investments. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to these gains and losses are not representative of our 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 our acquisitions), if any. We

believe that applying the non-GAAP adjustments and their related income tax effect allows us to highlight income attributable to our core operations.

The following table reconciles GAAP income from operations to non-GAAP income from operations and non-GAAP operating margin for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025
Income from operations			$	114,494					$	154,583
Amortization of acquired intangible assets			25,187						27,637
Stock-based compensation			128,681						111,978
Amortization of capitalized stock-based compensation and capitalized interest expense			15,016						12,359
Restructuring charge			183						361
Acquisition-related (benefit) costs			(759)						95
Non-GAAP income from operations			$	282,802					$	307,013
GAAP operating margin			11		%				15		%
Non-GAAP operating margin			26		%				30		%

The following table reconciles GAAP net income to non-GAAP net income for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025
Net income			$	106,319					$	123,171
Amortization of acquired intangible assets			25,187						27,637
Stock-based compensation			128,681						111,978
Amortization of capitalized stock-based compensation and capitalized interest expense			15,016						12,359
Restructuring charge			183						361
Acquisition-related (benefit) costs			(759)						95
Amortization of debt issuance costs			2,148						1,605
Gain on cost method investments, net			—						(9,313)
Income tax effect of above non-GAAP adjustments and certain discrete tax items			(37,515)						(11,797)
Non-GAAP net income			$	239,260					$	256,096

The following table reconciles GAAP net income per diluted share to non-GAAP net income per diluted share for the periods presented (in thousands, except per share data):

			For the Three Months Ended March 31,
			2026						2025
GAAP net income per diluted share			$	0.71					$	0.82
Amortization of acquired intangible assets			0.17						0.18
Stock-based compensation			0.86						0.74
Amortization of capitalized stock-based compensation and capitalized interest expense			0.10						0.08
Restructuring charge			—						—
Acquisition-related (benefit) costs			(0.01)						—
Amortization of debt issuance costs			0.01						0.01
Gain on cost method investments, net			—						(0.06)
Income tax effect of above non-GAAP adjustments and certain discrete tax items			(0.25)						(0.08)
Adjustment for shares (1)			0.02						—
Non-GAAP net income per diluted share (2)			$	1.61					$	1.70
Shares used in GAAP per diluted share calculations			150,022						151,064
Impact of benefit from note hedge transactions (1)			(1,338)						—
Shares used in non-GAAP per diluted share calculations (1)			148,684						151,064

(1) Shares used in non-GAAP per diluted share calculations have been adjusted for the three months ended March 31, 2026, for the benefit of our note hedge transactions. During these periods, our average stock price was in excess of $93.01, which is the initial conversion price of Akamai's convertible senior notes due in May 2033. See further definition below.

(2) Amounts may not foot due to rounding.

Non-GAAP net income per diluted share is calculated as 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 us pursuant to the note hedge transactions entered into in connection with the issuances of our 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, we 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 our 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.

We consider Adjusted EBITDA to be another important indicator of the operational strength and performance of our business and a good measure of our historical operating trends. Adjusted EBITDA eliminates items that we do not consider to be part of our core operations. We define Adjusted EBITDA as 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 represents Adjusted EBITDA stated as a percentage of revenue.

The following table reconciles GAAP net income to Adjusted EBITDA and Adjusted EBITDA margin for the periods presented (in thousands):

			For the Three Months Ended March 31,
			2026						2025
Net income			$	106,319					$	123,171
Interest and marketable securities income, net			(17,547)						(19,530)
Provision for income taxes			15,679						50,212
Depreciation and amortization			143,867						134,304
Amortization of capitalized stock-based compensation and capitalized interest expense			15,016						12,359
Amortization of acquired intangible assets			25,187						27,637
Stock-based compensation			128,681						111,978
Restructuring charge			183						361
Acquisition-related (benefit) costs			(759)						95
Interest expense			8,257						6,750
Gain on cost method investments, net			—						(9,313)
Other expense, net			1,786						3,293
Adjusted EBITDA			$	426,669					$	441,317
Net income margin			10		%				12		%
Adjusted EBITDA margin			40		%				43		%

Impact of Foreign Currency Exchange Rates

Revenue and earnings from our international operations have historically been an important contributor to our financial results. Consequently, our 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, generally 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 change at constant currency presented 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.

Liquidity and Capital Resources

To date, we have financed our operations primarily through public and private sales of debt and equity securities and cash generated by operations. As of March 31, 2026, our cash, cash equivalents and marketable securities, which are detailed in Note 2 to the interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q, totaled $1.7 billion. We place our cash investments in instruments that meet high-quality credit standards, as specified in our investment policy. Our investment policy is also designed to limit the amount of our credit exposure to any one issue or issuer and seeks to manage these assets to achieve our goals of preserving principal and maintaining adequate liquidity at all times.

Changes in cash, cash equivalents and marketable securities are dependent upon changes in, among other things, working capital items such as accounts receivable, deferred revenue, accounts payable, various accrued expenses and operating lease obligations, as well as changes in our capital and financial structure due to common stock repurchases, debt repayments and issuances, purchases and sales of marketable securities, cash paid for acquisitions and similar events. We believe our strong balance sheet, cash position and access to funds available under our revolving credit facilities are important competitive differentiators that provide the financial stability and flexibility to enable us to continue to make investments at opportune

times. We expect to continue to evaluate strategic investments to strengthen our business.

As of March 31, 2026, we had cash and cash equivalents of $382.7 million held in accounts outside the U.S. The U.S. Tax Cuts and Jobs Act establishes a territorial tax system in the U.S., which provides companies with the potential ability to repatriate earnings with minimal U.S. federal income tax impact. As a result, our liquidity is not expected to be materially impacted by the amount of cash and cash equivalents held in accounts outside the U.S.

Cash Provided by Operating Activities

			For the Three Months Ended March 31,
(in thousands)			2026						2025
Net income			$	106,319					$	123,171
Non-cash reconciling items included in net income			315,540						311,817
Changes in operating assets and liabilities			(109,351)						(183,788)
Net cash provided by operating activities			$	312,508					$	251,200

The increase in cash provided by operating activities for the three months ended March 31, 2026, as compared to the same period in 2025, was due to timing of payroll funding and vendor payments, as well as lower income tax payments due to intercompany sales of intellectual property paid in the first quarter of 2025 which did not reoccur in 2026. These increases were partially offset by timing of customer collections.

Cash Used in Investing Activities

			For the Three Months Ended March 31,
(in thousands)			2026						2025
Cash paid for asset acquisition			$	—					$	(29,930)
Purchases of property and equipment and capitalization of internal-use software development costs			(191,847)						(196,008)
Net marketable securities activity			(125,849)						1,105,875
Other, net			(1,798)						(3,091)
Net cash (used in) provided by investing activities			$	(319,494)					$	876,846

The increase in cash used in investing activities during the three months ended March 31, 2026, as compared to the same period in 2025, was due to an increase in maturities and sales of marketable securities during the three months ended March 31, 2025, that were not reinvested in order to repay our $1,150.0 million convertible senior notes, which we paid in May 2025. The increase in cash used in investing activities was partially offset by remaining consideration paid for the Edgio, Inc. asset acquisition during the three months ended March 31, 2025, that did not recur in 2026.

Net Cash Used in Financing Activities

			For the Three Months Ended March 31,
(in thousands)			2026						2025
Activity related to stock-based compensation			$	(84,955)					$	(51,881)
Repurchases of common stock			(205,886)						(499,963)
Other, net			(868)						(406)
Net cash used in financing activities			$	(291,709)					$	(552,250)

The decrease in cash used in financing activities during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a decrease in repurchases of common stock, partially offset by increased employee taxes

paid related to net share settlement of stock awards as a result of a higher stock price in 2026.

In May 2024, our board of directors authorized a $2.0 billion share repurchase program, effective May 2024 through June 2027. During the three months ended March 31, 2026, we repurchased 2.0 million shares of common stock at a weighted average price of $105.47 per share for an aggregate of $205.9 million. As of March 31, 2026, $974.6 million remained available for future share repurchases under the authorization program. Our goals for the share repurchase program are to offset the dilution created by our employee equity compensation programs over time and provide the flexibility to return capital to stockholders as business and market conditions warrant, while still preserving our ability to pursue other strategic opportunities. The timing and amount of any future share repurchases will be determined by our management based on its evaluation of market conditions and other factors.

Convertible Senior Notes

As of March 31, 2026, we had $4,140.0 million of convertible senior notes outstanding that are senior unsecured obligations and bear interest payable semi-annually in arrears. These notes mature between September 2027 and May 2033. The terms of the notes and related hedge and warrant transactions are discussed more fully in Note 6 to the interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Revolving Credit Facilities

In January 2025, we entered into a $150.0 million uncommitted revolving credit agreement ("2025 Credit Agreement"). Any outstanding borrowings are secured by collateral, consisting primarily of available-for-sale marketable securities. The 2025 Credit Agreement does not expire but is cancellable at any time and any borrowings can be due on demand. Borrowings under the 2025 Credit Agreement will bear a specified interest rate, based on the Secured Overnight Financing Rate, and interest period at the time of the confirmed borrowing. There were no outstanding borrowings under the 2025 Credit Agreement as of March 31, 2026.

In November 2022, we entered into a revolving Credit Agreement ("2022 Credit Agreement"), which was amended in May 2025 to increase the aggregate revolving commitments to $1.0 billion, which allows us to borrow up to $1.0 billion at various interest rates and contains customary representations and warranties, affirmative and negative covenants and events of default. The 2022 Credit Agreement expires on November 22, 2028. As of March 31, 2026, we were in compliance with all covenants. There were no outstanding borrowings under the 2022 Credit Agreement as of March 31, 2026.

The terms of the revolving credit agreements are discussed more fully in Note 6 to the interim condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q.

Operating Leases

We have entered into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for our servers and other networking equipment. In addition, we have entered into an operating lease with a data center operator for space in the Virginia area that we contemporaneously subleased to an affiliate of a large social media customer. A portion of the space at the subleased data center commenced in 2025, and the remainder of the space commenced in January 2026. Both the lease payments and associated sublease income are expected to substantially offset each other. As of March 31, 2026, there have been no significant changes in our obligations under these operating lease arrangements from those reported on Form 10-K for the year ended December 31, 2025, other than normal period-to-period variations, particularly as we execute on our expansion plans for cloud infrastructure services.

Purchase Commitments

We enter into long-term agreements with network and internet service providers for bandwidth, as well as execute purchase orders for the purchase of goods or services in the ordinary course of business, which may contain minimum commitments. These minimum commitments may vary from period to period depending on the timing and length of contract renewals with our vendors, and on our plans for network expansion, including our expansion plans related to our cloud infrastructure services.

Liquidity Outlook

Based on our present business plan, we expect our current cash, cash equivalents and marketable securities balances and our forecasted cash flows from operations to be sufficient to meet our foreseeable cash needs for at least the next 12 months.

Our foreseeable cash needs, in addition to our recurring operating costs, include our expected capital expenditures, particularly planned investments in AI infrastructure, investments in information technology, potential strategic acquisitions, anticipated share repurchases, lease and purchase commitments and settlements of other liabilities.

Off-Balance Sheet Arrangements

We have entered into indemnification agreements with third parties, including vendors, customers, landlords, our officers and directors, stockholders of acquired companies, joint venture partners and third parties to which we license technology. Generally, these indemnification agreements require us to reimburse losses suffered by a third party due to various events, such as lawsuits arising from patent or copyright infringement or our negligence. These indemnification obligations are considered off-balance sheet arrangements in accordance with the authoritative guidance for guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others. See also Note 13 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2025 for further discussion of these indemnification agreements. The fair value of guarantees issued or modified during the three months ended March 31, 2026 was determined to be immaterial.

As of March 31, 2026, we did not have any additional material off-balance sheet arrangements.

Significant Accounting Policies and Estimates

See Note 2 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our significant accounting policies and estimates from those reported in our annual report on Form 10-K for the year ended December 31, 2025.