Akamai (1AKAM) AI Stock Analysis

Company Guidance

For Q4 2026, Akamai projects revenue of $1.145 billion to $1.170 billion, up 5% to 7% as reported and in constant currency over Q4 2025, with foreign exchange fluctuations expected to have a negative $4 million impact on Q4 revenue compared to Q3 levels and a negative $5 million impact year-over-year, cash gross margin of approximately 70%, non-GAAP operating expenses of $368 million to $378 million, adjusted EBITDA margin of approximately 38%, non-GAAP depreciation expense of $165 million to $167 million, non-GAAP operating margin of approximately 24%, non-GAAP EPS of $1.50 to $1.70, taxes of $48 million to $54 million based on an estimated quarterly non-GAAP tax rate of approximately 18%, a fully diluted share count of approximately 149 million shares, and CapEx of approximately $2.445 billion to $2.645 billion; for full-year 2026, it expects revenue of $4.44 billion to $4.465 billion, up 6% as reported and up 5% to 6% in constant currency, CIS revenue growth of 40% to 42% year-over-year in constant currency, security revenue growth in the high single digits on a constant currency basis, delivery in other cloud apps to decline in the mid-single digits year-over-year on a constant currency basis, a positive $5 million foreign exchange impact, non-GAAP operating margin of approximately 25%, CapEx of $3.462 billion to $3.662 billion, and non-GAAP EPS of $6.47 to $6.68 based on a non-GAAP effective tax rate of 18.5% and a fully diluted share count of 148 million shares; it expects CIS revenue of $1.1 billion to $1.3 billion in 2027, total company revenue growth of 17% to 22% in constant currency year-over-year, 25% to 30% in the first half and 70% to 75% in the back half, and total company revenue surpassing $7 billion in 2028, while the $14 billion of signed CIS contracts is expected to generate approximately $2.2 billion of annual revenue when fully ramped, approximately 75% adjusted EBITDA margin, approximately 30% non-GAAP operating margin, an after-tax internal rate of return of approximately 13%, and non-GAAP average annual adjusted return on invested capital of approximately 15%, with revenue beginning to ramp in Q4 2026 and fully ramped by the end of 2028.