Akamai shifts investment toward security and compute as delivery declines

Transcript intelligence

What changed

Relative to the prior-quarter analysis, compute growth strengthened from 23% to 28% year over year, while management continued to describe delivery revenue as declining. The company added a behavioral DDoS engine, cited a workforce reduction and restructuring charge, and maintained its guidance framework while shifting investment toward security and compute.

Guidance delta

Maintained: Q4 revenue is guided flat to +3%, full-year revenue growth at 4% to 5%, security growth at 15% to 17%, and compute growth up to 25%.

Key takeaways

• Security represents the majority of revenue and is growing at double-digit rates.
• Compute revenue grew 28% year over year and is on track for a $100 million annualized run rate.
• Delivery revenue continues to decline amid macro headwinds and slower traffic growth.
• New API security and Zero Trust offerings are on track to reach $50 million and $180 million ARR, respectively.
• Management highlighted a shift of investment toward security and compute, including a larger go-to-market effort and partner expansion.

Management priorities

• Increase investment in cloud computing capabilities and new security products.
• Expand go-to-market efforts with hunters, specialists, and channel partners.
• Strengthen the partner ecosystem through a multi-year video workflow ISV partnership.
• Continue share buybacks while remaining opportunistic on M&A.
• Scale back the workforce and redeploy savings to faster-growing segments.