Akamai signed over US$14bn of cloud deals; it earned US$109m from cloud last quarter

01Three businesses: security pays the bills, delivery shrinks, cloud grows

Akamai has reported revenue in three lines since the start of 2026. Security, where Akamai names API security, web application and Guardicore segmentation products as the growth drivers, brought in US$622m in the quarter to September, up 9%. Delivery and other cloud applications, the content-delivery business, brought in US$391m, down 3%. Cloud infrastructure services (CIS), the compute business built on Linode, brought in US$109m, up 34%.¹²⁹ Total revenue was US$1,122m, up 6%.¹

Akamai puts the delivery decline down to “downward pricing of contract renewals” and to customers optimising traffic to cut costs, and CIS growth to “growth in sales to new and existing customers of our compute solutions, as well as the compute partner solutions running on our platform”.² In the quarter, security was 55% of revenue, delivery 35% and CIS 10%, on our arithmetic from the release.

Profit fell as the cloud build began. Cost of revenue rose to 45% of revenue from 41%, led by “network build-out and supporting services” (up 45%, mostly partner costs) and co-location (up 25%). The non-GAAP operating margin fell 6 points to 25%, and GAAP net income fell 16% to US$117m.¹²

02What was signed: about US$14.4bn, US$11.6bn of it from one customer

The commitments arrived in three steps. On 7 May Akamai announced that “a leading, U.S. based frontier model provider” had committed US$1.8bn over seven years.⁶ By 6 August the year’s multi-year CIS contracts were “collectively worth over $2.8 billion”, including more than US$600m over four years from a new US technology customer.⁵ On 18 September Akamai and Anthropic signed two project plans under a master services agreement dated 5 May, under which Anthropic “has committed to pay the Company approximately $11.6 billion”, each plan for “an initial seven-year term commencing on their respective service start dates”.³ Akamai said the capacity supports Anthropic’s “CPU workload” growth.⁴ It has not said whether the May customer was Anthropic.

A commitment is not revenue. It shows up first in remaining performance obligations (RPO), the contracted revenue Akamai has not yet earned under noncancellable contracts. RPO was US$19.9bn on 30 September, up from US$7.6bn three months earlier.⁷ Akamai expects to recognise about 35% of it within two years, 28% in years three and four, 21% in years five and six and 16% in years seven and eight.² It had been US$4.8bn a year earlier and US$5.2bn at the end of 2025.⁸⁹ A quarter earlier it expected 40% within twelve months: the backlog is now much larger and much longer.⁷

The contract can still fall short. Revenue depends on Akamai meeting “delivery and service availability requirements”; Anthropic may end a project plan “upon notice of a material outage, subject to certain conditions”, or the whole agreement if Akamai is taken over by “a direct competitor of Anthropic”.³ Akamai’s 10-Q now carries a risk factor that its CIS revenue “may become increasingly dependent on Anthropic”.²

03From contract to revenue: the capacity comes first

Akamai expects revenue from the new contracts “to begin to be recognized in the fourth quarter of 2026, accelerate in 2027, with anticipated capacity fully operational by the end of 2028”, and says that revenue “will primarily be derived in the U.S.”.² Before then it has to buy and install the machines. It estimates capital spending for the large contracts at “approximately $6.8 billion”, starting in the fourth quarter and continuing into 2028, and warns that these investments “are expected to precede a significant portion of the related customer cash inflows”.² In September it put the capex for the Anthropic plans alone at about US$5.5bn, with about US$1.7bn more in 2026 “to secure and pre-purchase critical supply chain components, including memory”.⁴

The supply chain is already contracted. On 24 September Akamai authorised Jabil, which builds its custom servers, to buy about US$1.7bn of memory components; a day earlier it had signed a seven-year statement of work with Lenovo for hardware and services.³ At 30 September it had US$2.4bn of co-location leases that had not yet started, most due to begin by the end of 2027, and about US$1.0bn of server purchase commitments that are “noncancellable, except upon customer cancellation”.² The 10-Q also notes “a significant increase in server and memory costs due to market dynamics driven by hyperscalers”, the same memory squeeze we charted in PC shipments and DRAM prices.²

04How it is paid for: convertible notes, cash, and no buybacks

Capital spending was US$464m in the quarter, 41% of revenue, against US$224m and 21% a year earlier.¹ On the cash-flow statement, Akamai paid US$605m for property, equipment and capitalised software while operations brought in US$433m: on our arithmetic, the first quarter of the three this year in which cash capex exceeded operating cash. It bought back no shares in the quarter, after spending US$616m on buybacks in the first half.¹

The money came mostly from convertible notes. In May Akamai sold US$1.75bn of notes due 2030 and US$1.75bn due 2032, both at a 0% coupon, and said it would use part of the proceeds “to fund the accelerated capital expenditure requirements” of CIS. Its convertible notes now total US$7.64bn of principal, including US$1.15bn due on 1 September 2027; its US$1.0bn revolving credit facility was undrawn.² Cash and marketable securities were US$4.239bn on 30 September.¹

Akamai expects to fund the build from cash, operations and its credit lines, but says it “may evaluate a range of financing alternatives”, “with consideration given to potential dilution to shareholders”, if spending and customer payments fall out of step.² There is also the warrant it gave Anthropic: up to 7.74 million common shares on conversion, about 5% of the company, at US$111.33 a share. About 2% vests with the first payment under the third project plan; the rest vests in three steps, one for each further US$3bn Anthropic commits.³⁴ Borrowing to build AI capacity ahead of revenue is the pattern we traced at Oracle and across Big Tech.

05What has to happen for US$7bn in 2028

The targets are steep against today’s base. Akamai guides 2026 revenue of US$4,440m to US$4,465m, against US$4,208m in 2025, which is growth of about 6%.¹⁹ For 2027 it guides CIS revenue of US$1.1bn to US$1.3bn and total growth of 17% to 22% at constant currency; for 2028, revenue “projected to exceed $7.0 billion”.¹ In August its quarterly release gave no 2027 or 2028 figure.⁵

The market has not settled on a reading. Akamai’s shares closed at US$77.84 on 5 November, down 9.4% that day before the results came out after the close, and rose 6.7% to US$83.09 on 6 November. That is 27% below the US$113.94 close of 25 September, the first session after the Anthropic announcement, and 25% below the warrant’s US$111.33 exercise price.¹⁰ We found no company statement on the moves.