AI Takeaway
Akamai Technologies reported Q1 2026 results with operating income declining 25.9% YoY to $114.5M and net income falling 13.7% to $106.3M, pressured by rising costs, while operating cash flow improved 24.4% to $312.5M.
Cost of Revenue
$471.3M
++12.50% YoY
EPS (Basic)
$0.73
-12.05% YoY
Operating Income
$114.49M
-25.93% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Cost of revenue rose 12.5% YoY to $471.3M, and R&D expense increased 14.6% YoY to $141.6M, collectively compressing operating income by 25.9% to $114.5M. These elevated cost structures reflect ongoing investment in infrastructure and product development.
Source: Source: 10-Q Income Statement
Despite weaker reported earnings, operating cash flow surged 24.4% YoY to $312.5M, supported by $183.8M in depreciation and amortization. This demonstrates Akamai's continued ability to convert operations into cash even amid margin pressure.
Source: Source: 10-Q Cash Flow Statement
Total assets grew 16.7% YoY to $11.65B, while total liabilities increased 24.8% to $6.74B, pushing the debt-to-equity ratio to 1.37. Stockholders' equity still grew 7.1% to $4.91B, but the leverage increase warrants monitoring.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockCost of revenue increased 12.5% YoY and R&D expenses grew 14.6% YoY, outpacing revenue growth and driving a 25.9% decline in operating income. If cost growth continues to exceed revenue growth, profitability could deteriorate further.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $1.61 versus the $1.63 analyst consensus — a -1.4% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Cost of Revenue | $471.3M | $418.94M | +12.50% |
Operating Income | $114.49M | $154.58M | -25.93% |
Net Income | $106.32M | $123.17M | -13.68% |
EPS (Basic) | $0.73 | $0.83 | -12.05% |
EPS (Diluted) | $0.71 | $0.82 | -13.41% |
R&D Expense | $141.58M | $123.55M | +14.59% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $11.65B | $9.98B | +16.67% |
Current Assets | $2.13B | $2.37B | -10.29% |
Total Liabilities | $6.74B | $5.4B | +24.81% |
Current Liabilities | $1.04B | $2.02B | -48.64% |
Stockholders' Equity | $4.91B | $4.58B | +7.07% |
Cash & Equivalents | $622.38M | $1.1B | -43.27% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $312.51M | $251.2M | +24.41% |
Investing Cash Flow | $-319.49M | $876.85M | -136.44% |
Financing Cash Flow | $-291.71M | $-552.25M | +47.18% |
Share Buybacks | $205.89M | $499.96M | -58.82% |
D&A | $183.75M | $174.02M | +5.59% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | 2.2% | — | — |
ROA | 0.9% | — | — |
Current Ratio | $2.057 | — | — |
Debt to Equity | $1.372 | — | — |
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Akamai's Q1 2026 results showed operating income declining 25.9% YoY to $114.5M and net income falling 13.7% to $106.3M, driven by a 12.5% rise in cost of revenue and a 14.6% jump in R&D expenses. On the positive side, operating cash flow grew 24.4% YoY to $312.5M, highlighting strong underlying cash generation despite margin pressure.
Yes, Akamai's diluted EPS fell 13.4% YoY to $0.71 in Q1 2026, compared to $0.82 in Q1 2025. The decline was driven by lower net income as rising costs outpaced revenue growth.
Akamai's cost of revenue increased 12.5% YoY to $471.3M, and R&D expenses rose 14.6% YoY to $141.6M in Q1 2026. These cost increases were the primary driver of the 25.9% decline in operating income to $114.5M.
Akamai maintains a current ratio of 2.06, indicating adequate short-term liquidity, but cash and equivalents dropped 43.3% YoY to $622.4M. Total liabilities grew 24.8% to $6.74B, pushing the debt-to-equity ratio to 1.37, reflecting meaningfully higher leverage compared to a year ago.
Akamai generated $312.5M in operating cash flow in Q1 2026, up 24.4% YoY, supported by $183.8M in depreciation and amortization. However, investing cash flow turned sharply negative at -$319.5M versus +$876.8M in Q1 2025, and the company repurchased $205.9M in shares, contributing to a 43.3% decline in cash reserves.