Operator: Good day, everyone, and welcome to the Q2 26 Akamai Technologies, Inc. Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then 1, using a touch tone telephone. To withdraw your questions, you may press star and 2 Please also note today's event is being recorded. At this time, I would like to turn the floor over to Mark Stoutenberg, head of IR. Sir? Please go ahead.

Mark Stoutenberg: Good afternoon, everyone, and thank you for joining Second Quarter 26 Earnings Call. Speaking today will be F. Thomson Leighton, Akamai's chief executive officer and Edward McGowan, Akamai's chief financial officer. Please note that today's comments include forward-looking statements, that include revenue and earnings guidance. These forward-looking statements are based on current expectations and assumptions that are subject to certain risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied. The factors include, but are not limited to, any impact from macroeconomic trends. The integration of any acquisition, geopolitical developments, and other risk factors identified with our filings with the SEC. The statements included on today's call represent the company's views on 08/06/2026. And we assume no obligation to update any forward-looking statements. As a reminder, we will be referring to certain non GAAP financial metrics during today's call. A detailed GAAP to non GAAP reconciliation is available in the Investor Relations section of akamai.com under financials. With that, I will now hand the call off to our CEO, Dr. F. Thomson Leighton.

F. Thomson Leighton: Thanks, Mark. I am very pleased to report that Akamai continues to build momentum and gain wide industry recognition as a key infrastructure provider for the AI driven economy. Akamai has long been known for operating the world's most distributed platform for content delivery and cybersecurity, at global scale and with a reputation for reliability, quality, and trust. And now we are leveraging our global footprint and years of experience serving the world's largest enterprises to do for the AI driven economy what we have done for cybersecurity and content delivery. The response from industry leaders and major enterprises has been very strong. In fact, we were very pleased to announce today that a US based technology company has committed more than $600 million over 4 years for our cloud infrastructure services to power their robotics development. The addition of this new customer brings the total volume of the multiyear commitments signed so far this year for our cloud infrastructure services to more than $2.8 billion. As a result of these commitments, and the exceptionally strong pipeline we are seeing, we now anticipate that Akamai's overall revenue growth will accelerate into the low teens in 2027. For investors who want to understand how the AI market is evolving, and why Akamai is such a unique and vital player in this new ecosystem, encourage you to read the July 23 article in Fast Company by Victor Day. In the article, Day explains the role by Akamai's distributed platform in transforming the content delivery and cybersecurity marketplaces. And how a similar approach can benefit the AI ecosystem with many agentic workloads being processed at the edge, close to users instead of in massive centralized data centers. In a related blog, IDC analyst Dave McCarthy considers a world transformed by AI agents and the practical challenges of automated execution of queries against a trained model. Whereas training frontier models requires massive data centers and energy consumption, the next challenge for AI is what it will take to run those models everywhere. At low latency and with affordable cost. it is also helpful to read a recent blog by Akamai CTO, Robert Blumofe, on how AI inference is reshaping the cloud. Bobby's post explains why the infrastructure needed for AI agents will ultimately be a flexible continuum. Stretching from the core to the edge. As the market for AI moves beyond centralized AI Akamai's strategy is to provide a unified distributed grid for AI inference. By pushing AI inference to the edge and combining it with our massive deployment of CPUs for delivery, security, and functions as a service, our platform will enable customers to run agents and models within milliseconds of their end users. With the responsiveness of local compute and the scale of the global web. Optimizing performance while reducing latency and cost. Customers are already leveraging our cloud infrastructure services for a wide variety of repeatable use cases. For example, an AI patent intelligence platform in Singapore shifted its inference workloads from a hyperscaler to Akamai. Boosting performance by 30% and cutting infrastructure costs by 20%. An AI powered decision intelligence platform in Poland chose us to run low latency game theory simulations globally and with predictable costs. An enterprise data storage provider in The US chose us to run their high throughput storage observability and analytics platform. A global AI software company in India chose us to run their GenAI image creation in a $12 million win over a hyperscaler. An AI powered communications provider in India chose us to eliminate unpredictable hyperscaler billing, and accelerate their customer engagement. A SaaS media workflow platform in The US, chose us for high throughput, live media encoding. Looking across our business as a whole, AI is not only driving adoption and revenue growth for Akamai Cloud, AI has also been a tailwind for our security solutions. In Q2, Akamai security revenue grew 10% year over year as reported and 9% in constant currency. Security growth was led once again by strong demand for our market leading web app firewall API security, and Guardicore segmentation solutions. Our WAF continued to see strong demand in Q2, from customers eager to protect against vulnerabilities that could be exposed by frontier models like Anthropic or GPT 5.5. Customers that added or significantly expanded their WAF usage in Q2 included 1 of the world's leading commerce sites, 1 of the world's leading automakers, and 1 of the world's largest banks. In a $14 million upgrade to have Akamai secure all of their applications. We also signed renewal upgrades for security and delivery products with 1 of the world's largest telcos in a contract worth more than $20 million over 2 years. And today, we are also very pleased to announce that CrowdStrike, a leading AI native cybersecurity platform, has switched to Akamai, for its web security, and content delivery needs. CrowdStrike told us they were dissatisfied with the inconsistent service they received from 1 of our SMB focused competitors. We see this validation from another security leader as a strong endorsement of Akamai's enterprise security capabilities and our hard won reputation for trust, reliability, and dedicated customer support. On the go to market front, we recently announced that Akamai has been selected as a strategic partner in WWT's AI Readiness Model for Operational Resilience, or ARMOR for short. This is the industry's first holistic vendor agnostic AI security framework. And our inclusion positions Akamai as a foundational security architect for the AI factories being built by WWT, and accelerated by NVIDIA. Without this collaborative security framework for AI, organizations are often forced to piece together fragmented security strategies. By aligning the Akamai security portfolio with ARMOR, we provide a methodology to protect large scale AI clusters proactively. By preventing the lateral movement of threats. As WWT's Chris Conrad said, no single vendor can secure the AI frontier alone. Through our close partnership with Akamai, turning the hype of secure enterprise AI into a tangible, scalable reality for customers through our close partnership with Akamai, turning the hype of secure enterprise AI into a tangible, scalable reality for customers. Akamai is also proud to be 1 of the industry's must have security providers partnering with Anthropic and OpenAI to help ensure the safe and rapid deployment of AI enhanced defenses. With our access to programs like Glasswing and Daybreak, and our participation in programs like the Open Secure AI Alliance, we are applying our expertise to help keep major enterprises critical infrastructure secure. As employees across all industries use AI tools more frequently, enterprises need more help to secure their workforce and prevent sensitive data from being leaked. that is why we acquired LayerX, a leading provider of secure enterprise browser, and AI usage control. With LayerX, now rebranded as Akamai Workforce Protector, were able to give security teams the deep visibility they need to see exactly how users are interacting with web content, SaaS applications, file uploads, and even raw AI prompts. By adding this browser security platform to our portfolio, Akamai is now uniquely positioned to protect enterprises from unauthorized AI agents, whether they are operating on a user's laptop or living inside internal applications that talk to external LLMs. What makes the combination particularly exciting is how nicely WorkforceProtector aligns with Akamai's existing Zero Trust portfolio. Including our Guardicore micro segmentation, Zero Trust network access, and DNS security solutions. That thousands of enterprises rely on today Ultimately, we believe these combined capabilities will deliver a powerful unified workforce security solution that directly addresses 1 of the industry's most urgent challenges: securing and governing how employees, partners, and supply chain ecosystems interact with AI, LayerX is the latest in a series of acquisitions we made to build out our security portfolio and make it easier for enterprises to obtain more comprehensive solutions from Akamai. As their strategic security partner. Overall, we expect our security portfolio to generate more than $2.4 billion in revenue this year, making Akamai 1 of the largest security providers in the market. In summary, we are excited to see AI driving demand for our cloud and security portfolios, and we are grateful for our talented team here at Akamai. Who continue to perform extraordinary work to deliver flawless digital experiences for our customers. Our employees' dedication to our customers' success is 1 of the reasons why so many of the world's top brands and most demanding businesses rely on Akamai as their trusted dependable, and reliable partner. Now I will turn the call over to Edward for more on our results and our outlook for the remainder of the year. Edward?

Edward J. McGowan: Thanks, Tom. Before I begin the standard review of our quarterly financials and updated 2020 outlook, I want to build on Tom's remarks. From a strategic and financial perspective, we could not be more excited about the trajectory of our business. Securing a 4-year $600 million GPU services deal with a leading US based technology company focused on robotics development brings our recently announced major wins to over $2.8 billion this year. A huge validation of our platform. Beyond providing great multiyear revenue visibility, it also underscores the scale of our cloud infrastructure services business. For this new customer, we do not expect any material revenue impact for 2026 but we do expect revenue to fully ramp throughout 2027. And finally, as Tom mentioned earlier, and backed by these multiyear commitments along with an expanding pipeline, we have a clear line of sight to accelerating our top line revenue growth from single digits this year to the low teens in 2027. With that, let's dive into the Q2 results. Revenue in the second quarter was $1.1 billion, up 5% year over year as reported and in constant currency. Cloud infrastructure services or CIS revenue was $99 million, up 39% year over year as reported and in constant currency. This was in line with our expectations, and we continue to expect CIS revenue to meaningfully accelerate in Q4 and then further accelerate in 2027. Security revenue maintained strong momentum with revenue of $4 million, up 10% year over year as reported and 9% in constant currency. The strength in the second quarter continued to be driven by our fast growing API security and Guardicore segmentation solutions. Moving to delivery and other cloud applications, revenue was $396 million, down 6% year over year as reported and down 5% in constant currency. International revenue was $549 million, up 6% year over year or up 7% in constant currency, representing 50% of total revenue in Q2. U. S. Foreign exchange fluctuations had a negative impact on revenue of $2 million on a sequential basis and a negative $1 million impact on a year-over-year basis. Moving to profitability. In Q2, we generated non GAAP net income of $236 million, or $1.59 of earnings per diluted share. down 8% year over year as reported and down 6% in constant currency. These results include our expanded colocation investments, higher depreciation and increased headcount costs all to help fuel faster growth for our cloud infrastructure services. Our non GAAP operating margin for Q2 was 25%, in line with our expectations. We expect operating margin to remain in the mid-20s for the remainder of this year as we continue to invest to capture the exciting growth opportunities in CIS. Our Q2 CapEx was $347 million, or 32% of revenue, Second quarter CapEx was below our guidance primarily driven by the timing of receipt of some GPUs. These shipments arrived a few weeks later than expected following the quarter end, pushing the bulk of the planned spend into Q3. Moving to cash in our capital allocation strategy. In May, we raised $3.5 billion via 2 equal tranches of zero coupon convertible debt, maturing in 2020 and 2030 to fund our growing CIS pipeline, for general corporate purposes. In Q2, we spent approximately $410 million to buy back approximately 3 million shares. Year to date, we have repurchased roughly 5 million shares for a total of approximately $616 million. We ended the second quarter with approximately $565 million remaining on our current repurchase authorization. However, given the strong market demand for CIS, we are temporarily pausing share repurchases to reallocate capital to support our high growth CIS pipeline. And finally, as of June 30, had approximately $4.6 billion of cash, cash equivalents, and marketable securities. Now before I provide Q3 and full year 2026 guidance, I want to touch on a few housekeeping items. First, on July 2, we completed the acquisition of the security company LayerX for approximately $205 million. From a financial perspective, we expect the acquisition to have no material impact on full year 2026 revenue. On the bottom line, we expect LRx will be dilutive to our non GAAP EPS by approximately $0.02 for 2026, split evenly across Q3 and Q4. Second, I would like to turn to foreign exchange and its expected impact on our second half 26 performance. Based on currency movements since our last earnings call, we now expect second half revenue headwinds of approximately $9 million Finally, I would like to provide additional color on our capital expenditures for the remainder of the year. For Q3, CapEx is projected to step up significantly, partly due to the shipments that slipped into July that I referenced earlier. And as we ramp up build outs to support the major contracts announced earlier this year. As mentioned on our last call, GPU demand remains exceptionally strong. As a result, all of our GPU capacity is completely sold out. Therefore, driven by the $600 million new customer win we announced today and a very robust pipeline, we expect to invest up to $500 million in CapEx to replenish and expand our GPU capacity. We expect to spend approximately $60 million of that this year with the remainder hitting in early 27. Moving now to guidance. For the third quarter, we are projecting revenue in the range of $1.105 billion to $1.130 billion, up 5% to 7% as reported, and up 5% to 8% in constant currency over Q3 25. At current spot rates, foreign exchange fluctuations are expected to have a negative $2 million impact on Q3 revenue compared to Q2 levels and a negative $8 million impact year over year. At these revenue levels, we expect cash gross margin of approximately 70%, as a reminder, gross margin is impacted by the significant increase in colocation as we accelerate the growth in our CIS business. Q3 non GAAP operating expenses are projected to be $347 million to $359 million We anticipate Q3 EBITDA margin of approximately 38% to 40%. We expect non GAAP depreciation expense to be $153 million to $155 million We expect non GAAP operating margin of approximately 24% to 26%. And with the overall revenue and spend configuration I outlined, we expect Q3 non GAAP EPS in the range of $1.60 to $1.80 This EPS guidance assumes taxes of $0.55 million to $2 million, based on an estimated quarterly non GAAP tax rate of approximately 19%, and it also reflects a fully diluted share count of approximately 150 million shares. Moving to CapEx for the reasons I highlighted earlier, we expect to spend approximately $475 million to $525 million in the third quarter. This represents approximately 43% to 46% of total revenue. Looking ahead to the full year 2026, we expect revenue of $4.445 billion to $4.530 billion, which is up 6% to 8% as reported, and up 5% to 7% in constant currency. Cloud infrastructure services, continue to expect year over year revenue growth of at least 50% in constant currency. We continue to expect security revenue growth in the high single digits on a constant currency basis in 2026 and for delivery and other cloud apps, we continue to expect a decline in the mid single digits year over year on a constant currency basis. The current spot rates, our guidance assumes foreign exchange will have a positive $9 million impact on revenue in 2026 on a year over year basis. Given the recent strength in the US dollar, this impact is significantly less than the positive $20 million we discussed on our last quarter's earnings call. Moving to operating margins for 2026, we are estimating a non GAAP operating margin of approximately 25% to 26% as measured in today's FX rates. Turning to CapEx. At this time, we anticipate our full-year capital expenditures will be approximately 40% of total revenue. Moving to EPS. For the full year 2026, we expect non GAAP earnings per diluted share in the range of $6.40 to $7.05 This non GAAP earnings guidance is based on non GAAP effective tax rate of approximately 19% and a fully diluted share count of approximately 150 million shares. Before wrapping things up, I want to provide additional color on how we safeguard profitability and manage risk across our cloud infrastructure services business. Specifically as it relates to our recently announced large contracts. While initial capital deployment happens upfront, these contracts are structured to deliver strong cash flows over their life backed by take or pay commitments. To give you visibility into how we manage these opportunities, I would like to outline the economics that are typical in these multi-$100 million multiyear contracts we have seen to date and expect in the future. While I will not speak to any 1 contract in particular, the following is meant to illustrate large deals that have been signed and what we see in our current pipeline. For these multi megawatt large scale deployments, we take several factors into consideration, including customer credit quality, contract duration, the specific compute architecture deployed, i.e., GPU or CPU, data center space, power availability, CapEx, and direct operating expenses such as networking, power, along with any software and hardware maintenance. Taking all these factors into account, our signed deals and active pipeline consistently reflect a highly attractive profile, delivering non GAAP cash gross margins spanning from the mid-60s up to the mid-70s. And after factoring in hardware depreciation and other operating expenses, these large scale contracts typically generate non GAAP operating margins ranging from the low- to mid-20s up to the low-30s. So with that, I will wrap things up, and Tomer and I are happy to take your questions. Operator.

Operator: Ladies and gentlemen, at this time, we will begin the question and answer session. To withdraw your questions, you may press star and 2 If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys. To ensure the best sound quality. Again that is star and then 1, to ask a question. Our first question today comes from Samit Chatterjee from JPMorgan. Please go ahead with your question.

Analyst: Hi. Thanks for taking the question, and congrats on the new win here. Maybe if you can just help us think about the what you are seeing in terms of more appetite from customers for the CIS business in terms of pipeline. You have announced these sort of significant deals, but you are also sold out as you are indicating. So does that sort of preclude you from signing any significant more sort of award with your customers in the near future as well. So any visibility on both those fronts would be helpful. Thank you.

F. Thomson Leighton: Yeah. Very strong pipeline. Really across the spectrum of industries and scale of the deals. And, no, that does not keep us from signing up more customers because we are ordering, obviously, more hardware. And typically, we are looking at about a 6- to 9-month window on the larger side. So, no, we are continuing to sign customers up. Edward, do you have more color on that?

Edward J. McGowan: Yeah. I was just gonna add so that, you know, the way to think about the comment we sort of gave you a little preview last quarter that there was a good chance we might be placing an order for more GPUs based on what we saw from the pipeline. And we were able to sell that all out. Some of that large deal will take up, you know, some of that remaining inventory. And, you know, we are placing another order with NVIDIA for, you know, significant chunk of additional GPUs, some to satisfy the new order. But a lot of that is covered by what we had before. And then the rest of it is based on, the strong pipeline we see for additional GPU demand. Now in terms of the way the market is going at this point, customers are essentially preordering in a lot of cases where a lot of folks do not have a ton of inventory on hand. So usually, the conversations are about getting some GPU capacity, generally, lock that in for a, you know, long period of time. So the of it as like a reserve instance is a good analogy to what folks do in the cloud market. And we will generally reserve that, you know, months in advance. So it actually enables us to maintain a good you know, inventory, if you will, and not extend ourselves too far out and meet the market demands. Rishi. I will pass it on. Thank you.

Operator: Our next question comes from Jackson Ader from KeyBanc Capital Markets. Please go ahead with your question.

Jackson Ader: The first 1 I had was actually about the timing between deal signage for these multiyear deals and the, you know, the multimillion, multiyear deals and when you actually expect them fold into revenue. Tomer, you said something about like a 6- to 9-month window. And I was curious, are you talking about from deal signage to actually seeing a revenue, or was that window referring to something else? Thanks.

Edward J. McGowan: Yeah, I will take that 1, Tomer, for you. So it is usually between signing and when we recognize revenue. For the really large deals, we generally will not keep the type of inventory. Like, for example, the last deal we mentioned last quarter, we you know, we are not buying that much sort of speculatively. So that will be informed by a you know, a large customer coming and ordering. And generally speaking there, you may need to get some additional data center space You know, we have a nice pipeline of data center space that is coming online between now through the end of next year, and it is sort of a core competency of ours anyway. So it is it is sort of a normal motion for us. But, when we talk about the between signage and revenue recognition, that is usually 6 to 9 months typically with these large deals. And to the extent that they are large enough, we will call them out on the call like we did over the last 3 calls. Actually, and give you some indication of when we think these contracts will start generating revenue. Okay. That makes sense. And then a quick follow-up. Edward, it was really helpful to kind of walk through, like, hey. You know, an illustrative example of the margin profile of these deals. But has that has that remained pretty consistent as you know, the component pricing and your own pricing on GPUs has fluctuated. And is there any risk that some of the margin profile to structurally shift lower if there is more upward pressure on components in the future? Thank you. Yeah. Great question. You know, I will use a term that is in terms of the pricing environment with especially with the big customers. I would say it is a bit more collaborative. And what I mean by that is there is a general understanding that inventory is tight. Availability of data centers is tight, and that, a, if they do not, you know, order when they say they are going to order, things may not be there and prices may go up. So prices are moving, relatively quickly in the marketplace, and we are able to pass on any sort of increase in pricing. And generally, we will have that structured into a large contract. So for example, let's say I am receiving goods over a period of 3, 6 to 9 months or something like that. If there are movements in pricing, whether it is memory or hardware costs or things like that, we do have mechanisms to take that into consideration. And we are constantly adjusting pricing. So for example, somebody may do a follow on order where they bought 6 months ago, and now they are buying today. We are buying the next set of inventory that is at a higher price. We just mark that price right up. But it is very collaborative with customers, and we are able to get price increases passed along in CIS. Got it. Thank you.

Operator: Our next question comes from John DiFucci from Guggenheim Securities. Please go ahead with your question.

John DiFucci: Thanks for taking my questions. And listen to nice job, guys. I mean, it really things look really impressive here. And then I really appreciate all the detail you gave on some of the characteristics, the profitability characteristics of these deals. I mean, the size of them and the revenue that is gonna come is pretty impressive, but so is the profit. But can I ask a little bit about that you gave some, like, over the life of these contracts? But just in from other companies that do similar deals, it seems like at first, you are gonna see but, you know, probably less profit coming from these things. You are gonna have to start spending and incurring expenses even before revenue, I would assume, and then the ramp up over time. So over the life of a longer term deal, let's say, a year deal, or whatever it is, when is it that you achieved that profit? Because I just do not want people to be surprised if at first you are seeing more pressure on the profit line until you get to where you need to be?

Edward J. McGowan: Yeah. it is a good great question, John. And the answer is it depends a bit. And it is also a dynamic you have in the in the business itself. Rishi? So in many cases, you will take on data center space ahead of time. So I will talk in terms of the big deals, where you might open up say, a half dozen data centers or whatever it may be with a particular customer. And, the equipment is being received over several month period or whatnot. So you will have definitely colocation costs ahead of revenue. Depending on the way the contract's structured. But generally speaking, when the when the equipment is ordered and we start taking depreciation, it is a relatively short period of time between when you, you know, rack and stack and get the equipment up and running to get revenue. The other thing to keep in mind too is accounting rules for both revenue and for colocation or leases, really, You if you have escalators and things like that, you generally will spread that out over the entire contract. So your cost will be amortized flat. Your revenue will be amortized flat. So you do pretty quickly get up to the that full profitability, but there may be a quarter where you have a little bit of noise where you have some cost ahead of time. But generally speaking, there is a pretty quick ramp up to get to that profitability given what we are seeing so far both in the pipeline and also with what we signed as far as customers wanting to, you know, stand up this capacity and more of like I said, a reserve instance type capacity where you give them know, a certain amount of up to capacity, and they have the right to use that over the life of the contract. it is just a question of how quickly you can stand it up. So as you are modeling, I would expect to see margins, a bit lower as we are ramping into these things, and then they should start to ramp up into those levels that I talked about.

John DiFucci: Okay. Great. And it and so when you say a relatively short time, like a quarter? Maybe? I mean, I know every deal's different, but okay.

Edward J. McGowan: Yeah. A quarter. I mean, on the long end, maybe it is 5 or 6 months, but generally speaking, about a quarter. Okay.

John DiFucci: Perfect. And if I could, a follow-up to Jackson's question because I think he is going right down where I am trying to think through this anyway. Are these if some of these longer term deliveries like, you mentioned a deal where you are gonna deliver capacity in maybe 4 data centers along the way. that is all coming online over the next year. I mean, it is coming out in the future. And you mentioned a lot about everybody's focused on inflation and component inflation. Are some of these contracts the ones that are longer term when you have longer term delivery? Are they cost plus contracts where you are gonna get a certain margin And is that margin protected even if inflation takes off Like, like it has over the last year or 2.

Edward J. McGowan: Yeah. I mean, every deal is a little different. But, generally, let's talk about the procurement side first, and we will get into the to the revenue side. So on the procurement side, when we will, contract for a data center, we generally try to get as fixed of a term as we can for as long as we can. There is some variability in power. And, generally, what you do is you agree to some sort of ups upfront escalator, a couple percentage points or something like that. Like I said, in the accounting rules, end up straight lining that just like you would on, you know, rent when you get, like, free rent or an escalator in rent. That sort of thing. So that generally covers that. So we pretty much know going in what our costs are for our power, and then our hardware is obviously fixed. Generally, if you have any hardware maintenance, you would agree you would negotiate that upfront and have a long term agreement. So you structure the revenue contract to do the same. So there might be an escalator for each year. To cover your increase in labor costs, your, cost for your, power escalations and things like that. But, generally, you can get a fair amount of it fixed over time. If there are long lead times in terms of, let's say, I am getting you know, 20% of the capacity stood up in the first quarter, then 30%, then 50 in the last quarter. Say it takes 9 months to spin it all up. If there are variations in pricing, like, say, with memory, you will have contemplated that and have a mechanism in the contract to deal with it, typically. So this is like I said, it is very collaborative with the customers. We are having these kind of conversations. And making sure that we are protected as best that we can. And generally speaking, so far, it is working out as we have we have expected. Perfect. Edward, thank you very much, and nice job.

Operator: Thank you. Our next question comes from Param Singh from Oppenheimer. Please go ahead with your question.

Param Singh: Yeah. Hi. Thanks for taking my questions. Firstly, on the compute side, you know, good to see all the visibility and pipeline. Just wanted to understand, when you think about available capacity, and, you know, what do you have in terms of megawatts? what is your pipeline? How much you can expand? And I also wanted to understand, would you need to expand to more sites versus what you have today? To support this growth? And then and then I do have a follow-up. Thank you.

F. Thomson Leighton: Yeah. We are continuing to expand the platform. In, you know, more locations, more cities having GPUs. And I think you will continue to see that going forward. And we are in a very good position to get the capacity and data center space that we need. You know, we probably deal with more data center companies than anybody. We have our servers today in 700 cities around the world, 130 countries. We have got a great reputation, for being a reliable partner. You know, strong financials, and, you know, and established relationships. So we are in a good position to get what we need to you know, take on these very large customers.

Param Singh: Thank you for that. And as my follow-up, good to hear the commentary around Agentic, You know, how do you think about acceleration in that part of the business especially, certain modules such as API security and micro segmentation attached pickup with Agentic AI. Traffic coming into the platform.

F. Thomson Leighton: Yeah. there is a great synergy there. In a lot of different dimensions. You know, we, use AI to make our products a lot more capable. We help our customers identify their shadow AI with API security. Now with LayerX, we help them protect the workforce. So when the workforce is using AI, they are not on an inadvertently exfiltrating, you know, corporate sensitive corporate data. And, of course, you know, in the compute business, we are enabling you know, the AI on our platform. So we are in a great position to support our customers' use of AI and to secure it at the same time. Thank you so much for that. Appreciate it.

Operator: Our next question comes from Rishi Jaluria from RBC. Please go ahead with your question.

Rishi Jaluria: Wonderful. Thanks so much for taking my questions. Great to see, continued momentum in the CIS business as well as some major customer wins. 2 for me. First, know, look. I think in addition to these large CIS deals that, you are talking about, you know, a lot of us have been debating the opportunity for you know, true AI edge inferencing to leverage the edge network that you have a long history of and the largest edge network in the world. Can you talk about, you know, some of the opportunities you are seeing there? And you know, is there an opportunity for some of these large, more central cloud driven AI deals to start to expand more to edge cloud, especially because you are the only 1 out there that has edge cloud and central cloud on 1 platform. Maybe help us understand that, and I have a quick follow-up.

F. Thomson Leighton: Yeah. I think you said it very well. it is really a continuum, and a big advantage that we have is that we can do the core, you know, for enterprise customers that wanna train their model, and we can do the edge for when they are doing the inferencing in situations where it is latency sensitive or bandwidth sensitive. You know, a great example is robotics, for example. You know, the robot has sensors, which could include you know, the equivalent of video. They are they are seeing the environment around them. And that is high bandwidth to get the video input and ingested. And then our GPUs that we deployed are actually very well suited to processing that video and then using AI to figure out what is going on And then with the AI to give an instruction back to the robot, what to do about it. And in many of these situations, it is also latency sensitive, not only the bandwidth of the video, but telling the robot what to do quickly. You know, think about the robot being a car. A driverless car, or the robots in an environment with humans, or it is in a factory where you know, if it does something in an untimely way, you could have a problem. And so that is a great example where, yeah, maybe the training is done. it is to be most efficient in a more centralized fashion. But the inferencing and the usage of it as it is operating well, there is examples you wanna do that really close to where the robot is. And, you know, we see that really across the spectrum and it is a big advantage for us to have it all on 1 platform. Now to be clear, we are not in the business of training the foundation models, the giant models. That, we are not doing. But usage of the models or training medium or smaller models, yeah, that works very well on our platform. And the key is to have the right resource in the right place for whatever your agent or model is trying to do. So you optimize cost and you optimize performance.

Rishi Jaluria: Wonderful. Very helpful. And then maybe just on the security side right now, especially with LayerX, acquisition, coming in, you know, when it closes. But as we see kind of the proliferation of agents, right, it is it is every brand has to figure out how do they embrace them, but also protect themselves, especially from not just nefarious, but even competitive agents. Maybe can you walk us through how we should be thinking about that as potentially becoming an accelerant, to the security business and where LayerX can fit in that overall strategy? Thank you.

F. Thomson Leighton: Yeah. LayerX, think of that as protecting your employees. Who, you know, for all the right reasons, are using a variety of AI tools. And agents and models and so forth. And the danger, of course, is that they are actually leaking sensitive data when they use those tools. And that is what LayerX prevents, identifies and prevents, and it enforces you know, the business rules that the that the security team has set up for an enterprise. Now, the dealing with the agents really goes far beyond that. You know, in fact, we are a leader, today with our bot management and agent management solutions because our customers with their sites and applications, more and more agents are coming maybe instead of people. Some of the agents are just fine. They are they are authorized. By a user and, of course, that we wanna be sure the case and then give them very good service. But there is a lot of agents doing things that are not authorized. And we help our customer by identifying what is the agent, is it authorized, what is it doing, and then our customer will tell us what they want us to do in response. You know, a good example is the LLM search engine. You know, of course, it is really important today that your brand show up in the next generation of search engines. And to help with that, we identify that, hey, this is the scraper coming from you know, a search engine, and we give it different content. Than the regular app or the site. And we give it content that has all the right key words and also is structured so that the agent can the scraper can process it much more efficiently. And as a result, the customer gets much better search rankings. And that is just 1 example of an agent that happens to be 1 example of a scraper, but there is just a myriad of different cases And that is what we help our customers do is identify what it is. Is it legitimate? And then take the appropriate action for their business. Very helpful. Thank you.

Operator: Our next question comes from Sanjit Singh from Morgan Stanley. Please go ahead with your question.

Sanjit Singh: Frank you for taking the questions. In a year that or less than a year that CIS has been stood up as a business, you guys have come up with almost $3 billion in bookings, which is super impressive. It sounds like these term rates are gonna continue, just given your comments on the pipeline. And so I wanted to get a sense for from the team about to what extent or what sort of the financing strategies going forward? And to what extent is the company willing to go into either a net debt position or access more equity capital to fund what seems to be a very strong pipeline of future business.

F. Thomson Leighton: Yeah. I will start and then hand it over to Edward. First, you know, we have been working on this business for years. And it is built on top of a platform that we have been developing for decades. So it is not an overnight phenomenon. But you are right that it is in the really, last year we have made more of an investment in go to market because CIS and the platform, our cloud platform is now in a position where we can take on major enterprise customers at scale. And so you are seeing very rapid growth, and we are in a good position that we have over $4 billion of cash, and we are going to invest to continue the growth of this platform. And, Edward, do you wanna give some more details around that?

Edward J. McGowan: Yeah. Sure. And as we talked about, know, we have 4.6 billion of cash on balance sheet today. We have structured our debt so far to have you know, every 2 years or so, there is there is a payment of a of a or a ladder, if you will, of retirements of debt coming up. But, you know, the way these big deals work even, the free cash flow is excellent after you, you know, deploy the initial capital. So you dip down a little bit here. And then as you start to you know, recover some of this on the on the other side, it is, you know, extremely high free cash flow margins on the on these deals. But that said, you know, we have excellent banking partners. We have been so lucky to work with a lot of amazing firms, and they give us excellent advice. So far, converts have been very, attractive for us and have offered the best economics You know, we work with our Board all the time on different strategies and scenarios and look at what makes the most sense for our shareholders, there is still a lot of debt capacity if we need it. If that is the right, you know, thing to do, we will do that. So far, we have not done we have done equity linked debt, but we have not done any equity offerings. We will, you know, look at whatever the best, opportunity is and what makes the most sense, the lowest cost of capital for us. I think we can grow the business quite a bit just in the in the model that we are in right now. We are still holding a investment grade credit rating, which is important and helps us with our colocation providers. But, you know, we you heard us talk about suspending the buyback temporarily here. To, you know, use all the available cash we have for growth because we have not seen a growth opportunity like this in a very, very long time. So to make sure we capture that. But I am I am very comfortable with our ability to finance the growth going forward.

Sanjit Singh: Understood. And as my follow-up, in terms of the trajectory of growth for CIS, we have had 2 quarters of a sub-40% growth, which is a little bit less than what we exited last year's with. And then you are targeting at least 50% growth for the full year. In terms of how you guys are sort of converting those big contracts and hopefully getting them to revenue generation capability, what is the how should we think about the ramp Q3 to Q4? Is it more of a sustained growth in CIS and then sort of a big hockey stick? And what gives you any confidence that, that hockey stick will emerge in Q4?

Edward J. McGowan: Yes. Good question. So we provide quarterly guidance. 1 thing I will say is we did talk about how we did receive Some of our GPUs a little bit later than we expected. They just pushed from Q2 into Q3. So there will be a few last weeks of revenue for deals that were signed that were scheduled to ramp in Q3. So I am not expecting a, you know, any kind of a growth acceleration certainly for CIS in Q3. But in Q4, I do expect to see, a big hockey stick of acceleration for a number of reasons. 1, we are now able to start getting revenue for the GPUs that we have sold that we have taken into inventory and starting to rack and stack and get, revenue for those contracts. The big contracts, I have given you guys some guidance on when I thought those would start to, produce revenue and they do start in Q4. Rishi now, as we look at everything's on track, it is not a question of having to execute of getting anything signed. it is just the time that we have in terms of everything being delivered set up, and generating revenue. So right now, we feel like we are on track with everything, and we expect a big hockey stick that should continue to ramp pretty significantly into Q1 of next year. As well because you get a partial quarter of revenue from some pretty big deals, and then you start to get a lot more going into Q1. And I expect that acceleration to continue throughout the year. Of next year. Appreciate the thoughts. Thank you.

Operator: Our next question comes from Frank Garrett Louthan from Raymond James. Please go ahead with your question.

Frank Garrett Louthan: Great. Thank you. How challenging is it to get power at the facilities where you are doing CIS? And can you give us an update on how many locations you have today, and how many will you need to have built out for this new business that you that you just signed?

F. Thomson Leighton: Thanks. Yeah. Great question. You know, we are really in a very good position to get the data center capacity and power that we need. You know, we have been in this business for an awfully long time. We probably deal with more data center companies than anybody. We have our infrastructure today deployed in over 700 cities in 130 countries. You have got a great reputation built up over many years for being a reliable business partner, for financial strength, and having a very strong business. And so we are able to get the capacity that we need We are continuing to grow our data center footprint, you know, more locations. And we are taking on larger locations, you know, more power as we grow. And I would expect to see that continue. But we are in a really good position there.

Edward J. McGowan: So 1 thing I would add, 1 of the advantages we have, Frank, is, we are incredibly flexible given that we run such a large backbone that for us to get power, say, for the West Coast, we have many different options of where we can go. And it is very attractive for data center providers where not all power is created equally even as you go state by state. So you might be able to go couple 100 miles from a really expensive state into a cheaper state deal anchor tenant for somebody who is building out data centers, make a long term commitment, get guaranteed power, with great performance because it is connected to our backbone, etcetera, and you are, you know, able to satisfy whatever the demands are for that particular customer. And get much better economics because the power is cheaper. So that is 1 of the other advantages we have is we are very, very flexible with where we can build out and where interesting enough to these big data center builders, where, you know, we are not asking for, you know, gigawatt facility. We are talking, you know, oftentimes 5 to 10, maybe 15-20 megawatts, which is a big enough commitment that can really help them scale and get, you know, good IRR on their investment as they go and get credit to build these facilities.

F. Thomson Leighton: Yeah. Edward raises a great point. You know, people do not think about it. Much. We operate 1 of the world's largest backbones. And, of course, we use it to connect all of our locations. We do not sell connectivity per se, and that makes a big difference when it comes to going into new locations. We can go places very successfully and connect it to our platform that others may have a challenge. Great. Thank you very much.

Operator: Our next question comes from Rudy Kessinger from D. A. Davidson. Please go ahead with your question.

Rudy Kessinger: Hey. Great. Thanks for taking my questions, guys. Question. Could you guys I know you do not really talk a ton about these mass deals and the use cases that you are doing there. But the extent you are able to maybe just talk about whether it is this robotics deal or some of these other large deals or just the deals in the pipeline, you know, what are the specific metrics whether it is latency or what have you, that these customers are looking at and saying, you know, Akamai delivers a definitive edge versus the Neo Clouds, the hyperscalers. Therefore, we are gonna go this route with Akamai. What are what are the specific performance advantages that are making you guys the choice for some of these large, workloads?

F. Thomson Leighton: Yeah. No. that is a that is a great question. And we cannot talk about the specific deals, but, you know, in general, Akamai would be chosen because we have a great you know, hard earned reputation for reliability, They can trust us. We have a massively distributed platform that is, you know, really unique in the marketplace. As I mentioned, 700 cities in 130 countries. We can get our customers compute needs close to the users, close to the data, that provides better performance, lower latency, better scalability, particularly if you are doing anything to do with video. We have full stack compute and storage combined with the world's leading cyber solutions, the world's leading delivery platform. And, you know, at a really good cost, You know, because we have the world's leading delivery platform, and this massively distributed capability, our cost for, you know, egress is a lot lower. Than the competition. And so we can give a compelling value proposition of a great performance, great reliability at a lower cost.

Operator: Our next question comes from Fatima Boolani from Citi. Please go ahead with your question.

Fatima Boolani: Oh, good afternoon. Thank you so much for taking my question. Edward, I wanted to talk to you about the capacity that you are bringing online, and you framed it as a reserved instance type model, which gives you a lot of visibility, and it gives customers a lot of predictability. But I know you have entertained sort of standing up a rental business within the confines of your CIS business. So I wanted to get a sense of where you are on that journey. And to the extent you do have excess capacity against which you can have more of a spot pricing to see maybe faster growth in CIS and to the extent that is relevant to think about over the course of this year? And then I have a follow-up on the security business, please.

Edward J. McGowan: Yeah. So, Fatima, we offer both, and, what we are finding, though, is there is a stronger demand for customers who want to lock in for a longer period of time. And those obviously are better for us in terms of, you know, locking in the value over a longer period of time. And you got a you know, guaranteed ROI on what is what you are investing in. We do offer We even have some customers that will come to us and ask us for, you know, different models of whatever you have access, I will take it for a period of time, and you just give me some amount of heads up if you need to take it back. So the market is I would say, probably more skewed, certainly with our customers anyway, for those who would like to have certainty. Versus just going and renting by the hour, but, you know, we do offer both. And I would say, most of the growth right now, obviously, given you know, the size of these deals is coming from that, you know, more committed model. But we do we do offer both. I appreciate that.

Fatima Boolani: And just on the security business, you specifically called out kind of the tailwind that you are seeing. On the Guardicore segmentation side. API security, just on the back of the traffic mix on the Internet and by extension, your platform changing. I am wondering if you can speak to some of your more, traditional and maybe more mature product areas like the DDoS and, you know, I would say classic WAF What are you seeing there? Is there a rising tide lifting all boats and not, maybe there is a renaissance spending from a customer standpoint, maybe a reinvigorated focus, I would love to get a better sense on what some of those traditional and more mature areas of the security product portfolio are doing in contrast to some of your higher growth SKUs in the portfolio? Thank you.

F. Thomson Leighton: Great question. Yeah. And we have seen real tailwinds from AI in sort of the post mythos world for our you know, more, you know, longer term security products. You know, I said, roughly, because of AI, the attackers have assembled much larger bot armies to launch attacks. And we have seen the scale of the attacks grow by maybe a factor of 10 over the last year. And so there is more of a need, you know, for our DDoS services And with Web App Firewall, especially there, because now there is gonna be a lot more zero days. And we see those first, and we get our firewall rules updated to protect our customers, before the zero day becomes public knowledge. And so that they will have time to do whatever patching they need to do, and they can do that safely. And I cannot tell you, I have talked to so many CISOs and CIOs and CEOs over the last few months, And many of them are having emergency projects underway to make sure all of their applications and sites are protected by our Web App firewall. Because they know if it is behind Akamai's Web App Firewall, they are gonna be okay. As the zero days inevitably come out. So we are seeing good tailwinds from AI across the board, and there is a chance for Akamai to really help major enterprise customers. Thank you.

Operator: And we have time for 1 final question and that comes from Patrick Edwin Colville from Scotiabank. Please go ahead with your question.

Connor: This is Connor on for Patrick. Thanks for taking the question. Just was wondering if you could double click on the CrowdStrike customer win. Which is really a positive sign, I think, for the Akamai architecture. Talked a little bit about, you know, when did that deal close and if there is any really, you know, partnership dynamics there as well as a customer relationship.

F. Thomson Leighton: Yeah. That closed recently, and it is a real validation point for our security solutions. Obviously, CrowdStrike is the company that cares a lot about security and cares a lot about reliability. And, you know, they were stated they were not happy with their current there is a the prior provider and they, you know, really were attracted to Akamai because of our reliability and the higher level of security capabilities that we offer them. And we do partner with them. You know, and so it is a good relationship that way as well. But I think it is a great validation of Akamai and our security solutions. Great. Thank you.

Operator: And ladies and gentlemen, with that, we will be concluding today's question and answer session. As well as today's conference call. We do thank you for participating and joining today. You may now disconnect your lines.