Akamai Technologies, Inc. (AKAM) Earnings Call Transcript & Summary

Good day, everyone, and welcome to the Q2 2026 Akamai Technologies, Inc. Earnings Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Mark Stoutenberg, Head of IR. Sir, please go ahead.

Good afternoon, everyone, and thank you for joining Akamai's Second Quarter 2026 Earnings Call. Speaking today will be Tom Leighton, Akamai's Chief Executive Officer; and Ed 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 August 6, 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'll now hand the call off to our CEO, Dr. Tom Leighton.

Thanks, Mark. I'm 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're leveraging our global footprint and years of experience serving the world's largest enterprises to do for the AI-driven economy what we've done for cybersecurity and content delivery. The response from industry leaders in major enterprises has been very strong. In fact, we were very pleased to announce today that a U.S.-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're 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, we encourage you to read the July 23 article in Fast Company by Victor Dey. In the article, Dey explains the role played 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's also helpful to read a recent blog by Akamai's CTO, Bobby 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 factories, 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 U.S. chose us to run their high-throughput storage observability and analytics platform. A global AI software company in India chose us to run their Gen AI 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. And a SaaS media workflow platform in the U.S. chose us for high-throughput live media and coding. 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 Mythos or GPT-5.5. Customers that added or significantly expanded their WAF usage in Q2 included one of the world's leading commerce sites, one of the world's leading automakers, and one 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 CIS products with one of the world's largest telcos in a contract worth more than $20 million over 2 years. And today, we're 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 one 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 for 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 architecture 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 Konrad said, "No single vendor can secure the AI frontier alone. Through our close partnership with Akamai, we're turning the hype of secure enterprise AI into a tangible scalable reality for customers." Akamai is also proud to be one 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're applying our expertise to help keep major enterprises and 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's 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're 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 Workforce Protector aligns with Akamai's existing Zero Trust portfolio, including our Guardicore microsegmentation, 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 one 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've 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 one of the largest security providers in the market. In summary, we're excited to see AI driving demand for our Cloud and Security portfolios, and we're 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 one 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'll turn the call over to Ed for more on our results and our outlook for the remainder of the year. Ed?

Thanks, Tom. Before I begin the standard review of our quarterly financials and updated 2026 outlook, I want to build on Tom's remarks. From a strategic and financial perspective, we couldn't be more excited about the trajectory of our business. Securing a 4-year $600 million GPU services deal with a leading U.S.-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 don't 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 $604 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 approximately 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 in 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 and our capital allocation strategy. In May, we raised $3.5 billion via 2 equal tranches of 0 coupon convertible debt maturing in 2030 and 2032 to fund our growing CIS pipeline and 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, we 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 a 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 LayerX will be dilutive to our non-GAAP EPS by approximately $0.12 for 2026, split evenly across Q3 and Q4. Second, I'd like to turn to foreign exchange and its expected impact on our second half 2026 performance. Based on currency movements since our last earnings call, we now expect second half revenue headwinds of approximately $9 million. Finally, I'd 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 2027. Moving now to guidance. For the third quarter, we are projecting revenue in the range of $1.105 billion to $1.13 billion, up 5% to 7% as reported and up 5% to 8% in constant currency over Q3 2025. 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 just outlined, we expect Q3 non-GAAP EPS in the range of $1.60 to $1.80. This EPS guidance assumes taxes of $55 million to $62 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 $4.53 billion, which is up 6% to 8% as reported and up 5% to 7% in constant currency. For Cloud infrastructure services, we 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. At 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 U.S. 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 a 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'd like to outline the economics that are typical in these multi-hundred million dollar multiyear contracts we have seen to date and expect in the future. While I won't speak to any one 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 and 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'll wrap things up, and Tom and I are happy to take your questions. Operator?

[Operator Instructions] Our first question today comes from Samik Chatterjee from JPMorgan.

Congrats on the new win -- customer win here. Maybe if you can just help us think about the -- what you're 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're also sold out as you're indicating. So does that sort of preclude you from signing any significant more sort of award wins with customers in the near future as well. So any visibility on both those fronts would be helpful.

Yes, very strong pipeline really across the spectrum of industries and scale of the deals. And no, that doesn't keep us from signing up more customers because we're ordering obviously more hardware. And typically, we're looking at about a 6- to 9-month window on the larger side. So no, we're continuing to sign customers up. Ed, do you have more color on that?

Yes, I was just going to add. So the way to think about the commentary, 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 some of that remaining inventory. And we're placing another order with NVIDIA for a significant chunk of additional GPUs, some to satisfy the new order, but a lot of that's 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 don't have a ton of inventory on hand. So usually, the conversations are about getting some GPU capacity. Generally, customers want to lock that in for a long period of time. So think of it as like a reserve instance is a good analogy to what folks do in the cloud market. And we'll generally reserve that months in advance. So it actually enables us to maintain a good inventory, if you will, and not extend ourselves too far out and meet the market demands.

Our next question comes from Jackson Ader from KeyBanc Capital Markets.

The first one I had was actually about the timing between deal signage for these multiyear deals and the multimillion multiyear deals and when you actually expect them to fold into revenue? Tom, 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 the revenue? Or was that window referring to something else?

Yes, I'll take that one, Tom, for you. So it's usually between signing and when we recognize revenue. For the really large deals, we generally won't keep the type of inventory, like, for example, the last deal we mentioned last quarter, we're not buying that much sort of speculatively. So that will be informed by a large customer coming and ordering. And generally speaking there, you may need to get some additional data center space. We have a nice pipeline of data center space that's coming online between now through the end of next year, and it's sort of a core competency of ours anyway. So it's sort of a normal motion for us. But when we talk about the delta between signage and revenue recognition, that's 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. All right. That makes sense. And then a quick follow-up. Ed, it was really helpful to, kind of, walk through, like, an illustrative example of the margin profile of these deals. But has that remained pretty consistent as the component pricing and your own pricing on GPUs has fluctuated? And is there any risk that some of the margin profile were to structurally shift lower if there is more upward pressure on components in the future?

Yes. Great question. Let me use a term -- in terms of the pricing environment with -- especially with the big customers. I'd say it's a bit more collaborative. And what I mean by that is there's a general understanding that inventory is tight, availability of data centers is tight. And customers understand that, a, if they don't order when they say they're 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'll have that structured into a large contract. So for example, let's say, I'm receiving goods over a period of 6 to 9 months or something like that. If there are movements in pricing, whether it's memory or hardware costs or things like that, we do have mechanisms to take that into consideration. And we're constantly adjusting pricing. So for example, somebody may do a follow-on order where they bought 6 months ago and now they're buying today, we're buying the next set of inventory, and that's at a higher price. We just marked that price right up. But it is very collaborative with customers, and we are able to get price increases passed along in CIS.

Our next question comes from John DiFucci from Guggenheim Securities.

Listen, nice job, guys. I mean it really -- things look really impressive here. And Ed, 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's going to come is pretty impressive, but so is the profit. But can I ask a little bit about -- 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're going to see probably less profit coming from these things. You're going to have to start spending and incurring expenses even before revenue, I would assume, and then they 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 achieve that profit? Because I just don't want people to be surprised if at first, you're seeing more pressure on the profit line until you get to where you need to be.

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

Okay. Great. And so when you say a relatively short time, like a quarter, maybe, I mean, I know every deal is different, but...

Yes, a quarter. I mean, on the long end, maybe it's 5 or 6 months, but generally speaking, about a quarter.

Okay. Perfect. And if I could, a follow-up to Jackson's question because I think he's going right down where I'm trying to think through this anyway. Are these -- if some of these longer-term deliveries, like you mentioned a deal where you're going to deliver capacity in maybe 4 data centers along the way. That's not all coming online over the next year. I mean it's coming out in the future. And you mentioned a lot about -- everybody is focused on inflation, on 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're going to get a certain margin? And is that margin protected even if inflation takes off like it has over the last year or 2?

Yes. I mean every deal is a little different. But generally, let's talk about the procurement side first, and we'll get into 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 upfront escalator a couple of percentage points or something like that. And like I said, in the accounting rules, you end up straight-lining that, just like you would on 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 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'm getting 20% of the capacity stood up in the first quarter, then 30% and 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's very collaborative with the customers. We're having these kind of conversations and making sure that we're protected as best that we can. And generally speaking, so far, it's been working out as we've expected.

Our next question comes from Param Singh from Oppenheimer.

Firstly, on the compute side, good to see all this visibility and pipeline. Just wanted to understand when you think about available capacity, and what do you have in terms of megawatts? What's 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 I do have a follow-up.

Yes. We're continuing to expand the platform in more locations, more cities having GPUs, and I think you'll continue to see that going forward. And we're in a very good position to get the capacity in data center space that we need. We probably deal with more data center companies than anybody. We have our service today in 700 cities around the world, 130 countries. We've got a great reputation for being a reliable partner, strong financials and established relationships. So we're in a good position to get what we need to take on these very large customers.

And as my follow-up, good to hear the commentary around Agentic. How do you think about acceleration in that part of the business, especially certain modules such as API security and microsegmentation attach pick up with Agentic AI traffic coming into the platform?

Yes, there's a great synergy there in a lot of different dimensions. 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're not inadvertently exfiltrating corporate -- sensitive corporate data. And of course, in the compute business, we're enabling the AI on our platform. So we're in a great position to support our customers' use of AI and to secure it at the same time.

Our next question comes from Rishi Jaluria from RBC.

Great to see continued momentum in the CIS business as well as some major customer wins. Two for me. First, look, I think in addition to these large CIS deals that you're talking about, a lot of us have been debating the opportunity for 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 some of the opportunities you're seeing there? And 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're the only one out there that has edge cloud and central cloud on one platform. Maybe help us understand that, and then I've got a quick follow-up.