Akamai Proposes Convertible Notes Offering, Directing Proceeds to Cloud and 2027 Maturity
Key Facts
Akamai Technologies announced on November 9, 2026, a proposed offering of senior convertible notes, with part of the net proceeds to be used to repay a portion of notes due in 2027 and fund capital spending for cloud infrastructure services. The offering targets qualified institutional buyers and gives initial purchasers an option to buy up to an additional $150 million of each series, according to the company statement republished on Yahoo Finance. The move follows cloud infrastructure services revenue growing faster than the company’s other businesses in the third quarter. Akamai also faces existing maturities within a convertible notes portfolio with an aggregate principal amount of $7.64 billion as of September 30. Interest rates and initial conversion prices had not been set when the offering was announced and will be determined at pricing.
The proposed series mature on November 15, 2028, and November 15, 2031, with semiannual interest payments beginning on May 15, 2027. The company did not announce an interest rate or initial conversion rate when it proposed the offering, saying they would be set at pricing. The additional options allow initial purchasers to increase their purchases by up to $150 million of the 2028 notes and an equivalent amount of the 2031 notes. The announced use of the remaining proceeds, after hedging and underwriting costs, is to repay a portion of the company’s convertible notes due in 2027 at maturity or cover amounts due upon early conversion. Those proceeds will also fund capital spending requirements for the cloud infrastructure business.
Akamai’s revenue in the third quarter ended September 30, 2026, was about $1.122 billion, up 6% from the same period in 2025, or 7% after adjusting for foreign exchange effects. Cloud infrastructure services revenue was $109 million, up 34% year over year, or 35% after adjusting for currencies. By comparison, security revenue rose to $622 million, up 9%, or 10% after adjusting for foreign exchange effects. Revenue from delivery and other cloud applications fell 3% to $391 million. The results reflect diverging performance, with growth in infrastructure and security and a decline in revenue from delivery and other cloud applications.
Revenue growth came alongside lower profits compared with the third quarter of 2025. Net income under generally accepted accounting principles was $117 million, down 16%, while non-GAAP net income was $262 million, down 3%. GAAP diluted earnings per share were $0.77, down 21%, while non-GAAP earnings per share were $1.77, 5% below the year-earlier level. The figures put the plan to finance capital spending in the context of an expanding cloud infrastructure business alongside pressure on net income and earnings per share. The available offering materials did not specify the cost of borrowing before pricing.
Against the backdrop of the expansion, Chief Executive Tom Leighton said the company had signed multi-year commitments worth more than $14 billion through November 5, 2026. He added that Akamai expects revenue growth to accelerate in 2027 and accelerate further in 2028. The company expects cloud infrastructure services revenue in 2027 to range between $1.1 billion and $1.3 billion, and total revenue to grow between 17% and 22% year over year after adjusting for foreign exchange effects. It also expects total revenue to exceed $7.0 billion in 2028. These projections remain subject to the company estimates reported by the source for the coming years, as attention turns to the notes’ pricing and terms.