Total Revenue

+2.5% (from $995M to ~$1,020M)

Total revenue increased modestly due to improved performance in higher‐margin segments (security and compute) partially offset by a significant decline in delivery revenue; this reflects a contrast with prior periods where broader growth was supported by stronger overall demand. " "

Security Revenue

+13.6% (from $470.95M to ~$534.95M)

Security revenue grew strongly as customer demand for advanced protection solutions continued to drive growth, building upon prior gains in key products; such consistent upward momentum is a continuation of the positive trends seen in earlier periods. " "

Delivery Revenue

–18.3% (from $389M to ~$317.71M)

Delivery revenue fell sharply as macroeconomic and geopolitical headwinds (including cost optimization by major customers) intensified, reversing some of the revenue gains seen in prior quarters where the decline was less severe. " "

Compute Revenue

+23.9% (from $134.92M to ~$167.09M)

Compute revenue increased significantly driven by strong demand and a broader customer base, reflecting an acceleration from earlier improvements in compute offerings and enhanced uptake of cloud optimization solutions. " "

U.S. Revenue

+2.7%

U.S. revenue saw modest growth supported by strong performances in security and compute segments that helped counterbalance the declining delivery revenue, an evolution from previous periods where similar dynamics were observed. " " "

International Revenue

+2.4%

International revenue increased modestly as gains in high-growth segments partially offset challenges such as foreign exchange headwinds, a trend that mirrors earlier periods albeit at a lower growth rate. " " "

Operating Income

–20% (from $184,786K to ~$148,060K)

Operating income declined significantly due to rising operating expenses and lower margins, even though revenue gains in high-margin segments helped; this marks a regression from prior periods where cost structures were more favorable. " "

Net Income

–13% (from ~$160K to ~$139,905K)

Net income decreased less severely than operating income as some non-operating items and tax benefits helped cushion the decline, but the drop largely reflects the revenue mix shifts and higher costs seen compared to previous quarters. " "

Basic EPS

Declined from $1.06 to $0.93

Basic EPS fell as a result of lower net income and higher cost pressures impacting profitability on a per-share basis, reflecting broader challenges that began to emerge in the current period compared to the previous period's stronger results. " "

Diluted EPS

Declined from $1.02 to $0.91

Diluted EPS dropped in line with the decline in net income and increased dilution from cost-related pressures, emphasizing the adverse impact on shareholder returns compared to the more robust performance in prior periods. " "

D&A Expenses

–24% (from ~$222,055K to ~$167,949K)

Depreciation and amortization expenses decreased markedly partly due to lower network equipment depreciation following extended useful-life adjustments, a strategy that was implemented in previous periods and yielded further benefits in the current quarter. " " "

R&D Spending

+10%

R&D spending increased moderately reflecting ongoing investments in innovation and the development of security and compute capabilities, continuing a strategic trend from previous periods aimed at supporting long-term growth. " "

Revenue

Q1 2025

no prior guidance

$1 billion to $1.02 billion "

no prior guidance

Cash Gross Margin

Q1 2025

no prior guidance

Approximately 72% "

no prior guidance

Non-GAAP Operating Expenses

Q1 2025

no prior guidance

$310 million to $316 million "

no prior guidance

EBITDA Margin

Q1 2025

no prior guidance

Approximately 41% "

no prior guidance

Non-GAAP Depreciation Expense

Q1 2025

no prior guidance

$132 million to $134 million "

no prior guidance

Non-GAAP Operating Margin

Q1 2025

no prior guidance

Approximately 28% "

no prior guidance

Non-GAAP EPS

Q1 2025

no prior guidance

$1.54 to $1.59 "

no prior guidance

Taxes

Q1 2025

no prior guidance

$57 million to $59 million "

no prior guidance

Fully Diluted Share Count

Q1 2025

no prior guidance

Approximately 152 million shares "

no prior guidance

CapEx

Q1 2025

no prior guidance

Approximately $237 million to $245 million, ~24% of revenue "

no prior guidance

Enterprise Compute Growth

Q1–Q3 discussions detailed robust revenue growth, expanding ARR and customer adoption, with incremental improvements in compute revenue and new customer wins ( " " " , " , " " )

Q4 saw record cloud infrastructure revenue at $230 million with 32% YoY growth, significant increase in enterprise adoption (300+ customers >$100K ARR and 15 customers >$1M ARR) and a strategic shift away from legacy compute products ( " )

Consistent strong growth with accelerated momentum and evolving product mix as legacy items are transitioned to focus on scalability.

Security Business Expansion and Product Innovation

Across Q1–Q3, there were multiple mentions of strategic acquisitions (e.g. Noname Security), the emergence of the Guardicore platform and API Security solutions, and robust customer wins driving ARR milestones ([26–29], " " , " " )

Q4 reported security surpassing $2B in annual revenue, with Guardicore ARR at $190 million (31% increase) and API Security solution's ARR leaping from $1M to $57 million, alongside expanded channel partnerships ( " )

Ongoing robust expansion and innovation with sustained ARR growth, further validating the product strategy and market expansion beyond initial verticals.

Delivery Business Performance and Market Consolidation

Q1–Q3 emphasized consistent revenue declines (11% to 16% YoY) due to slowing traffic (especially in media/gaming) and pricing pressures; market consolidation was noted as key to stabilizing rates ( " " , " " , " " )

Q4 reported delivery revenue at $318 million with an 18% YoY decline, yet highlighted strategic moves such as the Edgio contract acquisition to leverage consolidation and stabilize pricing ( " " )

A persistent revenue decline offset by strategic market consolidation efforts that aim to improve pricing stability and set the stage for recovery in 2025.

Margin Pressure and Operating Costs

In Q1–Q3, the calls highlighted margin compression due to higher colocation costs, heavy investments in compute scaling, and depreciation issues, though with intentions to drive operating leverage through scale (e.g. Q1’s colocation challenges, Q2’s maintained ~29% margin, Q3’s restructuring and CapEx discipline) ( " " , " , " " )

Q4 outlined continued margin pressures from a 90bps higher depreciation, increased CapEx at 19% of revenue, and significant compute investments (6% of revenue), alongside ongoing scalability upgrades (e.g. expanded data center footprint, upgraded object storage) ( " " " )

Ongoing margin pressure from strategic investments remains, but with a clear plan to leverage scale and infrastructure improvements to gradually expand margins over time.

Shifting Customer Strategies and Revenue Concentration Risks

Q1 mentioned revenue concentration risk due to a major social media customer's cost optimizations resulting in lower traffic, while Q2 provided context on customer shifts without major concern, and Q3 did not explicitly address this topic ( " " , " )

Q4 discussed the largest customer facing political challenges and shifting to a DIY strategy creating a 1%–2% headwind, but offset by a new 5‑year committed contract with minimum spend, reducing concentration risk ( " )

Evolving risk management: Customer-related revenue risks persist but are being mitigated through long-term contracts and strategic adjustments, reducing exposure over time.

Expansion into New Market Verticals and Distributed Compute Capabilities

Q1–Q3 repeatedly emphasized a broadening customer base beyond traditional media with compute solutions penetrating e-commerce, financial services, and other industries; distributed cloud advantages (low latency, real‑time processing) were also highlighted ( " " , " " , " " )

Q4 reinforced this theme by expanding its security portfolio into adjacent markets and detailing significant upgrades to its distributed compute platform (e.g. 41 data centers in 36 cities, enhanced object storage, GPU enhancements for AI and media) ( " " )

Continued expansion into new verticals coupled with significant enhancements in distributed compute capabilities signals a productive pivot away from legacy customer segments toward diversified, high-growth areas.

Macroeconomic, Political, and Geopolitical Headwinds

Across Q1–Q3, there were mentions of macro challenges including weak traffic, FX impacts, and geopolitical tensions affecting industry dynamics and customer behaviors ( " " , " , " " " )

Q4 reiterated these challenges with detailed discussion on political headwinds (largest customer’s DIY strategy due to domestic political issues), potential tariff impacts, and continuing geopolitical uncertainties—all managed through strategic agreements and supply chain adjustments ( " " " )

Persistent external risks remain a theme, with recent discussions in Q4 emphasizing political and tariff-related challenges, even as mitigation strategies (like long-term contracts) are increasingly implemented.

Declining Emphasis on Traditional Media Customer Focus

Q1 explicitly noted falling traffic in media/gaming alongside lower delivery revenue, while Q2 referenced diversification away from media; Q3 did not explicitly discuss this as the narrative was more focused on new opportunities ( " " " , " )

Q4 did not explicitly highlight a shift away from traditional media customers; instead, the focus was on transitioning legacy products and bolstering high-growth segments, implying a continued reduced emphasis on traditional media

The trend of declining reliance on traditional media continues, though Q4 focused more on strategic transitions rather than explicitly discussing media customer de-emphasis, indicating it has become an accepted backdrop of the overall strategy.