Edge network services: web and API security, content delivery, Zero Trust and edge or cloud compute. NET / AKAM. Run 28 September 2026. Built from FY2023 to FY2025 10-Ks, Q2 FY2026 10-Qs and releases, Q4 FY2025 to Q2 FY2026 earnings-call transcripts for both companies, SEC 8-Ks through 24 September 2026, and cited press. Events swept through 28 September 2026; most recent event checked: Akamai's $11.6 billion Anthropic agreement and warrant (8-K, 24 September 2026). Figures in US dollars as reported; both companies report in USD. Not a valuation and not a recommendation.
Three cells carry Cloudflare's next five years, and each rests on a mechanism that is still widening. First, large-customer expansion in the US and EMEA: pool-of-funds contracts let an enterprise commit spend once and draw it down across the whole product set on one rate card, so each new product sells into an existing wallet; that is why net retention climbed from 111% to 120% in a year (NET FY25 10-K; Q2 FY26 call). Second, the developer platform (Workers) is management's fastest-growing product, fed by agent traffic and by owning the tools developers start with: Cloudflare bought the teams behind Astro (January 2026) and Vite (VoidZero, June 2026), so the default web toolchain now deploys to its network (Cloudflare blog; Q1 FY26 call). Third, channel partners carried 31% of revenue in H1 2026, up from 16% in FY2023, reaching international enterprises without matching sales headcount (NET FY25 10-K; Q2 FY26 10-Q). Akamai will print faster growth in 2027 and 2028 than in any recent year, since management targets double digits in 2027 and the Anthropic ramp is reported at about $1.7 billion of annual run rate by end-2028 (AKAM Q1 FY26 call; TechCrunch, TechTimes, Sept 2026), but that growth is leased capacity with capex attached, while its security core grows high single digits and delivery shrinks on renewal price cuts (AKAM FY25 10-K).
The growth winner and the margin winner are different companies, and that is the most useful finding of this duel. Cloudflare wins at the gross line by 16.5 points because its network cost is low, but it spends 61.6% of sales on selling and administration and 20.7% on stock pay, so its GAAP operating margin averaged minus 11.0% against Akamai's plus 14.5% (FY2023 to FY2025 10-Ks). Forward, the two lines move toward each other: Cloudflare cut about 20% of its workforce in May 2026 (Q2 FY26 10-Q, Note 15) and guides FY2026 non-GAAP operating margin to about 15.5% (inferred: $443m to $445m on $2,864m to $2,870m revenue, Q2 FY26 release), while Akamai says its large compute contracts earn non-GAAP operating margins from the low-to-mid 20s up to the low 30s, below its own 29% of Q4 FY2025, so every contracted dollar dilutes it (AKAM Q2 FY26 and Q4 FY25 calls). Cloudflare is a compounder whose engine has not yet reached the income statement; Akamai is a cash-generative incumbent spending its margin to buy growth. One caution cuts against Cloudflare: its non-GAAP gross margin fell from 76.3% to 73.1% in a year as lower-margin Workers grew (Q2 FY26 release).
Akamai's exposure is balance-sheet and counterparty risk: it is committing about $5.5 billion of capex for Anthropic plus $800m to $825m for the $1.8 billion May contract, adding about $1.7 billion of 2026 capex to pre-buy components including memory, pausing buybacks, and funded it with convertibles that took total notes to $7.6 billion (8-K, 24 Sept 2026; Q1 and Q2 FY26 calls; Q2 FY26 10-Q). The May deal and the September plans appear to sit under the same Anthropic agreement (inferred: the Anthropic master agreement is dated 5 May 2026, two days before the $1.8 billion "frontier model company" deal was announced, and September added Project Plans 2 and 3), so one customer could approach a quarter of revenue by 2028 (inferred). If AI labs cut spend or Anthropic invokes its outage termination right, Akamai holds specialized capacity and debt while delivery keeps shrinking. Cloudflare's exposure is correlated failure: one stack on every server means one bad configuration file takes customers down worldwide, as on 18 November and 5 December 2025 (Cloudflare blog), and Akamai says CrowdStrike switched to it because of "inconsistent service" from "one of our SMB-focused competitors" (AKAM Q2 FY26 call; competitor unnamed, inferred Cloudflare). That costs Cloudflare accounts, not solvency: no customer exceeds 10% of revenue and it held $4.16 billion of cash and securities at June 2026 before $2.14 billion of new convertible proceeds (NET FY25 10-K; Q2 FY26 release; 8-K, August 2026).
Neither company discloses product revenue by region, so the cells are product lanes (all regions) and regions (all products); together they cover all of both companies' revenue. Every score is argued in the tabs below.
| Cell | Cloudflare | Akamai | Why (one clause, sourced) |
|---|---|---|---|
| App and API security, all regions | 4 | 4 | Akamai's $2.24bn security line grows 9% cc with API security above 100% (AKAM Q4 FY25 call); Cloudflare wins displacements but discloses no revenue (NET Q4 FY25 call). |
| Content delivery and performance, all regions | 4 | 2 | Akamai delivery fell 15% in 2024 and 5% in 2025 on renewal price cuts (AKAM FY25 10-K); Cloudflare bundles delivery into application services. |
| Zero Trust, SASE and segmentation | 4 | 3 | Cloudflare beats first-generation Zero Trust vendors in named deals (NET Q2 FY26 call); Akamai's API security and Zero Trust enterprise security together run about $90m a quarter, +36% (AKAM Q4 FY25 call). |
| Developer and serverless compute, agents | 4 | 2 | Workers is Cloudflare's fastest-growing act, sold in pool-of-funds deals up to $85m (NET Q4 FY25 call); Akamai folds EdgeWorkers into CIS without sizing it, and its compute wins are dedicated capacity (AKAM FY25 10-K; inferred). |
| Dedicated cloud and AI capacity (IaaS) | 1 | 4 | Akamai signed about $14bn of multi-year CIS contracts in 2026 and its GPUs are sold out (8-K Sept 2026; Q2 FY26 call); Cloudflare offers serverless inference, not contracted capacity (inferred). |
| United States, all products | 4 | 3 | Cloudflare US +41% vs Akamai US +4% in Q2 FY2026 (NET Q2 FY26 call; AKAM Q2 FY26 release). |
| International, all products | 4 | 3 | Cloudflare EMEA +30%, APAC +32% vs Akamai international +6% in Q2 FY2026 (same sources). |
Scores are anchored to the exhibits in the three tabs and are not summed; the three lenses get their verdicts in the Three Answers above. No cell scores 5: neither company shows share, price and growth compounding together in any lane.
The two companies cut their revenue on different axes. Cloudflare reports only regions (US, EMEA, APAC, Other) and a channel split, and management declines to size its four product "acts" (NET Q2 FY26 call). Akamai reports solution categories and a US versus international split only; in 2026 it regrouped them into Security, Delivery and other cloud applications, and Cloud Infrastructure Services (CIS) (AKAM Q2 FY26 10-Q). The product-by-region cross is ND for both, so the exhibit below shows the regional cells side by side and Akamai's product cells with Cloudflare's marked ND rather than guessed.
At about 1.9x Cloudflare's revenue, Akamai is the larger company; the comparison therefore runs on growth rates and shares of revenue, not absolutes. The headline contrast is breadth. Cloudflare's slowest region compounded 25.8% a year from FY2023 to FY2025. Akamai's fastest-growing sizeable line, cloud computing, compounded 18.5%, and its largest geographic cell, the US, grew 4.2%.
| Cell (FY2025) | NET rev (% total) | NET 2y CAGR | AKAM rev (% total) | AKAM 2y CAGR | Margin signal / leader |
|---|---|---|---|---|---|
| United States | 1,073.0 (49%) | +25.8% | 2,139.2 (51%) | +4.2% | Cloudflare, share-taker; Q2 FY26 +41% vs +4% |
| EMEA | 598.6 (28%) | +29.6% | 2,069.0 (49%) international | +6.0% | Cloudflare; Akamai does not split international |
| APAC | 329.8 (15%) | +39.8% | Cloudflare fastest region | ||
| Other (LatAm, RoW) | 166.6 (8%) | +33.7% | Cloudflare | ||
| Security | ND | ND | 2,243.4 (53%) | +12.7% | Akamai's margin core (inferred: software-like, no dedicated capex) |
| Delivery | ND | ND | 1,256.7 (30%) | -9.7% | Price-down on renewals (AKAM FY25 10-K) |
| Cloud computing (of which CIS) | ND | ND | 708.1 (17%) / 313.9 (7%) | +18.5% / +34.2% | Low-20s to low-30s op margin on large contracts (AKAM Q2 FY26 call) |
Normalization: Akamai's 2026 "Delivery and other cloud applications" combines FY2025 Delivery with the non-CIS part of cloud computing. Cloudflare's "Other" is its residual region. Sources: NET FY2025 10-K; AKAM FY2025 10-K.
Cloudflare, large enterprise (US, EMEA). Large customers rose from 2,756 to 4,698 between FY2023 and Q2 FY2026 and their share of revenue from 64% to 73% (NET FY25 10-K; Q4 FY25 and Q2 FY26 calls). The driver is expansion, not acquisition: dollar-based net retention of 120% means the same customers pay 20% more a year. The 2025 and 2026 acquisitions (Replicate, Human Native, Astro, VoidZero) are developer-tool and AI teams rather than revenue purchases (Cloudflare blog; inferred). Cost to grow: sales and marketing at 42.5% of FY2025 revenue (NET FY25 10-K).
Akamai, security (global). Growth comes from newer products on the installed base: API security above $100m run rate growing more than 100%, and Zero Trust enterprise security led by Guardicore segmentation, together $90m in Q4 FY2025, +36% (AKAM Q4 FY25 call). The remaining roughly $1.9bn a year of security, mainly WAF and DDoS, therefore grows mid single digits (inferred). Durable, because these are the accounts that trust Akamai most, but not fast.
Akamai, CIS (global). Growth here is bought with capex: about $5.5bn for the $11.6bn Anthropic plans and $800m to $825m for the $1.8bn May contract, with revenue starting in H2 2027 (8-K, 24 Sept 2026; Q1 FY26 call; TechCrunch). Revenue per capex dollar is about 2.1x over seven years (inferred: $11.6bn / $5.5bn). This is an infrastructure-leasing model inside a software company.
Cloudflare sells direct, self-serve and increasingly through partners: channel revenue went from 16% of FY2023 revenue to 31% in H1 2026 (NET FY25 10-K; Q2 FY26 10-Q). It sets price on one rate card inside pool-of-funds contracts, and in named deals it won against incumbents offering "significant discounts" (NET Q4 FY25 call). Akamai sells through a field force and partners and discloses no channel share; in delivery it is the price-taker, with revenue declines attributed to "downward pricing of contract renewals" in both 2024 and 2025 (AKAM FY25 10-K).
Both depend on colocation, transit and server components. Cloudflare flags "significant component shortages" in its server supply chain for 2026 (NET FY25 10-K) and runs commodity hardware with every service on every server, so capacity is fungible across products. Akamai raised 2026 capex by about $1.7bn to pre-buy components including memory and signed a seven-year Lenovo hardware agreement to secure its build (8-K, 24 Sept 2026), buying certainty with committed capital.
| Input | Cloudflare | Akamai |
|---|---|---|
| Servers and memory | Commodity; shortages flagged (FY25 10-K) | About $1.7bn of 2026 capex to pre-buy components; Lenovo 7-year SOW (8-K Sept 2026) |
| Colocation | Leases; PP&E $703m (Q2 FY26 10-Q) | Lease liabilities $1.78bn, up from $1.57bn in six months (Q2 FY26 10-Q) |
| Capex, % of revenue, FY2025 | 15.8% | 19.5%; about 40% guided for 2026 before Anthropic |
| Hardware fungibility | High: one stack | Lower: dedicated capacity per contract |
Cloudflare large enterprise: correlated outages push enterprises to a second vendor; Cloudflare is more exposed than Akamai because one stack serves every product. Cloudflare developer platform: Workers carries lower gross margin than the corporate average (NET Q1 FY26 call), so success dilutes the network's cost advantage. Akamai security: price competition from bundled platforms, lower exposure because it holds the most conservative accounts. Akamai CIS: counterparty and termination risk on a small number of very large contracts, far more exposed than anything at Cloudflare.
Traffic scale bought with a free tier: more than 20% of the web sits behind its network (Q4 FY25 call), and it books free users' bandwidth and colocation in sales and marketing (FY25 10-K), treating them as acquisition cost. Durability: High, since the traffic takes years to win. One stack on every server: a new product is a software release, not a build (FY25 10-K). High. Developer default: owning Astro and Vite puts deployment to Cloudflare inside common toolchains (Cloudflare blog). Medium to High (inferred).
Enterprise and government trust built over two decades, with US federal departments among customers (FY25 10-K). Durability: Medium to High. Longer contracts: RPO $5.2bn with about 40% recognized in years two and three, vs Cloudflare's $2.7bn with 64% inside 12 months (AKAM FY25 10-K; NET Q2 FY26 10-Q). Medium. Proven ability to source data-center space worldwide, cited by the frontier labs that chose it (Q1 FY26 call). Low to Medium: money can buy it.
Neither has a customer above 10% of revenue in FY2023 to FY2025 (both FY25 10-Ks). Cloudflare exercises price: its dollar-based net retention rose to 120% and it wins against discounting incumbents (Q2 FY26 and Q4 FY25 calls). Akamai concedes price in delivery at renewal (FY25 10-K) and will soon have its first dominant customer in Anthropic, a buyer that holds a warrant for up to 5% of Akamai and can exit on a material outage (8-K, 24 Sept 2026). The counter-evidence: Akamai won CrowdStrike's web security and delivery away from an "SMB-focused competitor" on service consistency (AKAM Q2 FY26 call).
Both run gross margins that fell in 2025 as network costs rose: Cloudflare from 77.3% to 74.5%, Akamai from 59.4% to 58.9%, and to 56% in Q2 FY2026 as colocation and depreciation rose ahead of CIS revenue (FY25 10-Ks; AKAM Q2 FY26 10-Q). Akamai has now locked supply for its contracted build (component pre-buy, Lenovo); Cloudflare has not disclosed equivalent commitments and warns of shortages. Pass-through: Akamai prices large CIS contracts to cover hardware and power (Q2 FY26 call); Cloudflare's rate cards do not pass through input costs explicitly (inferred).
| Cell | Route control | Pocket price | Continuity | Outcome (share / margin) | Confirming KPI |
|---|---|---|---|---|---|
| App and API security | Both direct plus channel; Cloudflare channel 31% and rising | Cloudflare below, bundled (inferred) | Akamai stronger record; Cloudflare outages Nov and Dec 2025 | Cloudflare share up, margin flat; Akamai share flat, margin flat | Akamai security cc growth at or above 8% |
| Content delivery | Both direct | Akamai falling at renewal | Parity | Cloudflare share up; Akamai share and margin down | Akamai delivery and OCA decline rate |
| Compute | Cloudflare self-serve and pool-of-funds; Akamai negotiated multi-year | Cloudflare metered, "highly competitive" with public cloud (FY25 10-K); Akamai contract-priced | Akamai contracts terminable on material outage | Both share up; both margin down (Workers mix; capex and depreciation) | NET non-GAAP gross margin; AKAM free cash flow |
Architecture, Major: Cloudflare runs one stack on commodity servers; Akamai runs a delivery network, a cloud acquired with Linode in 2022, and separate security products (AKAM FY23 10-K). Closing it means a re-platform, several years. Acquisition funnel, Moderate: Cloudflare's free tier and developer tools create demand before sales engages; Akamai's field model cannot buy developer habit quickly. Capital model, Major for risk: Cloudflare funds growth through operating expense and stock pay; Akamai through capex and convertibles. Akamai could reverse its choice, but only by walking away from the contracts that now carry its growth story.
Both report under US GAAP by function, so lines map directly. Three classification differences matter. Akamai reports amortization of acquired intangibles (1.8% to 2.6% of revenue) and restructuring (1.4% to 2.4%) as separate lines, so they sit in its EBIT but in none of its four cost lines. Cloudflare books free-tier bandwidth and colocation in sales and marketing (NET FY25 10-K), which flatters its gross margin and inflates its SG&A. Akamai capitalizes $240m to $287m of R&D salaries a year against Cloudflare's $21m to $28m of internal-use software (both FY25 10-Ks); on a pre-capitalization basis Akamai's R&D averages 18.2% of sales, not 11.6% (inferred). SG&A below is sales and marketing plus general and administrative.
| % of sales, 3y avg (FY23 to FY25) | Cloudflare | Akamai | Gap (pts) | What drives it |
|---|---|---|---|---|
| COGS | 23.9 | 40.4 | -16.5 | One stack on commodity servers; peering earned by free-tier traffic |
| R&D | 25.5 | 11.6 | +13.9 | Half the gap is Akamai capitalizing salaries (18.2% before) |
| SG&A | 61.6 | 29.5 | +32.1 | Growth-stage sales force, free-tier cost, stock pay |
| Gross margin | 76.1 | 59.6 | +16.5 | Mirror of COGS; Akamai excludes acquired amortization |
| EBIT margin | -11.0 | 14.5 | -25.5 | SG&A and stock pay (20.7% vs 9.8%) swamp the gross advantage |
| Year | NET COGS | R&D | SG&A | GM | EBIT | AKAM COGS | R&D | SG&A | GM | EBIT |
|---|---|---|---|---|---|---|---|---|---|---|
| FY2023 | 23.7 | 27.6 | 63.0 | 76.3 | -14.3 | 39.6 | 10.7 | 29.8 | 60.4 | 16.7 |
| FY2024 | 22.7 | 25.2 | 61.3 | 77.3 | -9.3 | 40.6 | 11.8 | 29.5 | 59.4 | 13.4 |
| FY2025 | 25.5 | 23.6 | 60.4 | 74.5 | -9.6 | 41.1 | 12.2 | 29.3 | 58.9 | 13.5 |
Cloudflare revenue $1,296.7m / $1,669.6m / $2,167.9m; Akamai $3,811.9m / $3,991.2m / $4,208.2m. Stock pay as % of revenue: Cloudflare 21.1 / 20.3 / 20.8; Akamai 8.6 / 9.9 / 10.9. Capex incl. capitalized software: Cloudflare 10.4 / 12.8 / 15.8; Akamai 19.2 / 17.2 / 19.5. Sources: both FY2025 10-Ks.
The most persistent gap is SG&A: 33.2, 31.8 and 31.1 points in the three years, larger than the gross-margin advantage it cancels. Its mechanism is Cloudflare's selling model, sales and marketing alone averaged 44.4% of sales against Akamai's 13.9%, plus stock pay twice Akamai's rate and free-tier network costs parked in marketing. The gross-margin gap, 15.6 to 17.9 points every year, confirms the power map: the company with the cost moat shows it at the gross line. The SG&A gap contradicts it at the operating line, which means either the moat is less valuable than it reads or Cloudflare carries self-inflicted weight. Evidence favors the second: SG&A fell 2.6 points over the window, headcount went from 5,156 to about 4,700 after the May 2026 restructuring (NET FY25 10-K; Q2 FY26 call), and non-GAAP operating margin is guided to about 15.5% for FY2026 (inferred from the Q2 FY26 release). Akamai's cost engine is heading the other way: cost of revenue rose to 44% of sales in Q2 FY2026 from 41% a year earlier as colocation and depreciation ran ahead of CIS revenue (AKAM Q2 FY26 10-Q).
| Metric | Threshold | By when | If it hits, it favors | Where published |
|---|---|---|---|---|
| Cloudflare non-GAAP gross margin | At or above 72% every quarter | Q4 FY2027 | Cloudflare | NET quarterly releases |
| Cloudflare dollar-based net retention | At or above 118% | Q2 FY2027 | Cloudflare | NET earnings calls, 10-K |
| Cloudflare non-GAAP operating margin | At or above 18% for FY2027 (FY2026 guide about 15.5%) | February 2028 | Cloudflare | NET Q4 FY2027 release |
| Akamai CIS revenue from the new contracts | 2027 Anthropic revenue within the reported $150m to $300m range | Q4 FY2027 | Akamai | AKAM releases, 10-K |
| Akamai free cash flow and security growth | FCF positive in FY2027 and security cc growth at or above 8% | February 2028 | Akamai | AKAM FY2027 10-K |