Ed McGowan
Chief Financial Officer at Akamai Technologies
Thank you, Tom. Today, I plan to review our Q2 results to provide some color on Q3, along with our increased full-year 2023 guidance. I'm pleased that Q2 was another strong and very profitable quarter, I'll have more to say about our double-digit EPS growth in a moment. First, let's discuss revenue. Total revenue for the second-quarter was $936 million, up 4% Year-over-Year. In the second-quarter security revenue was $433 million, growing 14% Year-over-Year.
As Tom mentioned, security revenue was driven by strong demand for our WAF, Bot Management, and segmentation solutions. Moving to compute, revenue was $123 million, growing 16% Year-over-Year as-reported, and 17% in constant-currency. On a combined basis, our security and compute product lines represented 59% of total revenue, growing 14% Year-over-Year and 50% in constant-currency. Shifting to delivery. Revenue was $380 million, declining 9% Year-over-Year as reported, and 8% in constant-currency.
International revenue was $456 million, up 7% Year-over-Year, and 8% in constant-currency and now represents approximately half of our total revenue. Foreign-exchange fluctuations were flat on a sequential basis, a negative 6 million on a Year-over-Year basis. Moving now to profitability. Non-GAAP net income was $228 million or $1.49 of earnings per diluted share, up 10% Year-over-Year and up 11% in constant-currency. These strong EPS results exceeded the high-end of our guidance range by $0.07 and were driven primarily by higher revenues, from savings from the headcount actions we took earlier in the second-quarter and continued progress on our cost-savings initiatives.
As a reminder, those cost-savings initiatives include third-party cloud savings, rationalization of our real-estate costs, depreciation expense, and other operating costs associated with lower capex-related to our delivery business. Disciplined spending with vendors and tighter travel and expense policy management. With respect to third-party cloud spend. I'm pleased to report that for as long as we have attract this expense. Q2 was the first-quarter with total third-party cloud spend declined Year-over-Year. While the decline was relatively modest it reflects disciplined vendor management as well as the beginning of savings related to the migration of our workloads onto our Tmall cloud platform.
This migration effort to move away from third-party clouds is in the early stages and we are seeing promising signs. For example, our Bot Management Solution is now running production workloads for 100s of customers on our own cloud computing platform. As a reminder, we anticipate that the amount of savings. We will be able to achieve, will start to ramp through the end of 2023 and into 2024 as we bring online the needed capacity and features. Moving to margins, our cash gross margin was 73%, adjusted EBITDA margin was 41%, and our non-GAAP operating margin is 29%, slightly ahead of our guidance.
Moving now to cash-in our use of capital as of June 30th, our cash, cash equivalents and marketable securities totaled approximately $1 billion. During the second-quarter, we spent roughly $137 million, to repurchase approximately 1.6 million shares. We now have about $700 million remaining on our previously-announced share buyback authorization. Our approach to capital allocation remains the same, to opportunistically buy-back shares to offset dilution from employee equity programs over-time, while maintaining sufficient capital to deploy when strategic M&A presents itself.
Finally, I'm pleased to announce that Akamai has obtained investment-grade credit ratings from Moody's and S&P. These ratings are part of a broader financial policy to further reinforce our business and financial strength not only with investors, but also with customers, vendors and other parties that we engaged with from a commercial perspective. The credit rating also broadens our financial toolkit, allowing us to evaluate all available financing instruments determined to determine what's best-suited for our financial goals.
Finally as a reminder, Akamai currently has two convertible debt instruments outstanding, $1.5 billion due in May 2025, and $1.5 billion due in September 2027. Before I provide our Q3 and full-year 2023 guidance. I want to touch on some housekeeping items. First, our annual merit-based wage increases became effective July first. This will result in an additional net operating costs of approximately $12 million per quarter. Second, in late July, the IRS released a notice that granted temporary relief for determining eligibility of foreign tax credits.
This will result in a lower than expected non-GAAP effective tax rate in Q3 and for the full year. And finally the guidance that we provide, so there is no change to the third macro economic environment. So with those factors in mind I will turn to our Q3 guidance. We are now projecting revenue in the range of $937 to $952 million or up 6% to 8% as reported and 5% to 7% in constant-currency over Q3 2022.
The current spot rates, foreign-exchange fluctuations are expected to have a positive one %10 million dollars impact year over year. At these revenue level we expect cash gross margins of approximately 74%, Q3 non-GAAP operating expenses are projected to be $297 to 302 million. We expect Q3 EBITDA margin of approximately 42%. We expect non-GAAP depreciation expense to be between 121, 2,123 million, CAD and we expect non-GAAP operating margin of approximately 29% for Q3.
Moving on to capex, we expect to spend approximately $162 to $170 million, excluding equity compensation and capitalized interest in the third-quarter. This represents approximately 17% to 18% of our projected total revenue for the third-quarter. Based on our expectations for revenue and cost we expect Q3 non-GAAP EPS to be $1.48 to $1.52. This EPS guidance assumes taxes of $42 to $45 million based on an estimated quarterly non-GAAP tax-rate of approximately 16%. It also reflects a fully-diluted share count of approximately 155 million shares. Looking ahead to the full-year, we have increased revenue to a range of $3.765 with $3.795 billion, which is up 45% Year-over-Year. As-reported and in constant-currency.
The current spot rates our guidance assumes foreign-exchange will have a negative $4 million impact to revenue, 2023 on a Year-over-Year basis. We are also raising our security revenue growth expectations to 12% to 14% for the full-year 2023 and we continue to expect to achieve approximately $0.5 billion of revenue from compute in 2023. Despite a significant year of investments, we are estimating non-GAAP operating margin of approximately 29%. With all that in mind, we have raised our estimated non-GAAP earnings per diluted share to a range of $5.87 to $5.95 and non-GAAP earnings guidance is based on a non-GAAP effective tax-rate of approximately 17% and a fully-diluted share count of approximately 155 million shares.
Finally, our full-year capex is expected to be approximately 19% of total revenue. In closing, we are very pleased with our financial achievements in the first-half of the year and our ability to increase our overall revenue. Security revenue and non-GAAP EPS guidance for the full-year. We believe that Akamai's with special class of businesses that have the ability and discipline to invest in future revenue growth, while continuing to be extremely profitable and generate significant cash flows. With that, we now look-forward to your questions, operator?
