CAMBRIDGE, Mass., Nov. 15, 2024 /PRNewswire/ -- Akamai (NASDAQ: AKAM), the cybersecurity and cloud computing company that powers and protects business online, today announced it is the winning bidder to acquire select assets from Edgio, including customer contracts from Edgio's businesses in security and content delivery, and non-exclusive license rights to Edgio's entire patent portfolio. No assets related to the Edgio network would be acquired as part of the bid. Pursuant to Edgio's filing for Chapter 11 ...

Core Insights - Akamai Technologies, Inc. reported its Q3 earnings, prompting a detailed analysis of the numbers and the company's outlook [1] Financial Performance - The company’s Q3 earnings report includes specific financial metrics that warrant further examination to understand its performance [1] Investment Perspective - Despite the analysis of the earnings, there remains a lack of investment interest in the company, indicating potential concerns or a cautious outlook on future growth [1]

CAMBRIDGE, Mass., Nov. 14, 2024 /PRNewswire/ -- Akamai Technologies Inc. (NASDAQ: AKAM), the cybersecurity and cloud computing company that powers and protects business online, announced today that Avesha Technologies is the latest organization to join the Akamai Qualified Compute Partner Program as an Independent Software Vendor (ISV). Avesha Technologies is providing two distinct Kubernetes solutions–one for connectivity and one for autoscaling.As an ISV in the Akamai Qualified Compute Partner Program, Av ...

Only 27% of respondents know which APIs return the sensitive data that attackers seekCAMBRIDGE, Mass., Nov. 13, 2024 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today announced new research showing that while API attacks are rising, visibility into API risks that open doors for attackers is declining. Now in its third year, the API Security Impact Study (formerly the API Security Disconnect) explores the state of API protection based on a ...

Core Insights - Akamai Technologies has launched the Akamai App Platform, a solution designed to simplify the deployment, management, and scaling of highly distributed applications, addressing key challenges in Kubernetes adoption such as skills, scale, and vendor lock-in [1][3][4] Company Overview - Akamai Technologies is a cybersecurity and cloud computing company that provides solutions to power and protect businesses online, emphasizing its commitment to performance and affordability on a distributed platform [11] Product Features - The Akamai App Platform is built on Kubernetes technology and offers ready-to-run templates that automate the provisioning process, significantly reducing deployment time from months to under an hour [3][5] - It provides a self-service environment for engineering teams, allowing them to build, deploy, secure, and maintain applications efficiently [5] - The platform integrates preconfigured upstream open source projects, simplifying deployment and management for production workloads [5][8] Market Positioning - The platform aims to balance the ease of use associated with hyperscaler solutions and the flexibility of open source, addressing the complexities and costs associated with both approaches [4][10] - Akamai's strategic choice to embrace open source solutions promotes workload portability, offering businesses freedom from vendor lock-in and increased cost efficiency [8] Operational Benefits - The Akamai App Platform reduces operational complexity by providing user-ready Kubernetes environments, allowing businesses to focus on applications rather than infrastructure [7][8] - It standardizes and integrates deployments and tools, creating a consistent operational environment that helps reduce time to market [8] Security and Observability - The platform includes advanced security and observability features, such as real-time threat detection and robust monitoring tools, enhancing application security and performance [8][9] Industry Context - Kubernetes has seen over 60% adoption among enterprises, yet challenges remain for DevOps teams in managing container orchestration technology [6][7] - The Akamai App Platform is positioned to disrupt the cloud status quo, particularly as edge native applications become increasingly important for AI inference [10]

Toronto , Canada - 28 June 2023; Tom Leighton, Co-founder & CEO, Akamai Technologies, on FullSTK ... [+] stage during day two of Collision 2023 at Enercare Centre in Toronto, Canada. (Photo By Ramsey Cardy/Sportsfile for Collision via Getty Images)Sportsfile via Getty ImagesAkamai stock tumbled 14% in Friday’s trading following its Q3 earnings report, which largely met expectations but raised concerns with a weaker Q4 guidance. Moreover, the continued decline in the company’s core content delivery network b ...

Revenue Performance - Security and compute solutions represented almost two-thirds of total revenue during the first nine months of 2024[98] - Total revenue for the three months ended September 30, 2024, increased by 4.1% to $1,004.7 million compared to $965.5 million in the same period in 2023[112] - Security solutions revenue grew by 13.8% to $518.7 million for the three months ended September 30, 2024, driven by growth in segmentation and web application solutions[112][113] - Delivery solutions revenue decreased by 15.9% to $319.1 million for the three months ended September 30, 2024, due to economic and geopolitical headwinds impacting customer traffic[112][114] - Compute solutions revenue increased by 28.0% to $166.9 million for the three months ended September 30, 2024, driven by growth in cloud optimization solutions[112][116] - U.S. revenue increased by 5.2% to $524.6 million for the three months ended September 30, 2024, representing 52.2% of total revenue[116] - International revenue increased by 2.8% to $480.1 million for the three months ended September 30, 2024, representing 47.8% of total revenue[116] Cost and Expense Trends - Co-location costs are a significant portion of cost of revenue, with long-term leases impacting expenses[103] - Network bandwidth costs are managed through internal software development to improve efficiency[104] - Network build-out and supporting service costs have increased due to compute infrastructure expansion[105] - Payroll and related costs, including stock-based compensation, are the largest expense[106] - Cost of revenue increased by 6.7% to $408.8 million for the three months ended September 30, 2024, primarily due to higher co-location fees and depreciation of network equipment[118] - Research and development expenses increased by 13.6% to $120.3 million for the three months ended September 30, 2024, driven by higher payroll and stock-based compensation[121] - Sales and marketing expenses increased by 4.7% to $138.6 million for the three months ended September 30, 2024, due to higher payroll and stock-based compensation[124] - General and administrative expenses increased by 8.6% to $159.96 million for the three months ended September 30, 2024, primarily due to higher acquisition-related costs and increased provision for doubtful accounts[127] - Amortization of acquired intangible assets increased by 34.6% to $24.37 million for the three months ended September 30, 2024, driven by recent acquisitions[128] - Restructuring charges for the three months ended September 30, 2024, were $82.01 million, primarily due to headcount reductions and impairments of acquired intangible assets[129] - Interest and marketable securities income, net, increased by 102.1% to $23.07 million for the three months ended September 30, 2024, due to higher cash balances and interest rates[132] - Interest expense increased by 35.1% to $6.74 million for the three months ended September 30, 2024, primarily due to the issuance of $1.265 billion in convertible senior notes in August 2023[133] - Provision for income taxes decreased by 21.8% to $15.90 million for the three months ended September 30, 2024, due to lower profitability and increased global intangible low-taxed income[135] - Effective income tax rate for the three months ended September 30, 2024, was 21.5%, higher than the federal statutory rate due to non-deductible stock-based compensation[136] - The company expects cost of revenue to increase in the remainder of 2024 due to investments in network infrastructure to support compute solutions growth[119] - Sales and marketing expenses are expected to increase in 2024 due to continued investment in go-to-market efforts and personnel added from the Noname Security acquisition in June 2024[126] - The company expects amortization of acquired intangible assets to be approximately $24.1 million for the remainder of 2024 and $92.3 million for 2025[129] - Restructuring charges for the nine months ended September 30, 2024, were $83.94 million, driven by strategic resource redeployment and completed acquisitions[129] Non-GAAP Financial Metrics - Non-GAAP income from operations for the nine months ended September 30, 2024, was $869.126 million, compared to $832.852 million for the same period in 2023[151] - Non-GAAP operating margin for the nine months ended September 30, 2024, was 29.3%, slightly lower than the 29.6% margin for the same period in 2023[151] - Stock-based compensation for the nine months ended September 30, 2024, was $294.333 million, up from $236.344 million in the same period in 2023[153] - Restructuring charges for the nine months ended September 30, 2024, were $83.942 million, compared to $56.675 million in the same period in 2023[153] - Non-GAAP net income for the nine months ended September 30, 2024, was $741.657 million, up from $697.376 million in the same period in 2023[153] - Amortization of acquired intangible assets for the nine months ended September 30, 2024, was $66.467 million, compared to $49.918 million in the same period in 2023[153] - Acquisition-related costs for the nine months ended September 30, 2024, were $7.387 million, down from $12.156 million in the same period in 2023[153] - Gain from equity method investment for the nine months ended September 30, 2023, was $1.475 million, related to the liquidation of GO-NET[153] - Non-GAAP adjustments exclude items such as stock-based compensation, restructuring charges, and acquisition-related costs to provide a clearer view of core business performance[142][143][144] - GAAP net income per diluted share for the nine months ended September 30, 2024, was $2.36, compared to $2.50 for the same period in 2023[155] - Non-GAAP net income per diluted share for the nine months ended September 30, 2024, was $4.82, compared to $4.51 for the same period in 2023[155] - Adjusted EBITDA for the nine months ended September 30, 2024, was $1.25 billion, compared to $1.18 billion for the same period in 2023[158] - Adjusted EBITDA margin for the nine months ended September 30, 2024, was 42.1%, compared to 41.9% for the same period in 2023[158] Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2024, was $1.18 billion, compared to $959.2 million for the same period in 2023[165] - Cash used in investing activities for the nine months ended September 30, 2024, was $554.5 million, compared to $1.53 billion for the same period in 2023[166] - Net cash used in financing activities for the nine months ended September 30, 2024, was $538.8 million, compared to net cash provided by financing activities of $500.2 million for the same period in 2023[167] - The company had cash, cash equivalents, and marketable securities totaling $2.0 billion as of September 30, 2024[161] - Cash and cash equivalents held in accounts outside the U.S. as of September 30, 2024, were $349.6 million[164] - The company's investment policy aims to preserve principal and maintain adequate liquidity, with cash investments in high-quality credit instruments[161] - The company repurchased 4.2 million shares of common stock at a weighted average price of $99.72 per share, totaling $419.1 million during the nine months ended September 30, 2024[169] - As of September 30, 2024, $2.1 billion remained available for future share repurchases under the authorization programs[169] - The company had $3,565.0 million of convertible senior notes outstanding as of September 30, 2024[170] - The company entered into a $500.0 million, five-year revolving credit agreement in November 2022, with no outstanding borrowings as of September 30, 2024[171] - The company expects to repay $1,150.0 million convertible senior notes due in May 2025 using a portion of the net proceeds from $1,265.0 million convertible senior notes due in 2029[174] - The company's liquidity outlook indicates that current cash, cash equivalents, and marketable securities balances are sufficient to meet foreseeable cash needs for at least the next 12 months[174] Market and Operational Challenges - Traffic growth on the network is slowing, particularly in media and gaming verticals, due to customer optimization and economic challenges[99] - Prices for delivery and security services have declined due to competition and contract renewals, impacting revenue growth rates[100] - International operations revenue continues to grow, but is impacted by foreign exchange fluctuations[101] - Global macroeconomic and geopolitical conditions continue to impact customer businesses and revenue growth rates[110] - The company's exposure to foreign currency fluctuations has increased due to growth in international operations, with the strengthening U.S. dollar negatively impacting revenue[181] - A hypothetical 10% strengthening or weakening in the value of the U.S. dollar relative to foreign currencies would not result in a material impact to the company's financial statements[181] - The company's available-for-sale portfolio would decline by approximately $10.9 million if market interest rates increased by 100 basis points[178] - The company's accounts receivable credit risk exposure is limited, with no customer having an accounts receivable balance of 10% or more as of September 30, 2024[185] Acquisitions and Investments - The acquisition of Noname Security for $452.3 million is expected to add $20.0 million in revenue for 2024[109] - Gain from equity method investment for the three and nine months ended September 30, 2023, was $1.475 million, representing a 100% decrease due to the liquidation of GO-NET[139]

Akamai Technologies, Inc. (AKAM) reported relatively healthy third-quarter 2024 results, wherein adjusted earnings matched the Zacks Consensus Estimate while revenues beat the same.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The company recorded higher revenues year over year, driven by healthy demand trends in multiple end markets. Strength in API security solutions was a positive factor. The introduction of advanced video workflow capabilities and the integration of Yospace in ...

Financial Data and Key Metrics - Total revenue for Q3 2024 was $1.005 billion, up 4% year-over-year, marking the company's first $1 billion quarter [12] - Compute revenue grew to $167 million, up 28% year-over-year, including a $7 million one-time benefit from a legacy contract [12] - Security revenue was $519 million, a 14% year-over-year increase, with $3 million in one-time license revenue [13] - Delivery revenue declined 16% year-over-year to $319 million, with a 3% sequential decline, an improvement from previous quarters [14] - Non-GAAP operating margin was 29%, and non-GAAP earnings per share were $1.59, in line with guidance [3][12] Business Line Performance - Security business exceeded $2 billion in annual revenue run rate, with strong customer interest and significant contracts, including a $70 million deal with a major financial institution [3][4] - Compute business saw strong momentum, with revenue growing 28% year-over-year, and enterprise compute solutions on track to achieve a $100 million annualized revenue run rate by year-end [6][12] - Delivery business faced macroeconomic headwinds, with slow traffic growth in streaming and gaming, but the company remains positioned to capitalize on future traffic growth [9][14] Market Performance - International revenue was $480 million, up 3% year-over-year, representing 48% of total revenue [14] - Strong interest in Prolexic DDoS protection due to large attacks in Asia, with the company thwarting two of the largest DDoS attacks ever seen [4] - Compute wins were seen across various regions, including the US, Europe, Latin America, and APJ, with significant deals in retail, SaaS, and media [6] Strategic Direction and Industry Competition - The company is shifting from a content delivery pioneer to a cybersecurity and cloud computing leader, with security and compute now accounting for over two-thirds of revenue [3][10] - Investments are being made in cloud computing capabilities, new security products, and go-to-market resources to expand the enterprise market [10][11] - The company is leveraging generative AI to enhance security solutions, such as Guardicore and WAF, and is differentiating itself with threat visibility and managed services [3][5] Management Commentary on Operating Environment and Future Outlook - Management noted macroeconomic headwinds impacting the delivery business but expects traffic growth to rebound in the future [9][14] - The company is focusing on profitability and cross-selling opportunities in delivery while reinvesting cash flow into faster-growing areas like security and compute [9][10] - Management is optimistic about the potential for future growth in cloud computing and security, with plans to shift more investment into these areas [10][11] Other Important Information - The company took an $82 million restructuring charge in Q3, primarily due to workforce reduction and severance costs, expected to result in $45 million in annualized savings [15] - Q4 revenue guidance is projected between $995 million and $1.020 billion, with non-GAAP operating margin expected to be 27% to 28% [16] - Full-year 2024 revenue is expected to be $3.966 billion to $3.991 billion, with security growth of 15% to 17% and compute growth of approximately 25% [18] Q&A Session Summary Question: Role of GenAI in Security - GenAI is being used by malicious actors to increase attacks, but the company is leveraging AI and ML in its security products for anomaly detection, bot detection, and customer deployment management [21] Question: Impact of Industry Consolidation - Consolidation in the delivery market is seen as positive, with the company expecting a stabilization of the market and potential for increased profitability [23][24] Question: Shift in Go-to-Market Strategy - The company is investing in hunters, sales specialists, and channel partners to accelerate growth in compute and security, driven by strong traction in API security and enterprise compute [26] Question: Advanced Security Package Penetration - The advanced security package has reached high penetration, with year-over-year comparisons now reflecting sales in both quarters [28] Question: Compute Profitability and CapEx - Compute profitability is still scaling, with better flow-through expected as the business grows, while CapEx is expected to remain stable in the near term [32][33] Question: Delivery Revenue Decline - Delivery revenue decline is attributed to slow traffic growth and tough year-over-year comparisons, with pricing pressure easing but not yet offsetting the decline [36] Question: Compute Use Cases and Vertical Performance - Compute use cases span multiple verticals, with a sweet spot in media workflow, and strong adoption across new and existing customers [39][44] Question: Security Product Performance - Security products, including WAF and DDoS, showed strong performance, with continued growth across all segments [40]

Akamai Technologies (AKAM) reported $1 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 4.1%. EPS of $1.59 for the same period compares to $1.63 a year ago.The reported revenue represents a surprise of +0.42% over the Zacks Consensus Estimate of $1 billion. With the consensus EPS estimate being $1.59, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they com ...