Core Viewpoint - Akamai Technologies has announced the addition of Janaki Akella and Bas Burger to its Board of Directors, enhancing its leadership in cloud computing and cybersecurity through their extensive experience in technology and global business transformation [1][4]. Group 1: New Board Members - Janaki Akella brings expertise in cloud computing, cybersecurity, and AI, with previous leadership roles at Google and McKinsey & Company, and currently serves on several boards including Southern Company and Sallie Mae Corporation [2]. - Bas Burger, CEO of BT International, has a strong background in executing go-to-market initiatives and driving customer acquisition and retention, contributing to global data and cloud connectivity solutions [3]. Group 2: Strategic Importance - The addition of Akella and Burger is seen as critical for Akamai's growth in cloud computing and cybersecurity, with their insights expected to support the company's transformation and innovation efforts [4]. - Akamai's CEO, Tom Leighton, emphasized the value of Akella's experience in digital transformation and Burger's international business acumen in driving future growth opportunities [4]. Group 3: Company Overview - Akamai is recognized as a leading cybersecurity and cloud computing company, providing market-leading security solutions and full-stack cloud computing services to safeguard enterprise data and applications [5].

Core Insights - Akamai Technologies has announced new enhancements to its API Security offerings, aimed at helping customers address evolving threats to APIs, which are increasingly targeted by cyberattacks [1][2] - The company's API Security solutions have received recognition through industry awards and positive customer feedback, indicating strong market validation [1][3] API Security Enhancements - The latest enhancements focus on improving visibility across the API development and production lifecycle, addressing critical security gaps [2] - Key features include: - Managed Service for API Security, which offers real-time monitoring and expert response to early threats [6] - Integration with code repositories for pre-launch risk assessment of APIs [6] - Compliance Dashboard for centralized monitoring against security and privacy standards like PCI DSS v4.0 and GDPR [6] Customer Feedback - Customers have reported significant benefits from Akamai's API Security solutions, highlighting improved visibility and risk management: - A CTO from an insurance company noted enhanced data usage visibility and minimized attack surface [2] - A CISO from a software company emphasized the tool's effectiveness in guiding their AppSec team and simplifying risk assessment [2] - An executive in healthcare praised the robustness and responsiveness of the tool, providing peace of mind regarding API-level visibility [2] Industry Recognition - Akamai's security solutions have recently won three prestigious industry awards, reflecting the company's growing traction in the market [3] - The Senior Vice President of Akamai's Application Security Portfolio stated that the recognition indicates the company is effectively addressing real customer problems [4]

Core Insights - Akamai Technologies is a significant player in the content delivery network (CDN) and cloud infrastructure services market, valued at $11.5 billion [1] - The company aims to enhance content delivery over the Internet, addressing issues like traffic congestion and bandwidth constraints, particularly in high-definition video streaming [2] Financial Performance - Akamai reported a 3% year-over-year revenue increase, reaching $1.02 billion, driven by strong demand in Security and Compute verticals [6] - GAAP net income decreased to $123.2 million or $0.82 per share, down from $175.4 million or $1.11 per share in the previous year, primarily due to high operating expenses [4] - Non-GAAP net income slightly increased to $256.1 million or $1.70 per share, surpassing the Zacks Consensus Estimate by $0.12 [5] Revenue Breakdown - Security Technology Group revenues grew by 8% year-over-year to $530.7 million, supported by demand for Guardicore Segmentation Solution and API security solutions [7] - The Delivery segment's revenues fell to $319 million from $351.8 million in the previous year, while the Compute segment saw an increase to $165.5 million from $144.5 million [8] Management Outlook - For Q2 2025, Akamai anticipates revenues between $1.012 billion and $1.032 billion, with a projected non-GAAP operating margin of 28% [10] - For the full year 2025, the revenue forecast is between $4.050 billion and $4.2 billion, with non-GAAP earnings projected at $6.10 to $6.40 per share [12] Market Position and Future Potential - Despite current growth challenges, Akamai may have opportunities in the emerging AI economy if it can develop new growth drivers [13]

Industry Overview - The content delivery network (CDN) market is expected to grow at a CAGR of 18.04% from 2025 to 2034, indicating strong industry growth potential [2]. Cloudflare Analysis - Cloudflare's CDN offers a high-performance platform that enhances content delivery speed and secures web connectivity, reducing latency and improving load times [4]. - The company employs advanced techniques such as tiered caching and Argo smart routing to optimize delivery efficiency and minimize traffic [5]. - Cloudflare supports advanced protocols like HTTP/3 and provides developer flexibility through Cloudflare Workers, which has been adopted by over three million developers [6]. - Projected revenues for Cloudflare in 2025 are between $2.09 billion and $2.094 billion, reflecting a year-over-year growth of 25.4% [7]. - Non-GAAP earnings per share for Cloudflare are anticipated to be between 79 cents and 80 cents, indicating a year-over-year growth of 5.3% [8]. Akamai Technologies Analysis - Akamai Technologies has experienced a decline in delivery revenues for 17 consecutive quarters, raising concerns about its CDN business sustainability [11][15]. - The company integrates security features like DDoS and WAF protection with edge computing solutions, handling approximately two trillion web interactions daily [12][13]. - Akamai's non-GAAP earnings are expected to be in the range of $6.10 to $6.40 per share, with a Zacks Consensus Estimate of $6.27 per share, indicating a year-over-year decline of 3.2% [15]. Stock Performance and Valuation - Year-to-date, Cloudflare shares have increased by 66.9%, while Akamai shares have decreased by 18.3%, reflecting diverging investor sentiment [11][17]. - Cloudflare is trading at a forward sales multiple of 26.65X, while Akamai is at 2.71X, suggesting that Cloudflare's strong market position justifies its higher valuation despite appearing overvalued [18]. Conclusion - Cloudflare is gaining market share and showing robust growth, while Akamai is struggling with declining revenues, leading to a more favorable investment outlook for Cloudflare [19].

Core Insights - Akamai Technologies has announced a strategic partnership with Cloudinary to enhance its Video Manager solution with Cloudinary's AI-powered video technology [1][3] - The partnership aims to address the increasing demand for high-quality video experiences across various devices and channels [1][2] - Cloudinary has extensive experience in managing and delivering video content, powering over 1 billion videos for thousands of customers [2][5] Company Overview - Cloudinary is recognized for its image and video platform, serving over 10,000 customers, including notable brands like Adidas and Grubhub [5] - The company claims that its solutions can yield up to a 203% ROI for brands, enhancing user satisfaction and engagement [5] - Akamai is a leader in cybersecurity and cloud computing, providing a robust platform for performance and security [6][7] Partnership Details - Cloudinary has joined Akamai's Qualified Compute Partner Program as an Independent Software Vendor (ISV), facilitating easier access to its services for Akamai customers [1][3] - The partnership will allow Video Manager customers to leverage Cloudinary's technology to improve video management and delivery [1][3] - The Akamai Qualified Compute Partner Program aims to provide interoperable services that can be easily deployed across Akamai's global cloud infrastructure [3]

Akamai (AKAM) FY Conference Summary Company Overview - Akamai was founded 25 years ago to address performance issues on the Internet by distributing servers globally to reduce choke points [4][5] - The company initially focused on content delivery through its CDN (Content Delivery Network), which now constitutes about one-third of its revenue [6] Business Evolution - Akamai has evolved from primarily a CDN provider to a significant player in cybersecurity, with a $2 billion security business growing at approximately 10% annually [8] - The security segment includes web security, which accounts for about $1.8 billion of the security revenue [8] - The company has shifted from 85% CDN revenue a decade ago to 52% from security today [11] - Akamai's compute business, which includes edge computing and full-stack computing, is growing rapidly at about 15% this year [17] Financial Performance - Akamai's gross margins are in the low 70s, with operating margins around 30% [27] - The company expects operating margins to improve as security and compute products grow [28] - The company has a recurring revenue model, with 70% of customers using both CDN and security services [20] AI Integration - Akamai is leveraging AI in its security products to enhance decision-making and protect against denial of service attacks [30] - The company has introduced AI security for large language models to prevent sensitive information leaks and manage costs [31] - AI presents opportunities for product innovation and addressing new security challenges [34] Security Market Insights - Micro-segmentation and API security are key growth drivers for Akamai's security business, with significant revenue growth expected [35][39] - The company has simplified the deployment of segmentation, making it more accessible for customers [38] Competitive Landscape - Akamai competes effectively against hyperscalers by offering cost-effective solutions without egress fees, which can be a hidden cost for customers using hyperscalers [43][44] - The company has seen a decline in CDN pricing but is benefiting from the exit of smaller competitors, leading to a more favorable competitive environment [53] Future Outlook - Akamai anticipates that its CDN business will stabilize, with traffic growth expected to pick up again [53] - The company views its CDN as a strategic asset that supports its security and compute businesses, enhancing overall performance and reliability for customers [55] Key Takeaways - Akamai's diversified business model, combining CDN, security, and compute services, positions it well for future growth [19] - The integration of AI into its offerings enhances both security and operational efficiency [30][34] - The company is focused on leveraging its existing infrastructure to provide cost-effective and high-performance solutions to a broad range of industries [47][48]

Core Insights - Akamai Technologies, Inc. has not been covered recently, prompting a review of the company's Q1 results [1] Company Overview - The company is focused on long-term investment strategies, typically with a 5-10 year horizon [1] - The investment approach emphasizes a balanced portfolio that includes growth, value, and dividend-paying stocks, with a particular focus on value [1] Investment Strategy - The investment strategy includes occasional options trading to enhance returns [1]

Core Insights - Akamai Technologies has launched Akamai DNS Posture Management, a solution providing unified, multicloud visibility and real-time monitoring to prevent DNS-based attacks [1][5] - The solution addresses the complexities of managing multiple DNS systems and helps organizations ensure proper configuration and security [3][5] Group 1: Product Features - Akamai DNS Posture Management offers agentless real-time monitoring and guided remediation across major DNS providers [1] - The solution includes a Certificate Monitor that organizes digital certificates by domain names to identify risks such as expired or misconfigured certificates [7] - It provides a comprehensive view of zones, domains, sub-domains, and records across various DNS providers, including Akamai Cloud, AWS, Microsoft Azure, and Google Cloud Platform [8] Group 2: Security Challenges - DNS configurations can become outdated, leading to vulnerabilities that may expose organizations to serious threats like unauthorized SSL/TLS certificate issuance and DNS spoofing [5][6] - The overwhelming number of unmanaged alerts and compliance requirements can lead to high-priority issues being overlooked, emphasizing the need for automation in compliance assessments [4] Group 3: Compliance and Regulatory Needs - Akamai DNS Posture Management automates adherence to critical security frameworks such as NIST, PCI DSS, and HIPAA, helping organizations reduce compliance costs while enhancing security [6] - Continuous compliance monitoring is essential to address critical gaps in DNS and certificate security hygiene [6]

Financial Data and Key Metrics Changes - The company has reset its long-term growth expectations, projecting about 10% growth for its security segment due to product maturity and market saturation [15][16] - The company anticipates a 30% to 35% growth in Annual Recurring Revenue (ARR) for new capabilities this year, particularly in API security and Gardacore segmentation [18][46] - Operating margins were close to 30% in Q1, with guidance for slightly lower margins for the year due to investments in new platforms and infrastructure [22][23] Business Line Data and Key Metrics Changes - The security segment is expected to grow at a slower rate due to maturity, while new products are projected to drive significant growth [15][16][18] - The compute business is identified as a major focus, with investments being reallocated from the delivery business to enhance growth in this area [25][26] - The delivery business is aiming for stabilization, with traffic growth expected to improve as market conditions rationalize [65][68] Market Data and Key Metrics Changes - The company has seen a shift in customer acquisition strategies, with channel partners becoming the primary source of new customers for security and compute services [8][12] - The competitive landscape has changed, with several competitors exiting the market, which may help stabilize pricing dynamics [68][71] Company Strategy and Development Direction - The company is focusing on a go-to-market transition to increase the ratio of hunters to farmers, emphasizing the need to target new customers beyond traditional CDN users [4][5] - Investments are being made in cloud infrastructure and security products to enhance the total addressable market (TAM) [23][25] - The company aims to position itself as a comprehensive cloud provider, similar to hyperscalers, by integrating compute, security, and delivery services [84][86] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by AI in the security landscape, noting that AI has increased the attack surface and sophistication of threats [53][57] - The company believes that the demand for new security solutions, particularly those tailored for AI applications, will drive future growth [55][56] - Management is optimistic about traffic growth in the delivery business, citing potential increases from video content and AI-generated media [68][70] Other Important Information - The company has been insourcing third-party compute services to improve efficiency and customer experience [44] - The compute business is seen as a significant opportunity, particularly in media, where customers are looking for cost-effective solutions [29][30] Q&A Session Summary Question: How has the go-to-market transition been going? - The company is evolving to focus more on hunting for new customers, particularly in security and cloud computing [4][5] Question: What led to the reset of growth expectations? - The company had not provided long-term guidance for over three years and felt it was important to update the community on current views [13][15] Question: What are the critical investments needed to achieve growth? - Investments are being made in technology, compute infrastructure, and sales force expansion to support growth [21][23] Question: Is compute the top priority for the company? - Both security and compute are considered equally important, with significant investments being made in both areas [25][26] Question: How is AI impacting the security landscape? - AI has increased the sophistication of attacks and the demand for specialized security solutions [53][55] Question: What is the outlook for the delivery business? - The company aims to stabilize the delivery business and improve traffic growth, with expectations for better pricing dynamics [65][68]

Core Insights - The report by Akamai highlights that China has the highest costs associated with API security incidents, amounting to $778,000 (approximately 5.68 million RMB) over the past year [2] - The report indicates a significant discrepancy in cost estimates between management and frontline employees, with management estimating costs at $517,000 and frontline employees estimating $920,000 [2] API Attack History - The evolution of API attacks can be categorized into four phases, starting from pre-2000 with internal API mechanisms and focusing on system vulnerabilities [3] - The second phase (2000-2010) saw the rise of standardized APIs with SOAP, introducing risks like XML injection and man-in-the-middle attacks, followed by the adoption of RESTful APIs which led to session hijacking and token leakage [3] - The third phase post-2010 was marked by the rise of cloud computing, where APIs became core digital assets, but many shadow APIs emerged, leading to DDoS attacks and data breaches [3][4] - The current phase involves the integration of generative AI, where API calls are essential for business applications, shifting more security responsibilities to cloud service providers [4] API Attack Statistics - From January 2023 to June 2024, the Asia-Pacific region recorded 108 billion API attacks, accounting for 15% of all web attacks [5] - In China, 27.6% of respondents prioritized "protecting APIs from attacks" as the top cybersecurity concern, significantly higher than other countries [5] Current API Security Challenges - Common vulnerabilities in API applications include misconfigurations, lack of interception by firewalls, and authorization flaws, with API misconfiguration being the most prevalent at 22.3% [6] - The primary types of API attacks currently include injection attacks, unauthorized access, and DDoS attacks, as evidenced by the attacks on DeepSeek and other major models [6][7] Recommendations for API Security - Companies should reach a consensus on the causes, impacts, and priorities of API security incidents [9] - Suggested strategies include enhancing API discovery and monitoring capabilities, improving API testing, maintaining thorough documentation, and utilizing runtime detection tools [9][10] - Organizations are encouraged to integrate API security solutions with existing security products to identify high-risk behaviors and intercept suspicious traffic [10]