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 ...

Akamai Technologies (AKAM) came out with quarterly earnings of $1.59 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $1.63 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this cloud services provider would post earnings of $1.54 per share when it actually produced earnings of $1.58, delivering a surprise of 2.60%.Over the last four quarters, the company has surpassed consensus EPS estimates three times.Akamai Tec ...

Revenue Performance - Third quarter revenue reached $1.005 billion, a 4% increase year-over-year from $965 million[3] - Security and compute revenue accounted for 68% of total revenue, growing 17% year-over-year[2] - Security revenue was $519 million, up 14% year-over-year, while compute revenue increased by 28% to $167 million[3] - Revenue for Q3 2024 reached $1,004,679, a 4.1% increase from $965,484 in Q3 2023[14] - Total revenue for the three months ended September 30, 2024, was $1,004,679, representing a 4% year-over-year growth[19] - International revenue for the three months ended September 30, 2024, was $480,068, showing a 3% year-over-year growth[20] Income and Earnings - GAAP net income decreased by 64% to $58 million, with GAAP EPS at $0.38, a 63% decline from the previous year[5][6] - Non-GAAP net income was $244 million, a 3% decrease year-over-year, with non-GAAP EPS at $1.59, down 2%[5][6] - Net income for Q3 2024 was $57,907, down 56.0% from $131,688 in Q2 2024 and down 64.0% from $160,542 in Q3 2023[14] - For the three months ended September 30, 2024, Akamai reported a GAAP net income of $57,907 thousand, a decrease from $160,542 thousand for the same period in 2023[26] - Non-GAAP net income for the three months ended September 30, 2024, was $243,514 thousand, compared to $251,071 thousand for the same period in 2023, reflecting a slight decline[26] - The non-GAAP operating margin for the three months ended September 30, 2024, was 29%, consistent with the previous quarter but down from 31% in the same quarter last year[26] Expenses and Costs - Total costs and operating expenses increased to $934,042 in Q3 2024, up 12.4% from $831,594 in Q2 2024 and up 18.3% from $789,355 in Q3 2023[14] - Research and development expenses rose to $120,347 in Q3 2024, a 6.5% increase from $113,352 in Q2 2024 and a 13.6% increase from $105,942 in Q3 2023[14] - Research and development expenses for the three months ended September 30, 2024, totaled $39,275, an increase from $33,366 in the same period last year[23] - The company reported a restructuring charge of $82,013 in Q3 2024, compared to $1,385 in Q2 2024 and $2,595 in Q3 2023[14] - The company incurred a restructuring charge of $82,013 thousand for the three months ended September 30, 2024, compared to $2,595 thousand for the same period in 2023[26] - Total amortization of acquired intangible assets increased to $24,368 in Q3 2024, compared to $21,076 in Q2 2024 and $18,108 in Q3 2023[14] Cash Flow and Capital Expenditures - Cash from operations for Q3 2024 was $393 million, representing 39% of total revenue[7] - Cash provided by operating activities for Q3 2024 was $392,542, a decrease from $430,963 in Q2 2024 but an increase from $359,436 in Q3 2023[16] - Net cash used in investing activities was $116,228 in Q3 2024, a decrease from $286,682 in Q2 2024 and a significant decrease from $1,164,163 in Q3 2023[16] - Capital expenditures for the three months ended September 30, 2024, were $163,991, representing 16% of total revenue[24] Shareholder Actions - The company plans to repurchase $166 million worth of shares, totaling 1.7 million shares at an average price of $97.29[7] Financial Guidance - Financial guidance for Q4 2024 projects revenue between $995 million and $1.020 billion[8] - Non-GAAP operating margin is expected to be between 27% and 28% for Q4 2024[8] Assets and Liabilities - Total assets increased to $10.190 billion as of September 30, 2024, up from $9.900 billion at the end of 2023[13] - Cash, cash equivalents, and restricted cash at the end of the period were $572,753, up from $462,290 at the end of the same period last year[17] Stock-Based Compensation - Total stock-based compensation for the three months ended September 30, 2024, was $102,607, compared to $87,017 in the same period last year[23] - Stock-based compensation for the three months ended September 30, 2024, amounted to $102,607 thousand, up from $87,017 thousand in the same quarter last year[31] Taxation - The GAAP tax rate for the three months ended September 30, 2024, was 22%, compared to 11% for the same period in 2023[26] - Akamai's total income tax effect of non-GAAP adjustments for the three months ended September 30, 2024, was $(41,097) thousand[26] Non-GAAP Measures - Akamai excludes amortization of acquired intangible assets from non-GAAP financial measures to provide a consistent basis for comparing pre- and post-acquisition operating results[36] - Stock-based compensation is excluded from non-GAAP measures to highlight the performance of Akamai's core business and facilitate comparisons with peer companies[37] - Acquisition-related costs, including transaction fees and advisory fees, are excluded from non-GAAP measures to provide a useful comparison of operating results to prior periods[38] - Restructuring charges are excluded from non-GAAP measures as they do not reflect expected future operating expenses and vary significantly based on the magnitude of the restructuring action[39] - Non-GAAP income from operations is adjusted for items such as stock-based compensation and acquisition-related costs, providing a clearer view of operational performance[45] - Non-GAAP net income per diluted share is adjusted for the impact of convertible senior notes, with specific conversion prices set at $126.31, $116.18, and $95.10 for notes maturing in 2029, 2027, and 2025 respectively[49] - Adjusted EBITDA excludes items like interest, taxes, and depreciation, providing a clearer picture of operational performance[51] - Capital expenditures (capex) are presented on an accrual basis, excluding stock-based compensation and interest expense, to reflect true investment in property and equipment[53] Risks and Forward-Looking Statements - The impact of foreign currency exchange rates on revenue and earnings is significant, with management emphasizing the importance of understanding these fluctuations for financial results[55] - Akamai's forward-looking statements indicate potential risks including competition, macroeconomic trends, and geopolitical uncertainties that may affect future performance[57]

Third quarter revenue of $1.005 billion, up 4% year-over-year and when adjusted for foreign exchange*Security and compute revenue represented 68% of total revenue in the third quarter and combined grew 17% year-over-year and when adjusted for foreign exchange*CAMBRIDGE, Mass., Nov. 7, 2024 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cybersecurity and cloud computing company that powers and protects business online, today reported financial results for the third quarter ended September 30, ...

Akamai Technologies, Inc. (AKAM) is scheduled to release third-quarter 2024 results on Nov. 7, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 2.6%. AKAM pulled off a trailing four-quarter earnings surprise of 4.68%, on average.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The company is expected to report higher year-over-year revenues, backed by healthy demand in security and compute verticals. Management’s focus on expanding i ...

Akamai Technologies (AKAM) ended the recent trading session at $101.85, demonstrating a -1.08% swing from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.33% for the day. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq lost 0.56%.Shares of the cloud services provider witnessed a gain of 3.15% over the previous month, beating the performance of the Computer and Technology sector with its gain of 2.83% and the S&P 500's gain of 1.83%.Analysts and ...

New real-time capabilities provide businesses with granular control and security across entire user account lifecycleCAMBRIDGE, Mass., Oct. 29, 2024 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today launched new capabilities to its Account Protector security solution. These enhancements are designed to safeguard user accounts against abuse throughout their entire lifecycle and provide advanced protection against account opening abuse, acc ...

Company Performance - Akamai Technologies (AKAM) closed at $102.80, with a slight increase of +0.08% from the previous session, underperforming the S&P 500's gain of 0.22% [1] - The stock has increased by 3.09% over the past month, outperforming the Computer and Technology sector's gain of 2.29% and the S&P 500's gain of 1.47% [1] - The upcoming earnings report is scheduled for November 7, 2024, with an expected EPS of $1.59, reflecting a 2.45% decline year-over-year, while revenue is projected at $1 billion, indicating a 3.62% increase [1] Earnings Estimates - For the full year, the Zacks Consensus Estimates project earnings of $6.43 per share and revenue of $4 billion, representing increases of +3.71% and +4.84% from the prior year [2] - Recent changes to analyst estimates indicate a positive outlook for Akamai Technologies, as upward revisions suggest confidence in the company's profitability [2] Valuation Metrics - Akamai Technologies has a Zacks Rank of 2 (Buy), with a Forward P/E ratio of 15.99, which is a discount compared to the industry's average Forward P/E of 35.45 [3] - The company has a PEG ratio of 2.26, aligning with the average PEG ratio of the Internet - Services industry [3] Industry Overview - The Internet - Services industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 63, placing it in the top 25% of over 250 industries [4] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]