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Akamai(AKAM) - 2024 Q3 - Quarterly Results
AKAMAkamai(AKAM)2024-11-07 21:04

Revenue Performance - Third quarter revenue reached 1.005billion,a41.005 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 519million,up14519 million, up 14% year-over-year, while compute revenue increased by 28% to 167 million[3] - Revenue for Q3 2024 reached 1,004,679,a4.11,004,679, 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,representinga41,004,679, 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 58million,withGAAPEPSat58 million, with GAAP EPS at 0.38, a 63% decline from the previous year[5][6] - Non-GAAP net income was 244million,a3244 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,down56.057,907, down 56.0% from 131,688 in Q2 2024 and down 64.0% from 160,542inQ32023[14]−ForthethreemonthsendedSeptember30,2024,AkamaireportedaGAAPnetincomeof160,542 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 160,542thousandforthesameperiodin2023[26]−Non−GAAPnetincomeforthethreemonthsendedSeptember30,2024,was160,542 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 251,071thousandforthesameperiodin2023,reflectingaslightdecline[26]−Thenon−GAAPoperatingmarginforthethreemonthsendedSeptember30,2024,was29251,071 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 831,594inQ22024andup18.3831,594 in Q2 2024 and up 18.3% from 789,355 in Q3 2023[14] - Research and development expenses rose to 120,347inQ32024,a6.5120,347 in Q3 2024, a 6.5% increase from 113,352 in Q2 2024 and a 13.6% increase from 105,942inQ32023[14]−ResearchanddevelopmentexpensesforthethreemonthsendedSeptember30,2024,totaled105,942 in Q3 2023[14] - Research and development expenses for the three months ended September 30, 2024, totaled 39,275, an increase from 33,366inthesameperiodlastyear[23]−Thecompanyreportedarestructuringchargeof33,366 in the same period last year[23] - The company reported a restructuring charge of 82,013 in Q3 2024, compared to 1,385inQ22024and1,385 in Q2 2024 and 2,595 in Q3 2023[14] - The company incurred a restructuring charge of 82,013thousandforthethreemonthsendedSeptember30,2024,comparedto82,013 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 24,368inQ32024,comparedto24,368 in Q3 2024, compared to 21,076 in Q2 2024 and 18,108inQ32023[14]CashFlowandCapitalExpenditures−CashfromoperationsforQ32024was18,108 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,adecreasefrom392,542, a decrease from 430,963 in Q2 2024 but an increase from 359,436inQ32023[16]−Netcashusedininvestingactivitieswas359,436 in Q3 2023[16] - Net cash used in investing activities was 116,228 in Q3 2024, a decrease from 286,682inQ22024andasignificantdecreasefrom286,682 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,representing16163,991, 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]FinancialGuidance−FinancialguidanceforQ42024projectsrevenuebetween97.29[7] Financial Guidance - Financial guidance for Q4 2024 projects revenue between 995 million and 1.020billion[8]−Non−GAAPoperatingmarginisexpectedtobebetween271.020 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 9.900billionattheendof2023[13]−Cash,cashequivalents,andrestrictedcashattheendoftheperiodwere9.900 billion at the end of 2023[13] - Cash, cash equivalents, and restricted cash at the end of the period were 572,753, up from 462,290attheendofthesameperiodlastyear[17]Stock−BasedCompensation−Totalstock−basedcompensationforthethreemonthsendedSeptember30,2024,was462,290 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 87,017inthesameperiodlastyear[23]−Stock−basedcompensationforthethreemonthsendedSeptember30,2024,amountedto87,017 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 87,017thousandinthesamequarterlastyear[31]Taxation−TheGAAPtaxrateforthethreemonthsendedSeptember30,2024,was2287,017 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 126.31,126.31, 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]